Money...That's What I Want!
Imagine that eight families, give or take, control more wealth than the other six billion, nine hundred and ninety nine million, nine hundred and ninety nine thousand, nine hundred and ninety families combined, or something like that. “What the heck.” You say. “Man, that's greed if ever I saw greed or whatever!” I know what” You shout, “I know how to solve this, we'll print trillions of dollars and give everyone billions, just to even things up. That way everyone will be equal.” And “Voila” problem solved.
“Damn that was simple. Why don't politicians just do that? Huh? Anybody got an answer? After all, inequality is bad. Equality is good. Right?”
Now that I've got the snark out of the way (more or less) let's get down to the business of answering this deceptively simple sounding question.
Equality isn't really the issue—money is. Which, admittedly, seems redundant. This should, if you're inquisitive, cause you to ask “Yeah, but what is money and how does it work?” That would be a good place to start. So here goes.
Before there was money, there was barter “You've got a chicken, I need a plumber, so let's trade.” As happy and as simple as this sounds, it only sounds that way if you have something to trade that the other person wants. If not, well, you're outta luck. To make things easier, coins were invented, enabling people to work for actual money—and then use it buy whatever they wanted. No more “You've got a wheel, but I don't have anything of value to trade, leaving me out in the cold.” Money, as bad a rap as it gets, was a huge innovation that enriched everybody.
“But, pray tell, why do coins or paper money have value? Huh? Why not just give everyone more money? I mean, couldn't the government just take from the rich and give to the poor?”
What's far more likely to happen is this; our new, all-powerful government takes from everyone, making everyone poor, which inevitably makes them rich. That's how you end up with an aristocracy. It doesn't matter whether it is a function of a royal class or a political one. It all ends up being the same thing. What evidence do I have to support this radical thesis? Pretty much all of human history, would be the answer. So, let's pull our heads from our nether-regions and get back to reality.
It used to be that the American dollar was backed by gold. Coins were considered valuable because a penny had a pennies worth of copper. A dime had 10 cents worth of silver. A nickle had 5 cents worth of nickle and so on. In other words, money had real value because things like gold, silver, nickle and copper were considered valuable. This worked perfectly fine for a very long time. Eventually, however, the desire to grow the economy to pay for things like war and an ever-growing list of social services meant that there simply wasn't enough gold in them there hills to back the amount of paper money needed to pay for them. So, the dollar was removed from the gold standard. That way the economy could expand, unhindered by things like common sense. It also meant that the only real value our money had was whatever our government said it had. Today, even our coins no longer have the same material worth, as the result.
Countries that thrive on paper money, without anything of substance backing it as their prime currency, generally end badly. It's simply too easy and too tempting to print enormous amounts of paper money as a way of magically growing your economy. This inevitably, has the effect of devaluing your currency, creating inflation. Simply put, this means that everything costs more. When left unchecked, it can lead to hyper inflation. Meaning, everything costs a whole lot more. The Housing boom and bust, at it's core, happened precisely because of this kind of currency manipulation. Germany after WWI experienced hyper inflation, and it destroyed their economy. A loaf of bread could cost hundreds of dollars, a pound of hamburger could cost thousands. People were sweeping-up huge piles of filthy lucre lying worthless in the streets—and, Germany was hardly alone.
This very same vile disease is presently at work in Venezuela, where the store shelves are empty and people wait in line, sometimes for days for a dinner roll, maybe a single square of toilet paper. But no worries, the socialists will blame the capitalists. This is easy to do when people are so illiterate regarding even simple economic matters that they could just as easily blame ghosts or evil dwarfs and people willingly believe it. “I mean, come on, someone must be to blame, evil dwarfs seem a pretty good shot to me!”
Finally, from Africa to Asia to Europe and beyond, economies tend to thrive only when they have a secure, intrinsically valuable money supply. That's why just giving people massive amounts of money isn't viable. There are other reasons as well, but that's a good place to start. I'm not suggesting that having wildly disparate gaps in wealth is a good thing. Only that the solutions generally offered, tend to be far more destructive than what currently exists.
