I am simply astonished by the current level of discourse currently raging on the topic of economics at the PRECISE moment the U.S. Government is announcing the lowest unemployment rate since 1969 and the highest stock market levels EVER.
But evidence from wife and daughter and employees is that our entire education system is ACTIVELY campaigning for an understanding of economics that is entirely, egregiously, and without apology the most utter nonsense ever expressed by anyone, anywhere, in the history of the world. And apparently, a significant percentage of our population has actually accepted this belief system wholesale. And they are doing so in the FACE of the daily news proving unequivocally otherwise.
That it is being provisioned by teachers, from kindergarten to graduate studies, who are mostly noted economically for their almost celebrated and readily confessed impoverishment, makes this even more astonishing. We don’t HAVE any billionaire professors teaching at a university. Why would you eagerly seek to learn to prosper at the ready knee of a puffed up self-important pauper?
Now it IS true that if you take the AVERAGE intelligence of the AVERAGE American, you have to understand that about half the people you will meet today are NOT going to be that smart. That’s what average IS.
But it remains that the average 80 IQ professional dishwasher should still know viscerally that this is nonsense. But the evidence of my own eyes and my own ears persuades me. An entire generation is just lost, dazed, and clueless on this topic.
And the consequences of that level of ignorance among that large a percentage of our population are dire. In our constitutional representative republic, we actually CAN deliberately choose poverty, starvation, and violence as a way of life. A future of American’s, desperately trying to escape as refugees to fight their way INTO Mexico, could actually happen.
So with enormous embarrassment, I’m going to deign try to explain it WITHOUT resorting to the obvious comparison of reality in Venezuela, North Korea, the Soviet Union, and Maoist China. I don’t want you to simply observe the obvious, and then mindlessly act on it appropriately.
I want you rather to UNDERSTAND it with all the why’s, wherefores, and “how comes” entailed.
Matthew Chapter 25 King James Version 14 For the kingdom of heaven is as a man travelling into a far country, who called his own servants, and delivered unto them his goods.15 And unto one he gave five talents, to another two, and to another one; to every man according to his several ability; and straightway took his journey.16 Then he that had received the five talents went and traded with the same, and made them other five talents.17 And likewise he that had received two, he also gained other two.18 But he that had received one went and digged in the earth, and hid his lord’s money.19 After a long time the lord of those servants cometh, and reckoneth with them.20 And so he that had received five talents came and brought other five talents, saying, Lord, thou deliveredst unto me five talents: behold, I have gained beside them five talents more.21 His lord said unto him, Well done, thou good and faithful servant: thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord.22 He also that had received two talents came and said, Lord, thou deliveredst unto me two talents: behold, I have gained two other talents beside them.23 His lord said unto him, Well done, good and faithful servant; thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord.24 Then he which had received the one talent came and said, Lord, I knew thee that thou art an hard man, reaping where thou hast not sown, and gathering where thou hast not strawed:25 And I was afraid, and went and hid thy talent in the earth: lo, there thou hast that is thine.26 His lord answered and said unto him, Thou wicked and slothful servant, thou knewest that I reap where I sowed not, and gather where I have not strawed:27 Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury.28 Take therefore the talent from him, and give it unto him which hath ten talents.29 For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath.30 And cast ye the unprofitable servant into outer darkness: there shall be weeping and gnashing of teeth.
I confess I have struggled with this particular chapter in Matthew. With otherwise consistent admonishment toward charity and care for the poor, Jesus appears to take a pretty hard line in matters of business. Well he WAS Jewish after all.
But it pretty much describes Capitalism to a tee. And the result is that a very small percentage of the participants in a free economy inevitably and in all cases wind up with an inordinate amount of the free capital in that economy.
This follows almost exactly the distributions noted by Vilfredo Federico Damaso Pareto a noted liberal economist. In 1906, he made the famous observation that twenty percent of the population owned eighty percent of the property in Italy, later generalised by Joseph M. Juran into the Pareto principle (also termed the 80–20 rule).
In his book on the Pareto Distribution published in 1909 he showed how wealth is distributed. He believed this natural distribution applied “through any human society, in any age, or country”.
He maintained cordial personal relationships with individual socialists, but always thought their economic ideas were severely flawed. He later became suspicious of their humanitarian motives and denounced socialist leaders as an ‘aristocracy of brigands’ who threatened to despoil the country.
Winston Churchill, one of my personal heroes, noted in the House of Commons, October 22, 1945: “The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries.”
In a speech in Perth, Scotland May 28 of 1948 he noted “Socialism is the philosophy of failure, the creed of ignorance, and the gospel of envy.”
