Everything in life has its price and anyone who’s taken a course in asset valuation can quickly measure any asset. Like with any knowledge, it’s always interesting to cross over into areas where it isn’t normally applied. As a property complex, every person has an aggregate asset value.
As a source of profit, every person generates an endless amount of discounted cash flow. Nobody plans to die, so we assume we’ll live long enough to take advantage of the discount rate formula for perpetual annuities. Intangible assets are factored into an individual’s future income – the more experienced, intelligent and educated make more money. That’s why they need not be taken into account. A person’s net worth can grow accordingly as he receives more education and subsequent salary increases.
Personal net worth is calculated using the following formula:
Individual = (annual income/CPI (or inflation)) + sum( assets )
Yes, it turns out that any individual can be bought, his possessions acquired and his future profits appropriated, as long as his living expenses are taken care of. Banks are smarter. They secure the individual’s entire future income for themselves, minus the funds he needs to cover his current expenses. Using the same formula with disposable income (less current expenses) instead of annual income, and the bank’s interest rate instead of CPI, we get the size of the loan the individual can expect to receive if he decides to take out a mortgage. By selling out to the bank, people solve one of the largest lingering problems for the majority of the population – the housing problem. History goes in circles, and capitalism has brought us back full circle to a slave society. Then again, we may not have ever left it, and only the names have changed, as people have begun to suspect that the quality of life is deteriorating. Strange as it may seem, slaves had more confidence in their future than we do. So if history moves in spirals, which is fine, then the next stop is the enslavement of the working class, and that’s already happening in some places. The way it works is production facilities are built next to housing complexes and leased out to the factory workers. For as long as the workers are employed, the lease payments are taken out of their pay, and after 15-20 years the leaseholder becomes the rightful owner of the property. Termination of the employment contract does not leave the employee with any rights to that property.
There are several advantages for the employer:
- Lower staff turnover
- Enhanced employee loyalty
- Optimized training costs
- Reduced payroll expenses
- Investment project created with guaranteed cash flow
There are disadvantages as well:
- One-time capital expenditure required
- Possible long term decrease in consumer demand
I wouldn’t go so far as to say that such lease agreements will become commonplace in the future. There would have to be a lot of preconditions to that. Even today, there are corporate towns whose entire populations work at a single enterprise. These people have nowhere to go. They’ve been ‘enslaved’. You would think the government would find some use for them, but they haven’t the slightest idea what to do with them in most cases. Interestingly, measuring individual worth assumes that the individual either owns something, or generates some profit. It turns out that not only do dependents (those that generate negative cash flow) not bring in profit, but letting them go takes a bite out of your budget as well.