ECON103: Value of labor essay

People above average (way less than half of the population) are working less for more reward. How? They are investing time for their better future either with more work or with learning. The positive effect is that the above average worker will find a higher paying job (in real inflation corrected terms) than the average ones because he or she has a higher economic value. They will significantly raise the non-weighted statistics for average income. The negative effect is the widening income scissors between these two groups, which as we already learned from history can lead to falling civilizations.
The average worker will work the same amount or less for the same or less (in real buying power) money. To prove this statement, here is an example:
Let’s imagine that a typical worker wants to buy the latest (in forreign currency ever more expensive) Iphone. Most of them can’t afford to pay one from their monthly salary, so they need to decide. Either work harder/more or to get a loan. An average worker doesn’t want to work more. Why? Because they don’t feel the importance. They see for generations that the price tags rise faster than their income even if they work harder, so they accept it “as it is” and they choose the easier way.
For decades now (in western countries) most choose to get a loan for even small things, like for an Iphone. But with buying expensive things and with it deepening into ever more loans they are getting more and more dependent on their current job. Soon they will be afraid to ask for more money (above CPI correction) because they might lose their job and in that case they could not pay their bills. With real inflation (not CPI) their salary real worth is getting slowly but surely wiped out and they can barely pay their loans, not to mention the increasing house, food, transport and leisure prices.
People living in the bottom of the Maslow pyramid can be controllable. Stuck in this situation they are not educating themselves, they hope for real help from their elected politicians (which never comes). The nowadays easy reachable cheap loans are just speeding these processes up.
With these terms and with a high time-preference thinking it will urge them to find easy ways for getting instant happiness (endorfin) in a wide range from Netflix to Sugary foods, pushing them further and further away from investing and not wasting time. It’s a lifetime trap which is embedded in the FIAT system.
The positive effect that these cheap loans will boost sales and shows (falsely) the economy is growing. The negative effect is that these debts will never be paid back and this thinking will likely never change in this group, so we are making future generations more and more in debt.


In a sound-money environment the above average worker will make even more income (at least at the beginning of the tranzition). The average worker will not get cheap loans and they learn to work hard for important things in their life. In the meantime they experience the most important thing. The ever increasing worth of their salary. With this experience they will change their time-preference for a lower one because they will choose wisely which things they really need to buy, knowing “tomorrow” their money will be worth more. Raising children in a low time-preference environment will wipe the earlier “average ones” thinking and will speed things up towards conversion of the population to a flourishing civilization.

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Labor. I can feel the weight by just hearing or reading the word. Do you get the same feeling? Such association to the word represents the heaviness it implies.

Labor may be the most obvious form of work. Work is synonymous to it in layman’s term. But thermodynamically, work comes in different forms, mostly associated with effecting a macroscopic change to the environment. Carrying weight is just an example we can directly translate between thermodynamic work and human labor. But there’s also non-mechanical work, i.e. magnetic, that can’t be expressed in purely human labor.

Why did I mention work in Thermodynamics? Because as humanity makes progress, we get to apply different types of thermodynamic work to ease our labor. Even if it doesn’t translate to work we can do physically, our expanded knowledge allowed us to solve problems we didn’t even know we had. We were able to develop machines that are stronger and faster than we are for specific jobs.

Alongside development of tools and machines is learning to cooperate in larger numbers. We built places of congregation. It started with places for worship, then places for settlement, and then developed places of labor. Later on, we developed communication channels that over time made borders and distances less and less relevant.

We’ve come very far in increasing our productivity as a collective.

A lot of labor now involves commanding the machines that were developed, or contributing to an organization’s common goal - one that is bigger than the sum of the individual contributions. A lot of labor is leveraged, whether we realize it or not. One person’s labor is now equivalent to a multitude of benefits. There may also be a rise in bullshit jobs, but that’s a different topic.

We go back to Thermodynamics. The energy required to be productive, though not obvious to a human, is higher. That’s because our sources of leverage require energy to maintain. We can do more in a given time period, because we also consume more power (energy/time). In this light, the value of labor increased over time.

Let’s talk a little bit about leisure and the tradeoff with labor. If we have increased productivity, a higher value for labor, then why don’t we have more time for leisure? Hedonic adaptation could be an explanation for this. We have increased our definition of survival, taking for granted, or perhaps not settling for the conveniences we already have. Because of the advanced technologies, basic survival knowledge is not enough. We need higher education. While this is not true in all fields, it certainly is for people who want to be involved in building something. There’s a need for them to understand more complicated concepts to keep up with the machines and facilities that are already here.

Circling back: our sacrifice of leisure in spite of the supposed convenience brought by advanced technology means that the value of labor has indeed increased over time.

I like how you married physics into the conversation of labor. It gives a different perspective to the subject as a whole. It makes you appreciate the positive side of humans and what we are capable of. It was a great read thanks!

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I am enjoying the different perspectives and insights people have been taking to this question.

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