THE
NATURE
OF
WEALTH
Narrative by Fred Lundgren
Charts & graphs by Jerome Friemel
Chapter Three
The Rules for Unlimited Prosperity
We (the capitalists) can have any degree of prosperity we desire while leaving as many people in poverty as we choose. However, to be inclusive, a capitalist economy must pays itself fairly and adequately at every stage of production, sufficient to insure internal balance. This "balance" is a prerequisite to consistent full employment and optimal production. The Nature Of Wealth argues for rules that foster such economic "balance". It proves the necessity for a fair and balanced economy. It explains that every American must be properly paid for their product or service in order to grow the American capitalist system in a manner that affords prosperity for all, as opposed to our current system which perpetuates poverty in the midst of plenty. For decades, the most powerful people in our society have cloaked this truth in the mysticism of a so-called "free market", and by doing so, have committed crimes resembling treason. Here is
Rule One
The national minimum wage for an hour of labor must be set by law at a level equal to the parity price for a bushel of wheat. Rule Two
These two prices must be updated yearly and extended from, (or indexed to) the only balanced base period in modern history, {1946 through 1952} = 100.
NOTE! Balance is impossible if these two prices are artificially set to conform with imbalanced base periods. Today, the only correct answer is $12.50.
Rule Three
The number of persons employed in raw materials production, (Agriculture, Forestry, Fishery, Mining, and Recycling) as a ratio to the total national work force must remain consistent with the state of the arts. This ratio is currently 1 to 7.5 and it increases very slowly as technology increases the efficiency of production. This ratio was 1 to 2 in 1900. Technology expanded it to a ratio of 1 to 5 1950. By the mid 1990s, this ratio had expanded to approximately 1 to 7.5. We refer to this ratio as the Parity Labor Ratio Adherence to this ratio is a prerequisite to achieving a fully and gainfully employed workforce. Rule Four
The ratio of total annual raw materials income (paid by the first buyers at the first points of sale) to total National Income must be the same as the labor ratio. This is the Parity Ratio of Raw Materials Income to National Income. Rule Five
The Government separates National Income into the five segments. The two "cost segments" include wages, salaries, supplements to wages and net interest The three "income segments" which combine as the total profits of private enterprise include Farm and Non-Farm Proprietors Income, Corporate Profits, and Rental Income. Annual National Income must be created in a fixed ratio of one part "cost" to two parts "income". Stated another way, 66 2/3% of all National Income must be earned by the "cost segments" of wages, salaries, supplements to wages and net interest and 33 1/3% of all National Income must be earned by the "income segments" of Farm and Non-Farm Proprietors Income, Corporate Profits, and rental income. Rule Six
Adherence to rules 1 through 5 yield a "Multiplier" effect consistent with rule four whereby one dollar of raw materials income creates $7.50 of "Earned" National Income. This multiplier will increase as technology expands the ratios. Rule Seven
Adhearance to rules 1 through 5 produce an annual level of national "Gross Savings" equal to all raw materials income earned annually at the first point of sale. (Gross savings is defined by the Federal Government's Bureau Of Economic Analysis as a nation's gross annual private savings or, the sum of personal savings and gross business savings, after adding or subtracting government surpluses or deficits. Rule Eight
Adhearance to rules 1 through 5 yeild a "capital pool" sufficient to fund the next annual cycle of investment. The capital pool is defined as the annual sums of corporate profits, net interest income and rental income. The pool is filled to levels which approimate gross savings or parity raw materials income. The ratio of the money in the capital pool to annual National Income must remain consistent with technology and expand with the other ratios.Rule Nine
A nation's total annual return on investment can be accurately calculated (regardless to adherence to the aforementioned rules) by subtracting total annual public and private debt expansion from the capital pool and expressing the net sum as a percentage of Domestic Wealth. Rule Ten
Gross annual raw materials income flows through a nation's economy in its several forms to become the natural floor under the profits of private enterprise. Rule Eleven
Total public and prive debt is nothing more than the accumulated loss of National Income over time. These losses originate when raw materials are underpriced (below parity) at the first point of sale. Rule Twelve
The "Profits of Private Enterprise" earned during any calander year will always approximate all parity raw materials income, (paid at the first point of sale) during the previous year. Rule Thirteen
Total checkable deposits, (as calculated by the Federal Reserve) will always approximate raw materials income at parity.Achieving economic "balance" is impossible without these rules. Rules pertaining to ratios are essential to the creation of economic lodestars (stars that leads or guides with certainty, such as the North Star), in the expanding universe of economics. Dire consequences always accrue to millions if the economy is altered in opposition to these natural ratios, because the gradual movement of these ratios is controlled by the expenditure of, and payment for, human and mechanical energy. They should only change in response to improvements to technology and refinements in the "State of the Art". Moreover, a close examination of these natural ratios prove why debt cannot be repaid with more public or private debt expansion and why the so-called profits earned from capital debt expansion must eventually become more debt. Failure to obey to these rules has yeilded a system so out of balance that Bill Gates has more net worth than the poorest 100 million Americans. .
"For the study of political economy, you need no special knowledge, no extensive library, no costly laboratory. You do not need textbooks or teachers, if you will but think for yourselves!" Henry George, Economist, speaking at the University of California. 
