Before ideas become policy, narratives have to change.

Before the USA joined World War 1, the US media dehumanized Germans and influenced the public into despising them. Before Hitler killed the Jews, he prepped up the population by dehumanizing them first. We see it again today

When media pundits, politicians, and authors talk about “the wealth gap” or when they claim that profit is indicative of exploitation (a classical Marxist theory)....all this does is set the stage for Government to step right in and regulate incomes while confiscating wealth

When you’ve been told by your professors and by media pundits that “there is no such thing as an ethical billionaire”...the assumption is that someone like Bill Gates only got his money by “robbing” his employees of their labor. That his wealth is a result of him underpaying them

Sometimes you’ll see these pundits saying things like “If you worked for 100,000 years straight, you still wouldn’t make 1 billion dollars” ....implying that the billionaire didn’t actually work for his money.

This is flawed, because “working” isn’t what we do to earn money

We earn money by providing value, and we use that money to acquire someone else’s value.

Working in and of itself is a means to an end. Working is the means we use to provide value, but value can be created through other means.

And value-creation has always been the objective

You can provide extra value to people without working any harder than you do now

A classic example is an NBA basketball player in 1980 working “just as hard” as the players in 2019. It’s the same job, but the value is different because there are far more customers today

The nature of the job hasn’t changed, yet the value scales are different....and this is through something not entirely within that person’s control. The athlete is more valuable today due to global trends that he played no part in, but nonetheless he capitalized off of.

The reverse works as well. If a man working in an Alcohol Brewery works very hard, his labour and effort becomes worthless if everyone in the world suddenly lost their taste for alcohol. It may not be his fault that this happened, but the reality is the same. His job is worthless

The idea that “working very hard” is how we assess value is silly and baseless. No one can measure exactly how hard an individual works.

I’m sure that the subsistence farmers in 3rd-world countries work very hard, but that would be a silly way to measure their labour-value

Value can only be assessed in the eyes of the consumer, no one else.

Since consumption is the end-goal of all economic activity, then we have to look at economics through the eyes of the consumer.

“The customer is always right” so to speak.

Don’t listen to these pundits and politicians who imply that jobs are the end-goal of public policy.

Jobs are a means to an end.

People don’t actually want to work. People want to consume, and working is a way to create value so they can consume someone else’s valuable products

And since consumption is the end-goal of all economic activity, and since value is subjective, then by what metric are these pundits using when they claim someone is “too wealthy?”

Who are they to make this assumption? Is this their personal opinion or are they using a standard?

If a singer like Rihanna releases a makeup product and she sells it for $300, I may personally find it wasteful and unnecessary.

But that’s just my opinion.

Clearly, there are millions of women who thought it was a good deal, and they actually purchased the $300 makeup

Who am I to say these women are wrong?

If a woman pays $200 for concert tickets, who am I to say she’s wrong for doing it? In her eyes, it’s a good deal. In my eyes, it’s a waste of money.

And this proves that value is subjective. It’s the customer who determines value

Theoretically, if that makeup product costs $301, just 1 dollar more.....the customer would still purchase it. Think about any item you buy, would you still purchase it if the item was $1 more?

Yes, and that’s because you value the product more than you value your money.

The consumer is making a profit as well.

The customer is paying less for a product than he was initially willing to pay. The customer thought it was a good deal...and if he didn’t think so, why did he purchase the product?

The customer profit—although unseen—is very real.

So whether you purchase John Rockefeller’s oil, or Andrew Carnegie’s steel, or Bill Gates’s software products, or Michael Jordan’s shoes, or Jeff Bezos’s delivery...a common theme amongst all of them is that they provide consumers with low prices while providing the highest value

The profit you see, is within the range of customer profit (ie what the customer is willing to pay) and the cost of producing that product.

That “range” is where prices fall. If you move out of that range, your company is now taking losses. And traditionally, the range is narrow

The range of prices for new industries can be high, but for more mature industries...it’s traditionally rather narrow. Profits are routinely hovering around 8%-10% for most mature industries, and when you factor in the 3% annual inflation, it doesn’t look as large.

