The Anti-Capitalist Mentality

Have you ever noticed that people who worry about inequality seem to be focused only on certain kinds of inequality? When they obsess about the income and wealth of the top 1%, they seem to be bothered by only some of those at the top, and not others.

For example, have you ever seen Robert Reich or Paul Krugman or any like-minded complainer bemoan the huge salaries of professional athletes? What about the stratospheric incomes of rock stars? Or movie idols? Or super models?

Even more puzzling, when is the last time you saw any of them assailing worthless heirs? I would guess that a large share of mega gifts to Barack Obama’s presidential campaign came from “trust fund babies.” These are people who are living (and living well) off the assets created by some deceased capitalist. All too many of the heirs spend a good part of their lives giving personal and foundation money to…well…to promote socialism.

Out of my mind.

Shouldn’t there be a Hall of Shame (and maybe an annual award for the most shameless) to draw attention to the activities of those who use the fruits of capitalism to try to destroy it?

Something else is odd about the sociology of the anti-inequality crowd. They seem to be unfazed by inequality created by government.

Take the recent Powerball outcome. At $588 million, it was the largest lottery prize in history ― to be shared by two ticketholders. In essence, hundreds of millions of dollars are being transferred from mostly low-income families in order to create a few super rich individuals. As I wrote previously:

I can’t think of any single act of government that creates more inequality than the lottery — at least per dollar raised and spent. Think about it. Thousands of (mostly below-average income) people buy tickets and, after the drawing, one of them becomes immensely wealthy…

I can’t think of anything in the private sector that even begins to compare to this reverse Robin Hood redistribution from the poor to the rich and the nouveau riche. And remember, in order to pull it off, government first has to establish a monopoly, keeping private competitors (who would at least raise the poor bettor’s expected return) out of the market.

Then there is the entire structure of elderly entitlements. They mainly take from people who have less and give to people who have more. Social Security, for example, is funded by a regressive tax on wages and is distributed to the population group that has the lowest poverty rate of all. It’s not just Warren Buffett who is on the receiving end. In general, the greater your lifetime income, the larger your monthly benefit. Medicare is also funded by a regressive tax on wages. Although the benefits are supposed to be uniform, in reality the zip codes where the largest Social Security checks are cashed are the places that spend the most on health care for the elderly.

Think about that last finding for a moment. Throughout the country, families who are struggling to get by and who cannot afford to buy their own health insurance are paying 15% of their income to fund hip and knee replacements for our true leisure class, so they can get back out on the golf course.

I suspect you could put a 50% tax on all the professional athlete income above $1 million and it wouldn’t change the outcome of a single football game. Similarly, I think you could really sock it to Hollywood and even the idle rich without too much economic harm.

But when Paul Krugman writes about the top 1%, this is not who he has in mind. He is complaining about the incomes of people who run large companies. He wants their tax rate to be 91%!

I think Ayn Rand may have been right. The left is populated by people who are not especially bothered by those who become wealthy by virtue of birth or luck or good fortune. They do not even seem to be bothered by the winner-take-all feature of professional sports that confers millions of dollars on some athletes while those who were almost as good languish in near poverty. No, who they obsess about are the creators, the builders, the entrepreneurs.

They don’t hate the wealthy who don’t deserve their wealth. They hate the wealthy who do deserve it.

Postscript: an exception to what I have just written is Joe Nocera, an economics writer for The New York Times. Last Saturday, he wrote:

[L]otteries may well be the single most insidious way that state governments raise money. Many of the people who buy lottery tickets are poor; lotteries are essentially a form of regressive taxation. The odds against winning a big jackpot are astronomical — far worse than the odds at an Atlantic City slot machine. The get-rich-quick marketing — by government, let’s not forget — is offensive.

Nocera writes about

[A] recent e-book written by Don McNay entitled, “Life Lessons From the Lottery.” McNay is a financial adviser and newspaper columnist, based in Kentucky, whom I’ve gotten to know over the years. He specializes in helping people who have come into sudden money. He is convinced that the vast majority of people who win big-money lotteries, like the recent Powerball prize, wind up broke within five years. “The money just overwhelms them,” he told me the other day. “It just causes them to lose their sense of values.”

Comments (57)

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  1. Brian Williams. says:

    Great post. Michael Moore falls into this category. He used corporate welfare (Michigan tax incentives) to make an anti-capitalist movie decrying corporate welfare. Hypocrisy doesn’t even begin to describe it.

    http://www.nytimes.com/2012/12/04/us/when-hollywood-comes-to-town.html

  2. Vicki says:

    Re: song. You’re not out of your mind. Krugman is out of his mind.

  3. Robert A. Hall says:

    Great truth here. Progressives are not at all interest in outcomes or the usually deleterious results of their policies on real people, only in feeling good about being for the right things. Intentions matter, not results. I will link to this from my Old Jarhead blog. (www.tartanmarine.blogspot.com)

    Robert A. Hall
    USMC 1964-68
    USMCR, 1977-83
    Massachusetts Senate, 1973-83
    Author: The Coming Collapse of the American Republic
    All royalties go to help wounded veterans
    For a free PDF of my 80-page book, write tartanmarine(at)gmail.com

  4. Diogenes says:

    I don’t know how you came up with the trust fund baby hallucination, but reality is different. Look at the Forbes top 10 richest list. Six are inherited money, Walton and Koch. Yes Koch, the Koch Brothers inherited Koch Industries from their father Fred Koch. All supporters of Romney. The other four: Gates; Buffet; Elison; and Bloomberg. All self made and all Obama supporters.

