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.