And what they can’t make up for in price they do so on volume. They focus their efforts to globalize their customer base as much as possible (and basically compete for the affection of the consumer)

They won over the customers by giving them a good deal. That’s how they got rich

The labour, the electricity costs, the land, the materials; all of that is paid for FIRST before any consumer good is produced

Something as simple to produce as a pencil requires thousands of men spread across continents while paying the market rate for the factors of production

This pencil, which is produced by thousands of men who produce the wood, the graphite, the rubber, the steel (to create the saws to cut the wood)...all of these factors are paid for FIRST, all of these men across continents have to be paid FIRST before the pencil was ever sold.

If I’m a 4th grader and I’m in the playground and I take my $0.50 pencil and I sell it to another kid for $1.00....am I now guilty of exploiting the pencil manufacturers? Did I “steal their surplus labour”?

If anything, I’m “ripping off” the customer. He bought it willingly

If we ever get to a point where pencils lose their appeal entirely, all of the factors of production; the labour, the electricity, the rubber, the wood...would be repurposed to make other things that other consumers want to buy. The materials would go into some other product.

If I’m a business owner and I use these scarce factors of production (they’re scarce because obviously, there’s a limited supply of these materials)....and I take these factors and I make some product that customers don’t want to buy....then I’m WASTING society’s resources.

And how does a business owner know he’s wasting society’s resources? Through the profit and loss mechanism. His losses show him

Capitalism isn’t a profit system; it’s a profit/loss system. And the losses are just as important as the profits.

The losses impose market discipline.

The losses signal that the business owner isn’t living up to the customer’s preferences, and he MUST change his arrangement of the factors of production...or risk going bankrupt

And sometimes (like in obsolete industries) bankruptcy is inevitable because the customers decided so

Capitalism is all about the consumer, and figuring out how to maximize production for the masses. So what you don’t make for in price, you make on volume. The billionaires got rich because they took a small percent per transaction but traded with effectively billions of people

Each trade is mutually beneficial; both sides benefit from a transaction.

So when a billionaire pays for a factor of production (he’s a customer in this transaction), both sides are benefiting. And when he rearranges these factors to make a sale, both sides are also benefiting.

The Boss is essentially trading resources for his employee’s time & labour, trading resources for materials like steel and lumber, and trading capital for a higher future return

He then packages these factors of production and makes a resell to millions of consumers globally

So when people make the false argument of comparing Jeff Bezos’s wealth with that of an employee, they’re getting the reasoning all wrong.

An Amazon-employed forklift driver based in Dallas Texas....theoretically only serves the customers in his immediate area.

That forklift driver in Dallas ONLY serves the customers of Dallas.

And he might even be getting a much bigger cut per transaction than Jeff Bezos is, but because he’s limited to the customers of his area (due to the nature of his job), his earning potential is limited.

Again, what you don’t make up for in price, you do so on volume.

Jeff Bezos is taking a much tinier cut per transaction...but because he has millions more of these mutually beneficial transactions adding up, he earns billions of dollars.

There is no exploitation going on

Labour doesn’t determine value. Consumer preferences are entirely responsible for determining it. It’s entirely subjective....and since billionaires engage in more mutually beneficial transactions, then they are adding value to society.

Their billions are indicative of new value

Their wealth is indicative of the value of all the cumulative “consumer profit” made through millions of trades.

The country is that much richer.

The profits are newly created value; something that previously did not exist. And the society is that much more prosperous.

By engaging in these millions of independent mutually-beneficial trades, the billionaire is promoting a public service. His existence is directly benefiting the country he lives in.

Rising inequality is a by-product of this process, and he will certainly reap billions.

In countries where you’ve had the fastest growth (the US during the period of 1870-1930, China from 1978-today, etc)...you see skyrocketing wages for regular workers as well as a larger number of billionaires

The rich are getting richer. But the poor are also getting much richer

The economy isn’t some “fixed-pie”.

It’s not like there’s a finite level of value out there, and that humans have hit a wall in our ability to acquire them.