  5. Slater says:

    That’s the problem when the government tries to right all the wrongs it perceives. Stick to the fundamental values of this country of freedom and equality. Cant go wrong if you put a value on these things.

  6. Kyle says:

    You know what’s a fun game? Mention the Laffer curve around Krugman and watch him spasm.

    The idea that taxing the rich (the only people who actually generate revenue) heavily actually decreases their incentive to work is completely foreign to him.

  7. Greg Scandlen says:

    Interesting. I’ve often been struck by the terminology used even by well-meaning people — such as describing successful people as “fortunate” and others as “the less fortunate.” Even wealth itself is described as a “fortune,” as if it is the result of a roll-of-the-dice, mere happenstance. I suppose lottery winners and Hollywood stars confirm that belief — they have become rich through no merit of their own, just the whims of the mob.

    I guess that is acceptable because it implies there are no inherent differences between people. It also plugs into the Marxist denial of “great leaders.” History is determined solely by social movements, not by determined individuals.

  8. Guy says:

    With respect to the collectivist urges of the super rich, Gates, Buffet, et al, Dr. Andrew Codevilla’s classic “The Ruling Class” article explains that admittedly counterintuitive phenomenon with near stunning clarity.

  9. Thomas says:

    I also hate the connotation associated with the 1% today. That’s 3 million plus Americans they’re labeling as undeserving. These are hardworking Americans who’ve worked for their money.

  10. Studebaker says:

    Lotteries may well be the single most insidious way that state governments raise money.

    Years ago I heard the saying… “The lottery is poor peoples’ chance to pay their fair share!”

  11. Patrick Pine says:

    With all due respect, you have no basis to claim that those of us who might be considered ‘liberal’ or ‘progressive’ have no problem with high paid entertainers or athletes nor a problem with lotteries.
    I do not like lotteries and think we pay ridiculous amounts to most entertainers and athletes. I do not begrudge those who are successful and have wealth far beyond my comprehension – but I do think that there are many ways that we can make our tax system more “fair” – even in a capitalist economic system. Part of that does involve taxing some very wealthy people more than they are taxed presently – but I also know that I will be paying more taxes, too. So I am commenting that you are making an assumption that liberals are the reason we have lotteries and that liberals do not object to the wealth of those who may not have worked very hard or long (or at all)and only object to the incomes and wealth of executives. But I know that I have worked very long hours, have earned an MBA and have invested in many hours of professional education, and still do work hard to continuously add to my knowledge and skills (like many others) – but have worked for some bosses that worked very little and/or did not invest in professional education and development but were and are being paid at many multiples of the pay for most, even those of us in managerial positions with annual incomes in the low six figures. It is fair to question the relative value of those individuals to the enterprise and society as a whole – ‘liberal’ or ‘conservative’ without being labeled as anticapitalist.

  12. Buster says:

    Over the years I have known some wealthy people — mostly small business owners. During this time I have also known some people who always seem to be struggling financially. From these observations I have gleaned a wealthy of information that explains why some people are wealthy and some are not.

    Most of the wealthy people have saved and invested in a small business (many were farmers). They live ordinary lives — except for their frugality, their initiative, and long hours they work. Some went to school and earned advanced degrees; although many of those merely earn high incomes but are not necessarily wealthy.

    On the other hand, the people who struggle financially often didn’t invest in education. They sometimes had children before they were ready. They didn’t save and invest their earnings. They made decisions to consume more than they earn and didn’t set aside anything for tomorrow. Yet, many of the people who struggle financially have the mistaken assumption that the only difference between them and the rich is the rich “just have more money. The reality is: the rich engaged in long term planning, invested in either education or in a business and let their money grow.

    Critics may counter that some merely inherited their wealth. But that’s fine to. Why should we tell a someone who worked and saved their entire lives what they can do with their money once they’ve died. A legitimate form of consumption is to leave your wealth to heirs.

  13. Kyle says:

    Patrick, when you say “fair”.. I’m confused as to what you mean.

    Bear with me while I work this out.

    This is unfair:

    Your bosses are less educated, don’t contribute as much (in your opinion), but get paid more.

    This is fair:

    Half of the households in the United States are less educated, contribute less, but get paid more (in terms of tax obligations/transfer payments).

    When you say “fairness,” what you really mean to say is Vertical Equity, or perhaps Justice. It is a very progressive idea for a capitalist.

    This kind of Robin Hood role for government is not capitalist.

  14. Kyle says:

    Buster, the figures number of people who inherited their wealth these days is smaller than you think. It’s a relic. Something liberals and progressives (sorry Patrick :) cling to.

  15. Al Peden says:

    My heart cringes every time I pass a 7-11, a liquor store or other establishment, some located in US government facilities, and notice the poor people spending what little the have, buying these worthless pieces of paper (a.k.a. buying a dream). Good blog.

