Subnostr

I think you greatly underestimate how much the rich depend on constant state action to remain that way for more than a few hours.

My country has thousands of pages of regulations and half a dozen federal agencies whose reason for existence is protecting passive corporate investors against their own hired management.

Corporations large and impersonal enough to need hired managers are a relatively recent innovation. In every industry, diseconomies of scale kick in at different levels, and function as natural limits to corporate growth; but lobbying and regulatory capture allow companies to grow well past these natural limits, and establish oligopolies that extract market rents greatly in excess of what they could by pleasing customers.

If the state and the courts ceased to recognise limited-liability corporations, the level of inequality would implode immediately. No risk-free passive investment would force wealthy parasites to get useful jobs.

Then, if we cut government spending by a good 99%...

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Discussion

mark tyler 2y ago

In your model the rich are a net cost to such a society?

Low Information Voter 2y ago

The top and bottom 1% are net costs, absolutely.

Individual exceptions exist, but they exist despite our society's bureaucratically modified incentive structures.

mark tyler 2y ago

How does the cost to protect their assets etc. overtake their productivity as they move from the 98.5th to the 99.5th?

If that same productivity were spread out over 3 people, why would those 3 not be more expensive to service than the single person?

Low Information Voter 2y ago

One of my clients has a house, whose ballroom is as large as the entire house I live in.

He's never had a real job in his life, but his "productivity" as measured by taxable income is at least 5x mine.

To his credit, he got bored and started a business. It has employees, who receive 95% of their renumeration from various government programs (I helped organise that).

It has permits, because he went to school with decision makers.

There is no universe in which he is a net benefit to society. But I like the guy, and for his social class he's well above the mean.

mark tyler 2y ago

Nice example. Plus the whole Elon thing. I guess we’d need to support the idea that those who leech off government handouts overwhelm those who produce. I could see that.

Low Information Voter 2y ago

Elon is the nearest thing to a counterexample I know.

With his just-the-right-amount-of-foreign charm and his Hollywood parties, he cajoled decision makers to open up a little space for Capitalism in two industries that had been regulatory-captured to the point of death.

And he's bright enough to understand what his staff are telling him, and even listens every once in a while. (Maybe less now than before.)

The exception that proves the rule, but doesn't justify the policies...