Yes, Earth is finite. But for economic purposes and the wishes of 7 billion humans, our resources are super-abundant

If the economy and spending was some fixed-pie, as they assume....then wouldn’t an increase in the human population necessitate a drop in everyone’s living standards?

More people to share the pie, so to speak.

But that’s not how it works, and economics never worked like that

Countries where you have no billionaires and very few millionaires, (like Malawi for example) also have a high poverty rate.

In fact, fostering the creation of more Malawian millionaires would actually make the society more prosperous. Because it would indicate new value created

If more Malawian millionaires arose as a result of mutually-beneficial trades, then their community is richer.

More people are employed, more goods are supplied, and the standard of living is higher than it otherwise would’ve been.

Their existence benefits their country.

The people who are poor, the people with low skills....these are the people who benefit THE MOST from this capital accumulation process.

There will be more consumer goods produced per capita, forcing down relative prices and allowing him to consume more

Everyone is better off

And in a society as globalized and intertwined as ours, you don’t actually need a high number of these folks to accomplish what we’ve been able to do so far

This push against “rising inequality” is a false argument. Someone acquiring more wealth/value has no bearing on my income

In fact, the existence of this billionaire means that he’s bidding up the price of labour by hiring people (and pushing up everyone else’s wages because of scarce supply) while also providing products at a price lower than the competitor.

His presence improves my living standard

And this isn’t even mentioning the billions of dollars paid in taxes on the profits of their transactions.

Again, this money wouldn’t have been collected at all if this billionaire was never born.

These profits are new wealth, and taxing it is taxing newly-created wealth.

Now, if you believe that the billionaires should pay higher taxes....that is a value-judgment that is totally separate from economics

Economics only describes the process. It is completely neutral, and people advocating for higher/lower taxes are making their own value judgment

Economics can only tell you the consequences of imposing certain policies. It’ll explain what’s going to happen as a result of some new policy.

Whether you’re willing to bear those consequences is a value judgment that is separate from economics.

There is a distinction here.

So if a President has a value-judgment that all the citizens in a society should “be as equal as possible”...then economics can explain the consequences of this value-judgment

Economics can explain that ALL people in a society would be poorer if we kneecapped all the rich people

A President might prefer this state of events anyway. He may believe it’s worth his energy to focus on “reducing inequality”...although economics will explain that it’ll inevitably lead to poor people being poorer

Anyone who cares for the welfare of the poor must understand this

So when politicians like Elizabeth Warren or Bernie Sanders talk about inequality, they are making the value judgment that it would be BETTER to make ALL people poorer, as long as the “gap” between the rich and the poor is reduced

They focus on inequality rather than prosperity.

Because they have this outdated “fixed pie” view of the economy (which was soundly refuted by Adam Smith and Frederic Bastiat)...they conclude that this rich man has billions because he deprived society of that same amount.

That his wealth is an indication of unearned value.

They are so oblivious to this reality, that Bernie Sanders ACTUALLY argues that billionaires shouldn’t exist.

Bernie states that resources cannot accumulate in the hands of a billionaire who is proven to be capable of efficiently allocating these scarce factors of production.

So when politicians make the argument that we should prevent the accumulation of billions, what they’re actually arguing for is that we stop the creation of new consumer value.

And any lost opportunity to further create new wealth represents a very real loss to society.

Elizabeth Warren’s economic advisors—including the famed Thomas Piketty—argued explicitly that reduced GDP per-capita growth would result from imposing new wealth taxes

In other words, a wealth tax would make the poor much poorer off, but inequality would certainly be reduced

Now, it isn’t the place for folks like Thomas Piketty to use economics as a crutch to impose value judgments on the rest of society.

He and Warren essentially argue that reducing inequality is more important than lifting poor people into the middle-class. Those are their values

Most people, most NORMAL people, can take a step back and reason that higher inequality doesn’t matter as long as all income-brackets are moving up.

If human welfare and satisfaction is your concern, then this inequality should be celebrated. Everyone is indeed better off

What socialism does is that it superimposes the decision-making process of the market and substitutes it for the judgments of a small number of bureaucrats.

