One day, I was giving a colleague some financial advice and, when I mentioned the concept of the Rat Race, my colleague said it was similar to the concept of Surplus Value. In this text I will demystify and prove that the two have nothing to do with each other. Here are the definitions.
Surplus Value
This is a concept created by the German Karl Marx in the industrial era that criticizes capitalism. From Marx’s perspective, there were those who owned productive capital, with which they expropriated surplus value, thus constituting the exploiting class (the bourgeoisie); on the other side were wage earners who did not own property (the proletariat). In current terms, there is the employer and the employee. The companies and the employees. The entrepreneur and the collaborators.
This concept was refuted by the Austrian economist Eugen von Böhm-Bawerk at the end of the nineteenth century. I do not want to go deeper into the core of the concept—you can research the original sources by Marx and Eugen—but, in popular terms, its consequence is to turn a lemon into a weapon. It transforms a contractual relationship into a war between employer and employee.
Today we are in a different reality: a global society, the information age. Personally, I do not like the man-hour formula, because it robotizes human beings, focuses on a person’s time in an environment, and not on what they actually produced. I prefer goals to be met by date x. This is the format adopted by modern companies such as Google and Microsoft. But even in the case of the man-hour, no one is forced to remain at the institution; there is no exploitation because people are not forced to remain in that environment. Anyone can work harder and pursue an enterprise in their spare time or study for a civil-service examination that pays more. In the information age, profit is a fair price that the entrepreneur receives for dealing with the risks and fluctuations of the market. The employee does not have to deal with that risk. Protection mechanisms exist, which is why the employee receives a salary: they help the company’s goal without taking the risks the entrepreneur takes. Of course, this example is based on the reality of Brazil, which is a presidential constitutional federal republic with a capitalist economy.
Rat Race
This is a concept created by the American Robert Kiyosaki. It is a vicious cycle caused by a lack of knowledge about how markets work and a lack of financial education, intensified by cultural self-saboteurs and distorted concepts that leave you trapped in endless debt and, consequently, unable to carry out meaningful projects or turn dreams into reality.
The rat race has absolutely no connection with the concept of surplus value. The project of leaving the rat race involves becoming aware of your potential and your expenses and balancing them by building a financial reserve so that you can have more freedom to devote yourself to personal projects that are more meaningful to your life.
In the rat race, a citizen may be working under a man-hour contract, but they are never forced to remain under that contract. It is each individual’s responsibility to know the rules of society and seek to reinvent themselves and stand out while respecting those rules.
The project of leaving the rat race consists of turning a lemon into lemonade—in other words, planning and reinventing yourself so that, at the right moment, you can change jobs, create an additional income, or start your own company. It is important to understand that not everyone has the profile to be an entrepreneur, and that is absolutely normal. In that case, the goal may be to get a job with a shorter workload that pays the equivalent, or to earn additional income without leaving a stable job, always with the intention of having more freedom and a more balanced life.
Some successful entrepreneurs go through several companies to learn. In the healthy process of generating wealth for their employer and society in exchange for a salary, they develop the ability to reduce the risks later when starting their own business. The petty-minded thought of complaining about life and blaming society and the employer is nothing more than a feeling of self-sabotage. The person loses opportunities and ends up creating their own island of misery and suffering.