While interesting, none of that describes WHY it is naturally this way. Let’s explore that.
Every four years we elect a President of the United States and every two years a House of Representative. Capitalism is four orders of magnitude more “democratic” than either of those salutary events.
Each and every day of your life after about the age of 10, you make decisions on how to deploy the “cash money hard come-by” that you may have in your pocket. And I would guess you make eight or ten of these decisions EVERY day and one of them is usually non-trivial.
And people are generally QUITE good and QUITE savvy on how they spend those ducats – by necessity of want. There is never quite as much of this resource as we would like.
You might vote for a President for any number of reasons. You might say something flattering to almost anyone you meet. Both of those don’t cost much. But if you part with the ducats for a single cup of coffee, you are making the most deadly sincere act of your life. You have gaged the size of the cup, the smell of the coffee, the coffee quality, the reputation of the coffee shop, your trust in their ability to make a good cup of coffee, and your need and desire for a cup of coffee, against the weight and heft and future promise of that $4.29 and voted it UP or DOWN. And if you find that VALUE PROPOSITION persuasive, you will part with the moolah. And you gage that down to the uttermost farthing. Weighing and judging. If you have done it before, perhaps with less agony as you have already made the decision before and if nothing has changed, same result.
By the way, in doing so you have REJECTED all other coffee merchants ON THE PLANET – for whatever reason – usually mostly a matter of geography and location.
But worse, you have rejected ALL OTHER PRODUCTS on the planet that that particular $4.29 represented. The $4.29 is gone forever. And you will never have another opportunity to spend it again on anything else.
You have also forfeited the opportunity of charity and you can no longer send it to St. Judes Children’s Hospital.
You make tens of such decisions per day and perhaps more and perhaps less. And you are one of 323 MILLION Americans on point and ever alert for a cup of coffee.
And so this is not a democracy every four years. This is a much more serious democracy exercised at the MILLISECOND level and rate. Hundreds of such selections each millisecond, 24×7. And each one weighed and measured and parsed to the utmost ability of each of the 323 million voters, legal citizens or not. EVERYBODY gets to vote in this election all the time. Vote early and often. As often as you like.
And the cumulative sum of 3 billion such value proposition evaluations per day becomes the FORCE of a kind of hyper rate super Darwinism guiding every tiny aspect and nuance of every product offered by every business in the country.
The ENTIRE population votes ten times a day on who wins, and who loses, in the U.S. economy.
That’s kind of a magic thing. It steers our economy in a sea of options in the direction based on the wisdom of crowds toward success. The better product wins. The better producer thrives. And the ultimate outcome is irrefutable. We all voted. All the time.
And as the pig noted, some producers are more equaller than others. Their products are just better received and weighed and evaluated by the public. And so they have higher sales. And so they have more income and resource to spend on developing OTHER products. Indeed this is where the concept of brand comes into play. You become biased in FAVOR of some brands or producers even without having much information on the product itself. And you have biases AGAINST others, no matter how alluring the adverstiment. Fool me once….
And every day, some producers break all previous records in income. And EVERY SINGLE DAY, others admit defeat, declare bankruptcy, and close the doors forever.
Even THAT is a creative act. As in defeat, they sell off all their equipment, buildings, and office furniture for six cents on the dollar they acquired all that for. And small producers just starting out snap up those buildings, and file cabinets, and desks and presses and bandsaws et al in yet ANOTHER evaluation of the value proposition. And indeed many startups would never succeed if they had not gotten a leg up eating the debris that had fallen to the forest floor.
And so we see that those who succeed in developing and offering a better product at a lower price that is voted UP by the 323 million participants become the “hath”. They were entrusted with a little bit of resource, and they multiplied it. And we voluntarily keep giving them MORE resource yet.
And what do they do with that? Retire to the Caribbean? Buy a 10,000 sf mansion? Drink expensive wine and favor fancy women, faster horses, and older whiskey? Or did I get that wrong. It might have been faster whiskey, older women, and fancy horses.
Well actually they do – up to a point. But they usally did not achieve success by being a moron. And after a brief period of basking in the perquisites of success, they learn, the easy way or the hard way, that you can only wear one pair of pants at a time. If you try to put four pair on at the same time you simply cannot walk. And they can only eat so much rich food before they hit the 300 pound level and can barely stand – don’t ask me how I know. And after the incredible complexity of building a successful business and the competition involved, card games and horse races seem childlike and boring.
Leaving usually the last lesson to be mastered in personal life, the women. Pick one single one with good qualities to make you a better person and stick with her and you’ll be better off. The fancy ones are generally expensive and useless and often a pain in the ass.
