Mike wrote: - >> resource price at the wellhead is zero - no one pays Mother Earth This is true of all recourses (and it demonstrates a misunderstanding of value). The sun shines for free, the wind blows for free, water flows from the mountains to the ocean for free, trees grow for free, oil, coal, natural gas, uranium, etc. all are found in the ground for "free". But that is irrelevant because we pay for all things based on their market value, which is what the supplier adds. For example, you can grow a tree for free, wait a long while, cut it down yourself, mill it into lumber yourself and build yourself a boat, house, etc. Or you could buy the wood, paying someone else to grow it, harvest it, mill it, ship it to your neighborhood where you can buy it. Or you can pay big $ to a craftsman to build you a nice wood kayak. What you are paying for for someone else to get it, rework it, and deliver it. Each adds value, making it worth more at each step. So in once sense all recourses only carry a value based on the added value, which is what someone is willing to pay for it. The "profit" that each person that handles the goods in the system is the value that each one adds to the item. A kayak builder has to sell the kayak for more than the material and labor costs to make it or the builder goes out of business. If people are not willing to pay more than the cost of making a product, than the builder either has to find a way to make it less expensive (use less resources), or change the design to make it more desirable (customers willing to pay more for it). This is true of all products, cars, houses, computers, etc. The fact that most are willing to pay more for milled lumber than raw logs is how the miller makes a living, it is how the kayak builder makes a living. If you make everything yourself from raw materials you will have NO time to do anything besides feed and cloth yourself, all your waking hours will be spent making food and clothes. That is the basis for all market systems, what we call an "economy". And it is the reason we have time to enjoy kayaking, the value of our work is worth more than the cost of buying clothes, food, housing, etc. what is left over is good for kayaking. You hopefully add value to your employer more than the cost for you to work there (or the employer will go out of business and you will be unemployed). To not understand that means you do not understand how all things have value, and how our economy works, employs people, and provides a pretty good living for most people that have skills to offer. Profit is only a measure of the value added by the supplier, the more the profit, the more value added over the cost of the raw materials, that means the moret people are willing to pay to get their goods or services rather than do it yourself. The more raw materials and labor that goes into a product, the higher the cost, and the higher the recourse consumption. The only exception to that is cost of unnecessary government regulations and taxes. That is why both are "evil" costs to any economy, they bog it down without adding value. Note I used the words there "unnecessary", for the sake of public health and safety (including environmental protection), stability and well being, certain regulations and taxes are necessary. The real debate is what is a benefit to us as citizens, and what is really necessary. *************************************************************************** PaddleWise Paddling Mailing List - Any opinions or suggestions expressed here are solely those of the writer(s). You must assume the entire responsibility for reliance upon them. All postings copyright the author. Submissions: PaddleWise_at_PaddleWise.net Subscriptions: PaddleWise-request_at_PaddleWise.net Website: http://www.paddlewise.net/ ***************************************************************************Received on Fri Jul 06 2007 - 18:38:36 PDT
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