  16. seyyed says:

    this is very interesting-i have never considered the left’s critique of taxes from this point of view.

    but also consider that athletes, lottery winners, etc, are subject to high taxes as well so they would fall into the same category as the rest of the rich that the left critiques.

  17. Don McCanne says:

    Although everyone already understands this, it is still important to distinguish between equality and equity. Most progressives are not striving for equality of income and wealth, rather the goal is equity – introduce an element of fairness in distribution.

    Although sometimes expressed as an anti-corporate bias, the objection is more to policies favoring massive perverse distributions, as from rent seeking for instance. Rent seeking that provides little net benefit to society while the rent seekers scoop up the wealth, to many of us represents a intense sense of unfairness.

    The work of Piketty and Saez demonstrates the unfairness that has now become the norm. In the face of a massive transfer to the wealthy, median household incomes are no longer enough to bring average families the American Dream – paying for essential needs while allowing enough for higher education of their children, adequate retirement accounts, medical costs for those with greater needs, and perhaps even a modest improvement in housing and transportation, and even an occasional well-earned vacation. And keep in mind the obvious that half of all households fall below the median.

    With equitable public policies in a wealthy nation like the United States, hard working families should be able to realize the American Dream. That’s fair. What isn’t fair is for the rent seekers to establish a plutocracy and use it to break up our unions, clobber our retirement and health programs, ship jobs out of the country, saddle higher education with intolerable debt, all of this and similar abuses on top of filling their coffers with funds they have wrested away from the main source of our productivity – the workers of America.

    Inequality will always be with us, but we do need policies that increase fairness by reducing inequity in America.

  18. David Alexander says:

    At the end of the day, the total cost of all levels of government(tax)is only borne by sentient human beings. It really doesn’t make good sense that the mechanism for collecting the tax is to burden the source of the economic wealth rather than the end user. Our gigantic and unwieldy tax system, the IRS and related state and local agencies, create so many unintended consequences and inefficiencies it’s no wonder there is no possibility of fairness or equality, let alone reasonableness or efficiency. Reform has to start moving in the direction of end user taxation, not more penalties for successful capitalism.

  19. Wasif Huda says:

    I am a strong believer in the free market, however, I do think the Kardashians, and similar celebrities, should be taxed more for all the stupidity they are spreading.

  20. FactCheck says:

    Robert Reich, April 2, 2012:

    “Organized gambling is a scam. And it particularly preys upon people with lower incomes … Given who plays [MegaMillions], this is one of the most regressive taxes in the nation.”

    Perhaps you should do any research before you write?

    http://robertreich.org/post/20364660524

  21. Bels says:

    Putting aside the straw man arguments that you put forward regarding progressive attitudes towards the lottery and professional athletes, etc., the focus of progressives on reform of the corporation welfare state and it’s attendant inequalities is entirely appropriate.

    When was the last time that you recall hearing about Eli Manning lobbying Congress for the deregulation of financial derivatives that led to a massive banking bailout? How about Mick Jagger hiring the six time senator to work for the appropriation of billions in defense contracts? Astounding naiveté on display here.

  22. August says:

    Inequality of opportunity, not inequality of outcomes.

    The current state of affairs is horrendously unequal for those in the lower class on both fronts.

  23. Charles Johnsen says:

    I want to reform the corporate welfare state as well. Of course, this includes the toxic labour union politics and their corruption.
    Best way to accomplish this? No corporate income tax, which would stop corporations from buying congress. The only reason the federal government taxes corporations is so they can sell deductions and loop holes. Same for regulations. The environment is of no concern to these people, except as an excuse to extort $ from businesses. Wall Street would collapse in a year or two if we had the freedom to buy and sell stock and bonds privately, even on the Internet. And, without any/ever government protection of private investment, except for fraud, what idiot would buy derivatives? It is the regulation environment that creates these corporate monsters because, like gov regs, over time they end up protecting, not controlling.
    Nothing about the Progressive Movement is progressive. All of it hungers for stability, a frozen in place economy and society. Examples: education is frozen in the methods and rules of the 20th Century as the Internet and digital communications in general could easily replace the infinitely more expensive classroom and school building designed a prison wardens. Medicine has had great progress but not in the financial area. Outlaw third party payments and prices would fall as waiting time and quality increased.
    Nothing here is radical or difficult to understand unless you were public schooled, or, even worst, have an American university education.
    One more: The stupid, unscientific food pyramid. Forget soft drinks, the curve of American fat started with that folly. I do include tv but this is an urban problem, not a country problem.

  24. Mark S. Krasnoff says:

    The question for Mr. Goodman is the fair application of principles to people. Take the principle that the government should not play favorites. Apply that to the tax code and capital gains are taxed by the same formula as working income.

    Now take the principle that we should not tax anyone on the money they need to meet their basic needs: food, shelter, clothing, education, health care. Decide how much money this takes, and apply that number to everyone. Thus everyone should pay the same lowest marginal income tax rate for their first ‘x’ dollars of income: 0%. As income rises above that level, marginal rates go up. Everyone is treated the same. Your 300,000th dollar may fairly be taxed at a higher rate than your 250,000th. The $1 millionth may be fairly taxed at a higher rate than the 300,000th.

