Imagine you have a sandwich to spare. You could really use a drink though. There’s a hungry guy with a drink to spare, and he’d give it to you in exchange for the sandwich. That’s trading.
Now imagine you run a sandwich shop. You need things like bread and toppings. If you just give your sandwiches away with nothing in return, you’ll run out of ingredients. No more sandwiches :(
So you need someone to give you sandwich ingredients. They also don’t just want to give their things away, because they also need other things.
Not everyone who has bread or toppings to share needs a sandwich though. A baker, for example might need flour. The miller might need grain. The farmer however does need a sandwich.
So to get your bread, you’d trade your sandwich to the farmer for some grain, that grain to the miller for flour, the flower to the baker and finally get your bread.
That’s a bit tedious though, so instead you all agree on a token of some value representing the work you put in to make this. You give your sandwich to the farmer in exchange for such a token, then go to the baker and trade it for bread. The baker trades it for flour, the miller for grain. That token is money.
Now, how do you get that token? Someone needs to have it first, after all, and give it to the farmer so the farmer can buy a sandwich. They’ll want something in return too, eventually - maybe they don’t need anything right now, but they will somewhere down the line, and they need to have that token back for that. That’s a loan.
Now, the farmer gave the token back, but the lender gave them a larger set of tokens. They used it to buy a better plow that helped them cultivate a larger area, netting them more grain they can trade for tokens. After giving the loaned tokens back, he’ll still have some left over. That’s profit.
Now one farmer starts gathering more tokens, because he got particularly lucky, and offers some to other people in exchange for a share of their land. Those other people had a bad year and desperately need some food, which the tokens can buy. In the long run, trading away their land will leave them off worse, but the short term is more important. That’s exploiting the misery of others.
The lucky guy, on the other hand, can’t work all that land himself, so he offers to let the less lucky ones work on his land in exchange for a portion of the tokens their work brings in. Again, they need that money to compensate the fact they now have less land, so they agree. That’s labour.
Notice how the lucky guy gives them a portion of their labour’s worth? He keeps the rest, for the privilege of owning that land he bought from them in the first place. That’s landlording.
He uses some of his profit to pay others to enforce his claim to that land. He uses some to buy more land. He uses his control of the majority of grain supply to leverage the miller into selling his mill too (although a skilled miller is worth a lot, so the lucky guy keeps the poor miller on as a labourer too). That’s concentration of wealth.
Eventually, he can use all that surplus to buy draft animals and more plows to make the farming even more effective. Obviously, his own lands benefit first, then he lets the poorer farmers pay to use these as well. By controlling the means of production, he forces the labourers into dependency at unfavourable terms. That’s exploitation.
Now, all that extra money from surplus grain can fund more things that aren’t food production. That enables the development of specialists in other areas, and due to it being non-perishable, the money can also be allowed to trade things across greater distances, because merchants can now use it to buy food and other things along the way instead of having to trade locally. Technologies, tools, material and luxuries all reach a broader customer base. That’s an economy.
Of course, due to the majority of the money being controlled by a few lucky people, those people end up affording most of the luxuries while the rest has to work hard for a living. That’s oligarchy.
Eventually, the steam engine is invented and heralds an age of industry. However, setting up factories to effectively harness the productive capability of those machines requires a lot of up-front investment for the machines, space, infrastructure and administration required to operate it efficiently. There just so happens to be a group of people with the wealth to fund all these things, and just as they controlled the land, the grain supply, the mills and so on, they now control the means of production.
Now imagine if the poor farmers were bailed out by a communal fund instead - a form of social safety net to catch them that they all pay into in good years, knowing a bad year won’t ruin them. They could afford communal draft animals and plows, they could fund an administrative apparatus to enable all those advantages of a monetised society, a military to secure them against the jealousy of greedy neighbours, all without parasites growing fat off of their sweat. Pretty sure there’s a name for that too.
Imagine you have a sandwich to spare. You could really use a drink though. There’s a hungry guy with a drink to spare, and he’d give it to you in exchange for the sandwich. That’s trading.
Now imagine you run a sandwich shop. You need things like bread and toppings. If you just give your sandwiches away with nothing in return, you’ll run out of ingredients. No more sandwiches :(
So you need someone to give you sandwich ingredients. They also don’t just want to give their things away, because they also need other things.
Not everyone who has bread or toppings to share needs a sandwich though. A baker, for example might need flour. The miller might need grain. The farmer however does need a sandwich.
So to get your bread, you’d trade your sandwich to the farmer for some grain, that grain to the miller for flour, the flower to the baker and finally get your bread.
That’s a bit tedious though, so instead you all agree on a token of some value representing the work you put in to make this. You give your sandwich to the farmer in exchange for such a token, then go to the baker and trade it for bread. The baker trades it for flour, the miller for grain. That token is money.
Now, how do you get that token? Someone needs to have it first, after all, and give it to the farmer so the farmer can buy a sandwich. They’ll want something in return too, eventually - maybe they don’t need anything right now, but they will somewhere down the line, and they need to have that token back for that. That’s a loan.
Now, the farmer gave the token back, but the lender gave them a larger set of tokens. They used it to buy a better plow that helped them cultivate a larger area, netting them more grain they can trade for tokens. After giving the loaned tokens back, he’ll still have some left over. That’s profit.
Now one farmer starts gathering more tokens, because he got particularly lucky, and offers some to other people in exchange for a share of their land. Those other people had a bad year and desperately need some food, which the tokens can buy. In the long run, trading away their land will leave them off worse, but the short term is more important. That’s exploiting the misery of others.
The lucky guy, on the other hand, can’t work all that land himself, so he offers to let the less lucky ones work on his land in exchange for a portion of the tokens their work brings in. Again, they need that money to compensate the fact they now have less land, so they agree. That’s labour.
Notice how the lucky guy gives them a portion of their labour’s worth? He keeps the rest, for the privilege of owning that land he bought from them in the first place. That’s landlording.
He uses some of his profit to pay others to enforce his claim to that land. He uses some to buy more land. He uses his control of the majority of grain supply to leverage the miller into selling his mill too (although a skilled miller is worth a lot, so the lucky guy keeps the poor miller on as a labourer too). That’s concentration of wealth.
Eventually, he can use all that surplus to buy draft animals and more plows to make the farming even more effective. Obviously, his own lands benefit first, then he lets the poorer farmers pay to use these as well. By controlling the means of production, he forces the labourers into dependency at unfavourable terms. That’s exploitation.
Now, all that extra money from surplus grain can fund more things that aren’t food production. That enables the development of specialists in other areas, and due to it being non-perishable, the money can also be allowed to trade things across greater distances, because merchants can now use it to buy food and other things along the way instead of having to trade locally. Technologies, tools, material and luxuries all reach a broader customer base. That’s an economy.
Of course, due to the majority of the money being controlled by a few lucky people, those people end up affording most of the luxuries while the rest has to work hard for a living. That’s oligarchy.
Eventually, the steam engine is invented and heralds an age of industry. However, setting up factories to effectively harness the productive capability of those machines requires a lot of up-front investment for the machines, space, infrastructure and administration required to operate it efficiently. There just so happens to be a group of people with the wealth to fund all these things, and just as they controlled the land, the grain supply, the mills and so on, they now control the means of production.
Now imagine if the poor farmers were bailed out by a communal fund instead - a form of social safety net to catch them that they all pay into in good years, knowing a bad year won’t ruin them. They could afford communal draft animals and plows, they could fund an administrative apparatus to enable all those advantages of a monetised society, a military to secure them against the jealousy of greedy neighbours, all without parasites growing fat off of their sweat. Pretty sure there’s a name for that too.