Capitalists Sincerely Want You To Be Rich
No, really, richer the better
The old question from Bernie Cornfeld, when hiring a salesman, was “Do you sincerely want to be rich?”. If so then join me and rip off those tax dodgers looking to invest away from home. Or, you know, something like that at Investors Overseas Services.
But let’s change this, just a tad, and ask whether capitalists want you to be rich? Surely not, they want to oppress you, live high on that caviared hog while you get exploited, right? Given that I’m slogging though Grace Blakeley’s latest at the moment (a book length rebuttal possibly to arrive real soon now) this is an idea that the synapses are being primed with. And, well, it’s wrong.
Capitalists sincerely want you to be rich. For the very simple reason that there’s more money to be made out of rich people than out of poor.
No, think about this for a moment, Berard Arnault is - sometimes at least - the richest man in the world. He owns LVMH and similar luxury goods brands. These are a tax upon people who are rich. Or, more accurately, those with a high enough income that they can start to pretend that they’re rich by buying those branded items that the actually rich know are parvenu and bourgeois. But people do have to be rich enough to be able to buy them - M. Arnault does not make his money from $2 a day peasants. Not even the factories where the goods are made employ them.
Or, take another example, Jeff Bezos. And run this the other way around. So, he’s got $200 billion or whatever as the Amazon share price bounces around. There are some 1 billion people out there at that $2 a day poverty level. They have no impact, whatsoever, on the Bezos fortune. He doesn’t buy from them, doesn’t employ them and most certainly isn’t selling anything to them.
Now the little thought experiment. Say those 1 billion suddenly - say we wave that magic free market wand and the next 50 years happen overnight - become as rich as the current rich world 1 billion. For that is roughly enough what the rich world currently is. N America, Europe, Japan, a few offshoots (Oz, NZ) and that’s about the 1 billion people that are the rich world. So, now we’ve 2 billion people about as rich as we readers here are today, not the current 1 billion.
Jeff Bezos get richer or what? Sure, details, schmetails and all that but an opening guess is that Amazon would be selling lots to these newly rich 1 billion, just as it does to the currently rich 1 billion, so the Amazon stock price will go up and Jeff Bezos get richer. A useful guess would also be that doubling the size of the addressable market would make him twice as rich.
So, do the two capitalist bastards want everyone to be rich? Sure they do, in fact, they’re praying that it happens. Which does give something of a problem for that idea that the capitalists want to keep the poor poor. For you get to be a rich capitalist by selling things to people and the poor don’t have any money. So, you get richer as a capitalist if you’re a capitalist in a world full of richer people.
Capitalists sincerely want you to be rich. Because that means there’s more money they can bastard out of you, obviously. Which is a bit of a problem for that Marxist claim that the capitalists want others to be poor, isn’t it?
If I may play devil’s advocate for a moment.
Wouldn’t a Blakeley argue that the vast wealth of a Bezos type is attributable not just to the large customer base, which of course he would like to double, but also to the “exploitative” margin earned on each item sold? If the margin were closer to zero, ie he paid a “fair” price to his Chinese manufacturers and a “fair” wage to his workers across the globe, rather than squeezing both to the bare minimum he can get away with, then the vast wealth generated by an Amazon would be shared rather differently as between owner, producer and worker.
Bezos would probably still be super, if less, rich since, say, 100 billion sales at a 10 cent margin is still a lot of money but the other human contributors to the value chain would be richer when not being “exploited”. And then these better rewarded contributors would then contribute more rapidly to the wealth generating circle by becoming customers themselves.
In truth I suspect that the Amazon business model is already one based on huge sales at thin margins (as opposed to a LVMH based on a relatively small number of sales at a huge margin) but I can see the Blakeley line of attack: it’s not about keeping everyone else poor but about an unfair division of the wealth generated.