I’ll gingerly offer one strategy in this death defying perilous topic. Marry a fat black woman who is strongly religious and knows how to run a home successfully without a man, raise great children, and do it all on no money. Marry her, then eat all her food and starve her until she’s drop dead gorgeous. Then kill anybody that comes within 50 feet of her without your permission. Just a tip. Again, don’t ask me where I learned these things. It’s just not important. Happy wife, happy life. Ignore at your peril.
But after all that, what you find is that beyond your basic needs, money is a tool to create reiteratively. And so you find the same entrepreneurs and entities continuously using “all that money” to create more and better products, and they become addicted to the game of “winning” in the market place. If they are good, really good, eventually they turn their eyes on “how to make the world a better place.” I would claim that among the natively wise, they would have done even better had they STARTED there. But we each have our path and our own cross to bear, the weight of which is usually all about us.
And those are the people that bring us better automobiles, smart phones, computers, air conditioners, refrigerators, televisions, electricity, the Internet, and an ever increasing abundance of things that make us smarter, stronger, faster, and better.
They produce that because we voted for it.
Of course along the way, the succeeding businesses grew and had to employ others to help make the coffee. One guy can only make so much coffee until he has to pay someone else to help him make it. And by the time he has 28,218 locations and has established himself as the Starbucks brand, he also has 238,000 such helpers and employees. It’s just what it TAKES to be that.
And you created it by voting with your $4.29. Which really is rather a lot for a cup of coffee.
So in a very huge way, you get what you pay for. Literally. We vote with the ducats we have for the products we like and need and use, and so we get more of that. And this works on a mind boggling scale.
And the products we don’t like or need or use we get less of. And this dynamic magic engine runs every second of every day. And wealth is created by taking dirt, making something useful of it, and selling it to someone who wants it.
And a very small percentage of the population consistently creates these products. And so we basically “entrust” them with more and more resource to do more and more things. And to he that hath, more will be given. And to he that hath not, even that which he hath will be taken away.
Succinct. Accurate. And true in all societies in all places in all times. And as it so happens, genetics being as they are, you wind up with 20% of the population with 80% of the available resources. And 20% of them have 80% of those resources. And so on until you get to the much celebrated if entirely arbitrary 1%. That’s not a problem. That’s a world.
And in this background, you then have a 28-year old chick coming on television with the message that “I know better how we should deploy our resources for the good of our society than this sick system. Vote for me and we can end this travesty.”
In the event that King Soloman somehow had “congress” with Mother Theresa and produced Edwin the Brilliant But Good, Eddie can’t tell the future. He can’t make 3 billion good decisions each day. He has no idea what products will be needed eight years from now and any resource he commits to a particular area can’t be reversed and recommitted somewhere else in time to do anything of particular good note. And it is guaranteed to be the WRONG thing 100% of the time.
It is not DOABLE with anything but the prospect of disaster. And communism and socialism do not fail because tyrants run them, the people who run them BECOME tyrants trying to make this nonsense work. You cannot issue Presidential decrees in an act of gravity defiance and enable everyone to fly. And if anyone notices that they are not flying, you pretty much have to shoot them or give up the entire concept you have based your life on. These aren’t evil people. They are FAILED people. And it is always the fault of the governed, as they should have never allowed this in the first place.
And so the way to “free national health care” is not to seize at the point of a gun the resources available to the innovators and entreprenuers, but rather to get government out of healthcare and out of the REGULATION of ALL healthcare and look for an Elon Musk of healthcare to get the cost of a heart attack down to $20.
Can’t be done? A 30 inch flat screen TV was $20,000 twenty years ago. It’s $189 in the aisle at Walmart today.
A $500,000 computer in 1979? You can get 600 of them for $4 today. But there was not a SINGLE LAW in the entire country and all 50 states regulating how many transistors you could legally put on a chip or who could do so. There really still isn’t.
But an Epi pen that was $35 is now $600 in our current regulated healthcare system. To make me safe? Is this a joke? And the Socialist “solution” is to nationalize it and regulate IT ALL? Again, are you jacking me off?
These are children and severely mentally handicapped child minds at that. And if you allow them power you destroy them and us as well. For what?
Our economy, and I do very specifically mean OUR economy, has reduced the incidence of poverty WORLDWIDE from 90% of the world population to 6% in thirty years. But no one has told you that at your local university I suspect. Or on your telly either.
You want to fix it? Fix what? You don’t even know what it is or how it works.
Our “leaders” and those whom we vote for with our money, are Jeff Besos, and Elon Musk, and Bill Gates and Steve Jobs. We give them ever MORE money because they create MORE innovation and MORE jobs, and MORE wealth.