They are substituting the judgment of millions of people across countries for the judgment of state bureaucrats.

And if a state bureaucracy is insulated from the market, then the normal profit/loss mechanism will not exist.

State planners would be “flying blind” so to speak, and they’d have no idea which products are most urgently needed by consumers, and which production processes to use

Losses will pile up, but because there is no profit/loss system, you won’t actually know if you’re taking a loss.

You wouldn’t know if it’s better to produce this item or that item, how much to produce, and which factors of production to use.

As a result, we have enormous waste

As a result, you’d have enormous shortages of some goods....while there’d be a surplus of unsold goods.

The bureaucrats pay no price for being wrong, unlike an entrepreneur who pays for his mistakes through market losses.

Now tell me, who is best to organize economic activity?

There is a reason why in socialist-driven economies, there exists a lot more equality....but the poverty is also much deeper

Economies do not grow because profits (a mechanism used to help us climb out of poverty) are outlawed

Everyone is much poorer, and there exists shortages

Make no mistake about it. Bernie might be sincere in his beliefs, but good intentions does not mean good policy.

Imposing a wealth tax, discouraging capital accumulation, would paralyze the growth of the US economy. The revenue collected won’t make up for the capital consumption

Imposing a wealth tax would require that we redirect economic activity away from savings and capital accumulation....and towards spending.

Government will spend these savings in the short-term, but this would erode the capital foundations of the country.

In fact, the wealth tax aims to raise revenue by taxing away the very mechanism which has allowed middle-class Americans and Canadians to be as prosperous as they currently are

It would be killing the golden goose that lays the golden egg. This would be the tradeoff

Life doesn’t give you solutions. Life only gives you tradeoffs.

For every action, there is a consequence. And there is no such thing as a “free lunch”

If this wealth is taxed and spent, then the short-term benefits (although very real) would be outweighed by much slower growth

And as a result, people will be much poorer off than they otherwise would be. Capital erosion will eventually prevent any increase in real wages, and the entire society is poorer in the long-run.

Every President, from Washington to Trump, understood this concept to an extent.

There’s a reason why even the most liberal Senators of past decades shied away from a wealth tax. They understood how economically destructive it would be....so they settled for high income taxes to fund social programs.

They didn’t want to completely kill the golden goose

Now, it’s one thing if you want to impose income taxes on everyone (with the rich paying more) in order to fund the Government. We pay taxes as a cost of acquiring certain services

It’s entirely different from imposing wealth taxes for the sole purpose of “regulating inequality”

Politicians no longer even pretend that they want to raise taxes to pay for needed programs.

They now wish to use taxation as a tool to alter people’s behaviour, and they wish to use wealth taxes as a deterrent for someone accumulating wealth.

This is what they’ve become

This is borderline sociopathic behaviour. These are politicians imposing value judgments that don’t even have a causal link to human welfare.

The purpose of taxes is to collect money. That’s it. Ideally we want to keep them as low as possible while funding certain programs.

According to Bernie Sanders, and Elizabeth Warren, and Jeremy Corbyn....the purpose of raising taxes is to reduce the size of the economic pie. Their goal is to “regulate inequality”, not to promote social spending.

Funding programs is an afterthought to reducing inequality

Again, it isn’t the politicians job to determine who is making “too much money.”

A politician should only be figuring out how to govern while using the least amount of his citizen’s resources as possible.

Value judgments should be made in the private, not the public sphere.

And this is why Bernie Sanders is fundamentally different from Obama, Trudeau, or any other typically Liberal politician.

While those guys were focused on promoting welfare, Bernie is focused on regulating incomes and confiscating wealth.

He’s a completely different beast

Bernie’s proposal for steep wealth taxes should have disqualified him from the Presidency by any sane and informed society.

