better world · Real Life Economy

The vicious cycle of our new economy – Part 3. Single Income model

The economic structure ruling the western world have a very simple set of principles. Promising the survival of the system and its rulers. In many ways, the only way the elite could promise the continuation of such an unequal mechanism, is to maintain a certain level of ignorance in the masses. For the sake of truly understand why the rich get richer while the rest stay poor, I believe it is time to open our eyes to some simple and logical principals. As I’m limiting myself in the length and complexity of each posts, the subject will spread on a few posts

The foundations of our current economic system require the existence of 3 different models, functioning simultaneity and supporting each other. “The Single income model”, “The multiple income model” and “The socio-economic separative model”. At this post we will concentrate in the first one.

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The Single income model can be defined in the following manner – A model in which an individual is supporting his existence by the creation of only 1 source of income while be committed to a multiple channel of spending. As you could figure out yourself, the majority of the population is surviving based on this model.

This kind of living is unstable and fragile. To start with, the income of the individual is the only mean of survival. While a massive imbalance exists between the channels of income/expenses. In many cases, the commitment of an individual (by contracts) to rents, bills and services put a high minimal price tag on the monthly required income of the person in questions.  In case a mathematical equilibrium exist between the income to expenses (Income= expenses). The need to maintain a specific job, will be required for the sake of not defaulting the obligations. In such a model, the worker become oblige to continue his employment regardless of the terms he will get.

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As you can see, I did not add many trivial costs. As free time hobbies, alcohol, cigarette, kids, vacations unexpected expenses and so on. The fragility and inflexibility of this model is clear. Logically, to maintain such a system for a long period in a safe manner will require the income to constantly be higher than the total expenses. Moreover, it is crucial that the employment itself will be secure, for all the period of the individual life. A reality of employment that do not exists in our generation.

Looking on the market of our days, the capacity of an individual to keep his job for a long period is limited. The general expenses are constantly rising due to inflation and our growing need for consumerism. In the reality, in such a model the capacity to save money is very smallIn many cases, a person will require a life time to save enough money for being considered rich. The idea of taking a loan is not a solution. The only thing that it does, is adding a momentary income for the sake of paying it back with interest. Which is another expenses in the balance.

This model promise survival, as one will manage to live in many cases comfortably as long as he cooperates with the system. From the other side, it is exactly this long-term cooperation that is needed for the sake of promising the survival of the elite and maintaining their enrichment.

Does it make sense to you? Can you identify your self-working based on this model?

This post is part of series, describing in simple world the economy of our days.

Share with me your thoughts. Awareness and open conversation are the keys for the creation of a better future.

Real Life Economy

The vicious cycle of our new economy – Part 2. Why the rich get richer

In my previous post we established some important principals, helping us understanding better why the rich get richer and the poor stay poor.  We establish a clear definition of who is considered rich and and who is not. This  important step was necessary, for the sake of developing a serious conversation. which will help us achieve a better understanding regarding the system we are living in and its cause. lets move forward.

There is one major point that we need to keep in mind during all this conversation, which we all know but like to ignore. Like any other minorities that are maintained by the rest of the population. The rich require the cooperation of the others to maintain their riches and create more money. It never worked oppositely. The feeling hold by some employees, dictating that it is the poor and middle class that requires the rich cooperation. Is just an unrealistic illusion created by the elite, for the sake of keeping its power. Without any doubt, the capacity of maintaining such a philosophy of doing, requires a misconception of the masses regarding the basic function of the system itself. Let’s understand why. precious 

The rich are normally occupying a high management position. They manager a group of people, that in their turn are managing a bigger group of people that are managing actual workers. The length and size of the chain vary between organisations and industries. In the reality, management is and always will be a secondary occupation of any system. To make it simple, lets take an example from a different spectrum of life. For any watch mechanism a time keeper is required to make sure the watch is accurate and show the actual hour.

Why the rich get richer and the poor stay that way

The job of the time keeper is to occasionally look at the hour and make sure it is accurate. In case it is, the time keeper will be re insured that the mechanism itself is working well (in the case of a factory, sales agency etc – the employees), and will go back to his occupation until the next check. In case the watch does no show the right hour, he will at first make a few moves that will make the mechanism go back the right hour and go back to his other occupations. If the mis-synchronization will repeat itself, he will open the watch check which one of the part of the mechanism is not functioning well, replace it and go back to his occupation. In the case of a factory, as you could easily understand the mechanism is the employees, which will be replaced.

The conclusion that should be taken from this example is not in any case, that a time keeper is not needed. His existence is important for the sake of keeping accuracy and order. The point is that without a watch to start with, the time keeper will not have a practical job to do.

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For the sake of developing the topic, understanding the current economy and understanding its vicious cycle, I will say that for the moment the following questions should be asked. If the rich requires the actual worker for the sake of maintaining themselves from the first place, how come their income in un-proportionally higher than the actual employee and more appreciated?

This question is important for the sake of developing a primary awareness to the reality we are living in. For the sake of it, organisation as banks, financial companies, investment companies and any full scale bureaucratic organisation can be considered as a management company. As you can figure out, those organisations are taking extremely high revenue and distribute high salaries. While the actual workers maintaining the system, are not evaluated as a necessity and not paid enough to finish the month. In this structure, an employee is incapable to buy a house and maintain decently a happy family. A very twisted reality, compared to the importance of the people in the system.

What is your opinion in the subject? Awareness and open conversation are the key for the creation of a better future.

Related Articles:

The vicious cycle of our new economy – why the poor stay poor and the rich get richer – Part 1