A war on #capital is not what we need

It is unfortunate that Bernie Sanders has reduced the political economy down to a battle between the wealthy and the rest of us. Since Mr. Sanders is an uber-statist there should be no surprise that he would leave government off of his list of bad things that impact the average American. Politicians whittle the status of the political economy down to a voting issue where packages of goods and services are concocted and offered to the electorate in exchange for the right to regulate commerce and create more programs that employ more bureaucrats.

Blaming the wealthy for the negative state of affairs only serves to heighten a sense of urgency to make change now before the lower classes predicament is worsened by increasing income or wealth inequality. Only the State can come to the individuals rescue and save her from the morass.

The politically astute realize that arguments like those made by Mr. Sanders, Hillary Clinton, and other progressives are a waste because they ignore the real definition of economics and the realities of a capitalist-based society. Macro-economics is about making a nation attractive to the flow of capital while micro-economics is about how efficiently that capital is put to use when it is converted into a going concern or a firm. The vast majority of the electorate play no role in how capital flows because the vast majority of the electorate how no capital to flow to anywhere. It makes the issue of voting moot since the vote has no impact on the day-to-day decisions involved in macro or micro-economics.

All is not lost for the individual, however. How she fares in a world where she has no leverage on the decisions to accumulate and distribute capital depends on how well she can enhance her value to those who hold capital. The individual must wake up every morning thinking about what value she can create; how she can leverage that value and be compensated for its provision. She has to take on a hunter’s mentality when negotiating the political economy and quickly discard a consumer’s mentality that expects something steady and risk free from the economic environment. This mindset can only be achieved with the realization that the ineffective nanny economy of progressives has to be replaced with an entrepreneurial, value-driven economy.

The individual’s value to the capital flow process is a concept that Mr. Sanders and other progressives never mention in part because they don’t understand how the American economic system works; in part because telling an electorate with a “do more for me” mentality that it should take on the responsibility of enhancing their value would be political suicide.

If Mr. Sanders is sincere about a revolution, he should first get rid of the “democratic socialist” moniker; join us anarcho-capitalists; abandon the “war on bankers” rhetoric (those guys have been around since Jesus. They aren’t going anywhere); and instill a little of that Brooklyn toughness and gruffness into a narrative that says that each individual should focus on identifying and providing the best value to our economic jungle.

About Alton Drew

Alton Drew brings a straight forward and insightful brand of political market intelligence. Alton Drew graduated from the Florida State University with a Bachelor of Science in economics and political science (1984); a Master of Public Administration (1993); and a Juris Doctor (1999). You can also follow Alton Drew on Twitter @altondrew.
This entry was posted in Bernie Sanders, capital, economics, Economy, Election2016, free markets, government, liberty, Political Economy and tagged , , , . Bookmark the permalink.

One Response to A war on #capital is not what we need

  1. kenski2013 says:

    I agree that each person needs to make the best use of his/her abilities to contribute to the creation of good and services in order to earn a living, and maybe eventually accumulate some capital.

    As Alton Drew points out, many people have no capital. Why is this? Some don’t make enough money to accumulate any capital, some spend all they make, some don’t know how to accumulate capital and/or why it’s important to do so.

    But there is another reason why capital is not easy to come by—many of those who work hard at accumulating capital are highly competitive, and many will do anything to “walk off with all the capital”, even engage in monopolistic acts. This “economic Darwinism” (to the capitalists go the spoils, and the devil takes the hindmost) runs rampant through our society and the entire world of business.

    Now, if the capital is obtained honestly, and reasonably fairly, then it is hard to argue against a competitive capitalist system. It’s my experience, and I think there is plenty of independent evidence that shows that capitalists often lie, cheat, deceive and exploit. The “bad” mortgages that were turned into marketable securities in the run up to the Great Recession are a sad example of this. Home mortgages were given to many families who didn’t have the income to make the monthly payments by falsifying the documents to get the mortgages approved. This pretty much guaranteed that these people would default on these mortgages, lose their homes, and, in addition, this led to the mortgage backed securities containing these mortgages created by fraudulent means (which had been vetted as relatively safe and good quality by rating agencies) being called into question when the high default rates on the mortgages that made them up made payments to investors fall far short of the original expectation. This almost led to a collapse of the world wide banking system, since these mortgage-backed securities had been sold to banks around the world. The uncertainty of their value made them difficult to buy and sell, thus freezing the markets through which they were traded.

    Why did all of this occur? Because the companies making the mortgages were only interested in the commissions and fees they received for doing so, and since they would not be responsible in the long term for the mortgages or the subsequent securities, had no reason or incentive not to make them, even for people who didn’t meet the normal lending standards. Now, you would think that ethical standards of honesty and fairness would have been enough to stop people from doing this, but apparently, that was not the case.

    I think Bernie Sanders’ heartburn with capitalists has a lot to do with situations like this one, where capitalists lie, cheat, deceive, and exploit, walk off with lots of money, to the detriment of other members (both people, other businesses, and institutions) of society.

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