The United States government in its entire history has never produced ANYTHING we consume. They enable us to produce and consume by virtue of their three basic responsibilities:
To defend us from marauding bands of outsiders who would take what we have and kill us.
To maintain a stable currency of exchange so we can technically vote with it for the products we want accurately.
To maintain civil order, to keep marauding bands of insiders who would take what we have and kill us.
Anything beyond those tasks is suspect.
Yes, a case can be made for infrastructure such as the Interstate Highway system. Of course that pretty much killed a much more energy efficient system of railroads. But we had really good intentions. Does that count?
A system of free and public education. Currently graduating learned apostles with $150,000 in debt and no clue how our economy actually works or how they can succeed in it. Best strategy: get a job with the government. Or become a lawyer. We need more of those.
Currently we have marauding bands of outsiders streaming through our southern border quite willing to kill us and take our stuff.
The stability of our currency is threated by our $22 trilllion of debt.
And in the streets, they are now shooting people en masse in our CHURCHES, for Christ’s sake, literally and excuse the pun. People are being attacked in the street for their HATS. Our constabulary is powerless to investigate any crimes unless it shows up on TV.
Elon Musk arrived in the U.S. without sufficient funds to rent an apartment. He’s now personally worth over $27 billion 25 years later. Along the way, we got Paypal, SpaceX, Tesla, Solar City and soon SkyNet and a global photovoltaic energy storage solution.
That revitalizes the concept of space travel and exploration, leads ultimately to the replacement of gasoline cars with electric cars, establishes a global gigabit to the phone Internet, and could enable the transition of half of our electricity production to clean quiet photovoltaic panels. I vote for all of that with my ducats.
Why would I resent his house? He sleeps on a couch at the factory where he directly employs 47000 people at a median wage of $56,000.
Why would I resent his car? He BUILT his car. As it so happens he built mine too. And I “voted” him $56,000 for it, which was a HUGE improvement over his LAST car which I voted $107,500 for just six years ago. It just isn’t as good as the new one.
Capitalism is based on the fact that we cumulatively as a group make wiser and more carefully considered choices when it is about each ducat of OUR personal money. We weigh every value proposition on its merits. And no government office or leader can even APPROACH the accuracy of our net cummulative judgements on these matters.
Try this experiment:
I have a recipe I have developed over 40 years to make the best iced tea on the planet. Anyone who has ever tried it agreed emphatically. I’ve never had an exception. Accept no substitutes.
Go make two gallons of it.
Go out on the street and offer people a taste of the tea from one gallon. The other gallon is priced at $5. If you want to grow faster, take a cooler of ice with you and some red Solo cups.
See how many had to taste before one of them parted with the $5.
Take the $5 and use it to make 5 gallons of tea.
Back to the street. Tastes from one gallon. Sell the other four at $5.
Rinse and repeat.
First person to a net ONE MILLION DOLLARS after taxes and product expenses wins. If you work at it every day, I fail to see how it could take two full years. And it’s not like shoveling gravel. You’re making tea.
Here’s the recipe.
Use a standard 12 cup drip grind coffee maker. Place in the 12 cup glass pot the following: One two inch long stick of cinnamon. You have to use a stick, not ground cinnamon. Four bags of Twinings Earl Grey tea. ONE whole clove. If you are tempted to put two, put one in your mouth to sweeten your breath and put the other ONE in the pot. Do NOT put two.
Fill the coffee maker tank with clear cold water and turn it on. Make sure there is NOTHING in the basket that normally holds coffee.
Fill a 64 ounce pitcher with ice.
Add 1 full cup of Splenda sweetner to the pitcher on TOP of the ice.
Let the coffee pot steep for five minutes with the burner/heater off.
Pour the tea in the coffee pot over the ice in the pitcher and stir vigorously.
Pour into glass over ice and taste.
Now if you calculate the cost of the tea bags, the very finest cloves, the most eggregiously overpriced sticks of cinammon, the cost of a one gallno plastic jug, a richly illustrated adhesive LABEL for the jug, the cost of water, of electricity to make the ice and heat the coffee pot, the life of the pot, EVERYTHING, you will find that you just can’t cram a full dollar into that jug. It just won’t fit. And everyone who gives you $5 KNOWS that.
In fact, I would find it unusual for you to be ABLE to sell one of these to anyone who doesn’t already like iced tea and has indeed made it themselves many times. So why would they vote you up at $5 ducats?? They will only do so if it TASTES better. And your value add is the expertise with which you make the tea – largely thanks to me. But whatever. I’ve made a fortune several times already and I can only wear one pair of pants.