    Now take the rates from the Bush tax cuts. When only the top marginal rate is restored, from 35 to 39, EVERYONE keeps the lower rates on their taxable income below $250,000. In fact, those with a taxable income of $250.000 or more get to keep a larger amount of money due to the lower rates than those who earn less taxable income. A graduated income tax treats everyone the same. The more money you earn by either work or capital gains, the more money you have after taxes.
    Mark S. Krasnoff, M.D.
    Sent from my iPad

  25. Frank Timmins says:

    @August

    Perhaps you can explain our current “inequality of opportunity” for those you label the “lower class”. Do you mean they don’t have the educational opportunities? Perhaps you mean these “lower class” people are denied employment in favor of others with the same or lesser capablilities. Or maybe you mean these “lower class” people are denied the opportunity to establish their own enterprises by some power.

    If these are not relevant to your meaning please tell us exactly what you mean.

  26. steve says:

    Stupidest post you have ever written John. I read you every day and while I often disagree with you, you seldom sink to this level. One strawman after another. Sigh.

    Steve

  27. steve says:

    @Kyle- The Walton heirs have more wealth than the bottom 40% of the population. 6 of the top 20 are wealthy by inheritance.

    http://www.forbes.com/forbes-400/#page:1_sort:0_direction:asc_search:_filter:All%20industries_filter:All%20states_filter:All%20categories

    Steve

  28. Frank Timmins says:

    Steve says, “The Walton heirs have more wealth than the bottom 40% of the population. 6 of the top 20 are wealthy by inheritance.”

    Steve, so what? Why do you seem to think that all this wealth is buried somewhere in the backyard of palatial estates? This “wealth” is invested in enterprise for the most part. It creates jobs and “wealth” for others in the economy. Do you actually think that this “wealth” is better utilized if it is sequestered by the bureaucracy? It defies logic that you would want bureaucrats with the power of the government (read: guns) to control and distribute wealth.

  29. Bels says:

    Frank, it’s actually a demonstrable economic reality that the rich spend a smaller portion of their wealth each year than average income people. Tax incentives geared toward the working class are quickly recycled back into the economy while those targeted at the highest income levels are disproportionately banked.

    I’m not interested in begrudging the wealthy their fortunes- but the realty is that tax incentives geared toward the highest income individuals may enrich their personal bank accounts but do little to foster wider economic prosperity. The opposite is true for progressive tax policy.

  30. Greg Scandlen says:

    Bels, you are right — they don’t spend it on consumption goods. As you say, they bank it. But what does that mean? That it sits in a vault somewhere collecting dust? No, it means it is being INVESTED. It is being used to finance new enterprises. This “fosters economic prosperity” far better than spending it on beer and pizza could ever do.

  31. Stephen Small says:

    John Goodman’s December 10th blog on the “anti-capitalist mentality” is the rubbish from his own imagination and has no relationship with reality whatsoever. He is attributing attitudes to imaginary people he calls anti-capitalists that suit his own bias, nothing more. His attitude towards what amounts to millions of people is depraved. Go ahead and wallow in your own feel-good politics, if you want, but it is not doing you any good.

  32. Kyle says:

    Steve, the Fortune 500 has a massive turnover rate. Something like 50 percent over 10 years.

    The Waltons weren’t on the list in 1955, and it’s a family owned business. I’m inclined to believe that their participation in a company that employees several million people might have had some small role in generating their wealth. Please tell me you had a bigger point than this?

  33. Frank Timmins says:

    @Bels

    I think you miss the point. It is not about “how much money the rich “spend” each year. It is about how much they “invest”. “Investment” means job creation and wealth creation. The “rich” use the money better than the government to create jobs. It is not a hard concept.

  34. Charles Johnsen says:

    One more time!
    The problem is spending more than we have or earn. The biggest sinner is the fed gov, next CA. IL, NJ, etc. But it also includes individuals who buy too much house and too much beer with money they do not earn.
    When we earn money in a free society, like America before the Progressives, it can only come because we invest and labour in activities that create wealth–ranges, roads, roofs. This is the ONLY way to grow an economy. Spending has nothing to do with growth, except that when we spend what we do not earn growth is retarded.
    Look at the brain dead idea of unemployment welfare. It not only spends money that we do not have it, removes a worker and investor from the activities that do create wealth. A double hit on prosperity and the surest way to slow creation of jobs and keep people poor and angry. The claim that unemployment payments increase GDP is risible.
    Want a wealthier nation, especially for those who have nothing but gov give-aways now? CUT SPENDING! Government spending, private spending. CUT! CUT!
    Anything else is an excuse for buying votes: the Chicago Corruption.

  35. August says:

    @Frank Timmins

    In his recent book “Twilight of the Elites” Christopher Hayes explores the idea that inequality (however you measure it) reinforces its self by unleveling the playing field.

    Freakonomics and Alan Krueger supports this this idea by comparing income inequality to inter-generational mobility. (http://www.freakonomics.com/2012/01/19/is-higher-income-inequality-associated-with-lower-intergenerational-mobility/) Although it uses the Gini coefficient the international comparison still holds insight.

    I see inequality in the US as a problem, and I agree with the Hoover Institute that we should focus on leveling that playing field to rectify the situation.

