Showing posts with label plutocrats. Show all posts
Showing posts with label plutocrats. Show all posts

Friday, December 22, 2017

Before going after the “filthy-rich”, it behooves us all to consider how they got their wealth and what they have done with it.

The plutocrats can have obtained their wealth in many forms ranging from highly licit and commendable ways that have even enriched many others, to odiously having used criminal means leaving many impoverished in their wake. But, once that wealth exists, what can the wealthy do with it?

They can invest their wealth in bonds and shares, which mean these assets, if well invested, will be productive.

They can freeze their purchasing power, by a sort of voluntary tax, on walls or in storage rooms, like for instance the $450 million Leonardo da Vinci “Salvator Mundi” (What those who got the $450 million fresh purchase power do with it, is what then becomes relevant to the economy) 

They can spend their wealth on things that no normal human being could spend on, which helps to create jobs than would otherwise not exist.

They can put some cash, on which they earn 0%, under the mattress... a couple of $100 bills?

They can engage in philanthropy, hopefully efficiently in worthy causes, otherwise that's a loss.

They can use their wealth to manipulate and exert undue influence.

That should primarily make us go after that wealth that has been obtained through illicit or immoral means; and that wealth that is used to manipulate and obtain more influence than what its owner should rightly have; and keep an eye out for useless and even bad philanthropy.

I argue all this because, when redistribution profiteers try to increase their franchise value by instigating envy and hate, it behooves the rest of us to make a clear distinction between the good and the bad among the astronomically wealthy; and to much better understand what has already been "redistributed" by the wealthy themselves, so as to avoid unexpected consequences.

What is absolutely certain though is that any redistribution of wealth will yield only a minuscule fraction of the benefits so loudly promised.

PS. There are though many market inefficiencies that allow wealth to be accumulated in legal and moral ways but that should anyhow be combated. This includes monopolies or excessive rent extraction from intellectual property rights.


Thursday, April 24, 2014

Let us avoid the merchants of poverty

I admire those who help the poor. Not so those who use the poor to help themselves.

Even though there has been a considerable reduction in the number of poor in the world (not necessarily sustainable), inequality, in terms of differences in income and wealth between the richest and the poorest has increased considerably during the last decades ... and that's not healthy, to say the least.

And accordingly, opportunistically, those who argue that everything is solved redistributing, meaning taking from the rich and giving it to the poor, now appear on the scene. How easy it would be if everything was just that easy. It is not. It is our duty to make sure that merchants of poverty, with their insidious sowing of envy and hatred, makes it even more difficult to help solve the poor’s already sufficient precarious situation.

The proposed solution is based on the illusion that it is possible to take away purchasing power from the rich and hand it over to the poor; and that the poor can then go with that purchasing power to the grocery store. False!

First, the rich have their wealth invested in assets, houses, stocks, paintings, yachts, etc. And so, to transform those assets into money, you have to sell them. To whom? Without wealthy buyers around, the sale would only translates into a reduction in the value of the assets ...resulting in a lower amount than estimated to be delivered to the poor. How does it help the poor that a Picasso valued at $50 million, is then only worth $1 million? 

Second, assuming you could sell the assets and give the money to the poor, will there be sufficient supply to satisfy the needs of the poor? No! The unexpected new demand will result in much inflation.

Does this mean that there is nothing to do? Not at all! What is clear is that instead of attacking the results of the inequitable distribution of income and wealth, we must concentrate on attacking its causes ... especially the artificial ones, those not based on the natural reality that we are not all equal.

What are these artificial causes? Each economy has them, in different degrees, but their most frequent common denominator is state interference. Licenses leading to monopolies (intellectual property rights?), foreign exchange controls, transparent and non-transparent subsidies, corruption, discriminatory regulations, etc. For example, in Venezuela, how much more could you have benefited the poorest if the government had not insisted on giving away gasoline at US$ 4 cents a liter... or selling foreign exchange cheaply to those vacationing abroad?

A seemingly easy way out like re-distribution, is simply not enough, nor is it sustainable, and it is the poor who most need to know that. It cannot be that the final result of the redistribution of wealth and income in Venezuela would be to concentrate even more income and wealth in the hands of our Boligarchs of turn… whatever political color they wear. 

But Kurowski! Have you not for years insisted in distributing all of Venezuela´s net oil revenues to the citizens­? Yes! But with that, much more than a redistribution of purchasing power, I mean the redistribution of powers and opportunities... from petrocrats to citizens.

And if the rich want to help, welcome, but perhaps they better deliver that help directly to the poor, instead of going through the politicians who so often are only acting as the merchants of poverty.

In other countries, where for the .01% plutocrats what the 99% holds seems not to suffice they are now looking for the other 0.99 %. Tax the wealth and, at the end of the day, without further changes, most of it will come back to fewer and fewer Plutocrats.

Translated from El Universal, Caracas Note: You will not find the link. I was censored in my homeland Venezuela 

PS. Legend holds it that when Otelo Saraiva de Carvalho, chief strategist of the 1974’s Carnation Revolution in Lisbon, told Sweden’s Olof Palme: “In Portugal we want to get rid of the rich”, Palme replied, “how curious, in Sweden we only aspire to get rid of the poor” 

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