Let's Not Work - Let's Create Value
by Dr. Doug Cardell
One of the biggest economic misunderstandings is about work. Work doesn't necessarily get you anything. You can spend all day digging holes and filling them up again and you will have done a great deal of work but accomplished nothing. Why not? Because you created no value. We say we work for a living but that's wrong. We create value for a living. As I write this I don't think of myself as working, I think of myself as creating value. If you've read this far, you believe what I've written has the potential to be of value to you, maybe valuable enough to spend more time reading it. This change in viewpoint will change your life, dramatically.
Creating value instead of working has several important effects. You will almost certainly be more successful in your job or career. You are being paid to create value for someone else. If you stop working and start creating value you will certainly create value more effectively. Greater value creation leads to pay raises, promotions, and appreciation. If you can't see your job as value creation, CHANGE JOBS! Find a job where you can see value creation. However, if you look you can find value creation in every job. If you are flipping burgers at a fast food place, where is the value? Someone who just pulled up to the drive through doesn't have time to cook dinner for the family today, so they are paying you to do it for them. As you flip those burgers, think of them: think of how they are going to get home and enjoy the value you create for them. It will make your day a lot better.
What if your employer isn't paying you enough? Here comes the economics lesson. Most employers do not set value. Most employers are middlemen. The job of a middleman is to bring consumers and producers together. In our fast food example, you are the producer and the hungry customer is the consumer, the fast food joint is the middleman. They built the building where the exchange takes place, they bought the equipment, they paid for employee training and they pay for the raw materials, the burgers and buns. For spending that money to arrange the exchange between producer and consumer, they take part of the profits. Without this middleman there would be no exchange and you'd be out of a job and your customer would stay hungry.
So who decides the value of what you create? The consumer, or more correctly, the collection of all possible consumers. They decide what is worth to them to not have to cook today. If the price goes above the value they have set, they won't buy the burger you cooked; they'll go home and cook their own. If many consumers decide that way, your employer will have to start laying off producers because if he has more producers than consumers the business of bringing producer and consumers together fails. Part of the middleman's job is to monitor prices and set the prices at the point where the most producers and consumers are brought together. He makes more profit this way, but more producers and consumers benefit as well. Everyone wins!
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