And truth to tell, one out of a hundred readers will actually make the tea. And truth to tell, one of a 100 of THOSE readers will actually make two gallons and go into the street and present it to people. And of THOSE who do one out of 1000 will actually put in the work to finding places to present it and people to try it every day for a week.
Competition? There isn’t any. It’s an illusion. But this explains why the 1% are so few. How many people have the physical and mental ability to perform this act? Everybody. How many will actually do it? Almost nobody. They just don’t BELIEVE in tea and cannot conceive in their minds that such a small thing could become a big thing. And to get to the million dollars, you kind of have to eat tea, drink tea, breath tea, sleep tea and shower in tea 24 hours per day for the next 2 years. You have to commit your LIFE to tea for a time. Total commitment. War to the death. Tea or die. Bitch.
On January 29, 2018, Keurig Green Mountain announced it was acquiring the Dr Pepper Snapple Group in an $18.7 billion deal. Snapple is an iced tea that started in exactly the way I have described. Their tea isn’t as good as mine, but they have years of growth from their start at a table in a farmers market. And after very carefully weighing the value proposition of the deal, to the uttermost farthing, Green Mountain paid it.
I myself now “vote” Dr. Pepper UP eight times a day.
So can you look at a one gallon jug of tea and see $18.7 billion dollars? If you can’t, don’t apologize. We all need employees and underlings to make all this happen. Welcome to the 80% club. Or even better company – the 99%. Either way, you’ll make a better living than a vaguely homosexual effete socialist college professor with pretensions to be considered “intellectually elite” as he depends for his existence on screwing children out of their lunch money.
I consider this now an “open source” recipe. I would be interested in feedback on the TASTE of the tea. I don’t really care about your position on Splenda, the history of the British tea trade, your opinion on cinnamon, or the working conditions of the poor enslaved children who are forced to pick cloves in the hot sun. This is an up/down thing. You like the tea or you don’t like the freakin tea.
If you do like the tea, consider that I might know something about tea. Then reread the rest of this article with the brand bias that I might know something else. Then send me $4.29 – but only if you find it worthwhile. And while considering the value proposition I present here, note that I’m 71 cents cheaper than a gallon of tea. And these hard won lessons of six decades weigh less and are easier to carry home.
35 thoughts on “71 Cents Cheaper Than Tea”
A couple of issues:
“The stability of our currency is threatened by our $22 trilllion of debt.” is saying the USA is technically bankrupt – if this was a household it would have been sold along the lines of the GFC. The 80 or 99% will be paying that back forever while the 20% or 1% continue to not pay tax via their tax havens. So government does produce something – a financial noose for the 80%, or is that the 99%.
“Currently we have marauding bands of outsiders streaming through our southern border quite willing to kill us and take our stuff..” and
“Elon Musk arrived in the U.S. without sufficient funds to rent an apartment.”
Just as well Musk was allowed in then huh.
Those aren’t issues. Kind of sounds like blah blah blah stupid blah blah bla moron. Babble.
I do agree as far as the National Debt functionally being a mechanism to extract wealth from society and give it to the rich, and not just rich Americans. “Help us balance our books and in return we promise to extort future monies from the American public and give it to you.”
Damn good read, saw it on FB first. Thanks for sharing your wisdom sir!
This article reminds me of a quote from the book by R.A.H. Time enough for love.
Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty. This is known as “bad luck.”
Another R.A.H. quote from the same book is also apropos to this article.
Political tags — such as royalist, communist, democrat, populist, fascist, liberal, conservative, and so forth — are never basic criteria. The human race divides politically into those who want people to be controlled and those who have no such desire. The former are idealists acting from highest motives for the greatest good of the greatest number. The latter are surly curmudgeons, suspicious and lacking in altruism. But they are more comfortable neighbors than the other sort.
There are three types on this planet, the good people, the evil self centered, and the stupid ones who cant seem to recognize either side. I just hope that stupid doesn’t involve this planet in to an atomic war, and we end up like Mars.
Mr. Rickard, thank you for sharing your thoughts and insight. I always find them valuable and look forward to your next post.
That was rather genius, intuitive and inspiring all in one. I enjoyed the article, copied it and emailed it to a few friends who would appreciate it’s instructive accuracy.
