Wednesday, February 13, 2019

All the Toys

Adults are really just big kids. If a small kid was hogging all the toys, the person looking after them may be inclined to a little deception. They could take a piece of paper and cover it in glitter as a "Toy Token". If they were very good at Kid Talk, they could convince the little bully to hand over the toys to other kids in exchange for tokens. Tokens that grow if the other kids enjoy themselves more.

This was the huge leap forward we took in the shift from Mercantilism to Adam Smith Capitalism. Instead of Nations being seen as competing schoolyard bullies, the people within those nations could exchange toys. Stock Markets are the tokens. The toys get handed over and grow *IF* they do or make things that the other kids want.

The wealthy today are massively incentivized to put their Capital to work rather than hoard it in pools of gold coins. Conspicuous Consumption is a stupidity tax, where the wealth gets transferred from someone who wants to spend $10,000 on a bottle of Champagne to someone who puts that $10,000 to work. Those who inherit massive amounts and just buy stuff with it, will slowly see that stuff become worth less if it isn't working.

It isn't perfect. Far from it. I believe a Universal Basic Income is necessary for pure play Adam Smith Capitalism. He argued that local markets were the best way of finding out what people wanted. Rather than a bunch of stiffs sitting in a board room "representing people". The act of buying something is direct empowerment. A form of voting. But you can't vote if you don't have any cash in hand to start.

The three richest men in the world no longer "hog their toys". Buffett owns share is Brick companies, Insurance companies, Media, Logistics, Capital Goods, Household Products, Food and Beverages. Even Bezos and Gates don't hold all their wealth in Amazon and Microsoft.

A big part of the magic trick of Capitalism is getting people to carry on working for those tokens. To see their number grow. That is dangerous. Like fat, salt, and sugar... numbers are a too easy proxy for the real things that matter. There are lots of holes that need working on. Lots of incentives that need discussing. Lots of self-evaluation and deciding what really matters.

But the answer isn't just taking the richest people in the world's toys and sharing them around. They don't actually have the toys they think they do. The numbers are just glitter-covered tokens.

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