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The Rich, The Poor, & The Trouble With Socialism
Authored by Bill Bonner (of Bonner & Partners), illustrated by Acting-Man's Pater Tenebrarum,
Rich Man, Poor Man
Poverty is better than wealth in one crucial way: The poor are still under the illusion that money can make them happy. People with money already know better. But they are reluctant to say anything for fear that the admiration they get for being wealthy would turn to contempt.
“You mean you’ve got all that moolah and you’re no happier than me?”
“That’s right, man.”
“You poor S.O.B.”
We bring this up because it is at the heart of government’s scam – the notion that it can make poor people happier. In the simplest form, government says to the masses: Hey, we’ll take away the rich guys’ money and give it to you. This has two major benefits (from an electoral point of view). First, and most obvious, it offers money for votes. Second, it offers something more important: status.
...and ending up moping.
After you have food, shelter, clothing, and a few necessities, everything else is status, vanity, and power. Extra money helps us feel good about ourselves… and attract mates. It’s not just the money that matters. It’s your relative position in society. From this point of view, it does as much good to take away a rich person’s money as it does to give money to a poor person.
Either way, the gap closes. Never, since the beginning of time up to 2015, has government ever added to wealth. It has no way to do so. And no intention of doing so. All it can do is to increase the power, wealth, or status of some people – at others’ expense.
The Trouble with Socialism
That is a perfectly satisfactory outcome for most people, at least in the short term. But the more this tool is used – the more some people’s power, status, and wealth is taken away – the more the wealth of all of them declines.
The trouble with socialism, as Maggie Thatcher remarked, is that you run out of other people’s money. You run out because there is only so much wealth available… and because the redistribution of that wealth distorts the signals and incentives needed to create new wealth.
Joseph Stalin’s modest little dacha in Moscow – highly appropriate for a the global leader of the proletarians
Photo credit: RIA Novosti
This means that society gets poorer relative to other societies that are not stealing from one group to give to another. After a while, the difference becomes a problem.
The meddlers see that they are falling behind and change their policies to try to get back in the race. (This is more or less what happened in Britain and China in the 1970s and the Soviet Union in the 1980s.) Or the poorer society is conquered by the richer one (which has more money to spend on weapons). There is one other wrinkle worth mentioning…
Stalin’s summer residence in Sochi – the leader of the proletarians after all needed to rest now and then.
Photo credit: Miracle Maker
Although it is true that “leveling” may have a pleasing aspect to the masses (bringing the rich down so there is less difference between the two groups)… it is also true that leveling is just what powerful groups do not want to happen. Even when the elite go after “the rich” with taxes, confiscations, and levies, they tend to look out for themselves in other ways.
Stalin’s private indoor swimming pool in Sochi – a marble-quiet place of contemplation, perfect for hatching out the new plans to improve the happiness of the proletarians.
Photo credit: Miracle Maker
They allow themselves special rations – special medical care… special pensions… special parking places… and various drivers, valets, and assistants. One study found that there was more difference between the way Communist Party members and the masses lived in the Soviet Union than there was between the rich and poor in Reagan’s America.
Soviet leader Leonid Brezhnev photographed during a hunt in the GDR with his buddy Erich Honecker. Only the “dear leaders” could indulge in such luxuries in the socialist Utopia.
Photo credit: Wladimir Musaelian / TASS
About to go deer hunting in the GDR’s hunting grounds for comrades that were slightly more equal than the rest of the population (from left to right): Günter Mittag, Secretary for the Economy of the Socialist Unity Party’s central committee, Erich Honecker, General Secretary of the central committee of the Socialist Unity Party, Andrei Gromyko, Foreign Minister of the Soviet Union of Socialist Republics, and Pyotr Abrassimov, the Soviet Union’s ambassador to the GDR
Photo credit: Bundesarchiv
Alan Greenspan Was Right
All of this brings us to here and now… and to gold. Traditionally, gold is a form of money. Money has no intrinsic value. It is the economy that gives money its value. The more an economy can produce the more each unit of money is worth. It doesn’t matter whether it is gold, paper, or seashells.