This would cause capital depreciation and capital flight on a scale never seen in human history. That this nutjob is close to the White House is alarming

And what makes all of this worse is that there exists a naive section of the population who actually believe that the focus of his agenda is to improve their economic situation

This can’t be further from the truth. People will focus on his stated goals, rather than actual policy

If we actually follow this economic agenda to its logical conclusion, then we will revert to barbarism

The only thing that separates us from our ancient ancestors is our stored reserve of capital. If this deteriorates than we WILL regress

This is why the 2020 stakes are so high

Donald Trump, Barack Obama, George Bush....although these leaders have their obvious flaws, they do not threaten the fundamental nature of the economy.

Bernie and Elizabeth do, and voters need to understand the crucial differences here.

A wealth tax would paralyze the economy.

And I want voters to understand that during elections, you may not necessarily get the guy you want.

But sometimes you have to support one candidate for the sole purpose of preventing a more dangerous candidate from winning the election.

Even if you don’t like that candidate.

During previous election cycles, there was little difference between candidates. Whether Al Gore, Bush, Kerry, McCain, Obama, Romney, or Clinton won...it made no significant difference to the functioning of the society.

Hence why people could afford to be politically apathetic

The same cannot be said for 2020

Elizabeth Warren is so radical that she’s even caused politically apathetic Silicon Valley figures to speak out against her wealth tax

She is not your typical union-supporting high-taxes Democrat. She is a Communist, and the wealth tax proves it

The only rational justification for having a wealth tax is through the belief that wealth is “finite” and if someone has more money, it must be because of sinister actions.

And therefore the State must intervene and regulate this inequality through high wealth taxes.

This is the Marxist “Labour Theory of Value” ....a long debunked economic argument that underpins Communist thought and Communist ideology

Although it was disproven by Carl Menger during the Marginal Revolution of the 1870s, this theory is still alive and well in Marxist circles

You may not be a fan of Donald Trump.

I totally understand and I’m not that fond of him personally.

However, folks need to understand that if Elizabeth Warren or Bernie Sanders come out of the primaries, then voting for Trump becomes your moral duty and obligation.

Even if you dislike Trump, even if you can’t stand the idea of the President tweeting at 2am, he is STILL a much better option than having Warren or Sanders in the White House

Voting AGAINST Warren doesn’t mean you necessarily support Trump. It just means you want to stop Warren

And I want regular Independents, Republicans, and Democrats to understand this

Bernie and Warren are not normal. The difference between Bernie and Obama is much greater than the difference between Obama and Trump

Obama looks like a libertarian standing next to Warren/Sanders

Don’t be distracted by talk about universal healthcare or “trying to make America into Denmark”

It’s not true. Denmark doesn’t have a wealth tax, and trying so would paralyze the Danish economy. Bernie is disingenuous when he brings up Denmark while not understanding the country

There are a lot of people in America who dislike Trump, and will vote for whoever is opposing Trump in November 2020. However, just because you dislike him doesn’t mean you can’t vote for him

If the alternative (Warren, Sanders) is that much worse, what other option do you have?

Regular folks need to repudiate this line of thinking. They need to repudiate scientific socialism

They need to understand that the free market and the profit/loss system is the source of their prosperity. If people don’t get this, all of the progress achieved will be undone

It is our privilege that we have a society as rich as we have it now.

It would be foolish for us to throw it all away due to the cancerous policies of economic illiterates such as Sanders and Warren.

Every voter must keep this in mind while we’re in this political climate.

Do not allow them to set the conversation’s parameters. Tell them you don’t care about Trump’s bad personal qualities, or his bad trade policies.

Focus on the issue, and the issue is this wealth tax.

The wealth tax is the single dumbest idea ever devised in political history.

All of these Twitter accounts which talk about “eating the rich” are operated by economic illiterates.

They want to “eat the rich” and “abolish billionaires”

And their Twitter name often has a beside it. They need to be confronted and refuted. We have to own the conversation

It is your duty as a well-informed citizen to understand all the arguments for socialism. Without understanding it you’ll never be able to refute it.

And it’s your duty to inform others who aren’t as well-informed as you.

Explain concepts to them using analogies if you have too

Socialism has never worked in any country it’s been tried. That is a historical fact

Billionaires make their country better off. That is another fact

Society does far better with private property, freedom, and competition. That is another fact

Refute these people. You have too