Week 1 - I mow the lawn.
Week 2 - He mows the lawn.
Week 3 - I mow the lawn.
...
Sounds fair and simple, right?
Maybe it isn't.
Let's say on week 4, he doesn't have time to mow the lawn, so he says: I'll give you 4000 psp (imaginary money) to mow the lawn. I'm glad, because it takes me about 2 hours to mow the lawn, and that means 2000 psp/hour - that's about how much my time is valued at anyway. Cool
A few weeks later I don't have time to mow the lawn when it's my turn, so I tell my brother I'll give him 4000 psp if he does the work instead of me. Now, he's actually not happy with the offer, because he says his time is worth more - he'll do it for 5000 psp!
New system:
Week 1 - He gives me 4000 psp.
Week 2 - I give him 5000 psp.
...
I'm losing 1000 psp every two weeks, even though we're both doing the same amount of work as before. :(
What did money do when it got into the picture? Two things:
1) Money changed the picture to represent the real value of our times simply be being an intermediary trade currency.
2) Money pushed the little guy down and pulled the big guy up!
In effect I should be doing more lawn-mowing than my brother so that I won't become bankrupt.
So it seems it's important to make my time more valuable. "Everything is worth as much as its customer will pay for it". In other words my time is only worth a lot if I can actually find work for that much.
How do I make my time more valuable? Experience and education. This is a fundamental importance of education - making your time more valuable. The more valuable your time is the less you have to do and the more time you will have, simply because your time has a better price-tag.
Of course this is one of the great properties of capitalism and also one of the great problems of it. - The better you are, the easier it is for you to get even better. In this case the more my time is worth, the more time I have to develop myself to make my time be worth even more.
Sounds evil, doesn't it? Rich people with lots of free time are propelled towards becoming even richer with even more free time. In fact the capitalist pit of evil is so terrible that we have another effect stacked onto the time-value problem - the more capital (money) you have, the more you can invest and you will get even more money!
The bright side: it's worth investing! That's the (open) secret of capitalism - to invest is to prosper. Because if your time gets a little more valuable you will have more resources to invest more to get even more valuable! This is really a key momentum of the 'great American success stories' where people from poor backgrounds get to the top of the world.
In fact this is why the whole capitalism is a boomer - every second is part of a race for everyone to get more potential - everyone's racing, and whoever stays behind gets left behind - so keep investing in yourself!
Ok there's a bunch of things we could talk about here. I think probably the most important thing from this line of thought is that as long as we live in a capitalistic world, education is the single most important thing in society.
Education gives way for people to invest in themselves - it opens the gates of social mobility because people from lower layers of society can quickly break out if they have the opportunity to invest in themselves.
About investing - I should get one of these (I think it's called a mowercycle):
Nice post, enjoyed it.
ReplyDeleteThanks for the feedback, man.
ReplyDeleteI don't get it: why would you accept the 4000 psp offer again?
ReplyDeleteBut the thing with the time is quite true. There was a smart guy two thousand years ago who also formulated the same theory: "For to those who have, more will be given; and from those who have nothing, even what they have will be taken away."
Because that's what 2 hours of work are worth for me. So my time is worth 2000 psp/hour. My brother offered me that much because he knew how much I was willing to accept. (If he would've offered a different amount we would've negotiated until we get to this number.)
ReplyDeleteBasically that price is determined by the supply and demand of my time - it's that simple.
:) Jesus might have been thinking about something else.
What else was he thinking about??! He described exactly the same thing, re-read the part carefully (Mt25:29). OK, he talks about investing money (and talents), not about time...
DeleteBTW this is called Matthew effect and there are a lot of interesting studies about it. I think I might even have a book at home called "small worlds and the groundbreaking theory of networks" where the author translates this effect to the language of networks.
But already at the starting point your brother doing the same job costs much more? Same work, same time, same quality, same monopol situation... Why? I still don't get it.
ReplyDelete