But just as the common man is deceived by money (he thinks more of it will make him happier), so are policymakers. Their belief is a little more sophisticated. They know it is the economy, not money, that creates wealth. But they believe that adding money (and more demand) will make the economy function better… and make people wealthier.
Digital credit galore: total US credit market debt (black line), gross federal public debt (green line) and GDP (red line). Somehow, adding more and more debt hasn’t really made us a lot richer. It has however created a great mass of debt slaves – click to enlarge.
And in today’s post-Bretton Woods monetary system, they don’t add physical money (gold, paper, or coins); they add digital credit. This new form of money takes the scam to a new level. We have been trying to understand (and explain) how the system works and why it is doomed to failure.
But Alan Greenspan – bless his corrupted little heart – was on the case even before the credit bubble began:
“Under a gold standard, the amount of credit that an economy can support is determined by the economy’s tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government’s promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets.
A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit.”
Alan Greenspan, here photographed during a poker game as he announces a raise by ten dimes.
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Our space program existed because of private business. Once again, you have no idea what you are talking about.
Plenty of private roads existed before the government 'invented' them Emperor Trajan.
So how about a nice graph showing us greedy taxpayers our return on investment. It would appear by all statistics that it has been severely negative for decades now....long since the interstate highway projects.
All living things require water, but we can all drown pretty easily too.
We are drowning now.
Now that's a fine idea.....show me a return on my tax "investment." It's what I would demand for any other investment.
Nancy Pelosi said you get $1.30 in return for every $1 spent on food stamps (or something similar). I was like, SIGN ME UP! I'LL INVEST MY LIFE SAVINGS IN THAT! That's a 30% return on your investment!
Of course, it's a GD lie, just like any other time they refer to stealing your money as an "investment."
Don't panic .... government will be around .... we just want a lot less of it .... government is like a kid taking his mom with him on his paper route .... dead wood !
God, that's stupid. The highway system wasn't built for free, and it isn't used for free. We pay taxes for that shit, man. You have no idea what you're talking about.
"Find me a country with no government and I'll show you a shithole."
The wealthiest nation that has ever existed on Earth was founded on the premise of LIMITED GOVERNMENT. The more limited the government, the more prosperous the nation.
The idiot that said money can't buy you happiness, has obviously never been poor.
Most would agree with your words, however a few studies came out recently and surprisingly the ten happiest countries in the world are in Latin America.
The studies don't surprise me. I know people will say "Why are they trying to come accross the border?".
There will always be those because of circumstance, poverty or threat of death may wish to leave, but many love their countries and make their way and are happy doing it without the McMansion, Beemer, platinum cards and stress.
They're Muslim free and mostly Jew tolerant !
Cherry, I'm sure you mean what you have said; still, I can't imagine 'Anybody' being 'truly' happy without at least a Premium card if Platinum is beyond their reach, and for you socialists out there, what good would a Platinum card be if everyone could have one?
Humans have a desire to be 'Important' since it is impossible for an entity as ephemeral as man to be important except in his own mind, or the minds of others, people crave the envy of others, iwhich is an affirmation of their importance, in this light useless possessions can be seen as props dangled before the envious masses!
I love these surveys. Could their happiness be determined by a gun in their face? Saddam's democratic "survey" indicated 90% of Iraq's loved him.
I would challenge the whole notion of happiness. I'm not sure most people have any idea of what that is, as most of us have been severely manipulated and indoctrinated to a consumer mentality, a mindset that relies heavily on buying things, owning things, to signify our happiness, even if we don't feel it.
To me, happiness is a derivative of contentment, which can never be satisfied through consumption. Just because no one is happy with starvation, gluttony apparently doesn't work either. Contentment comes from the inside, from the sense of accomplishment which can only be met with achievable goals. ..not the constant indoctrination for the demand for wealth and power over others. Listen to politicians speak to YOUR need for empowerment through the grasping hands of government, your demand for power over others that only they can provide.
ZH continues to be the world capital of destructive simplification. The pea-brained libertarians who flock here can't seem to grasp that complexity is an unavoidable feature of an advanced civilization. That's why intricate things like the Internet and nuclear technology require the combined contributions of government and private sector (socialist and capitalist) economic models.