    “Rather than focusing on income inequality, policymakers should address the very real impediments to achieving equality of opportunity, particularly for the youngest and least-skilled workers among us. We believe such efforts should begin with fixing our k-12 education system, which is failing to train many young Americans to be competitive in today’s global labor market”

    So I’m not exactly in line with Krugman, but I hope my view makes sense.

  36. Wanda J. Jones says:

    This is a blog for the ages; note how it makes gorges rise.

    Isn’t anyone willing to be irritated at the constant whining of the willing poor who quit school at 15, won’t show up in time for work at Burger King, and who still gripe at the nerd boy from 11th grade who now owns his own software company? When half the country is supporting the other half, and that half complains about the very people who support them, what is that but rank ingratitude? It is especially galling to have people complain about how tax rate for the upper 1% should be raised when 50%, yes, 50%, pay no taxes whatsoever?!!!!!! Where is thew fairness and justice in that?

    John is right about anti-capitalism, and Krugman is the Court Jester of that particular kingdom of foolishness. If you think capitalism had nothing to do with this country’s wealth, ask yourself where we would be without Apple, Microsoft, Google, A T & T, and all the other knowledge-based companies. Get it? We are in a new era–we are no longer a manufacturing society but a knowledge society. There is no way this can be a level playing field because only a few people value and practice knowledge entrepreneurship. Yet most of the poor know how to acquire a flat screen TV.

    Cheers to all the ill-educated progressives…

    Wanda Jones
    San Francisco

  37. Charles Johnsen says:

    Yes! Reform K-12 education. We only need to amend the Bill of Rights to add these words to the First Amendment:
    Congress shall make no law respecting an establishment of a school nor prohibiting the free acquisition of knowledge or skill.
    In the age of electronic communications the government run, tax funded, union teach led classroom template is stone age.
    As for the universities, they have no shame and suck up every gov funded loan or grant for the most foolish of degrees that leave their students unwise and unemployable. No more gov $ for schools at any level. God $ have ruined education.

  38. Frank Timmins says:

    @August

    There is no rational argument supporting the notion that there are no problems with K -12. As you suggest it is a mess. The problem is that the “Progressives” seek to throw tax money at the problem (while ingratiating themselves to unions and entrenched academia – read: buying votes). People should understand that the problems with K – 12 is not so much funding, but rather (like every other progressive initiative), the “top down” management approach.

  39. John Steinsvold says:

    An Alternative to Capitalism (since we cannot legislate morality)

    Several decades ago, Margaret Thatcher claimed: “There is no alternative”. She was referring to capitalism. Today, this negative attitude still persists.

    I would like to offer an alternative to capitalism for the American people to consider. Please click on the following link. It will take you to an essay titled: “Home of the Brave?” which was published by the Athenaeum Library of Philosophy:

    http://evans-experientialism.freewebspace.com/steinsvold.htm

    John Steinsvold

    “Insanity is doing the same thing over and over and expecting a different result.”~ Albert Einstein

  40. Frank Timmins says:

    To John Steinsvold

    Utopianism, collectivism, Communism, etc. is not exactly a new concept sir. Not only is it silly and unworkable, it discourages the basic human instinct to excel and better one’s life. With due respect, this has been tried and continually proven ill conceived, not because of incorrect administration, but rather a failure to recognize basic human psychology. Yet some people still support the concept.

    Perhaps your cite of the Einstein quote is indeed appropriate.

  41. Charles Johnsen says:

    “The Human Race has improved everything except the Human Race.” Adlai Stevenson

    Your quote, John Steinsvold. It is correct.

    We cannot “improve” the human race. We are born with a nature, which is in full agreement with modern evolutionary biology as well as Genesis One. Wise people know that humans have a human nature that includes such things as mating for life and war. Don’t like that? Too bad. We are what we are.

    As for money: about the time a child can walk they get the idea of money. I believe money, a coin for a candy, is a universal genetic endowment of humankind. Try and take a toy away from a child to discover how deep the sense of private property is within us. To make your nightmare society work you will have to create a new species. Good luck with that. Warts and all, we are what we are, even you are what you are.

  42. John Steinsvold says:

    Charles Johnsen,

    Is it not human nature to try to improve one’s lot in life?

    Most important to humans are his well being and the welfare of his family and society in general. The reward that people inherently seek is image; it is respect and reverence from their community.

    Today, we live in a materialistic society. Material wealth is a status symbol. Currently in the USA, wealth directly symbolizes competence, power, and intelligence. In a way of life without money, we will all be economically equal (or nearly so; at least poverty will be eliminated). You will not be able to tell a CEO from a janitor by the clothes they wear or by the cars they drive or by the homes they live in. The aristocracy in a way of life without money will be those who contribute the most to society in the way of achievement, leadership & ideas. They will be held in our esteem.

    Perhaps for the first time in history, we, as a nation and as a people, have the ability to conduct our internal economic affairs without the need to use money. We have the necessary democratic government, we have the abundant resources, we have the educational facilities and also the technical knowledge to do so. In light of what is happening in our economy today, should we not, at least, explore this possibility?

