Monday, February 25, 2019

Class Warfare


 Doug Casey 




Justin’s note: Are billionaires bad?
Many Americans on the left are asking themselves this question. And Alexandria Ocasio-Cortez – the Democrat’s new rising star – is certainly no exception. Just look at what AOC said in a recent interview.

It’s not to say someone like Bill Gates, for example, or Warren Buffett are immoral people. I do not believe that.
I do think a system that allows billionaires to exist when there are parts of Alabama where people are still getting ringworm because they don’t have access to public health is wrong.

AOC, of course, isn’t alone. Two weeks ago, The Huffington Post published a piece titled “Should Billionaires Even Exist?” The New York Times followed up a few days later when it ran a similar piece titled “Abolish Billionaires.”
In short, class warfare is no longer just a radical leftist idea. It’s gone mainstream.

To figure out what’s behind this, I got Doug Casey on the phone. Below is a transcript of that conversation.
Justin: Doug, class warfare is heating up in the United States, and billionaires are getting the worst of it so far. What do you make of this? Are billionaires as bad as the left says? Should they be allowed to exist, or is that a “policy failure?”
Doug: Well, I’ve said for years that the time to eat the rich would come. That is, of course, a very bad thing. Here’s a fact. Most people who are rich got that way because they’re smart, productive, hard-working, and virtuous. Most people who are poor suffer from stupidity, sloth, and bad habits.
Yes, I know saying that is extremely un-PC, and smacks of Calvinism. I’m very aware that some rich people are swine, who stole their wealth. And in today’s world, where the government is involved in everything, and is expected to be a cornucopia, increasing numbers got it by being cronies. I’m also very aware that there are some righteous poor, who suffer from bad luck. Nor can everyone be Helen Keller. Or The Who’s Tommy, the deaf, dumb, and blind kid who nevertheless played a mean pinball.
That said, bad luck tends to afflict the unprepared. But that’s another discussion…
The intense hostility towards the rich, combined with the visceral hatred between “red” and “blue” parts of the country, tells me that we’re moving into a time similar to that before the French Revolution. Or the War Between the States. Or maybe the Russian Revolution.
And this trend is accelerating. It’s going to be very tumultuous for reasons I’ve spelt out in past interviews.
It’s said there are about 2,200 billionaires in the world, about a quarter of them in the U.S. But I’m sure there are many more that keep themselves under the radar. Certainly those who made a killing in drugs, politics, or other criminal activity.
Politicians and the rich have always feathered each other’s nests. Since government today is far, far more powerful and intrusive than ever before, the rich are more inclined than ever to curry favor with politicians. And politicians are equally anxious to cozy up with the rich. It’s much easier to get a few checks with lots of zeroes after the dollar sign, than cadging nickels and dimes from the unwashed.
Many billionaires are wealthy largely because they’re cronies. All of them have benefited from being connected to the firehose of money created by the Fed. They receive favors from the government. They’re granted government contracts, licenses, monopolies, and the like. Frankly, they deserve to be eaten.
But those are exactly the ones who are safest. The rich can make massive campaign contributions to politicians in the present. And it’s understood that they’ll assist in paying huge speaking fees, consulting fees, book deals, directorships, seven-figure employment, sweetheart investment deals, and the like after the pol is out of office.
In our interview on AOC, I said she was already well on her way to her hundred million dollars. She’ll get that, but not the traditional way, with briefcases stuffed with $100 bills. That no longer works in the U.S. because of onerous bank regulations, money laundering laws, and the decreasing utility of cash. In addition, the U.S. is still a relatively “high-trust” society. Government officials are reasonably comfortable waiting a few years for a fat payoff. It’s different in the Third World, where trust is very limited, and payoffs tend to be in cash on the barrelhead.

