Defending Capitalism… from Capitalists

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Dear Capitalists,  There has been a widely reported and alarming statistic being bandied around lately.  That the 85 richest people in the world control the same amount of wealth as the bottom 3.5 Billion.  That’s Billion with a B.  And of course, what’s wrong with that?  Here’s the trouble.  It’s so very hard to exploit the very poor.  It really is.  They don’t make particularly good laborers, they tend to have lots of health problems, and are lousy consumers of high end products, tend to exist in places with a lot of fomenting social and political upheaval, and what’s worse they don’t generally break into the entrepreneurial class where the real money is made.  My tone may be light, but I’m deadly serious.  The entrepreneurial class IS where the money is made.  The poor do very little to advance the interests of the wealthy or even the middle class.  At best they can consume inexpensive goods and provide a source of menial labor.  In the days of the serfs, menial labor was a genuinely excellent source of wealth.  Back in the day, someone might have asked themselves what the point of hospitals, education, infrastructure, and progressive tax policies might be for serfs.  Wealth was created merely by harvesting natural resources and basic goods also produced through massive amounts of manual labor.  The more of it, the better.  Today is different.  Wealth is created by technical labor and intellectual content.  That requires a great deal more from your workers.  Technical workers require a great deal of resources to obtain and maintain.  That resource must needs be maintained through health and economic systems.  Complex infrastructures is needed to create new avenues of wealth, tax and administrative policies are required to create a consumer base for your high end technical goods.  It’s a vastly more complex system, and it takes a great deal of money to maintain and propagate but it is how wealth is generated in the modern era.

Here’s the trouble.  You can offload the application of an modern economic system onto governments, and there’s nothing wrong with that.  Governments are happy to build roads, power plants, provide education, take care of the elderly, provide a little for displaced persons, maintain security, and manage the basic bureaucracy necessary to a well run society.  That’s no trouble at all.  The government is more than happy  to absorb these responsibilities and to be honest, the government is actually better at this than you.  However, it can not indefinitely absorb the costs.  I mean, sure, we COULD increase taxes on the bottom half of the global population, but I can think of a simpler solution.

For the last 30 years economic gains have gone almost exclusively to the wealthy and even more so to the super wealthy.  This is perfectly fine, for now.  In the long run though you will eventually begin to start cannibalizing each other for greater profits and that’s bad for business.  Wealth generation exclusively for the wealthy is exceedingly self-limiting.  Like I said before, you need to grow the entrepreneurial class largely through supporting the underclass.  Remember, Henry Ford provided each of his workers a high enough wage to afford his cars.  This is a useful analogy for developing future wealth streams.  If you want to grow your company you need an economy that can generate consumers wealthy enough to gobble up your next-gen products.  I mean you can’t really target the wealthy, they already have your stuff, and there’s shockingly few of them anyway.  You need to target the underclass, and you do it through social advancement.  Think about it, there’s 3.5 Billion of them.  If you can help them be socially mobile it will make the last 30 years look like chump change.  Trust me.  It’s good for business.

Here’s another thing that you may want to consider.  In so much as we don’t generate as much wealth purely from farming, lumber, mining and so on any more, those are still really really profitable.  Not only are they profitable they tend to be pretty popular with your consumers.  However, while I’m sure you would never destroy the environment, gut regulations, ignore health and safety protocols all in the name of short term profits, your competitors might.  Not only would they damage key elements that your consumer base needs to be happy and be healthy.  Their bad faith will also destroy your profit base.  It works like this, many business can use a resource simultaneously in different ways.  Tourists, fisherman, airlines, bikini makers, and more all depend on a healthy beachfront.   Your depletion of this resource  here may not harm your core business model, but you may harm all the overlapping businesses.  If that happens, then demand will go down for your key product.  You may be really good at protecting the environment and your employees without government oversight, so it’s tempting to try and get it removed.  However, your competitors may seek short term advantages by being unscrupulous.  I know it’s unheard of in the business community but it’s true.  So while it’s counter-intuitive to seek increased government regulations, in the long run it’s good for business.  You’ll protect the environment and the many overlapping business interests dependent on a healthy ecosystem, and you’ll protect your employees which represent a sizable investment in training, healthcare, and (not to mention) an exploitable consumer.

So in conclusion, I congratulate you on a generation of obscene wealth building.  You guys deserve it.  However, I caution you all.  Your ability to continue this historic run of profits is threatened by the massive social inequality.  I know you’d never seek to influence government opinion, but you might, just maybe want to consider seeing how you can help the government pave the way for another 30 years of profits by investing in the poor and middle class.  There is almost untapped potential in this high reward low risk investment opportunity.

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