A Wealth of Nations and the Fallacy of Capitalism. (05/10/01)

A simple economic fact that is always ignored and overlooked by economic theorists, and for good reason too since it renders their musings invalid, concerns the fact that wealth, no matter how it is measured, does not exist as an infinite quantity. Since the total aggregate of all wealth available for distribution among the world's population is finite, economic equality and economic justice are goals that can never be achieved. Any economic theory that argues to the contrary, as capitalism always does for instance, is quite simply a lie. The idea that a free-market economy is a good thing for people and nations to embrace, for instance, where everyone will be rewarded in kind for the industry and enterprise they bring to the marketplace, is simply invalid and untrue.

A simple analogy can be used to illustrate the truth of this assertion. Let us assume for the sake of argument that a single grain of sand represents one unit of wealth. In the first place, it is obvious that wealth is finite in this circumstance because the total aggregate of all grains of sand on the earth do not occupy an infinite space. While it might be true that there are a great number of grains of sand available for distribution as wealth, that total falls well short of being infinite in number. Again, for the sake of argument, let us say that the finite pool of available wealth as measured by grains of sand reaches a total of 5 billion. At the same time, let us also assume that there are 5 billion people on the earth. Economic equality and economic justice, strictly defined, therefore, would be achieved when each person on the earth possessed exactly one grain of sand.

Since terms like equality and justice cannot be rationalized to mean something other than what they mean in this context, if one person anywhere on the face of the earth possesses more than one grain of sand, say two grains for instance, then it must be inevitably true and inescapable that another person must have no grains of sand at all because there is a finite number (5 billion) of them available for distribution. If a single person possesses six grains of sand, then there must be five people who have none at all, and so on. While this simple observation may seem inconsequential, even completely benign, consider the fact that a single individual was recently given $252,000,000 to play baseball. If you take the trouble to convert that windfall into the terms of the model being proposed here, then it must be true that 251,999,999 other people somewhere on the face of the earth have been reduced to possessing no wealth whatsoever, since the 252 million grains of sand used to enrich the baseball player had to be taken from someone, somewhere in order to be given to him. In that single transaction, then, an inequality of such massive proportions has been perpetuated and accomplished that its extent is virtually incomprehensible.

The problem with analogies, of course, is that they never reflect the true state of actual conditions. This one is no exception to the rule in that a strict one-to-one correspondence between individuals and grains of sand falls far short of expressing the complexities involved in contemporary economic systems. The point to be taken here, nevertheless, is perfectly valid; that is, when any single individual is allowed, even encouraged, to accumulate as much wealth as possible, the idea that no one at all suffers any depravation as a consequence of that fact would be true if wealth itself were an infinitely renewable and ever-expanding reality. The fact that wealth is not infinite, however, makes it inevitable that many people, even a majority, must suffer depravation, even of basic necessities, in direct proportion to the number of people that accumulate vast quantities of wealth. For every newly minted millionaire that emerges in our culture, hundreds, even thousands, of newly starving children are pushed below the poverty line somewhere on the face of the earth.

A basic and fundamental problem these facts reveal is that the idea of democracy, if it can be said to depend on economic equality and justice, cannot be said to exist in a culture that encourages, even demands, that a certain, and proportionally very small, number of its members pursue and accumulate wealth at the expense of everyone else as a means of maintaining overall economic health in society at large. This is especially true in a consumer-based economy since the ability to purchase goods and services is necessarily restricted disproportionally, even by design, to the few who possess wealth as opposed to those who do not. This structure, then, and again even by design, generates a natural tyranny of the richest members of society over the poorest. That a progression to this kind of political tyranny is inevitable can be confirmed by the fact that the majority of "democratically" elected representatives in our political culture are now, and perhaps always have been, members of the wealthiest class of our citizens.

To assume, at the same time, that the wealthiest members of any society will pursue policy that benefits the poor at the expense of themselves is pure delusion. An obvious example of this reality is the tax cut plan proposed by George W. Bush, a plan that clearly favors the wealthiest members of society over the poorest, since 43% of the cut is targeted to the top 1% of people who pay taxes. People who do not pay taxes now, because they already fall below the poverty line, will not benefit in any way whatsoever. In fact, they will suffer an even greater burden than they already do because programs administered by the government, improvements in education for their children for instance, will necessarily be cut to pay for the reduction in taxes for those who already have more wealth than they can possible spend in their lifetimes. The issue here does not involve a few grains of sand either, since Bush's budget and tax cut targets $635 billion that he intends to return to 2.7 million individuals. Each one of them, on average, stands to gain $235,000 from Bush's windfall for the fabulously wealthy. The other 99% of tax-payers will have to split the rest; that is $715 billion among 243 million people, which sadly amounts to only $2,950 each on average. This is exactly the kind of distribution wealthy legislators perceive as being fair and equitable.

At this point in our nation's history, when it is becoming more and more obvious that natural resources of a kind that can be converted to profitable enterprises, ones which have traditionally generated wealth, if only for the few, are becoming daily more and more scarce, even to the point where basic necessities are beginning to cost more than average people can reasonably afford, such as gasoline and electricity, there is an ever-increasing probability that unrest and civil disobedience against a government for the wealthiest among us will reach dangerous levels. A government which fosters a tax cut for the wealthy, while claiming it is to the benefit of the poorest among us, can hardly expect to win the hearts and minds of the people they are deliberately alienating. This matters little, of course, when most of those people are basically voiceless. When the upward spiral of depravation penetrates into the middle class, as it is already doing in the current energy crisis, however, an oligarchy drawn from wealth alone will begin to lose its ground. "These are the days of miracle and wonder," as Paul Simon would say, and while he could not have been referring to Bush's most recent press conference (05/11/2001), in which he (Bush) claimed that his tax cut would make it much easier for average Americans to pay their energy bills, it will take more than miracles for the current brand of conservative ideology (compassionate though it may be called) to survive the ever-increasing decline in available wealth. As fewer and fewer people control more of it, as less and less of it is available through the depletion of natural resources, more and more average Americans are going to realize that the "dream" of limitless wealth never included them under the blanket of its delusion in the first place. Policies that only feed the distinction between rich and poor in this country and the rest of the world do little but hasten the end of our so-called democratic institutions. One should not expect the birth of true economic equality and justice out of the fall of contemporary systems, however, since the wealthiest among us will simply keep what they already have by exerting ever more harshly oppressive measures to prevent the rest of us from having anything at all.