The Stuff Theory

Great Debates
1

Economics seems confusing to most people.

To others it seems to make sense, but they’ve got it all wrong.

Forget all you know about inflation, unemployment, the Dow, the Fed, etc.

It’s all about STUFF.

The more stuff there is to go around, the better off we are. It’s that simple. When you hear about something, ask yourself will there be more stuff or less stuff if we do this.

Let’s try an example. How about corporate downsizing.

ABC Widgets Inc. has found a way to make the same number of widgets with 10 percent fewer workers. So, they dump 100 of their 1000 employees. These 100 workers enter the workforce, and make something else. The economy now has the widgets it had before, plus the other STUFF that the 100 laid off workers are making at their new jobs. Granted, it’s a bummer for the 100 laid off folks, but their misery will, for the most part, be temporary. The benefits to the rest of us from the added efficiency will last forever. Not to mention, when they get back on their feet, they will also benefit from the lower priced widgets.

We, the people, will be able to afford the new stuff for what we would have paid for just the widgets. Why? Because the price for all the new stuff in the world, has to equal the sum of everone’s paychecks. If the amount of all of the paychecks goes up faster than the amount of stuff, we have inflation. If productivity goes up, then we have things getting more affordable.

2

Let’s take on class warfare.

It’s not fair that Bill Gates has billions and billions while you take out a loan to go on vacation, is it?

The thing is, Bill isn’t really as rich as he seems.

Pretty rich, sure. But not as rich as you think he is.

To most of us, how much STUFF you have is directly related to how much money you have. In other words, your ability to consume is directly related to your ability to produce.

However, since Bill has a million times as much money as you, he could NEVER consume as much as he produces (our causes to be produced). Eventually, he has all of the STUFF he needs, and has to spend his money on something else. The only thing left is new businesses. In other words, he has to spend his money making new STUFF.

If we took away 95 percent of his fortune because we thought he had too much, he would still be able to consume as much as he does now. What we would be doing is restricting his ability to produce.

Liberals complain that under Reagan and Bush, the rich got richer. That’s true. But that’s not bad.

Presumably, these people got wealthy by putting money to work making the STUFF that we, the people, wanted. By allowing them to keep their wealth, we are allowing them to continue making more STUFF that we will want. If they continue to make good STUFF, they will continue getting wealthy. When they begin making STUFF we don’t want, our money will start to flow toward people who make the right STUFF.

Remember, taxing the hell out of them isn’t going to take away their diamonds, furs, and limousines. These people are spending only a small percentage of their income. Overtaxing them is merely going to restrict their ability to make the STUFF that we want.

3

Let’s just shoot them and take their wallets from their corpses.

4

I’ve generally noticed that when I get more stuff, it leads to having less money.

Anyways, do you have any sort of references from real economists that might support your theory? I’d like to understand what you’re saying, but I’m going to need something a bit better defined to go on.

5

STUFF is bad because it makes you work more:)

If we tax the rich more it doesent take away their stuff but it does give us the ability to spend more on our own stuff therefore giving us the perfect reason to tax them.

6

Didn’t George Carlin do this once?

7

What is “STUFF”, Kid? Lots of people get paid lots of money for doing things that produce no STUFF—i.e., material consumer goods of the sort you’re talking about—at all. How do these people fit into your marvelously simple economy?

8

I’m sure some of my religious friends would disagree with you. They insist less stuff is the answer, and living simpler lives.

Did you realize that Belgium has a greater GNP than all of sub-saharan Africa? But they squander it all on a few Belgians and want more. Wanting more is natural, but it’s not the only reason to do things. Especially to set economic policy for a nation.

9

Hmmm, well, let’s ignore the fact that you hve failed to provide any proof that more “stuff” in society as a whole benefits individuals. Your system seems to be watered-down Reagonomics, if that’s possible. :rolleyes: More production of stuff only benefits those who already have money and stuff. This does not translate to a healthy economy.

10

Asmodean said:

And if I take your money I’ll have the ability to spend more on mystuff, so you’ve just given me the the perfect reason to mug you.

11

hello!

there is way more to life than stuff. stuff is, in teh long run, unimportant. mere eye candy. something to waste your time on.

what is more important? fulfillment. love. friendship. experience. wisdom.

12

Yes, Dixie. I’ll remember that the next time you barge into my (hypothetical) place of business and demand that you have a right to be given STUFF, because you have quality X. I’ll just say, “There’s more to life than jobs and housing!”

