My Thoughts on Consumerism and The Idea That Entrepreneurs Don’t Create Jobs

Posted: May 31, 2012 in Epistemology, Ethics, Metaphysics, Politics, Uncategorized
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In response to The above video advocating consumerism, specifically as it applies to job creation:

I will begin by saying that propagating false principles and ideas that cater to the fashions of the time is easy in that it can be brief; it takes length to root out the error(s) by catering to people’s reason.  The initial advantage goes to the fashionable, but in the end reason is what “sticks” if people are willing to make the effort to discover what is true and why.

Life is a process of self-generating and self-sustaining actions — look at anything that is alive today and you will see this to be a true principle.  This action translates into human action as production — the self-generated action of man to the production of goods that he requires for sustaining his life.  It is self-sustaining if he produces more than what it costs to produce — i.e., his actions are profitable.

If left alone, man must produce for himself, but once he has a neighbor there can be a division of labor and trade — there “CAN be”, meaning it’s an option.  Both traders can now neglect a certain action that they will trade for; they can now focus on producing more of what they will use to exchange for what the other will make.  This is the formation of the most basic job — of neglecting one thing and creating more of another, in order to exchange at a net gain (or profit) than otherwise would be possible.  Both traders increase their activities in one area — creating the option of a certain action in exchange for wages.  This principle applies throughout a free economy: division of labor and production reorganizes as a trade to the profit of all.

It is true that demand creates an incentive for production, and demand creates an incentive for creating jobs to support production, but without rich entrepreneurs and the super rich, most of those demands would go unfulfilled.  Neither a sea of tears nor an army of guns will create any value that is demanded.

When the rich are starting a business, he creates the option of work that wouldn’t otherwise exist in exchange for wages; and he creates an option to buy a product that wouldn’t otherwise exist in exchange for payment.  It is also true that without others to make use those options, then those options would go unfilled or unbought.  It is safely assumed that people choose, to the best of their ability, the best options for themselves; and if they take a job or buy a product, then it is the best option for them according to them.

If entrepreneurs lack the capital to start a company, they CAN look to others who have capital (the super rich) and create an exchange to the profit of both.  The super rich lending their money is providing a service.  They worked or their relative worked and saved — i.e., withheld their consumption — to acquire that capital.  They earned it, and that is their property by right.

Where entrepreneurs and the super rich get the credit for creation is creating the production and job opportunities that would otherwise not exist, and on top of that they do it in a fashion that is consistent with life — in a self-generating and self-sustaining fashion — i.e., at a profit.  Consumers filling the created job opportunity or consuming the resulting production is not and can never be a function of creation; it can only be the consumption of something that has been created.

It is also said that people create the value that is demanded by demanding that value — demand creates value.  True, things are of value because of demand; however, assuming that individuals want to live, then there will always be demand and a need to produce — the nature of reality and life requires this.

To give credit to people for creating demand where the nature of reality and life is responsible is worse than a contradiction; it’s an evasion of reality.  It amounts to saying that consumers created demand where it would otherwise not exist, and they alone hold power over demand and can turn their demand on or off, instead of realizing that the nature of reality and life is the true source of demand.  The former leads to the fallacy of consumerism and the primacy of consumers, and the later leads to a correct framework for analyzing economics and the primacy of reality.  

Prove me wrong consumers by stop demanding, and with your ceasing of demand goes your ceasing of consumption — do it, stop consuming if you can!  Alas!  A false principle never fails to betray itself.

With a false principle, sprouts false and destructive ideas — like the video suggests.  If consumerism is assumed to be a correct framework, then I agree with the video that it logically leads to taxing the rich and giving it to the middle class and those who consume.  They would be the true source of the value given to production after all.

What would taking from the rich and “investing” in consumers do (analyzing it through a correct framework)?  It violates our first principle that life is a process self-generating and self-sustaining action.  Taxing the rich is a forced acquiring of their profit (remember that profit is the result of their self-generating and self-sustaining action), and giving it to consumers will simply allow consumers to consume in exchange for that money.  The result is the feeding off of self-sustaining and self-generating action to support a “sink hole.”  The ratio/percentage of this siphoning has it’s limit before the entire system cannot be self-sustaining!  Why, in the name of life, would we ever want to move in that direction!

The last objection I have of consumerism is the argument that the rich getting richer will result in a lack of consumers because people will have less money to buy things.  What a tragedy that existence has in store for man when he harms himself buy producing and selling more of what other people want!  We are doomed!  We are doomed to do little for our fellow man or to harm them, and we are doomed to harm ourselves in both cases!

Fortunately existence doesn’t have it out for man and has provided a mechanism to avoid destruction.  The solution is simple — the price mechanism.  The nature of pricing dictates that if the production of goods are up and the amount of money in circulation is down, then the prices of products will necessarily drop provided that trade is left alone by the government or those who would like to initiate the use of force.

Do not get fixated on money — it is deceitful when analyzing economics because it is easy to confuse money for wealth.  Money is a medium of exchange only.  An exchange involving trading a product/service for money is incomplete until that money is in turn exchanged for a product/service.  It is products and services that are the ends and it is production and money that is the means to self-generating and self-sustaining processes — i.e., to life.

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