The patent system is both a wonderful, and a terrible system at the same time. It allows the truly creative people earn a living for their brilliance, but also can let terrible deeds be done by the owners of said patents eg the above mentioned epi pen. You believe that less regulation in healthcare would promote cheaper options available, however i would counter that instead what we do actually see is cheaper options patents are bought by the companies that do not want those cheaper options to ever see the light of day. I believe that you are correct on many points in the capitalistic mode of behavior, but there needs to be some sort of limit to the greed inherent in the system. You might say oh well a CEO deserves 700% or whatever it is now more salary than a normal employee, but do they really? I believe china ran an experiment where they put a monkey in charge of a bank, and it still was profitable because the system is just rigged to be that way. I have nothing against actual genius creators like musk, but many of the corporations in existence today have no such brilliant people at the head who could be even remotely deserving. Consider our commander in chief with 1 billion in business losses. Regardless, i expect the wars and political issues caused by climate change will most likely force an end to the way society currently operates. Either we will move further down the path of dystopia or we will correct course for a brighter future run by our robot overlords.
What you are saying is valid, but myopic. You want to regulate the health care industry because they do evil things with their patent monopoly. The PATENTS themselves ARE regulation. I see and hear this all the time. If a little regulation causes an “unintended consequence” why do in the raw light of reason then would you think a little MORE regulation will somehow fix the problem? And when THAT has an unintended consequence, the solution is always the SAME? More regulation? You’re going to fix all this by regulating until everyone is forced to lay on the ground with their hands behind their heads or be shot?
Kind of like having an opioid addiction and curing it by drowning it in more opioids? You’ve got sunburn and you want to treat it with a MAP torch? You’re too short so you’re going to walk around on your knees so people won’t notice?
I just…don’t…get it…
There already IS a very corrective solution to overreach in capitalistic practices. It’s the same vote I described. If you don’t like snake oil, high drug prices, etc, simply don’t vote for it with your ducats, and spread the word about dishonest players.
Not saying socialism is the way but this article written by Einstein definitely shows the flaws of Capitalism. https://monthlyreview.org/2009/05/01/why-socialism/ There’s definitely an inherit good to ‘earn by providing’ but at the same time, not sure how you can’t think there is corruption that is controlling everything. Once you are at the top, you don’t have to be a good person, and you don’t have to be a person to get there. More importantly, the fact that we fail as a society to vote. Not to mention everyone can’t be rich, and the more money the rich do have, the more torn the lower 90% is. I’m not sure how financially well you are but your house seems nice enough, you are able to enjoy your trades etc, but you are not the problem. The problem are the people who are so wealthy that they are making salary of a ‘rich’ person hourly. Unfortunately there’s no swaying anyone on this, you are either happy with your life and think poor people are attacking you or you are unhappy and think everyone deserves better. I don’t know the answer to create an ideal society but I’m pretty sure shitting on your fellow human is not the best way. Here’s to making it to a post scarcity society before machines take peasants’ positions and only the uber wealthy carry on.
You are clearly the product of the education system I describe. NONE of that is ANYTHING but nonsense. And I’m not picking out part of it because it is ALL wrong headed and nonsensical. A fantasy based on wishful thinking swimming in nonsense. It is not about virtue. And it isn’t about evil. It’s about producing new products and goods and improving the lives of EVERYONE. The 1% don’t get to lord it over anyone. It just doesn’t work. They’re not making a salary of a rich person hourly. You are HANDING them that resource because of YOUR desire for more and better STUFF. More value for the money. THings to make you bigger, more powerful, faster, taller, wiser, able to communicate over vast distances with ease. Big screen views of HOCKEY GAMES. It isn’t about punishment and reward. It isn’t about “deserving” anything. It’s about who we entrust with the extra resources we have beyond breathing, eating, and taking a dump out of the weather. Who do we give it to and WHY. Because they give us stuff. We like stuff and we want more stuff.
It is what it is. Some people are better “stewards” and we invest in them with a daily talley sheet of 3 billion decisions. If you took all the resources and distributed it to all the people, it would wind up right back where it was in less than two years. The poor would take the new bounty and immediately go out and VOTE MORE and more enthusiastically. And all efforts to dampen this system simply slows it down and creates LESS wealth all the way around. Whatever you INTEND in your high minded moralistic idiocy, that’s the impact.
You want to drop the cost of prescriptions to $4? It’s EASY. Do away with the FDA. Quit requiring “prescriptions”. And simply void all the medical patents. In other words, lose the regulations. ALL of them. The nice thing about all the fraud, scam artists, and “patent medicine shows” is that they cost less than a buck, and you didn’t HAVE to buy them.
If you did away with the FDA, snake oil would be all you could get, because no-one would bother to invent or even just make medicine that doesn’t kill you and actually works. Without the FDA you wouldn’t be able to tell who makes the real stuff and who is just faking it, and the fakers enjoy much better margins.