    John Steinsvold

  43. John Steinsvold says:

    Frank Timmins,
    As I envision a way of of life without money, we will gain economic freedom in addition to and without infringement on our present freedoms. The ONLY common denominator between a way of life without money and socialism/communism/Marxism is economic equality which, in my opinion, we desperately need here in the USA. Economic equality will eliminate poverty. It will also eliminate materialism which warps our sense of value and corrupts our system. It will also reduce crime dramatically. Otherwise, our government will remain the same. The Democrats will still do battle with the Republicans. Our free enterprise system will still exist as it does today.

    John Steinsvold

    These capitalists generally act harmoniously and in concert, to fleece the people.-Abraham Lincoln

    “The free market is indeed free. Its free of responsibility and accountability. Owners are free to ignore the future, free to act in ways that generate short term gains for themselves and push long term costs onto other people, the environment and the future.”-Lloyd Ireland

  44. Charles Johnsen says:

    Dear John (Steinsvold),

    Your analysis of what is wrong with us is flawed, no, hellishly wrong. There is a long, long list of dictators who have tried to make us equal in poverty. They always use violence and murder because human beings are not robots that we can program to some idealist pipe dream. We are born with a natural set of ethics, values, and social skills. Among them are private property, money, the division of labour, charity, curiosity, language, mating for life, raising children, perhaps a god instinct, and many, many more. We are not blank slates that you can play with like little dolls. Left alone, these natural system bring order and wealth because very simple skills in individuals combine into world markets and increased knowledge and wisdom. You would kill the only engine we have a species to improve our lot and control crime. Unless you are prepared to kill half of us to make the rest into serfs. Again, there will always be inequality of power and ownership. The human way is a flexing and open and natural and evolving world of opportunity and peaceful trade. Your kind of inequality is everybody is a serf except for one or two who own everything, especially the guns and jails.

    An aside: It is a good thing, in a free society, to have battles between political parties. Free speech means free to argue and only in this battle will truth be discovered and taught. The scariest word in American English is “bipartisan”. If both of the ruling parties agree everybody else is screwed. We are not a democracy. Majority votes do not rule us. We rule ourselves. We are free.

  45. Frank Timmins says:

    Mr. Steinsvold, your world view is one that could be characterized as “eternal denial”. It ignores the most basic human need which is the desire to enhance one’s life. That, of course, is what tyrannical governments always try to supress. And the encouragement to pursue that need has been the foundation on which this society has been built.

    You seem to infer that “money” is some kind of evil incarnation when in reality it is nothing more than a convenience to make trading easier. At the same time you claim to value “free enterprise”. It seems that you have not really thought this through. If you have, I can only hope there are not many who think this way. Every single collectivist society in history has failed totally or is currently awash in misery and squalor. I would again suggest you refer to your original Einstein quote, and then grab a world history book.

  46. John Steinsvold says:

    Frank Timmins,

    Nearly everyone believes that money is a necessary evil. We have been brainwashed since childhood to accept this slogan as an undeniable truth. After all, money is, in great part, responsible for our prosperity. People honestly believe there is no viable alternative.

    Yes, in the past, there have been numerous attempts at various forms of “Utopia”. Their failures are well documented. For example, at Johnstown, people hunted at night so they wouldn’t have to share their food with others. It failed because food was scarce in those days. As a nation, we can supply the necessities and luxuries for everyone many times over. There is no room for greed. In Russia, the peasants despised the communist party and therefore there was no cooperation between them and it failed miserably. Other groups have tried by isolating themselves in a colony but could not sustain themselves because of their isolation. Each has a sad story to tell.

    Yes, our capitalistic system can work wonderfully well if we were all moral; but this simply is not the case! If people have a choice between being honest and economic gain, which do they choose? The answer is obvious. Perhaps if you are middle class or wealthy, you can afford to be honest? How sad!

    I believe the American people are entitled to know of an alternative to capitalism.

    John Steinsvold

    “If we are to get on the right side of the world revolution, we as a nation must undergo a radical revolution of values. We must rapidly begin the shift from a thing-oriented society to a person-oriented society.”- Martin Luther King, Jr.

  47. Charles Johnsen says:

    It is not capitalism that we defend but liberty!
    Of course people are greedy and selfish. That is the “genius” of markets. A price mechanism to allocate resources and labour will set limits, automatically set limits without any law or regulation, to greed and selfishness. A great profit will attract competition (unless lobbying provides a government granted monopoly, which is the only kind of monopoly that lasts very long). A high price will encourage exploration for more of a scarce material and exploration for alternative materials.
    I do not trust corporations or people. I trust the natural human mechanisms of money and price and markets to control them. It is government, the guys with the guns, that I distrust the most.
    It is like free speech. The answer to lies is not less free speech but more. The answer to distorted and unfair prices is not less free enterprise but more!

  48. Guy says:

    On the notion of somehow creating a system that structurally dispenses with poverty, two things:

    First, if it could be done at all, it would only be at the expense of liberty… a price that would surely/hopefully trigger a counter revolution by any moral/civil remnants of the society, i.e., those individuals who innately abhor coercion.

    Secondly, and perhaps more fundamentally to the point understanding-wise, as the late, great, British economist Lord Peter Bauer so eloquently stated in his high Etonian accent (and with reference to the U.S.’s silly “War on Poverty” attempts to get at the root causality of poverty), …”Umphhh! Poverty has no causes! It’s the natural state when we pop out the womb! Wealth has causes.”

