Risk versus labor

Told you the abstruse stuff would be back.

I have been pondering one of my many perennial subjects today, and that is the two systems of earning activate in the world today.

In general, people think you earn the legitimate ownership of things by paying for them, and you earn the money to pay for them via either labor or risk.

Labor is by far the easier of the two to understand. You do the work, you get paid. Anybody can grasp that. And while everyone in the modern world has some knowledge of why a business pays for labour, that system of paid labour would not work unless it tapped into something deep and primal in our minds.

Namely, the instinct we have to contribute labour to our tribe.

So when people work for a ;living, what they are really doing (in one sense) is fulfilling their duty to the “tribe” of modern society. That’s why people, even quite dull ones, take pride in “working for a living” and “pulling their own weight” and so forth.

Deep down,. we need to believe that we are doing what we are supposed to be doing in society, and the money we earn for doing so is the way society rewards us for our contributions. This is the most “legitimate” way to earn in society.

Risk, on the other hand, is less clear cut. Our instincts can handle the idea of risking your assets being rewarded in proportion to the risk taken.

That’s how gambling works, after all.

What doesn’t track in people’s minds s unlimited rewards for finite risk. Sure, the founder of a business took a big risk by investing money in a new business. And they deserve a reward prop[proportional to that risk.

But the way thoings work in modern society is that the owner of the business gets rewarded via profits for as long as the business exists. In that sense, the reward is unlimited, and hence way out of proportion with the risk.

Then there’s the fact that any business with employees has the much clearer labor theory of value in play. From a psycho-sociological point of view, it’s the people who do the actual work that deserve the rewards, not the people or person who took the initial risk and who now don’t do anything but collect the profits and boss people around.

This creates a definite and distinct tension in modern society. Deep in our social programming we feel that there should be some point at which the person has been rewarded for their risk and therefore should get no more reward out of it.

Society is now set up that way, though. And I am not sure how it could be. We lack even the concept of time-limited ownership. To us, ownership is a fixed value that remains the same until acted upon by an outside force.

So basically, ownership has inertia.

If you own something, you own it till you sell it or otherwise legitimately transfer ownership of it. This is such a solid concept in modern society  that we consider ourselves to still own things that are far away from us in both time and space and which we are highly unlikely to ever see again and for which we have no real use.

These items are still, nevertheless, “ours”. No legitimate transfer of the property of ownership has occurred, ergo it’s still ours.

Back to earning. The superiority of clarity that comes with earning via labor as opposed to earning via risk ensures that the tension between the investing class and the labor class will always be there.

Or at least, it will be there until we enter a post-scarcity world where everyone can get everything they want for free.

That’s  probably at LEAST two decades away.

Let’s look at things from the point of view of the person who takes the risk. I think that even they can get confused by the difference between the modes of earning.

That’s why even the most callous of them will feel some need to “do something” in order to justify their continued rewards. This might be as minimal as checking up on the business via the Internet now and then, or as deeply involved as being the center of the whole shebang and they from whom all authority flows.

It is very rare to find the person who is one hundred percent committed to the “I don’t care so long as the money keeps coming in” philosophy.

And even other member sof the investor class will look down on such a person because they are making money without “doing anything” to earn it.

That’s why society holds a special kind of contempt for those whose wealth is entirely inherited. And I think that the people who are so “lucky” feel this keenly. It’s a big part of what drives them to fairly extreme behaviours when they are younger. Society tells them they should be happy to be so fortunate as to not “have” to work but their deep social instincts drive them to want to contribute labor to society. Not money, not fame, not respectability, but labor.

Only labor really “counts” in our minds.

Compared to that, reward for risk is a nebulous concept that,. deep down. does not “make sense” to us.

After all, a disconnected business owner isn’t “doing anything”.

So where does consciousness of this phenomenon lead us? There is no obvious solution. Capitalism could not function without people willing to take on the risk of founding and running a business. Those people are going to feel a strong sense of ownership of the product of said risk. Having that ownership abruptly end at a certain point would feel highly wrong to most people.

And yet, having that person own the thing permanently feels wrong too.

Ideally, there would be a fixed amount of profit anyone can expect from any kind of investment – for the sake of argument, let’s say it’s triple their money back/.
But how on Earth could you bring that about?

I have no idea. Do you?

I will talk to you nice people again tomorrow.

 

 

 

 

 

 

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