One thing you forgot to list amongst legitimate jobs of the government is to protect people from being swindled. The bad insiders don’t always want to kill you, many want to con you out of your “votes”. Preventing fraud is a big job, and it requires regulation.
Another thing you forgot to mention is taking care of the sick and elderly, but that is a different conversation.
I agree that Jack is ignoring the predatory and war-theft of groups vs. groups. How mafia, gangs, greed-seeking governments, and conquest invasion happens. Unbound capitalism end sup leading into a mob / mafia corruption structure of some variation. The most abusive and dehumanizing treat bank account balance sheets like video game scores and just keep up the greed no matter how much they have. Fake medicines backed by powerful advertising and marketing. The human mind is too easy to exploit with images, sounds, graphics – and we do not educate to defend against art attacks.
The 6 percent poverty tag is a little suspect me thinks
I get what you are getting at, but what I don’t get is why people that have followed your basic formula, and become amazingly wealthy, are so anti-Trump a pro-business business man?
Why would a multi-billionaire capitalist buy a newspaper that bashes a man that wants the people to have more money to buy his products? Why would companies that made money by capitalizing on free speech flip and start censoring?
Thanks for all you do.
Oh, that one is not so much a mystery. It’s the hair. See one guy has hair. And one guy doesn’t have any hair. Sometimes you walk right past the answer looking for a more complicated one…
Nice touch with RIDE THE LIGHTNING Podcast-esc Tesla update
Oops I meant Hyper-Change-esc. Typing myself stupid again. Not sure how I mixed those two up.
This article is spot on. 3 other areas where the government has meddled and complete screwed up the supply/demand curves and thus artificially messed with pricing:
Home Mortgages – by providing tax reductions and guaranteeing loans, the cost of houses sky-rocketed as tax payers footed the bill.
Education – by providing lower cost of loans, university costs have accelerated up while the cash-flow cost of a loan increased to the same level before government intervention (lower percentage on larger loan), and thus students are starting life under a massive debt load.
Investment markets – so it is ok to buy $20 worth of lottery tickets, but it’s illegal to invest $20 in a startup as you need protection by the government? The “new” jobs act increased the thresholds of private investors, but limited the number and total amount of investment that can be made. How can it be ok for 2000 people to invest but illegal for 2001?!? And legal for a company to raise $1m, but illegal to raise $1.1m from the SAME people. But legal to raise 100x this from a smaller group (who love the restrictions).
This is one of the best articles I have ever read – thanks Jack!!
There are 3 other classic examples of government interference causing the opposite of intended consequences –
Home Mortgages – government guarantees with reduced interest rates simply caused the cost of houses to shoot up thus reducing any cost of purchase expectation, but massively increasing things like taxes, insurance and other
Secondary Education – by reducing the interest rates at tax payer expense, the cost of education skyrocketed and thus, even though interest payments are lower, the net cash-flow is more as people are saddled with massive debt
Investments – the heart of capitalism, yet the government overreaches under the pretence of “protecting”. Amazingly, a person can buy $100 of lottery tickets without an issue, but it is illegal for them to invest $20 in a startup if they are investor 2001. How can the number of investors make something illegal: the “new” jobs act allows for up to 2,000 investors, but 2,001 makes it illegal. Raising $1 million from 100 investors is ok, but $1.1 million from 100 is illegal!
And they tried to take control of the internet by regulating it as a Utility, under the auspices of a deceitful name of “Net Neutrality” – anyone have a utility provider that does not have a government guaranteed monopoly to service you at their established rates: – you only have one of each of these
I just cut down some trees on my farm and the town wants to fine me as I need a permit and have to go through the Zoning Review Board – it’s 132 acres of agricultural farmland – and while we have a concept of innocent until proven guilty, when it comes to the city council, you are guilty until you manage to fight and win to prove your innocence!
Reminds me a few years ago, I was going to put up a wooden high fence in the middle of my yard, I have a shop in the rear, I like a bit of privacy, not to mention not tempting some riff raff getting funny ideas. My little town officials attempting to tell me I had to get a permit and pay some yo ho inspector a 100 dollars to approve it.
Went to the next town meeting and told them the rule was not legal, and told them to remove it.
They did, its funny how governments think they can just put up and order, cause they feel like it to keep their inspectors busy with crap, even if its not legal.