    Bauer, I believe, nailed it. Just as the natural state of cold is displaced only by heat and the natural state of darkness is displaced only by light, so the natural state we know as poverty is displaced only by the creation of wealth. Accordingly, the moment society loses its primary focus on creating economic (not just financial)wealth, the natural state of poverty will inexorably begin to creep back in.

    So we’re back to same old question, the one that both history and logic answer repeatedly and resoundingly, “What kind of human devised system of governance and economy works best to create wealth?

    If you lack modern empirical grounding in the answer to that (amazingly) lingering question, please see the Fraser Institute’s “Economic Freedom of the World: 2012 Annual Report” at
    http://www.freetheworld.com/2012/EFW2012-complete.pdf

  49. Frank Timmins says:

    ” I trust the natural human mechanisms of money and price and markets to control them. It is government, the guys with the guns, that I distrust the most.”

    That is precisely the point Charles Johnson, and well said. It is such a simple and correct concept, and I am continually in awe of the fact that “progressives” or “liberals” (if you prefer) have some sort of dead zone of understanding in their brains that prevent the light bulb from lighting in this regard.

    I am really not trying to be sarcastic and I am not talking about the “Statist elites” with their agendas for controlling the population. We know what they are attempting to do. Rather it is those who enable the power of the elitists that leave me befuddled. Are they simply not capable of processing this type of information?

  50. John Steinsvold says:

    Guy,

    There is no excuse for poverty in the USA.

    Yes, the administration of a way of life without money is a huge problem. As proposed in my essay, a web of “economic bodies” would be created; one for the federal, one for each state and one for each local level. These economic bodies will coordinate the economic traffic in our nation. They will interact with each other as much as modern technology will allow. A balance of supply and demand will be achieved taking every conceivable factor into consideration including conservation and our environment as well as the needs of the people and their craving for luxuries.

    In short, these economic bodies will be coordinating what is now our free enterprise system to fulfill the economic needs of our nation.

    John Steinsvold

    If you want people to fight, throw them a bone; if you want them to cooperate, have them build a tower.
    –Saint-Exupéry

  51. Charles Johnsen says:

    This will be my last comment on this thread. It is getting silly. Please read Mises! Please. No computer, no committee, no “economic body” or “web” of them has the ability to set a price because no conscious effort or mental deliberation has the power that the simple algorithm of “offer, counter offer, done” repeated billions times a day has: to mediate supply and demand. It is a social skill/instinct of man that cannot be duplicated by any programmed or designed “system.” Might as well redesign gravity. To read Marx and not Mises is to disqualify yourself from further consideration on any topic of economics, politics, or philosophy. Wisdom is not cleverness but understanding.

  52. John Steinsvold says:

    Charles Johnsen,

    Yes, today we use money as a standard of value. It takes so many dollars to build a tank, a plane or a house. What would we use as a standard of value in the absence of money? Surely, this is a problem; but not an insurmountable one. Perhaps our economists could arrive at a solution which would satisfy even our environmentalists and conservationists. Profit would no longer be a factor which would simplify matters.

    John Steinsvold

    Perhaps in time the so-called dark ages will be thought of as including our own.
    –Georg C. Lichtenberg

  53. Charles Johnsen says:

    John Steinsvold,

    We are human beings, not Martians. By either our Creator or our evolution, or both, we claim private property, division of labour, language, profit, etc. You cannot change this! You cannot make people in YOUR image by education, oppression, law, or reason.

    It is not about capitalism but about human nature.

    Believing that economists can invent a better species than we are is risible. And arrogant in the manner of that savage, Marx. It is this sort of inhuman utopianism that has caused all of the death of the last century and desires the ruin of America today.

  54. John Steinsvold says:

    Charles Johnsen,

    In my essay: ”Home of the Brave?”, I stated that our goods would be distributed according to need (on an ongoing basis) rather than by the ability to pay. Thus, no one will lose their private property. God forbid! Donald Trump and Bill Gates will hang on to their many houses, planes & cars. This should be of some consolation to the rich & powerful.

    Is it not in “human nature” to try to do what is best for oneself? We must recognize that what is best for society is also best for the individuals within that society. Man will always strive to do what is best for himself, his family and friends. If a way of life without money promises a better way of life, he will surely take that step. The advantages border on the spectacular. Let’s not sell ourselves short. Our children will thank us for it.

    Today, the word “work” implies a means to “make a living”. In a way of life without money, the meaning of the word “work” will change completely. Work will become a stairway to learning, creating and achieving our goals in life without any economic fear. Cooperation and sharing will become our way of life.

    The best way to motivate people is to allow them to do the work they love to do. One of the goals of a way of life without money is to provide everyone with the opportunity to find a match between their abilities and the opportunity to serve society. If training is necessary, a free education is provided. Every effort will be made for each individual to find the work they love doing. There will be no pressure. I believe everyone has an ability or talent they want to use for the benefit of society. Otherwise, yes, a way of life without money will fail!

    There are people who love to farm. There are people who love manufacturing products. There are people who love being storekeepers and being behind a counter to serve people. There are people who love to bake. There are people who love being carpenters, plumbers, mechanics, farmers and yes, even janitors. There will be people who love bringing the necessities and luxuries to your local store so you can help yourself.

