Wednesday, April 06, 2011

Allowing Investments Of Short Duration

Let's suppose, without any external investment, we are earning some amount every month. If we get some extra investment, then our income increases. One external organization is ready to invest for certain unspecified duration. As long as they keep the investment with us, we get extra income. Once, they withdraw the investment, we will fall back to the original income that we were receiving.

In this case, should we allow the external organization to invest in our organization or not?

Ask any communist, they would reject this idea without any second thought, and clearly says, no external organization should invest in our organization. For that, they show the proofs.

The graph would be something like below.

Any disturbances in the external organization would lead to the drops like B to C. There are many incidents like this. We don't want to suffer because of their disturbances.

But, if we step back, and look at the complete graph, it would look like something below.

F is the point where, the external organization invested money. Because of their investment only, we started getting more money. Once they withdraw the money, then our position will not fall back to the previous place, but, it would be little better than our previous position because of the extra income that we received during their period they invested. But, the typical communists do not see the whole picture, but, just sees the period where it is fallen, and criticize capitalists in all possible ways.

You’ll never meet a rich person who has never lost money. If you never want lose money, then you will never become rich.

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