The modern US is a cartoon caricature of an irresponsible society, where punishing the poor and the weak is considered essential to the efficient functioning of markets. Countries like Sweden, Norway, and Switzerland are ignored by libertarians, as their statistics on social welfare and economic effficiency completely demolish the arguments of the Ayn Rand crew. In America, even the tiniest step toward a compassionate society, like parental leave, is instantly declared to be the return of Stalinism by zealots who scream that the SACRED MARKET has the answer to everything.
Markets cannot function without contracts. Contracts are enforced by law. Law requires the organization of government. Thus Capitalism cannot function without competent government. That is why we have a MIXED ECONOMY. Changing the mixture to tear down government and return America to the time of the McKinley administration is not progress.
Sweden and Norway are being over run by Somalis and Ethiopians .... and their socialist governments are full partners .... in their mixed (up) immigration problem .... Anders Behring Braevik .... has unfinished work .... let him out .... to lead the Norwegian Resistance !
The victims of the collectivist murder Breivik:
http://beforeitsnews.com/mediadrop/uploads/2014/03/bb6fbb365d1ab761763fa...
Sweeden and the whole Europe is run by a bunch of Jewish politruks (politiceskij rukovoditel, political commisary).
Sweeden and Norway and EU are occupied by the same cabal (jewish internationalists with their World Government), which was running the jewish-bolshewik revolution in 1917 in Russsia and turned the county into a paradise of forigners, who believeed in the jew Marx and Jew Lenin.
Soviet emipre was NOT run by Russians, but by internationalists and predominantly by Jewish internationalists. The same is Sweeden or Norway today, run by jewish internationalists in the instance of the local gov.
agree, but is a central govt. required, or can we simply do with decentralized govt. a la the swiss model?
Why would one need an elite gang with the right to rob and kill others in order to live peacefully? Could the contradiction be any more obvious?
Nutjob Nazis such as yourself will never grasp that you are no longer needed. Obsolete. You can take your glorious 3rd way and shove it up your ass.
https://www.youtube.com/watch?v=Kehrxmt0j4s
Yes, but who pays for all that? Capitalist do....Hmmmm..
the USSR was the "Jewish Workers and Farmers Paradise", that means it was a paradise for the jewish and not of the workers and Famers.
The jewish USSR goverment destroyed allmost all christians churches and murderd millions of russian Christians!
all my friends stab hoods, my self included. we get along sometimes,nature of the town and history, fuck up one year, sentimental frends the next, jay z just got tv guide readres digest fame. youre a woman. i SHOOT BETTER THAN YOUR BEST GUY SO SHUT THE FUCK UP.
Youre beats are see and say, i dont get any fame for what i do. I already have the money, so i just watch. me and my pal are drinking ipa, hes out i have the rest, All youre heroes to me are my prized whippets. I get shot at, again and again this is my job
https://www.youtube.com/watch?v=gJP_EmYeuvw
yes, fuck your favorite crew, i dont believe you
conflating the Soviet "communist" experiment with socialism, are we Bill?
Socialiism is for losers and wannabee autocrats. Those are the only two groups that do well.
............other societies that are not stealing from one group to give to another.......
correct. in Capitalism the capitalist takes away everything he can, from the poor, in socializm there is no capitalist, so the game is played with swaped sign.
A BS, what that guy writes. Probably a Jewish troll, sayanim.
One difference between the rich and the poor.
Who is more likely to help you out by doing you a favor, somebody rich or somebody poor ?
The poor are far more generous than the wealthy or rich.
At least you know 2 rich people read this.
Obviously they believe by allowing you to clean their boots, they are doing you a favor.
Does a poor person employ you? Where do you get your retirement from? Where do you work if you work at all? Was your computer made by a poor person who made it in his garage with his bare hands? Truly asinine. From my experience, poor people are not that helpful as you claim they are and are actually very greedy. Difference is, a rich person is a ambitious person who takes action and takes the opportunity to remove himself from poverty, along the way, he creates opportunity for others. Your opinion does not make the poor better people than rich people. Sorry. Not true at all.
wrg
All socialism ever was a huge revenge fantasy concocted by people who knew they didn't have what it took to succeed in a free society and market economy on their own merits. Socialism never existed in reality (though Democratic Kampuchea came close), and can't be applied without returning society to a subsistence farming level of development (and population). That didn't matter. The real point was to give revolutionaries and their FSA an excuse to kill everyone who ever pissed them off and take their stuff.
