According to one popular analysis, our economic turmoil today is a consequence of a small wealthy elite hoarding resources and depriving the masses of necessities. This growing wealth gap is a direct consequence of capitalist exploitation, and proves that markets and property serve to divide the working class from the bourgeois who produce nothing. Anyone who is rich is hoarding money which rightfully belongs to others.
This fixed-pie zero-sum dog-eat-dog model is fundamental to Marxist, socialist, and populist demands for taxes, redistribution, and political intervention. It is also fundamentally flawed. I agree the typical mega-corporation executives cited as crooks by these people are often criminal, but I disagree with how they are criminal and how this should be remedied.
Good analysis requires acknowledging some fundamental principles and sound analysis, but social media is filled with empty memes like the one above designed to generate outrage and hate instead of serious contemplation.
Sustainable economic progress is impossible without saving and investment. A successful business owner plans to fund equipment or inventory replacement, long-term upgrades, and experiments to see what new changes may serve the market better. Long- and short-term investments have different probabilities of beneficial outcomes, and may be high- or low-risk with commensurate high and low reward potential. Hyper-fixation on the financial profits of one side in an exchange ignores the non-monetary benefits gained by the other party. Value is always subjective, even when applied to intrinsic properties of goods and services.
Voluntary exchange is mutually beneficial, or it would not occur at all. Coerced exchange is never mutually beneficial, and coercion is proof in and of itself. Counter-offers and refusal to exchange are not inherently coercive, although it is often presented as such.
My dispute with the ultra-wealthy is not that they have wealth, but how it was gained. There is nothing inherently corrupt in finding a new way to satisfy the wants of others at a price they are willing to pay, and being financially rewarded for it. This is a win-win situation, and not inherently exploitative for anyone. Only when coercion enters the equation do I see a problem. If the entrepreneur is wise, he will probably continue to invest in improving his business, building more wealth and funding the careers of myriad employees while improving the lives of his customers.
If, however, this entrepreneur seeks government coercion to prevent competition, or compel people to buy his product, we have left the sphere of economic analysis and entered the realm of politics. Bailouts, subsidies, and government contracts are not the result of market action, but rather racketeering with extra steps and a veneer of legality. People who gain wealth through political entrepreneurship are indeed guilty of plunder, but not in the way these left-leaning analysts want to suggest, because recognition of political abuse undermines their fundamental belief in politics as a means of collective action for the working class or general populace.
"Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
—Frédéric Bastiat, Government (1848)
If you look at the economy as a fixed pie, and demand violent redistribution to enforce your concept of Social Justice, you will get a centrally-planned economy with a political zero-sum game enforced by a police state. Saying you care about equality and justice does not change the fact that inequality and injustice of the most violent kind is the necessary outcome of such a scheme. Politics is a zero-sum game at best because it is rooted in coercion rather than consent, no matter how much we are told about democracy and having a voice.
The system in which we live is a consequence of central planning, political intervention, and massive wealth redistribution through credit expansion and money supply inflation. The Cantillon effect explains a lot of the growing wealth gap far better than nebulous appeals to "greed" as if that vice ebbs and flows with the economic cycle. Speaking of that cycle, the booms and busts are blamed on "unfettered free-market capitalism run amok" by people who do not understand what any of those words mean, much less how they might explain the cycle. For over a century, we have lived in the world of planned economies and the encroachment of fiat money allowing for completely arbitrary debt and interest rates. These artificial signals distort the long-term planning of market entrepreneurs because there is no real saved wealth to support the investments and long-term plans they initiated based on those signals. When the house of cards inevitably collapses, the businesses who lost get the blame while the bureaucrats responsible get showered with accolades.
Today, we are told inflation is under control and our benevolent overlords have masterfully brought our economy into a soft landing despite the COVID disruptions, war, debt, and inflation. Those greedy capitalists will be brought to heel and we can return to normalcy. There is nothing to see here. Move along, citizen. But 2023/2024 is feeling too much like an echo of 2006/2007 for comfort. I'm not saying a collapse is coming, but I am saying none of the fundamental problems we saw even before COVID disruptions have been fixed. Technocrats who tell us everything is fine and we're all just too stupid to see how good we have it are so obviously disconnected from reality in their ivory towers that now even mainstream folks are taking notice. But once reality is unavoidable, will they address the root problems with liberty or authoritarianism? If the technocrats and the gullible masses get their way, the cure is always just more of the disease.
Sorry about the disjointedness of this stream-of-consciousness rant inspired by what I have seen and heard recently. If it's unclear, incomplete, or you disagree, please comment. Money is a tool, so use it to build something better. We have better tools than government fiat or corporate banks in both crypto and precious metals. We can have a parachute instead of just allowing ourselves to be carried along into the next inevitable crash sooner or later. My advice: hoard some real wealth for yourself, invest in your future, and do what you can to divorce yourself from the fickle political system. My suggested remedy is as unconventional as my analysis.
“Resolve to serve no more, and you are at once freed. I do not ask that you place hands upon the tyrant to topple him over, but simply that you support him no longer; then you will behold him, like a great Colossus whose pedestal has been pulled away, fall of his own weight and break in pieces.”
― Étienne de La Boétie, Discourse on Voluntary Servitude (1548)
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