As a very wise man once said, “Capitalism is a pretty crummy system, except when you compare to every other economic system.” In that light, it looks pretty damned good. I'm just saying.
Mark Magula
“Damn that was simple. Why don't politicians just do that? Huh? Anybody got an answer? After all, inequality is bad. Equality is good. Right?”
Now that I've got the snark out of the way (more or less) let's get down to the business of answering this deceptively simple sounding question.
Equality isn't really the issue—money is. Which, admittedly, seems redundant. This should, if you're inquisitive, cause you to ask “Yeah, but what is money and how does it work?” That would be a good place to start. So here goes.
Before there was money, there was barter “You've got a chicken, I need a plumber, so let's trade.” As happy and as simple as this sounds, it only sounds that way if you have something to trade that the other person wants. If not, well, you're outta luck. To make things easier, coins were invented, enabling people to work for actual money—and then use it buy whatever they wanted. No more “You've got a wheel, but I don't have anything of value to trade, leaving me out in the cold.” Money, as bad a rap as it gets, was a huge innovation that enriched everybody.
“But, pray tell, why do coins or paper money have value? Huh? Why not just give everyone more money? I mean, couldn't the government just take from the rich and give to the poor?”
What's far more likely to happen is this; our new, all-powerful government takes from everyone, making everyone poor, which inevitably makes them rich. That's how you end up with an aristocracy. It doesn't matter whether it is a function of a royal class or a political one. It all ends up being the same thing. What evidence do I have to support this radical thesis? Pretty much all of human history, would be the answer. So, let's pull our heads from our nether-regions and get back to reality.
It used to be that the American dollar was backed by gold. Coins were considered valuable because a penny had a pennies worth of copper. A dime had 10 cents worth of silver. A nickle had 5 cents worth of nickle and so on. In other words, money had real value because things like gold, silver, nickle and copper were considered valuable. This worked perfectly fine for a very long time. Eventually, however, the desire to grow the economy to pay for things like war and an ever-growing list of social services meant that there simply wasn't enough gold in them there hills to back the amount of paper money needed to pay for them. So, the dollar was removed from the gold standard. That way the economy could expand, unhindered by things like common sense. It also meant that the only real value our money had was whatever our government said it had. Today, even our coins no longer have the same material worth, as the result.
Countries that thrive on paper money, without anything of substance backing it as their prime currency, generally end badly. It's simply too easy and too tempting to print enormous amounts of paper money as a way of magically growing your economy. This inevitably, has the effect of devaluing your currency, creating inflation. Simply put, this means that everything costs more. When left unchecked, it can lead to hyper inflation. Meaning, everything costs a whole lot more. The Housing boom and bust, at it's core, happened precisely because of this kind of currency manipulation. Germany after WWI experienced hyper inflation, and it destroyed their economy. A loaf of bread could cost hundreds of dollars, a pound of hamburger could cost thousands. People were sweeping-up huge piles of filthy lucre lying worthless in the streets—and, Germany was hardly alone.
This very same vile disease is presently at work in Venezuela, where the store shelves are empty and people wait in line, sometimes for days for a dinner roll, maybe a single square of toilet paper. But no worries, the socialists will blame the capitalists. This is easy to do when people are so illiterate regarding even simple economic matters that they could just as easily blame ghosts or evil dwarfs and people willingly believe it. “I mean, come on, someone must be to blame, evil dwarfs seem a pretty good shot to me!”
Finally, from Africa to Asia to Europe and beyond, economies tend to thrive only when they have a secure, intrinsically valuable money supply. That's why just giving people massive amounts of money isn't viable. There are other reasons as well, but that's a good place to start. I'm not suggesting that having wildly disparate gaps in wealth is a good thing. Only that the solutions generally offered, tend to be far more destructive than what currently exists.
As a very wise man once said, “Capitalism is a pretty crummy system, except when you compare to every other economic system.” In that light, it looks pretty damned good. I'm just saying.
Mark Magula