Society rests on some agreed-to fictions. Money is one of them. It’s not real. We just agree that it works and then it works. Our collective imaginations becomes solid like stone. Fairness, on the other hand is something that is baked into our collective DNA. Even animals have an innate sense of fairness. (See capuchin monkeys.)
Capitalism is a great system for putting these fictions to work to benefit all of mankind. However, without regulation, capitalism devolves into an oligarchy. After the industrial revolution, a century ago, robber barons ruled society with an iron fist. Wealth was concentrated into a small number of dominant players like Carnegie, Rockefeller, JP Morgan, and others.
At the time, many things were unregulated. As example: insider trading was perfectly legal back in those days. Government did not have agencies dedicated to making sure people played fair. These industrialists polluted the environment, stole from the public treasury, crushed competition, bribed politicians, and did everything in their power to enrich themselves at the expense of everyone else. It was not fair, but it was the way it was.
This led to the roaring twenties and then the great depression.
Only in that employment crisis were social reforms and regulation introduced into the capitalist system. FDRs second vice president (before Truman) was Henry A. Wallace. For anyone who is a progressive, you should know about this man’s life and accomplishments. He is one of my political heroes. Great book on his life. (He should not be confused with George Wallace who was a total asshole.)
Some selected Wallace quotes from almost a century ago. These ideas are as apt today describing Bezos, Musk, and other billionaires as then to describe the robber barons.
Henry Wallace quotes
“It is no coincidence that the growth of modern tyrants has in every case been heralded by the growth of prejudice.”
“We must not tolerate oppressive government or industrial oligarchy in the form of monopolies and cartels.”
“In an effort to eliminate the possibility of any rival growing up, some monopolists would sacrifice democracy itself.”
More quotes from Henry Wallace
Taxes
Regulation can not happen without taxes. Many (rich) people think taxes are “theft”. This is ridiculous when you think about the systems that government supports such as roads, electricity, GPS satellites, the internet and much more. Private corporations only have a profit motive. They will never be responsive to human needs. Only government can look beyond the profit motive to look at what is best for the society as a whole.
The richest people have been evading taxes for as long as taxes existed. Check out this chart by Robert Reich that explains the way taxes went up during the social reforms of the FDR New Deal and then have steadily declined for almost a century.
That money is not the billionaire’s money. It’s the public’s money. When we decry our schools as being underfunded it is so a single person can have a mega yacht. When we see potholes, it is because a single person wants to own their own Hawaiian island. When we see a loved one succumb to cancer, it is because one person wanted to take famous artwork and stick it in a vault where no one can experience it.
Billionaires are not good. There is a line where more money doesn’t even change your lifestyle. If you have 250 million dollars (estimate), you fly a private jet and have a yacht. If you have 350 million dollars, you have the same jet and yacht. If you have a billion dollars, doubling your wealth is effectively meaningless.
There is a wealth tax proposition in California which seeks to get the billionaires of the state to pony up 5% of their wealth (one time) to taxes. Truly, this is a meaningless amount of money for them. It would literally affect 250 people. Sergey Brin and Larry Page (Google Founders) paid just 0.07 percent of their wealth annually in California income tax. That’s unfair and gross. Meanwhile they are spending hundreds of millions to oppose the proposition.
Great article about the details of the billionaire protest against prop 40.
Regulation
Regulation is about keeping things fair. It does not mean every gets the same house and all the same stuff. It’s still capitalism. It just means the worst cases are not as bad and the best cases (billions or trillions!) of wealth may not be quite as riddiculious. We would still have billionaires, but they would have to pay taxes for the benefit of society. They still get their jets and yachts and artwork. They just don’t get to have EVERYTHING.
Regulation helps us keep our waters clean, our forests healthy, our environment from warming, our electricity and housing affordable. Regulation doesn’t always work perfectly, but deregulation ALWAYS leads to bad outcomes.
History is a great teacher. Without regulation, we will end up with an oligarchical system or dictatorship that jails or kills anyone who wants to improve things for the rest of the us. Without regulation, we will continue our downward path into despotism.
Regulation is not the enemy. Taxes are not the enemy. Unregulated billionaires are the enemy and must be reigned in. I am not suggesting a French Revolution with guillotines. We just need to fund government to be responsive and accountable to the people.
It is times like these I wish we all had a collective crystal ball and could see what our choices are leading us towards. We can have nice things. We can have amazing things. It just takes work and for us collectively believe it is possible.
Whatya think?