The problem with all the "no worker
deserves anything" ideologies and arguments is that
workers having money drives the economy.
I linked to an article last night that deals with this (
Economic growth more likely when wealth distributed to poor instead of rich), but I guess no one bothered to read it. So here's the words of Stephen Koukoulas, from a think tank called Per Capita, lifted from that article:
I, too, run a small business. I'm aware of how tough it is with increased costs - from raw materials, transport, and packaging to labour costs.
But I'm also aware of the fact that if my customers don't have money,
they can't buy anything.
This is the thing that is seemingly totally ignored by the Chicago School of "free markets": money needs to circulate in order to keep an economy ticking over, and as Mr Koukoulas pointed out, when money is allowed to accumulate at the top of the wealth pyramid, it is
invested, and not spent. Every Pound or Dollar or Yen sat in a bank account, converted into stocks, or used for property speculation is a unit of currency that is actively not engaging in the local economy.
And just what happens to that invested money? Does the Big Evil Rich Man put it under his pillow? No, it's used to either fund the growth of companies via equities, lend money to the government, especially, in the form of bond purchases, or to create brand new places of employment as the banks lend that money for new business ventures.
The idea that wealth just "accumulates" at the top is held only by people who've never themselves invested and believe in a net-sum-zero economic world. You literally would have no middle class of any size with a very distinct wealth class.
Oh, and most modern wealth on that scale isn't inherited. It comes from the creation of brand new things people value: Microsoft, Apple, Tesla all leap to mind here.
Our very ability to have this debate here is fundamentally fueled by that ability for wealth to be accumulated. Without it, we'd all still be trading chickens.
People complain about governments and central banks printing money and devaluing a currency, and true - this is problematic. "Quantitative easing" should be a last resort, but those that complain about it rarely seem to address why it is necessary: money is actively being taken out of the economy and needs to be replaced. And, guess what? It's not the people on minimum wage who are the ones squirrelling it away.
This is a chimera. I know plenty of millionaires, and even a few billionaires, and I've never met a single one of them that is "squirreling" away their wealth. It's all being put to use somewhere or another. Your premise is faulty at its core, and your conclusions are similarly faulty.
In fact - and this is a bit of a different rant, but there we go - a significant amount of economic strain is being caused by housing costs. I'm not sure what the situation is in the US, but here in the UK, the "buy to let" mortgage was widely embraced, and private landlords sprang up everywhere. Couple "traditional" landlords with the AirBnB crowd, and we really start to have a problem. All of this "buy to let" may have given people who already had a certain amount of wealth a more stable future (a lot of people use these setups to replace or supplement pensions, as a lot of private pension pots are basically worthless), but it also heavily increased house prices through that lovely "supply and demand" mechanism that Friedmanites love to harp on about. And, as a result, rent is now taking up a much larger chunk of people's salary -
the Office of National Statistics said it was between 25% and 30% in 2022, depending on region, but
Savills estimate it's now between 35% and 42.5% - and we don't have the network of "council houses" (state-built and state-managed social housing) that were built after the war to act as a viable alternative and help force the rents in the private sector down any more.
The houses built after the war were tiny by comparison. Mostly did not have anywhere near the same amenities as a home built today - air conditioning, central heat, many advanced appliances, steam showers, bidets ... the list is endless. What people want is the housing they like
at a price they feel they want to pay. This is economic fantasy.
But the real reason for all this is the the reason that folks trapped in your ideological cage dont' want to face. The demand for these finer things is happening because - in the West at least -
more people are moving out of the lower middle classes into the upper middle classes and even wealthy groups. They can afford this stuff. It's not some mismanagement of the economy that made it possible, it's exactly because free market economies made so many more people prosperous.
Well, they DID, until the We Know What's Good For Everyone societies decided that it wasn't "fair' that people who were not trying as hard were not prospering at the same rate and decided to buy their votes with promises of "free" things. THAT is what inflated the currency and drove prices skyward.
The free market types will proclaim "well, this is the market at work! The market will charge what the market will allow, and if it is too expensive, people will stop paying and the price will have to be lowered!" But that doesn't happen. People need homes - they're
No that's not what we say. What we say is "the market is efficient at pricing things." It is a measure of the relative scarcity of something as compared to the demand and sets the price accordingly. Collectivist/communist/socialist types love to blame markets for things that are actually the bad outcomes of their own monetary fiddling schemes. But the markets are just thermometers and nothing more.
Moreover, people do not "need' homes. They need shelter but this can exist in many forms. The notion that everyone needs a home is pernicious, and its made moreso when people demand private home ownership for everyone, even when everyone has not earned such a home for themselves.
forced into paying rent in one form or another (or they end up on the street and become, effectively, criminalised for doing so). As a result, the huge financial burden created by overpriced housing in the private rental sector actively syphons money out of the economy; if the average person is spending over 40% of their salary on housing, they're spending a lot less on "luxuries" in the high
Another repetition of an utterly false premise . The money isn't being "siphoned" anywhere and just disappearing. It's being more efficiently applied where it can do the best work to produce the best returns for the owner of said money. That same owner, in this example, is hiring workmen to build these rental properties, hiring others to maintain them, and still others to deal with the accounting and taxation paperwork of the regulatory state. There are net new jobs thus created.
street. And, it's those "luxuries" - whether coffee, or wine, or clothing, or avocado on toast, or film - that keep shops open, that pay people's salaries, and yes, enable more people to buy coffee, or wine, or clothing, or avocado on toast... or film.
Capitalism is destructive. It punishes businesses that do not adapt to economic reality. If you're overcharging (against market demand) for wine, the local volume wine merchant will snuff you out of business. That means you lose your business, but it also means that everyone in the community saves money. And it's not like you won't go back to work, You just won't make what you once did.
No one has a reasonable expectation to never be threatened by economic competition with the threat of economic extinction. That's why collectivists use government force to get what they want. They don't want to pay for their own mistakes, but instead use the threat of a violent third party to have someone else pay the bills. Having done so, they try to sell this illusion that they are noble. They are not. They are common thieves.
