What Does Owning Property Really Mean?

My last post explored our sustenance from the miraculous biosphere that is supplying our every need.  We looked at our responsibility to be stewards of this life-giving planet including the proper allocation of resources based on value. We saw that value is a factor of how much we need or want something (demand) as well as the scarcity and value-added production of the good or service (supply). Distribution of resources is a factor of negotiated exchange through trade or monetary systems based on demand and supply.

All of this is based on the assumption that people have ownership of property. Ownership is an elusive concept. The earth with its sustaining resources was created before human life even existed. Therefore, man had nothing to do with it and has no claim to it other than as stewards or caretakers. To declare that anything on earth is “ours” is really arrogance. As concluded in my previous post, everything in our biosphere is made from elements that have been here from the beginning of time. How can we possibly declare ourselves owners of any of it during our blink-of-an-eye existence on earth?

Then, what is this property ownership thing? Well, ages ago humans advanced from roaming on earth as hunters and gatherers to more organized inter-dependent groups. The concept emerged of rights to the use of property and exchange of goods and services based on value. Man developed agreements, contracts, and titles to provide rights to oversee and manage certain properties.  Over time, many societies saw this concept evolve into some type of centralized authority with power to determine who would have responsibility for what property. Proceeds from use of the property would be given to the centralized authority and distributed among the property stewards at the whim of the authority. This was a monarchy system with a serfdom economy which dominated the world for centuries. It was the forerunner of today’s communism and socialism.

Although small pockets of free trade economies have existed in the world throughout history, only the establishment of the “new world” of America provided the opportunity for freedom-loving people to begin a broad economic experiment. Such a free economy had never before been tested on a large scale. America’s economy was born with free market and private property concepts hammered out by our forefathers.

The revolutionary economic model initially allocated land obtained by either war or decree to American settlers. The early settlers received title to manage and add value to the land by growing crops, producing products, offering services, setting up trade venues, or renting it to others. Proceeds from these endeavors were kept by the owners of the property, not given over to a central authority for redistribution. The government only provided the granting and enforcement of legal rights to properties. This was pure and non-interference exercise of free trade and individual private property ownership. Keep in mind that what we call private property ownership was and always has been the official guaranteed right to control and use whatever we “own.” When we sell or buy property, real or personal, we are just legally transferring the right to manage and use that property. That right is legally enforced by government to prevent theft, encroachment, damage, or abuse.

The free market democratic right to our private property includes the right to use that property to our personal advantage. That might be to sell the resources of real property such as plants or minerals, use the resources to produce goods or services such as growing crops or operating a business, or simply to allow the property to increase in value through scarcity or increased demand.

The only advantage of owning private property is to add value to it for individual self-interest. National economic growth is dependent on citizens adding value to private property. An empty house does not add value. It adds value when it is purchased and becomes a home providing a venue for sustaining life. A vacant piece of land does not add value. It adds value when it is purchased and becomes a site for a business which produces goods or services. A piece of equipment adds value during its fabrication, but its added value stops after it is manufactured until it is purchased to produce things that adds further value.

So, owning property actually means just having the legal right to use or sell the property as desired. The only benefit to owning property is to add to its value in order to advance self-interest. Individuals or groups adding value to owned property is the heartbeat of a nation’s economy.

My next post will examine how firms, industries, and nations determine what and how much to produce to add value and stay economically healthy.

Click “Follow” at this site to ensure that you don’t miss any of the weekly posts in this series.

 

Economics: The Basic Fundamental

This is the first of a series of weekly posts that will explain the subject Americans are concerned about most, but understand least–Economics. You owe it to yourself to be better informed about this crucial topic. Commit just a few minutes each week to reading each post that builds on the previous ones.

Ahh! The miraculous planet earth, center of the universe from our perspective. This tiny sphere among billions of others has supported life for many millennia. Its inhabitants include its managers, human beings, who now number almost 7.5 billion. These human beings at the top of the intelligence scale of living things have been given the responsibility of stewards of earth’s resources for living. This responsibility is enabled by the principles of economics.

You can find many definitions of economics. My definition created for this blog is:

The science of managing and allocating limited resources for the best quality of           life among competing users.

This very general definition assumes the consideration of production, distribution, and consumption of goods and services within a structured system of exchange. It also considers scarcity of resources and ecological regard. Let’s begin our journey through economics with a look at the most basic core of its concepts.

Whatever your understanding may be regarding the age of the earth, I’m sure you will agree that it is a very, very old planet. It started with a surface of water, then land appeared, then life in the form of plants and animals. Humans became the final and highest life form and were assigned as overseers of all the earth contained. Since the beginning, mankind has had all the resources necessary to sustain life and flourish. These resources recycle continuously with no replenishment. Every present atom of the earth has been here from the beginning. None of these particles that form matter have been added since the beginning of time. Atoms form molecules that serve temporarily in one capacity, then break down into atoms for another molecule of temporary capacity. What Solomon said is true, “There is nothing new under the sun.”