You’re not the first and most certainly won’t be the last free market capitalist touting the holiness of unregulated markets. In fact, It is your fellow ideological comrades throughout early American history who provoked the public to seek government protections from the likes of Snake oil salesmen, robber barrons and countless other inherent anti-social misgivings of pure Capitalism. I urge you to be more honest with yourself, and take the time to research early American economics and reflect upon the various reasons for why we are in the situation we are currently in. And, if you’re wondering, one of my favorite pastimes is reading about, listening to, and watching some of my fellow great apes who have amassed wealth and then find it necessary to profess how pure, unregulated capitalism is the answer to everything. You’re regurgitating an old story. No system is pure, yet I believe ours is better than any other, ever. And, it’s not because of men like you… it’s because of the men who sacrificed everything to protect your freedom to express your own outdated beliefs. Cheers.
That was an excellent description of power surge protection. I appreciate the time you took to describe it.
JACK your brutally honest remarks are killing me. I had to change my depends 5 times reading your stuff. Jack I have a 800 sq ft built in 1900 house a few miles from Elon’s factory where his 47,000 workers earn $56,000 median pay. I rent my 800 sq ft – built in 1900 house held together by termite shit , to 5 guys around 30 years old for $4,000 per month in rent . These 5 losers earn over $250,000 combined. 2 of then don’t own cars and together they spend twice the amount I charge in rent for booze, 420 & video games. Each of them spends between $20-30 a day on pizza and between the 5 of them they don’t even have a pot to piss in or a window to throw it out of……I talked myself blue trying to help them but it’s of no use.
It’s very high on my bucket list to meet you in person one day, I’m out right now shopping for some yellow crocks, a bucket of KFC and a carton of Camels for you
I love that comment Jerry.
This should make you smile: AOC and banking. https://www.armstrongeconomics.com/international-news/politics/aoc-banking/
There is quite a bit nonsense in this article. These “socialists” are actually social democrats. And to see what they propose, you should look at Norway instead of Venezuela. Strangely enough that never happens. They do not reject capitalism at all, they just want to soften the hasher consequences of capitalism.
Pure capitalism has in itself no objection against children working 20 hours a day. That is what actually took place in the nineteenth century. Society (and not the market) decided this was not right and created laws to prevent it.
In a similar vein the social democrats want to go further on this path and make sure people will have adequate healthcare when they get sick. It seems a sensible and humanitarian idea and almost every industrialised country has it. In no way does it hinder capitalistic activities of Musk or others.
Interestingly, Musk supports Andrew Yang, who proposes a Universal Basic Income. Probably because he has a pretty good idea of where automation will eventually lead to.
that’s good stuff
Yes capitalism is by far the best system. However and this is a huge however, capitalism is never practiced in its pure form. That is it is never forced to account for all costs! In other words the damage to our environment, the damage to other people’s health., are rarely if ever accounted for and never done very equitably when done. That is how we get to the point where we allow fossil fuel corporations to control our government to buy our legislature are senators and even our presidency, and then knowing full well that the consequences could literally end civilization continue to allow them too freely consume a public resource and create a public waste problem. Not practicing capitalism in its purest form that is to account for all externalities results in this over and over again. Industries that have inertia on their side can prevent new and better ndustries from emerging to take their place.
Hence the oil industry can prevent the solar power industry. And the fossil fuel industry and internal combustion engine auto makers can prevent electric cars from being popular. Fossil fuel corporations receive subsidies to the tune of some 800 billion dollars in the u.s. alone!
I think when it comes to economics and The Bible, most modern people in the USA when it comes to interpretation of today’s issues… ignore and ignore page “1 John 3:17”.
Jack, love your technical work, but you are not an economist. Well, never mind, most economists are badly educated, and not by the hard working teachers of the system as it is, but by the professors of economics whose positions are based on nothing more than ideology.
I appreciate your point of view, but it is steeped in ideological rhetoric. The issue isn’t how the inventive geniuses are treated by the state system of regulation, the issue is that most “capitalists” are not interested in producing a better mousetrap, but get ahead by working the system better than everyone else.
Only a few capitalists are building new economic value, like Ayn Rand’s imagined inventor of a new kind of steel, John Galt, the rest are the ones she criticizes that are monopolists who work the system through lobyists and lawyers to get a system that keeps the wealthy wealthy and doesn’t provide for investment capital if it might compete with their existing monopolies.
The drug companies are not using regulations to keep their monopolies, they are using taxpayer funded basic research that they convert to private intellectual property.
The problem is that rent seeking is enshrined in the economic system. This is not a system that works. We don’t have much socialism for the people in the U.S. but we have lots of socialism for failed strategies that keep going because they have monopoly market positions. The markets that are touted as opportunity for all, are just not that. They are a system that concentrates wealth and keeps it that way.
If they had their way, they’d outlaw Musk and his new tech because it threatens trillions or more in sunk investment they need to make productive. This system barely needs people if they can buy enough automation and make it exclusively their own.