Friday, January 09, 2009

New Year, New Title

Around New Years I was thinking of what overly simple, cliche motto I could use to make my mission statement for 2009 or at least rename my blog. I loved that my blog was called What Do the Data Say, but it hasn't lived up to that name. It'd be nice to have a blog that just looks at the data or refutes commonly held misconceptions by use of unadulterated numbers, but that takes more time and discipline than I have.

So, I'm going with: Value Added. In introductory economics we describe profitable entrepreneurship as the process where one person takes some resource and makes it worth more--ie: adds value to it. This would be Apple taking a trifling amount of plastic and silicon and selling it for $299 as a video Ipod (source). Read the article, at each stop on the supply chain to make the Ipod, someone in some country adds value to the input he bought from someone else who previously added value to it. The sand becomes silicon which becomes a microchip which becomes...

Many countries have a Value Added Tax (VAT) where the value added is taxed at each stage of production (rather than a sales tax on the end product). The U.S. will likely end up with a VAT one day instead of sales taxes.

Every task I engage in, I ask myself-- am I adding value? Will this activity add value to my life? Am I taking this 5 minutes and turning into something that's valuable, or am I wasting it? Am I using the gifts God has given me and adding value to them in a final activity, or am I squandering them (Matthew 25:14-30)? Is the marginal activity the going to maximize the value added or is there some better use of my time/energy/money?

If Apple had taken that same amount of plastic and silicon to make a coaster for your drink, it probably wouldn't be worth $299 to you. If people value the final product less than the input, then the market punishes the entrepreneur who goes out of business. The enterpreneur subtracted value from that resource. In the process of creative destruction the resources will then go to someone who will find a way to add value to them. "For everyone who has will be given more, and he will have an abundance. Whoever does not have, even what he has will be taken from him" (v. 29).

So, if you're consuming (reading) this blog I hope that I add value to your knowledge, understanding, or overall well-being and that your time isn't wasted. If I don't, then don't consume the blog any longer.

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