Socialism doesn't work mainly because it the lower productive people drag down the higher productive people. Socialism is about a society working as a team, if one is too successful, he must pause his success so he won't get to far ahead on his other people who are trying to catch up. That's what is, and that's why socialism doesn't work well as capitalism in creating wealth. Socialism is a like a regulatory and tax burden that punishes people who are far ahead of everyone else, so we must tax, and regulate the clear winner, so everyone can catch up. Socialism = giant regulatory burden. It don't work. Of course when there is more people who are less ambitious and not as successful and the system is leveled more to unproductivity, the whole thing crashes, the burden becomes bigger for the productive versus the low productive, or unproductive.
In the case fo Greece, 67% of Greeks recieve income from the government, so as you can see in democracy it's no wonder they vote in politicians that promise them to keep their income that comes from their government. It's not that Greeks are lazy, it's just they were living beyond their means, while their productivity was not sustaining their lifestyles.
Libertarianism 101:
Anarcho-kapitalism (not to confuse with anarcho-syndicalism) definitely works in RAT COMMUNITIES locked in the jar. Socialism works when they are free since they reject rat kings and choose democracy, peace and sharing.
See this interesting video describing development of competition and leadership formation processes. Fascinating study and instructive conclusions, especially for those who need to loose weight . Applicable to humans as well. Enjoy.
http://www.youtube.com/watch?v=SwnUzo2252s
Are you equating libertarianism with Socialism, and if you are then you're retarded.
Socialism does not work and never will.
Socialism is equal misery for all and a guaranteed violent revolution
The ultra-rich individuals who have purchased control over government and the market are criminals. If you, the 99% fail to regain control, you are dead.
Below is Disclosure Testimony of the Illegal State starting at: h:mm:ss 1:07:13
For example, the Disclosure Project submitted a proposal to congress to fund Stan Meyer water based energy.
Senator Gravel states at 1:20:02 that it is illegal to refuse to disclose technology that frees humanity [from the crimnal cabal].
Greer states at 1:21:53 that we have a moral obligation to oppose the criminal national security deep state.
Source:
https://www.youtube.com/watch?feature=player_detailpage&v=lyXi1efbYrk#t=4033
The title should be,
The Rich, The Poor, & The Trouble With an Ever Expanding Central StateWe don't have capitalism or socialism, we have an ever expanding central state that will continue to do so using whatever is politically expedient to accomplish that goal.
Capitalists offer every bit as much political cover for the ever expanding central state as do socialists.
There is an inherent trickle up in the current system that allows the rich to take from the poor:
a) Those with excess capital invest it and collect interest, dividends and rent.
b) Those with insufficient capital borrow money and pay interest and rent.
The rentier Capitalist with the right portfolio of investments can live a life of leisure through the hard work of others.
This is more glaringly obvious in the UK, where the young associates of the Royal Family come into trust funds at 18 or 21 and live an obvious life of idle leisure.
Capitalism is about Capital not hard work.
The clue is in the name.
What happens when there are low taxes for the wealthy?
1920s/2000s - high inequality, high banker pay, low regulation, low taxes for the wealthy, robber barons (CEOs), globalisation phase
1929/2008 - Wall Street crash
1930s/2010s - Global recession, currency wars, rising nationalism and extremism
1940s/? - Global war
What's killing Capitalism?
Everyone wants to be an investor and no one wants to do anything.
I want to use my capital to ride on someone else's back that does all the work.
It hasn't done Warren Buffett any harm.
"Putting all your eggs in one basket, starting up your own company always looked too risky for me. Then there is all the hard work, why bother?" Warren
US is a consumption economy. Only around 10% of the economy is actually investment. Hardly anyone is a investor in the US when most americans are hardcore consumers. Capital investments are good. We need more investments. Just no investments into asset appreciation casino created by Central Banks with cheap money.
Re "There is an inherent trickle up in the current system that allows the rich to take from the poor:" yes, and that IS in the very design of the monetary system. Most can't see that.
