Silly, Sillier, Socialism!

The new star of the (increasingly radical) Democratic Party, Alexandria Ocasio-Cortez (left) attends a symposium on 21 January where she is asked if it is moral to have “a world that allows for billionaires.” She replies it is not, adding that “a system that allows billionaires to exist when there are parts of Alabama where people are still getting ringworm because they don’t have access to public health is wrong.” By the way, before I look at the morality of having billionaires, ringworm is a common fungal infection that can strike anyone and is easily treated with antifungal creams obtainable inexpensively from any local pharmacy. The clunky machinery of public health is not required.

In the blink of an eye Ms Ocasio-Cortez has become sufficiently celebrated to be referred to as “AOC”; like, say, FDR, LBJ or JFK. Fortunately for America she is only twenty-nine years old and therefore can’t run for the presidency. A recent poll found that 74% of Democrats would consider voting for her were she to run. The rational mind boggles.

The lady is on the extreme end of the callow scale. This is an excuse of sorts for her saying that the world will end in twelve years unless something is done about climate change and for espousing naive socialist nostrums through her Green New Deal, GND to those in the know. But what about the supposed adults who support her?

Surely there is now no doubt. There has been a secular decline in the intelligence and common sense of those who identify as progressives; and, to boot, in their common decency. Witness the Kavanaugh ordeal and the despicable attack on the Covington kids, as just two examples of many. But I digress. Back to billionaires.

According to Forbes, there were 2208 US dollar billionaires in the world in 2018. About 540 reside in the United States and 30 or so in Australia. Hold onto your hats, along with AOC, I think that is too many. I think that because it seems to me from common observation that many fortunes have been built on special favours extracted from government and on the anticompetitive effect of masses upon masses of regulations.

We would be better off if government had a more even and lighter hand. Perforce, this would likely result in fewer billionaires. At the same time, in this more competitive world, more people would have the opportunity to jockey for spots among the top point-one percenters, albeit falling shy of billionaire status. But fear not, honestly earned great riches bring great benefits to us all.

It goes without saying that AOC would not agree that government should have a lighter hand, but at least I have found some common ground with her, albeit of postage-stamp size. Like all leftists, AOC has no understanding of economics. Though to be fair not many of those who claim to be “economists” have much understanding of economics.

I happened to hear one among many who somehow believe that if the wealth were spread the resulting spending on “baubles” would engender economic activity and growth. This belief is symptomatic of the Keynesian disease that has robbed would-be economists of their senses. Spending on baubles does not create wealth. It uses up wealth.

You can’t eat the coconut until you have picked it. The picking comes first. Too hard to understand? Go into the dunce’s corner.

It is vitally important to understand that billionaires and other very rich people do not have in their keeping vast hordes of goods that they are refusing to share. Predominantly, they own “paper” titles, to productive resources; to things that make things like, for example, factories and machinery. What they own employs people and produces goods that make us all, or most of us, more prosperous.

You cannot widely spread what they own. A factory cannot be divided into ten million parts and parcelled out. You can widely spread the titles to what they own. Everyone would then get a small sliver of ownership. What would happen? Spending on baubles would soar. Factories would have to be retooled to meet the demand. Little or nothing would be saved to reinvest. Factories and machinery would soon fall into disrepair. No new investment would occur. Deprivation and misery would follow.

Rich people are a vital necessity because they save. Only rich people save very much. Savings fuel investment which builds productive resources, which produces employment and the goodies – the real wealth – which makes lives better. Those who become very rich in their lifetimes are also vital because in their former poorer state they had the gumption to build innovative businesses and, thereby, enrich the lives of millions, as well as themselves.

Socialists, like AOC and so many contemporary fellow travellers, are fools. Blind to the lessons of history, they all, to a man and woman, want to share the cake around without cognisance of what it took to bake it or what it will take to keep on baking bigger and better cakes. Running them a close second in the fools’ stakes are “economists” who put eating cake on a level with growing, harvesting and processing wheat and sugar; milking cows and making butter; producing eggs; transporting these ingredients; packaging, wholesaling, retailing, buying, mixing and cooking them. Weep for the loss of economic logic. Weep for the replacement of John Stuart Mill’s sense with John Maynard Keynes’s nonsense.

Billionaires can do harm when they wield untoward political power. That can be a problem. They can use up valuable productive resources when they spend extravagantly on luxurious baubles; though perspective is required. When set against world production of goods and services; mansions, maids and Maseratis don’t cost that much.