Justin: Sure. But not every billionaire exists because of government handouts. Right?
Doug: Of course, many billionaires are wealthy because they’ve created immense wealth for the common man. The average human should worship creative billionaires for vastly increasing his standard of living. Instead they prefer to apotheosize political figures and actors – who throughout history have been classed with prostitutes, con men, and professional liars. Mass media and the leisure economy have inverted many traditional values.
The problem is that humans are essentially chimpanzees – and I don’t mean the gentle bonobo either. As individuals, they can be quite rational. But they immediately fall to the lowest common denominator if you put them together. It’s easy to get them to hooting and panting, anxious to tear apart some real or imagined enemy.
And a lot of that has to do with envy, a much nastier vice than simple jealousy or covetousness. Jealousy says: “You have it. I want it. I’ll take it from you.” That’s understandable. It’s how the world has worked for at least 500 million years, since animal life arose.
Envy, however, says “You have it. I want it. I’ll not only take it from you, but I’ll hurt you for having it. And if I can’t have it, I’ll destroy it, so you can’t have it either.” One chimpanzee has a bunch of fat appetizing grubs, and the other chimpanzees – well represented by all the Democrats running for president – are chock-full of envy. I’m afraid that’s just the way things are on Planet Earth today. Not just with chimps, but even more so with humans.
It’s well known that Earth’s twenty, or whatever, richest people control about half of the planet’s wealth. And half of the people on Earth have approximately nothing. That doesn’t seem “fair” – an extremely dangerous word when we’re talking politics. So, it’s perfectly natural for the poor chimpanzees to try and take it away from the rich chimps.
They’ll use the time-tested method of violence in some places. But the political process is a much lower-risk way to get what you want – if you’re incapable of creating something and trading. They’ll vote for someone who promises to give them free stuff and even things out. Make things more “fair.” That’s what happened in Venezuela. It’s what happened in Zimbabwe. It happens constantly in Africa, although sometimes things get a bit out of control, as they did in Rwanda twenty years ago where, you’ll recall, a million folks were hacked up with machetes. It’s happened in scores of countries in just the last century. It can happen anywhere. The United States is no exception. In fact, it’s starting to happen here right now.

Justin: Yeah, all this hate directed at billionaires and support for things like wealth taxes tells me the U.S. is moving closer to full-blown socialism with each passing day.
Doug: Well, this term socialism is bandied around constantly. However, very few people know what it actually means. Let’s define a few words. If you can’t define a word precisely, then you can’t really understand what you’re talking about. I’m afraid that’s true of 90% of people. Add to that the fact that they don’t actually think, they feel. No wonder tempers run high when either politics or economics are discussed. We revert to mimicking our cousins, the chimps.
Karl Marx defined socialism as a system where the means of production – farms, mines, schools, hospitals, factories and the like – are owned by the people, which is to say by the State.
Socialism is supposed to be a temporary stage on the way to Communism. Communism is a system where not only the means of production are owned by the state, but where consumer goods are also common property.
Under socialism, consumer goods – like cars, houses, retail stores, handicrafts – are still privately owned. This ties into what fascism is – another term often used descriptively, but never defined. Fascism has nothing to do with jackboots and black uniforms – those can be a part of any statist system. Again, if you don’t define words properly and precisely, it means that you don’t know what you’re talking about.
Let me define fascism. It’s an economic system where both the means of production and consumer goods are privately owned, but – very important – they’re totally regulated by the state. In today’s world, the only real socialist countries are North Korea and Cuba. Every other country in the world is fascist, in the sense that both the means of production and consumer goods are privately owned but are all regulated – controlled – by the state.

Justin: So, you don’t think there are any capitalist countries in the world?
Doug: No. Capitalism is a system where everything is not only privately owned but it’s totally privately controlled. In other words, the state has no intervention or influence in the economy at all. Capitalism doesn’t exist anywhere in the world today.

Justin: And yet, people blame capitalism for all of today’s problems. I don’t just mean some people. Distaste for capitalism has gone mainstream.
At this point, there’s no doubt in my mind that the Democrats will rally around eating the rich during the next presidential race. 
Doug: No question about it. We’re on the cusp of a cultural revolution, not dissimilar to what China went through between the mid-sixties and the mid-seventies.
And it could totally overthrow America’s most important traditions. The U.S. has been mutating, on its way to becoming another country for a long time. It used to be unique and exceptional. Now it’s just another nation state like the 200 others covering the face of the globe like a skin disease.
It’s a major trend. And cultural, civilizational trends usually accelerate until they reach a crisis.
The thing is that most people have no understanding of economics. Why? Because economics is an intellectual matter. And people are not interested in intellectual arguments. They’re only interested in emotional arguments.

