Subject:
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Re: A hypothetical economics question...
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Newsgroups:
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lugnet.off-topic.debate
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Date:
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Thu, 28 Feb 2002 17:28:39 GMT
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Viewed:
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291 times
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In lugnet.off-topic.debate, Frank Filz writes:
> And personally, in my opinion, no one who has "toys" or any other
> "luxury" wealth above the wealth that the majority of the people in the
> world have has any justification in taking such a position as you seem
> to be taking. Your LEGO collection is just a difference in magnitude,
> not a difference in kind from Bill Gate's wealth.
You are, of course, advocating communism: "Anyone who possesses even a
single item beyond basic living requirements is equally culpable as one who
possesses countless frivolous luxury items."
And in fact I think there is a manifest difference between Gates-level
wealth and Marchetti-level LEGO; Richard can realistically use all of his
LEGO collection in a construction project (ie, in its principal function),
and his wealth will remain the same. Bill isn't realistically likely to
"use" all of his wealth except as a vehicle for making more wealth (its
principal function). For the moment, let's consider only Bill's liquid
assets, such as easily-convertible stocks, bonds, funds, notes, and similar
holdings, as well as raw cash (even this fraction of his wealth is far more
than you or I will ever likely see in our lifetimes). Naturally, we can
posit that Gates might be stricken with sudden altruism and undertake a
series of vast, vast, vast charitable programs, but that's still manifestly
different. If Gates, for example, donates say half of his fortune to fund
research for a cure for children's leukemia, he's still left with half a
zillion dollars with which to accrue still more wealth. If Richard donates
half of his LEGO collection to raise money for the children's leukemia
effort, he's left with only half of his collection. Richard's "wealth" is
different in kind from Bill's wealth because Richard's wealth has no
inherently self-replicating ability, whereas Bill's does. Sure, Richard
could raise money by parting out his Monorail set and thereby purchase more
LEGO, but that requires Richard to convert FROM his "wealth" TO cash and
then BACK TO "wealth." Gates, however, has direct wealth that remains
direct wealth even as it's accumulating even more direct wealth.
As Richard indicates, the possession of wealth is absolutely not an
inherent evil. I would go a step further and say that "what one can use in
a lifetime" is an arbitrary measurement of "appropriate" wealth. I don't
even care that Gates is rich beyond all dreams of excess. However, the
ridiculous pretense that there is no difference of kind between the wealthy
and the impoverished is flatly insulting.
> Take a young family, who has been in the workforce for just a few years.
> They would like to acquire a house. How will they get the capital to
> acquire that house? If they have to borrow that money, shouldn't they
> pay something to the lender to compensate the lender for the use of the
> money?
Of course, this is how they hose you coming and going. They (banks and
lending institutions) charge account owners fees for services while
returning nary a pittance of interest, but they (banks et al) charge
considerably higher rates for loans. Naturally, we can say "the bank
charges its account owners for the convenience and security of banking."
Sure, but the bank is only getting its money from its account holders, so
the bank charges for services it wouldn't be able to provide without account
owners in the first place. Obviously, large accounts receive preferential
treatment in this regard because they provide more income for the bank, but
the bottom line is the same; without account owners to fund the bank, the
bank would lose a huge percentage of its holdings and would be unable to
earn more income or charge for services.
I'm not naive or foolish about this; I know this is how the system works,
and I accept it without too much grumbling. But since we live in a
debt-addicted society, what would happen if everyone stopped incurring debt?
What if, hypothetically, everyone only used/acquired/purchased those things
that they're capable of paying for outright? The economy as it stands would
disintegrate.
> If no one is allowed to have more wealth than they can personally
> use to sustain their own living (and how do we measure what is
> reasonable to accumulate for toys?), then who would have the excess
> money to allow the young couple to borrow money to buy the house?
It would be helpful to distinguish here between individual wealth and
corporate wealth (even though some ridiculous legal notions tend to treat
corporations as immortal "individuals"). To that end, can we imagine a
corporation worth, say, $1 billion in the aggregate, but in which no single
person owns more than say $100,000? Of course we can--mutual funds and
publicly-owned companies, to name just two examples. Similar corporations
can lend money to individuals who successfully petition for loans of perhaps
$60,000, but at the same time no single member of the corporation is
individually responsible for the loan.
With this in mind, it quickly becomes clear that a system of loans is
possible even if no single individual participating in the system has
particularly large amounts of wealth. As long as the aggregate system is
large enough, it can work.
Dave!
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Message has 1 Reply:
 | | Re: A hypothetical economics question...
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| (...) Dave! Way to keep your eye on the moving targets! This was not a small topic you raised with your seemingly simple query. Of course, all of the things you describe are brought to us by the friendly passages contained in Title 12 of the Federal (...) (22 years ago, 28-Feb-02, to lugnet.off-topic.debate)
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Message is in Reply To:
| | Re: A hypothetical economics question...
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| (...) Please show me where I have EVER stated that I pay much heed at all to the Bible. I really would hardly consider myself a Christian either, true, I do consider Jesus to be a "great man" (possibly even supernaturally great, but definitely NOT (...) (22 years ago, 28-Feb-02, to lugnet.off-topic.debate)
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