Put aside any natural aversion to billionaires hanging out at Davos. Capitalism is the only system which can continually reduce poverty and give us no end to increasing prosperity. Capitalism creates very rich people. Capitalism won’t work without there being very rich people. This isn’t a moral issue. It is an economic imperative.

  • padraic

    When I read the bit about billionaires and ringworm I had the same reaction as did you, Peter and then I saw that you literally took the words out of my mouth. Billionaires can’t be all that bad if the only fall out is that some people cannot afford a tube of antifungal cream. I suspect there is a small number of drug addicts in Alabama – some of whom are not noted for high standards of personal hygiene due to their outdoor living habits – who spend all their money on drugs and have not enough left over for a tube of cream. Public health kicks in for methadone but certainly does not cover minor fungal skin infections.
    I wonder what she thinks of the many billionaires in the “socialist” paradise of China? Billionaires = jobs and income for others. As is rightly pointed out if they start trying to run the show (vide George Soros et al) it gets a bit messy, but by and large they are an agent of good.

  • Richard Bell

    The argument for Capitalism never seems able to be won, and the lessons of Socialism while continually being taught, never seem to be learned.

  • whitelaughter

    that, Richard, is because ever generation needs to be taught, and we have handed the task of teaching over to the dregs of society.

  • en passant

    The destruction of capitalism is relatively easy – just ask Chavez/Maduro in Venezuela – a country while I was there, I thought was on the march to success in reducing poverty, until Chavez blindly destroyed initiative and destroyed it.
    The lessons of the tribal ‘wantok’ system are never learned. When Presidential Candidate Carly Fiorina took over as CEO of H-P she was hailed in the first year (or two) as an economic genius as ‘paper’ profits soared. This was done by buying up companies and revaluing them upwards. An old trick, but not her only one …
    Her true stroke of incompetence was when she slashed the very high investment in R&D. Without that ‘expense’ profits leapt even further – in the short term. Withing three years H-P had gone from No. 1 in laptop manufacture to No. 2. Printer sales plummeted as no new models came out, and Lexmark passed them by with new features and new innovations. Their big winner was ‘Dome Servers’, high-priced, leading edge computing technology, but as they stagnated several other innovators left them in the dust. Carly’s final claim to genius was to change the sales & marketing war-cry from “We aim to be No. 1′, to ‘We aim to be a leader in all that we do’.
    The USA dodged that bullet by electing Trump.

  • brandee

    Peter it is so good that I want to hear it said again: “Capitalism creates very rich people. Capitalism won’t work unless there are very rich people” and “rich people are a vital necessity because they save”.
    I recall that the Industrial Revolution in the UK was often as not financed by those who made much money from wool growing, or from overseas trade.
    Ordinary Australians are not good savers, many live with huge credit card debt, but on the contrary in Japan the people save and hence capital developments are nationally funded and not funded by foreign borrowing as in Australia.
    In the New Testament Jesus was no advocate of redistributive communism and only thought the Rich Young Ruler had an attitude problem. Only later in the church did ‘poverty’ become such a virtue along with clerical chastity rather than marriage.
    In current times Charismatic Christian churches applaud the successfully rich if they are also generous..

  • Les Kovari

    AOC obviously has not read Michael Galak’s piece on Venezuela. It is a very accurate description of how things happen in a socialist country and is not on my wish list.

  • gardner.peter.d

    I expect the French will take a very dim view of this. They have won the battle across the world to reserve the name champagne for wines of their own. I wish them luck with AOC.

  • gardner.peter.d

    Peter Smith is right to laud wealth put to productive use that benefits us all. Sadly this is not always the case. George Soros is an example of one who is using his wealth to do great harm to the West as a whole and Europe in particular. On wonders what drives such a person. It certainly isn’t philanthropy although that is what it is called for tax purposes.

  • Jody

    I think the Soros case is laced with irony. Here was and is the Left hating somebody like William Randolph Hearst who did the same thing Soros is doing but who was the object of derision in “Citizen Kane”. Now they choose to turn a blind eye because Soros spouts their ideologies, though he behaves no differently from Hearst. You couldn’t make this stuff up!! The staggering hypocrisy of the Left which, in effect, cries out “you’ve done it for a long time and now we want to be the ones to do it”!! And cartels and corporations talk the talk that progressives want to hear and get a leave pass, avoiding scrutiny of their corporate practices. To tell truth, if I were in big business I’d do that too; it’s a simply way of getting them off your back. It’s smart but the Left is full of useful idiots and gulls and will never get to figure that out!!!


    I bet AO-C thought ringworm is a third-world parasitic nematode infestation.

Post a comment

You must be logged in to post a comment.