Posts tagged OWS

Column on Who Needs Austerity When Some are Rich?

Who Needs Austerity when some Are Rich

Tibor R. Machan

Portugal is broke but austerity measures there are protested persistently. Greece is in the same fix. And indeed in America, too, the Occupy Wall Street crowd appears to believe that if even a few folks are doing very well, no one need tighten his belt since all that’s needed is to rip off those well off and force them to continue to work hard.

The math is, of course, terribly off — even if all the wealthy were raided for their resources, it would do very little to improve the situation of the vast numbers of those who need to cut back on their spending (including, especially, governments). It’s like a pyramid shaped storage of stuff, taking from the top and distributing it below isn’t going to create abundance. What is required for that is overall productivity, nothing less.

But these days millions of people, especially their politicians and academic agitators, hold the insane idea that wealth is collectively owned, sort of like in a family or commune. No private property is recognized so whatever anyone owns, everyone else owns as well. So if you have been profligate for years and now can’t pay your bills, never mind; there are those others with some money stashed away which can be confiscated because, well, it belongs to everyone. Never mind that it is just that kind of thinking and behavior that leads to widespread poverty, a direct result of the tragedy of the commons.

I have recounted this episode of my life before but it is relevant here again: At about 12 I was being lectured by a good communist teacher in my elementary school in Budapest about how we should all live by the Marxist idea, “From each according to his abilities, to each according to his needs” (taken from his famous essay, “Critique of the Gotha Programme”). I asked the teacher how would this work if my friend and I both started with a few bucks and I spent it on booze and he on wood. Once he made a nice little table, I’ll simply drink myself under it, so would he have to help me out, would his table be my table, as well? And this landed me in hot water. (Both the Nazis and Commies dealt severely with students who asked the wrong questions, what today would be called politically incorrect ones!)

The idea now is that so long as other people are productive and lucky, the rest of us need not fret since we can always dip into their stuff and conscript them to work for us. But since the math in this “solution” sucks, it leaves everyone without sufficient wealth and, moreover, tends to discourage people from trying to increase theirs. Marx knew that this would happen so he envisioned communism as the society in which everyone became a “new man” and would automatically work for the commonwealth, the public interest (is how it is called now). With self-interest having been erased from the human race, no one would mind being poor, having to cope with austerity.

Sadly, the Occupy Wall Street people and others of similar attitude around the globe haven’t experienced this necessary alteration of human nature, whereby no one cares about himself and his intimates but only about the society as a whole. (Not that that would work out but at least people might put up with it more compliantly.) They are very much concerned mainly with their own and their loved ones’ well being. Certainly they care nothing about the well being of those who are productive, especially on Wall Street. Instead they hold the view that other people must all become fierce altruists while they themselves can remain self-indulgent. (At least that is how they behave, so I think it is fair to attribute that line of thinking to them.)

That there are free loaders among us is no news, nor a tragedy. What is, however, really disgusting is how many erudite people throughout academia, governments, and the media egg them on in their pathetic misconceptions.

Column on OWS & zero sum games

Markets aren’t Zero Sum Games

Tibor R. Machan

The more I read about “Occupy Wall Street,” including the pundits who apologize for it, the more I find that people still believe that market exchanges are zero-sum games wherein for someone to gain, someone must lose. But this is plain bunk, as economists since Adam Smith have shown conclusively.

But consider–is a marathon race a zero-sum game? Does someone’s running really fast make all others run slow? Clearly not. How fast the winner runs doesn’t slow down or speed up the losers. When a person buys a watch at the mall, both the merchant and the costumer are getting what they want from the other, no one is being ripped off. And the same applies to all honest deals on Wall Street. I buy some shares in a company and it is doing well with its products or services and so the monetary value of the shares increases. Those who didn’t buy these shares do not make the gains I did but not because I prevented them from doing so, only because the purchasing public didn’t want the services or products of the companies in which they bought shares, unlike in the case of my choice of company.

Like marathon races, market processes do not involve what happens in a boxing ring–no one is knocked out so that another may be triumphant. Yet it seems nearly all those who sympathize with the people marching in the Occupy Wall Street parades, as well as the people who speak up for them in their midst, fail to see the difference.

Put bluntly, Bill Gates billions do not make me or anyone else poor. In fact, his billions make it possible for a lot of folks to improve on their economic circumstances. Bill goes out and buys a lot of stuff or just gives his money away in Africa and people will then go out and maker standard purchases with these funds. No one has lost anything, not a dime.

All the wealthy folks in my neighborhood who live on lakes in fancy homes and have yachts and Bentleys aren’t making anyone poor. So resenting them is nothing but sheer envy, a filthy vice! Like hating someone with a great voice when one cannot carry a tune! Or a tall basketball star when one is too short to play the game.

We are often very different from one another–indeed we are all individuals and then gather into groups–and some of this means that what we have stuff and opportunities that others do not, whether they badly want it and even need it. But those who have it aren’t guilty of any wrongdoing except in the fantasy world of egalitarians which is, being a fantasy world, a distortion of the real world in which problems need to be solved. This is, however, a welcome thing to most of us who give it but even a little thought. After all, since you aren’t like me, you will want different stuff from what I will and that way we can trade quite fruitfully, with both of us ahead once the trade is done. Yes, sometimes the market value of what you get from the trade is much lower than of that which I get from it. But so what? If I badly want to have your worn out gloves and am willing to give you my fabulous sunglasses for them, some will see this as a huge rip off but who are they to tell? In most cases they wouldn’t know and in any case they have no business butting in. (They may offer some advice but that’s all.)

Ever since I arrived on these shores many, many moons ago, I have had zero sympathy for people who insisted that we should all enjoy equal wealth, equal advantages, etc. Why? No reason. Maybe what such folks missed out in their education is the study of Orwell’s Animal Farm, Vonegut’s Harrison Bergeron, and Rand’s Anthem. I see get thee back to the classroom and off the streets, especially Wall Street.