Everything that man and every other organism needs to survive and thrive has been provided by the closed biosphere earth since its formation. Man was not only given the responsibility to manage all of these resources, but also the ability to craft from them food, shelter, clothing, tools, weapons, energy, vehicles, ships, airplanes, and millions of other necessities and conveniences.

Since our sustenance is all provided, the next question is how should it all be allocated? In earlier, less civilized ages, allocation of resources was determined by sheer power–group power and individual power. However, some of the earliest archeological finds have provided evidence of some forms of bartering or trading one type of good for another. People began using a monetary system around 3,000 years ago. Whether trading or purchasing with money, the exchange of goods and services has always been based on their value.

Value is measured by demand and supply. The degree an item or service is needed or wanted (demand) helps determine its value. On the other hand, scarcity or shortage of an item or service (supply) also helps determine its value. A good or service that is greatly needed or wanted will have a higher value, and a good or service that is limited in availability will have a higher value. When many people want a good or service that is not available to all of them, the ones who want it most and have the most resources (trade or money) with which to get it will end up with it.

Another consideration in determining final value is the added value from production. In ancient times, iron ore was a valuable commodity due to its scarcity and the labor to mine it. But, forged iron from the ore was even more valuable due to the labor and equipment necessary to forge it. Then, an iron shield was much more valuable due to the craftsmanship needed to fashion it from the forged iron. Today, think of the value added to iron, glass, plastic, and fabric when they all are expertly fashioned into a new car.

So, everything you own, rent, borrow, or otherwise use in life has value added to many of earth’s provisions that have been there from the beginning of time. What you gave up to attain all of these goods and services was a factor of how badly you wanted them, how much went into making them, and how available they were.

Think about the last item you bought–some food, gasoline, a piece of clothing, etc. It was made of atoms that have been on earth from the beginning. The atoms made up its molecules that may have previously been molecules of something completely different. You gave up something precious (probably money) according to the item’s value based on how much you and others typically want that item. The value of the item also included the complexity of its production and the scarcity of it.

This first post in our tour of economics has been just to get us thinking about some of the basics. My next post will be a look at how you come to own things. Do you really “own” anything? You may be surprised. Watch for this next stop on our journey. “Follow” this blog so you won’t miss any of the weekly posts. Please share it with others you think would be interested in this series.

 

 

 

 

 

Why Are We Electing a President We Don’t Like?

Donald Trump and Hillary Clinton have risen victorious although over half of their own parties view them as unfavorable. At no other time in history has any nominee for the office of President of the United States been disliked by most of their party. In the aggregate, the overwhelming majority of voters have expressed their disapproval of both candidates consistently for months in almost all polls. Yet the majority of voters are lining up behind them to ensure that one of them becomes president. This has to fit the definition of lunacy. Why is it happening?

Media pundits have made this voter masochism a national sport. Reasons they give for it include the disgust Republicans voters have for the do-little establishment and the Democratic voters’ appetite for the status quo. Republicans want radical change, and Democrats want to protect their liberal agenda that has mushroomed under Obama. These opposing rationales are supposedly leading both sides to accept candidates they don’t like, but who will do what they want done. This is a dangerous position to be taking. It is especially troubling, since the main thing the voters don’t like about either candidate is his or her proven lack of integrity and character. Why do the Trumpsters and Clintonians think the nominees will ever do what they say? Maybe there is a better explanation of this phenomenon.

I don’t believe any of the pundits have really hit on why the majority is electing a disliked, disrespected, president. Oh, I agree that Americans are mad and many are going radical to make their point. My dad used to call it cutting off your nose to spite your face. But until recently, Americans seemed to always vote for whom they at least thought would lead them with character and integrity. Our values and principles have ultimately won out even if we initially flirted with extremists like George Wallace, Ross Perot, and such. So, what has changed?

For the past half-century, our nation has been in an exponentially steepening and accelerating dive in standards of morality, character, civility, and consideration of others. This lowering of civic standards seems to be reaching critical mass of recent. One needs to look no further than our toleration of perverted sex, marriage, and gender, as well as acceptance of racism, hate speech, foul language, and lewd entertainment. We have become numb to disgusting behavior as one becomes numb to pain after a while.

In this presidential primary, many either hardly notice or don’t care about the lies, the spewing of hateful words, the cursing, the filthy accusations, the flaunted egotism, and even the probable unlawful activity of both candidates. Are we now so hardened to depravity that it is hardly a consideration in selecting the one who will lead our nation and the free world? Have we lost our moral center? Has our history of sacrifice for the greater good given way to accepting whatever will provide immediate personal gratification? Apparently, yes.

This summer, America will show the world what we have wrought as we experience the nastiest presidential campaign in our history between two candidates that most of our citizens voted for, yet find repulsive. One will move into 1600 Pennsylvania Avenue in eight months. And, accompanying him or her will be the character and integrity that he or she modeled throughout the campaign. Then, may everyone remember the good men and women–true and honorable patriot leaders–who were left wounded on the primary campaign battle ground. But, by gosh, we showed ’em.

 

 

Powered by WordPress.com.

Up ↑

%d bloggers like this: