Listening to younger people than me posit theories of wealth. There are common themes that I hear.
- Wealth is concentrated in too few hands
- It is impossible or next to impossible to build wealth
- