Wealth

I've been doing a good bit of reading lately.

Recently, I learned about a website called Distributed Proofreaders, which I am quite enthusiastic about. They are set up so people can help them put books on line. They "let" people help proofread and format books that have been scanned. I have been finding it fun as well as interesting.

There are a wide variety of books. Among the books I have worked on proofing, have been several about economics, which has been a subject of interest to me in the last year or so.

I told some of my friends some time ago, that because of my having a business I started thinking about the subject of value--well, actually price. Things like: How do you decide how much to sell something for? Or, conversely, how do people decide how much they are willing to pay for something?

There were 2 passages from the Bible, that came to mind one day when I was meditating on this subject. One was in Proverbs 20:14, "Bad, bad says the buyer, but when he goes away he boasts." The other was from Revelation 13:16&17, "He also forced everyone, small and great, rich and poor, free and slave, to receive a mark on his right hand or on his forehead, so that no one could buy or sell unless he had the mark, which is the name of the beast or the number of his name."

I didn't have any insight into these two verses to start out. But as I thought over it this is what I came to:

1. The price of something is a tension between the buyer and the seller.
2. This relationship can be interfered with by other forces.

The seller may consider work done and costs, and maybe he thinks about how much the buyer is willing to pay.

One of my proofreading books was essays by Benjamin Franklin. He wrote about this subject of how things are priced and he concluded that all value comes from what is produced by the earth (land and water) in order to feed ourselves. First you must be able to survive. Anything beyond survival can be considered wealth. The following, (obviously) is quoted!, and comes from the book I just mentioned.

Franklin:

Positions to be examined, concerning national Wealth*.

1. ALL food or subsistence for mankind arise from the earth or waters.

2. Necessaries of life, that are not foods, and all other conveniences, have their values estimated by the proportion of food consumed while we are employed in procuring them.

3. A small people, with a large territory, may subsist on the productions of nature, with no other labour than that of gathering the vegetables and catching the animals.

4. A large people, with a small territory, finds these insufficient, and, to subsist, must labour the earth, to make it produce greater quantities of vegetable food, suitable for the nourishment of men, and of the animals they intend to eat.

5. From this labour arises a great increase of vegetable and animal food, and of materials for clothing, as flax, wool, silk, &c. The superfluity of these is wealth.With this wealth we pay for the labour employed in building our houses, cities, &c. which are therefore only subsistence thus metamorphosed.

6. Manufactures are only another shape into which so much provisions and subsistence are turned, as were equal in value to the manufactures produced. This appears from hence, that the manufacturer does not, in fact, obtain from the employer, for his labour, more than a mere subsistence, including raiment, fuel, and shelter: all which derive their value from the provisions consumed in procuring them.

7. The produce of the earth, thus converted into manufactures, may be more easily carried to distant markets than before such conversion.

8. Fair commerce is, where equal values are exchanged for equal, the expence of transport included. Thus, if it costs A in England as much labour and charge to raise a bushel of wheat, as it costs B in France to produce four gallons of wine, then are four gallons of wine the fair exchange for a bushel of wheat, A and B meeting at half distance with their commodities to make the exchange. The advantage of this fair commerce is, that each party increases the number of his enjoyments, having, instead of wheat alone, or wine alone, the use of both wheat and wine.

9. Where the labour and expence of producing both commodities are known to both parties, bargains will generally be fair and equal. Where they are known toone party only, bargains will often be unequal, knowledge taking its advantage of ignorance.

10. Thus he, that carries one thousand bushels of wheat abroad to sell, may not probably obtain so great a profit thereon, as if he had first turned the wheat into manufactures, by subsisting therewith the workmen while producing those manufactures: since there are many expediting and facilitating methods of working, not generally known; and strangers to the manufactures, though they know pretty well the expence of raising wheat, are unacquainted with those short methods of working, and thence, being apt to suppose more labour employed in the manufactures than there really is, are more easily imposed on in their value, and induced to allow more for them than they are honestly worth.

11. Thus the advantage of having manufactures in a country does not consist, as is commonly supposed, in their highly advancing the value of rough materials, of which they are formed; since, though six-pennyworth of flax may be worth twenty shillings when worked into lace, yet the very cause of its being worth twenty shillings, is, that, besides the flax, it has cost nineteen shillings and sixpence in subsistence to the manufacturer. But the advantage of manufactures is, that under their shape provisions may be more easily carried to a foreign market; and by their means our traders may more easily cheat strangers. Few, where it is not made, are judges of the value of lace. The importer may demand forty, and perhaps get thirty shillings for that, which cost him but twenty.

12. Finally, there seem to be but three ways for a nation to acquire wealth. The first is by war, as the Romans did, in plundering their conquered neighbours. This is robbery.--The second by commerce, which is generally cheating.--The third by agriculture, the only honest way, wherein man receives a real increase of the seed thrown into the ground, in a kind of continual miracle wrought by the hand of God in his favour, as a reward for his innocent life, and his virtuous industry.

B. FRANKLIN.

April 4, 1769.

* The above passage is taken from Dr. Percival's Essays, Vol. III. p. 25, being an extract from a letter written to him, by Dr. Franklin, on the subject of his observations on the state of population in Manchester and other adjacent places. B.V.