We are not suffering under some corrupt version of capitalism or socialism or some perverted hybridization of the two. What we suffer from is ignorance, not a lack of education, but ignorance. Yes, they have created a system that allows many to profit from the ignorance of others. No one is forced to borrow or spend (obamacare not withstanding) yet. We have made the decisions to buy cheap imports and cheap illegal labor production. We have made the choice to spend an increasingly greater amount on credit costs. WE have made the choices, the easy choices, that have enriched those at the top, and not only enriched them but provide them the power over our government.
WE have done this.
THIS IS THE SYSTEM WE HAVE CHOSEN.
It is unfortunate that democracy allows this growing ignorance to take what rights many of us still prize. Our constitution was designed to protect us from this taking, the tyranny of unrestrained democracy,and our founders warned us of the consequence of ignorance, which is why education was so highly valued. Unfortunately education for enlightenment has been displaced by indoctrination.
The state comes into being primarily to protect the assets of the wealthy.
In the old world, before a powerful state comes into being, the wealthy (nobility) constantly fight each other to steal each other's wealth.
The indigenous US population stood no chance against the power of the UK state.
Without a powerful state, today's US would not exist.
Of course they needed armies of poor people to do it for them, who will eventually get uppity and disagree with the propaganda about divine rights, homesteading or whatever other shit the wealthy come up with to lock up ownership of the commons for perpetuity into the hands of a tiny elite.
Which is where the robots come in.
what a stupid article.
I, too, find it trite to focus on Stalin rather than leaders and successes of modern socialism. Look at President of Uruguay José Mujica. He eschewed big houses and lived in a simple one. He understood that to consume like an American, as the global market is pushing, we'd need three planets of resources to do it (and a lot more Zanax and panic rooms.) That people are trained to consume, consume, consume in this globalized, privatized world, but when economic crisis hits and you can't consume anymore, people are merely marginalized. Uruguay has the lowest poverty rate in Latin America now. The Danish have a remarkable egalitarian and high standard of living in the world. (No wonder Goldman Sachs wants to sabotague it by buying into DONG.) The Danes are content with enough and temper their greed for the social good and humanity. Plus, we already have socialism for private corporations (really called fascism) Every stadium in America built with funds that should be going to public schools and libraries, but going to profit some private corporation and sports team. From oil to beef to corn to war to prisons, taxpayer subsidies prop up private corporations with socialist funds. (Look how socialist the entire US military system really is!) And is it even moral to profit from sickness, war and prisons as the US mantra exhorts? There is a huge profit from poverty in the US. The Morlocks feeding off the Eloy in H.G. Well's The Time Machine comes to mind. At any rate, let's not forget what Marx said about capitalism: it always creates that which destroys it. A proletariat in poverty rises up and rids itself of its greedy, selfish masters. Wealth is one thing, have at it, Caesar. But exploitation and looking the other way at suffering it causes, especially to the most vulnerable - like children, the elderly and the environment - are the tools of its demise and spiritual death. (Just ask Jesus.) Capitalists can hoard like reptilian dragons all they want their odiously gained wealth to rot off shore as they scurry in fear to preserve it. But they will not be able to hide for long. Just like on the island of Montserrat, the slaves knew their masters well. St. Patrick's day is such a huge holiday there becuase slaves knew to rise up on that day. All their Irish masters and plantation owners would be drunk enough to easily slit their throats. Cudjoe Head is a road named to commemorate that concept too. Nobody wants violence, but history has a way of telling the story of reality and truth under capitalism. It's not pretty. Socialism, as it evolves out of the decay of the dying capitalist, corrupt society we have now, will prevail becuase it's about compassion and people. Higher values than Caesar's coins one loses ultimately in death. So drink up, capitalists! Drink up!
I get tired of this everything is socialist crap as if crony capitalism is any better. Obviously it is NOT or we would not be calling it socialism.
Love how crony capitalists call themselves "self made men." I'd be "self made" too if I could lobby gov't for favorable tax laws, rigged markets that are in my favor and a host of other regs and laws that benefit me. You're also self-made if you inherit Daddy's billions too.
Now, don't complain or bitch. Don't speak of how the system is rigged. Don't draw any attention to those who "worked hard" to have gov't prop their rich asses up. Don't do that! Your job as a taxpayer is to shut up and prop up any private failure that occurs.
