“Can you give me a good reason one person should have a BILLION dollars??”
Some questions produce more questions than they do answers.
That question comes from Peter Daou, a politico formerly in the employ of John Kerry and Hillary Clinton, who asked it on Twitter to much applause. The coming War on Wealth grows over more noticeable in public discourse, and is something British investors should pay attention to. Though the more obvious threat to wealth in this country in the guise of Jeremy Corbyn recedes, the hunger of the state grows ever more ravenous, unabated.
Who deserves a billion dollars?
Leaving aside wisecracks like “they need to pay for something in Zimbabwe” (the question isn’t specific on the kind of dollars after all), the question itself asks many more on the nature of money, capital, and wealth.
After all, what would be the worth of a single dollar, if you were banned from accumulating some arbitrary number of them?
What would the worth of a dollar be, if politicos got to decide who “should” have them in the first place, rather than their accruing to those who provide goods and services to customers and clients?
What use would a dollar be to measure the value of anything, if once your bank account contained a certain number of them you were suddenly deemed unworthy of them, that a bell rang somewhere in the taxman’s office and all your funds were wired away to the state?
I would hazard to guess that a dollar would be valued similarly to a North Korean won, and be just as functional as a means of exchange. Putting a cap on a billion dollars will only make billionaires find imaginative means of avoiding reaching a billion dollars – capital will always flow around government intervention, and obey the letter, but not the spirit of the law.
As hedge fund manager Mike Green observed recently on strange market phenomena caused by state intervention:
“… almost inevitably when you find somebody doing something that on its surface seems foolish, the answer is they’re either doing it because they’re trying to evade taxes, or they’re doing because they have to for regulatory purposes.”
Seek to dominate capital, and capital evaporates, and you end up with the North Koreas and Venezuelas of the world where economies barely function, and when they do, it’s on the black market.
Why a billion? How about $999 million? Are the men and women with a net worth only in the millions deserving, while those with billions undeserving? If you let the state take half, or donated half to charity, and still had a billion dollars left behind, would you deserve it then?
£762 million doesn’t have anything like the same ring as a billion dollars, but they equal the same thing on the FX market – are Brits allowed to have £762 million, but a billion pounds is what should be made illegal?
How about $20 million? That may seem miniscule by comparison, but that was the fortune of John Jacob Astor upon his death in 1848, and he was one of the richest men on the planet. Adjusted for inflation of course, that’s over a $100 billion today. Compounding inflation makes all of us, especially your children and grandchildren, closer to becoming billionaires by the day, so arguably this question of will become ever more important with time.
While the rage against billionaires may seem removed to all who are not so wealthy, it should be paid close attention to. What’s good for the goose is good for the gander, and strategies to loot billionaires to the very wealthy of their capital will be swiftly employed against the next rung down on the wealth ladder, and then the next when the billionaires use their ample means to move their capital out of reach. The everyman does not have the means, and so must pay for the government’s pet project from his own pocket.
Not that everyone minds about that, however…
Bring on the communism
A couple of weeks back I asked if you had any questions for our editors for our upcoming 20/20 Vision series. I was amused by one email, with a Marxist bent, which quite fittingly contained no questions at all, but was instead a list of demands that the government intervene everywhere to fix all of our problems.
Here’s a small segment, emphasis mine:
The UK’s housing industry to be given a complete and no holds barred overhaul by the government to produce hundreds of thousands of low cost houses suitable for low earners. No ifs, no buts. Huge government investments required and land to be compulsorily taken from landowners at less than present values, if necessary. The haves can live-off their other “fats”. Housing is a national emergency that absolutely needs dealing with. Government intervention is entirely justifiable. There are too many landowners holding vast swathes of land – no longer permissible! Own land, yes, but not such large amounts. Large to be defined as required.
The U.K. government to completely modify the present arrangements of private landlords. Their rent levels are way beyond what ordinary people can afford and the upkeep of properties well below standard. No ifs, no buts. The government to institute the building of properties for rent at affordable prices and maintain their upkeep. Huge investment required.
The U.K. government to institute a nationwide scheme for properly trained people to access each dwelling in the land to enquire as to the wellbeing of children. The said trained people – properly protected as required before knocking on any door – to produce a report for each dwelling. All reports to be government reviewed with a view to assisting families that do not meet minimum standards to improve. Huge government investments required but with enormous long term gains to the economy and well-being of the nation’s people.
As Marx once said, “From each according to his ability, to each according to his needs”, or as the founder of this company once put it, “Somebody should do something about all of the things.”
I think the only thing I agree with in this dear reader, is that such dreams would require “huge investment” – not so sure about anything else.
You’ll often find that a “government intervention is entirely justifiable” to remedy the last government intervention (which was no doubt, entirely justifiable) landed us in this mess. You have a problem with wealth inequality, you should take it up with agents of the state who control the price of money, rewarded bank failure and have inflated the value of capital – including land and property values – over labour ever since the financial crisis.
If rent levels were unaffordable, landlords would not charge them, and the standard of their properties is their business – it is, after all, their property, and if standards amongst landlords fall generally, this creates an economic incentive for a landlord who keeps higher standards. The government stealing private land, sorry “compulsorily taking land at less than present value” will be as successful in increasing living standards as it has historically.
As for agents of the state inviting themselves into the home of anyone with children to decide whether they approve of the furnishings (with, no doubt, all manner of powers they can level against parents they dislike)…
Why bother with all the “properly trained people” in the first place (government service pensions are mighty expensive after all), and simply mandate that government surveillance cameras and microphones be installed in the home of every family? Sounds delightful. Perhaps the kids could be supplied with a small red book containing government approved mantras, so as to remind them that the state is their parent as well..?
Alas, our role here at Southbank Investment Research is to try and help you grow and protect your wealth, not to devise strategies on how to destroy it.
Earlier this year, a photo was sent around from the World Economic Forum in Davos, where the global economic elite and all manner of celebrities gather to congratulate each other and feel important. It was an image of a hot air balloon, its fabric covered in images of different nations’ passports, and the world GLOBAL written across the side in all caps. It was beached across the snow like a dead whale, deflating, in what seemed like foreshadowing of what was to come.
And lo, just yesterday BoJo banned ministers from attending with the claim “our focus is on delivering for the people, not champagne with billionaires”. I’m no fan of the “Davos Man”, but you should pay attention to the backlash against him: for the desire to hoover up his cash is not limited to one political party, and that hoover can just as easily be levelled at you.
All the best,
Boaz Shoshan
Editor, Capital & Conflict
Category: Market updates