Justin: In what sense?
Doug: The key is the difference between “think” and “feel.” Those words are used interchangeably – which is absolutely wrong, and part of the problem. People don’t think – which means using logic, reason, and solid fact. What they do is feel – using emotion, stray anecdotes, and gut impressions. They dramatize their buried psychological aberrations. They have very nebulous, undefined, notions of right and wrong.
One thing that’s for sure, though. They’re interested in feeling like they’re the good guys. They want to be on the right side, the moral side, of issues. Everybody likes to feel god’s on his side. It doesn’t matter whether it’s Yahweh, Jesus, Allah, Krishna, Odin, or Crom.
Here’s the critical thing: the socialists have positioned themselves as the good guys, the ones doing the moral thing. And nobody, with the exception of Ayn Rand – and libertarians – has ever defended capitalism on a moral basis. Which is actually the way it should be defended. But their arguments are intellectual, not emotional. So they’re totally lost on the average chimp.
The Republicans are completely worthless, less than worthless, in this battle. They’re an active liability. At best, they make a weak effort to defend the free market based on the fact that it’s productive and efficient. But that’s not going to cut it. No wonder they’re viewed – correctly, in my view – as weak-kneed sellouts, hypocrites, and moral cripples. The average person is going to go for what he thinks is socialism because he wants to feel that he’s doing the right thing.
I’m afraid the battle is completely lost at this point. The only way to change course is through intellectual arguments. That’s supposed to happen in school – but perversely, that’s where arguments for socialism are made instead. The average person just gets the bottom line: socialist values are good and right.
I’ll tell you what they want. They want free housing, free medical care, free schooling, free food. And if it’s not completely free, then it should at least be subsidized. They want to be taken care of. What they really want is a fascist welfare state. Why? So they can still own stocks, and maybe get wealthy.
Socialism is just kind of a buzzword for free stuff, for the fascist welfare state. People don’t really care who owns the means of production; they think “stuff” is produced magically.

Justin: Yeah. It is quite remarkable how people pin so much blame on capitalism while ignoring the fact that socialism has destroyed entire economies countless times.
Doug: And it will happen again. It will, ultimately, result in the collapse of the economy. Producers will decide, “To hell with it. I’m not going to bother. It’s not worth it. I don’t want to be a milk cow.” For a considerable number of people, it’s going to be more trouble than it’s worth to produce when you account for all the aggravation, the risks, and hard work that goes into being an entrepreneur. Anyway, it’s kind of fun having a guaranteed annual income, and binging on a TV series all day.
Is a new Dark Age possible? Of course. Anything is possible, on both the upside and the downside.
There are, of course, some reasons for optimism. One is that the average person – notwithstanding socialist rhetoric and welfare state benefits – is wired, like a squirrel, to produce more than he consumes, and save the rest. Which creates capital. Another is technology which – believe it or not – has been advancing at the rate of Moore’s Law for about 200,000 years.
It’s possible that technology in the form of artificial intelligence, nanotech, biotech, and such can advance quickly enough to create new wealth faster than stupid ideas can destroy it.
Perhaps, only a generation or two from now, robots will produce everything that people need. That’s possible, though unlikely in the short-term. What’s more likely is that stupid ideas, which also seem to be gaining ground at an exponential rate, will destroy immense amounts of capital. Perhaps enough that there won’t be sufficient pools of capital to conduct science and build new technology. These things are highly capital-intensive today. We need large pools of capital to keep advancing. The kind of pools that hated billionaires shepherd and make grow.
If socialists succeed in making it impossible, or perhaps just unpalatable and apparently anti-social, to become a billionaire, you’re not going to have the pools of capital to keep science and technology advancing. The economy and society will fall apart. That’s what destroyed the USSR and Mao’s China.
It’s possible that we could be facing either the Singularity or a new Dark Age. I don’t know which it will be. It’s a toss-up. Maybe both, in different areas. But the best predictor isn’t going to be think tanks. It will be science fiction.
There will be political ramifications. I fully expect the Republican Party to break up into at least two. But that’s a subject for a different discussion. However the most degraded, ignorant, misguided, and unintelligent people are those rising to the top in the Democratic Party. Which, incidentally, is also going to break into at least two pieces.
Just wait until the U.S. economy collapses later this year. Now, I know I’ve been very premature on this call. But I’m convinced it’s imminent.
When that happens, people will start losing their houses. They’re going to have their cars repossessed. Even if they don’t lose their jobs, they’ll be unable to service all their debts. They’re going to go wild.
Things will get ugly. Could we have a real civil war? As you know, I’m prone to look at the bright side. Since half of the country is on Prozac, Ritalin, Xanax, and 50 other psychiatric drugs, and the other half is glued to their video screens, maybe people will give fighting a pass…

Justin: I hope I’m outside of the States when that happens. Like you, I’d much rather watch this play out on the television, preferably in a country where things are more stable.
Doug: Yeah. But Joe Louis was right. You can run, but you can’t hide.
Justin: Thanks for speaking with me today, Doug.
Doug: You’re welcome.

Norb Leahy, Dunwoody GA Tea Party Leader

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