    Yes, there may be a problem in getting the menial tasks done; but with people of below average intelligence, a menial job can be a challenge. In a way of life without money, cooperation will replace competition. Thus, the most menial task becomes easier when people work together. Also, technology is constantly eliminating menial tasks. In my essay, I offered “perks” as another option to consider.

    As I envision a way of life, the people who do the menial tasks will be treated like royalty. Not only will they be economically equal to CEOs; they will also be given the highest priority when it comes to seating at sporting events, shows, operas, etc. They will also receive the highest priority in determining who gets the scarcer luxury items, the choicest vacations, etc. Therefore, I don’t believe there will be a problem in getting people to do the more menial tasks.

    This country is more than capable of producing the needs and common luxuries for everyone. Thus, no one individual will have a personal “need” for anything since everything will be free. Therefore, his motivation to work is gone? What about the needs of our society and of our nation? What about the need to eliminate our importing of oil from the Middle East? What about the need to produce automobiles that are truly safe and fuel efficient without messing up our environment? What about the need to conserve our resources? What about the need to beef up our national security? What about the need to do research in preventing and curing diseases? What about the need to do humanitarian work abroad? The list is long. Is not improving our way of life adequate motivation? Is not doing the work we want to do or even love to do adequate motivation? Do we not all have dreams of accomplishing something in life?

    John Steinsvold

    The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living.
    –Elizabeth Barlow

  55. Charles Johnsen says:

    for John Steinsvold

    Need not limited by the ability to pay is unlimited.

    It is not human nature to “try to do what is best for oneself”. A human group doing “better” is a SIDE EFFECT of characteristics of our brain wiring and social instincts. It is always this way in biology. Genes operate indirectly. We are not computers that can be reprogrammed.

    Rather, our species does better because of the gadgets built into us by evolution/creation. There are hundreds of them, from the ballistic ability to throw a rock, to heterosexual mating for life, to the division of labour implied by the expression “hunter/gatherer”. We are not blank slates upon which you are free to experiment with inhuman schemes.

    You say, “We must recognize that what is best for society is also best for the individuals within that society.” Nonsense. I believe you automatically assume the equality of society and government. This is the talk of Fascists trying to justify their power. It is actually the exact opposite as anyone who has read Smith or Mises, or worked a day in his life, knows. A person’s efforts to gain wealth in a free market place always leads to more wealth in the society as a whole, as long as the government does not take away the increase.

    Of course work means making a living! Everybody from the greeter at Walmart to the union guy on a production line knows this. Or, in a just world, they starve. If there is no “economic fear” there will be no wealth creation and no goods and services for you to hand out to your political constituency. Have you ever been on a factory floor, much less worked on a production line? Have you ever had a software deadline? How about a client waiting for your service? Sure, I enjoy my work. Sure, I am lucky and have had several careers that I choose and enjoyed. But not all of them. And there is nothing better than hunger to encourage one to do what society needs rather than what I want to play with.

    Sure there are people who love to farm. But if there is no market place for their excess, the inevitable result of a society without money, they will grow and raise enough for their families and to the rest of us they will say “Screw you!”

    When you say, “yes, even janitors” and “menial tasks” you expose yourself as an elitist. And then this: “the people who do the menial tasks will be treated like royalty.” Ya, right. You refuse to see the value of a market in labour that gives people the freedom to decide if a given job is worth it and for the employer to decide the value of that labour as well. Instead, you will decide who gets the good stuff which will result in Steve Jobs fighting to get that job on the garbage truck instead of investing his life in making our lives better. Your way will take guns and more cops than people. And who is going to pay them?

    Your final paragraph is pure ignorance and special pleading without ANY objective evidence that people will behave as you wish. Of course some of us, at least a few of us, are motivated by these grand passions for the nation and the environment. But, to the person, every single one of them will need to be paid enough to feed themselves and their children or have been successful enough to not need payment. Bless them but do not expect very many of them in any generation. If they are not producing wealth they are parasites on those of us who do.

    And, look at how we solve these problems you mention. Somebody sees the trouble, a visionary even, and seeks a way to fix it. Always, always, we measure the value of that solution by profit, money, wealth, and status. If otherwise, why bother? A human society without money is not a human society but a cardboard game with little tokens and plastics houses.

    And then this: “everything will be free”. No, there will be costs and incentives even in Oz. Who will pay these costs? Martians?

    Charles Johnsen

  56. John Steinsvold says:

    Charles Johnsen,

    In some respects, our economy will be the same as it is today. Our free enterprise system will remain in place as it is today; but no money will be exchanged. Profit will no longer be a factor and cooperation and sharing will replace competition. A balance of supply and demand will be achieved taking every conceivable factor into consideration. This includes the needs of the people and their craving for luxuries. It also includes conserving our resources and protecting our environment which is essential if we are to survive.

    Yes, I believe it is human nature to “try to do what is best for oneself”. Otherwise, democracy would never have been born.

    John Steinsvold

    “The free market is indeed free. Its free of responsibility and accountability. Owners are free to ignore the future, free to act in ways that generate short term gains for themselves and push long term costs onto other people, the environment and the future.”
    -Lloyd Ireland

  57. Moneybags says:

    Strawman argument.