13

i never said i was a stuff-virgin. i own some stuff. i enjoy owning some stuff. i plan to own more stuff. i will enjoy the ownership of that more stuff.

but stuff is not the most important. i would rather lose every bit i stuff i own, than lost my spouse. i would rather lose every bit of stuff i have ever owned than the memory of my experiences thus far. i would rather lsoe every bit of stuff i will ever own than my physical health.

ps, you won’t find me going in a place of business and demanding anything. but that’s me.

14

The problem being, so many times in our society 100 workers are not laid off to make 1000 more widgets, but instead to give the impression that ABCW is capable of producing 1000 base widgets more efficiently, thus boosting their “value” by +3/16 and giving more “stuff” to the people who already have “stuff”.

And the 100 workers, who have done nothing with their lives since college aside from make widgets are forced to wander from ABC Widgets to XYZ Widgets to PDQ Widgets asking for permission to make widgets for them. Now XYZ may have room to hire them, having just signed a big contract to produce new widgets for ASS Agri-biz, but since they are in a position of power, they hire them at a substantive (-10%) pay cut over what they made at ABCW.

Now figure that into the matrix, and there are not only fewer widgets actually being produced, there is fewer “stuff”. The workers who were laid off and rehired at a loss overbalance the scale, losing more net “stuff” than the company owners / shareholders gain from laying them off.

15

Kid_Gilligan does have a point, although it is overly simplified. If Company A produced 100,000 widgets with a labor force of 1000; they may soon loose market share to Company B producing the same number of widgets with the same number of employees. How? Company B is located in China and the labor cost is only a fraction of what Company A pays for its labor.
So what should company A do? A few scenarios:

  1. They could request help from their government. Let’s say the government agrees to Subsidize Company A. This will certainly make the workers happy as well as management as they will still be making the same revenue before Company B entered the market place. It may make some consumers happy as the price comes down on widgets. But it is a burden on the taxpayers. Why should the taxpayers support the workers of an industry, which can’t compete? It is welfare disguised.

  2. The company could drop prices in order to beat the competition. This would cut into their profits. If the profits are reduced, investors get upset and dump the stocks. Stock prices go down and the company becomes a target for take over. Company B takes the opportunity and buys Company A, closes the factory and lays off all the workers. Or, the company goes bankrupt and closes factory and lays off all the workers.

  3. Company A develops a more efficient way to produce widgets, lays off 500 workers, but remain competitive by producing the same number of widgets. 500 unhappy unemployed.

  4. Company A builds a factory in Mexico, hire Mexican workers at a fraction of the cost of American workers. The factory in the US is closed, but the company remains competitive.

  5. Company A develops a better widget. The quality allows them to maintain the higher price, but they will still loose some market share to price conscious consumers.

  6. Company A creates new markets for export. In order to maintain current production levels and employees. However, as each new market is opened, Company B follows in quick pursuit.
    There are countless other solutions, solutions that should be determined by the product in question. A combination of different solutions is the most effective. In the past, subsidies and trade quotas has usually been the answer, but that ultimately leads to stagnation. The companies that survive are the ones who develop efficiency and quality. This leads to better and cheaper stuff which makes consumers happy. Which in turn keeps the economy healthy. A healthy economy leads to a tighter labor market, which means the workers laid off to improve efficiency have more opportunity to find employment elsewhere. Etc, etc.

Although this is overly simplified, I think I have made my point.

16

In my experience, ABC will not lower widget prices. It will simply sell widgets at the same price, or raise prices, and pass the profits on to the shareholders.

17

what about the depreciation of stuff? doesn’t stuff wear out? is the stuff designed to wear out?

what about stuff that doesn’t wear out, like software? i can load the original DOOM on my computer and play it. who needs new games? oh i forgot, have to keep up with the joneses. the jonses can kiss my a$$, i’ll play doom.

are software makers deliberatly making useless variations in file formats? you can’t read the new word processing file format with your old word processor, so you have to upgrade to read files from your clients. the Y2K business was the result of companies using software 20 years old and more. why do we need to upgrade every 18 months now. Y3K is a long way off.

                                              Dal Timgar
18

Ask George Carlin about stuff because his theory is the best by far, you can see “stuff” on “The Facts - George’s Best Stuff”… available on video.

I like my own stuff although it is time to get a bigger home as I have too much stuff. Of course with a bigger house I can go out and get more stuff.

When it comes down to it, stuff isn’t really all that important. Maybe I should have a yard sale and clear some of it out…