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.