Quote:
Originally Posted by Mr. Blonde
Can somebody address this?
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I tried to.
What I mean is this:
It's not enough to lift a lever, or dig a hole. Or even get a bright idea. Humans and tools work together. And humans work with other humans.
Tools are capital, and profit motivates humans.
People do not work on their own accord, they need a profit motive.
The profit motive is what makes the businessman sell stock in the open market to raise funds to build an apple pie factory. His borrowed money allows the pie bakers and apple slicers to all do their jobs. The allocation of resources, in this case, has created wealth that otherwise would not have been, because a man cannot efficiently slice apples on an industrial scale without an apple pie factory.
How does the business man get the money in the first place? He gets it from the wealthy who think that investing in an apple pie factory is a good idea. Theese greedy, profit motivated people, have looked at all their investment opportunities and have decided that the apple pie business is the place where they can profit most - which is a very damn good proxy for value created for society. Remember, these greedy, rich people chose to invest in the apple pie factory and not the banana pie factory. Banana pies aren't as highly valued to society so people wouldn't pay as much for them - which means less profit for the businessman running the factory, which means less dividends paid to the greedy, rich investors.
They chose the apple factory instead of the banana factory because there was more profit. It's easy to forget how amazingly important this choice was for the economy as a whole. Now we have highly valued apple pies instead of less valued banana pies. Which is a huge win for the economy - in effect it's the investor class that, through profit motive, gives society what it needs.