Strawman argument much?
Socialism is like asking a cuckoo to build its own nest.
Because it won't, can't, doesn't, we have to make sure it doesn't throw out the resident owners chicks or eggs.
That is, if the sheeple/electors are intelligent enough to see through the lies and decepetions.
Socialism is like asking a cuckoo to build its own nest.
Because it won't, can't, doesn't, we have to make sure it doesn't throw out the resident owners chicks or eggs.
That is, if the sheeple/electors are intelligent enough to see through the lies and decepetions.
That's exactly my point: GULAG was established by Yiddish-speaking jews (same apllies to the so called "Russian" revolutiob led by Tritsky's thugs) and 90% of GULAG administration was was Jewish. You just don't get the point why it's so important for chosenites to tarnish Stalin's name: 1) he hampered their satanic plans for the World Wide Revolution and 2) he stopped ethnic cleansing of native Russians 3) he showed an alternative and just socio-political system. But I hear you -- you have been enjoying the results of imperialism/colonial taxation (free lunch thrown at she sheeple by banksters), you are just not happy with the fact imperialsm consumed the whole world and the bones from the free lunch are not thrown any more.
Article is correct that money in itself is not wealth. It's supply and that hindering the formation of new production and wealth generating enterprises to redistribute wealth from productive activities, and people who sustain them, or create them to lower productive entities and their operators slows down wealth creation.
Wealth is abundance of goods. Everything else follows. A economy is about producing abundance, ie, cheaper prices, more consumption without having to spend more nominal money. These is where Keynesians, certain socialist thinking is wrong. They think we need more money to make us wealthy. Money itself is not wealth in context of society. Sure to an individual the more money he has, the better, but the economy does not get wealthy be having more money, it's actually supply of goods. Money, or currency is easy to produce. Paper money is cheap. No real limiting factor in production of paper money, so why don't we all just print money to buy up everything? Because money is not wealth, what gives money purchasing power is supply of exchange-able goods. Productivity increases leisure time, reduces work, and increases real wages.
Productivity in goods leads the way in increasing living standards. Another thing people confuse jobs with wealth. Jobs in themselves are not wealth either. Jobs are a means to an ends. The ends being more supply. Service jobs are there simply that fill up the gap of non-physical goods, but even in a highly advanced society, even service jobs will be done by mostly robots.
Socialism does not emphasize productivity, or wealth creation. It's a theory of income redistribution and leveling consumption between unequal incomes. Socialism was never about that.
" The one calling for creation of 12 million jobs to rebuild America's infrastructure, for millions more jobs to build a green economy and a $15 minimum wage."
So? "calling for" something and actually making it happen are two different things. I can call for unicorns or for the seas to recede. Doesn't mean I have the ability to make that happen.
And suppose Bernie did pull off a miracle and make it happen? Where would he get the money? From other people. How many jobs are killed when he does that? How does he get these folks to give it to him? Ultimately, at the point of a gun. Call it socialism, nouveau monarchy, fascism (probably more accurate), or whatever you want. Don't care.
And the final problem, crony corporates, crony unions and crony NGO's are sucking so hard off the government teat already and with such good results for themselves, they have the influence and the money to make sure the salaries for those 12 million jobs are paid for, directly or indirectly, by the middle class, not by themselves.
" The one calling for creation of 12 million jobs to rebuild America's infrastructure, for millions more jobs to build a green economy and a $15 minimum wage."
So? "calling for" something and actually making it happen are two different things. I can call for unicorns or for the seas to recede. Doesn't mean I have the ability to make that happen.
And suppose Bernie did pull off a miracle and make it happen? Where would he get the money? From other people. How many jobs are killed when he does that? How does he get these folks to give it to him? Ultimately, at the point of a gun. Call it socialism, nouveau monarchy, fascism (probably more accurate), or whatever you want. Don't care.
And the final problem, crony corporates, crony unions and crony NGO's are sucking so hard off the government teat already and with such good results for themselves, they have the influence and the money to make sure the salaries for those 12 million jobs are paid for, directly or indirectly, by the middle class, not by themselves.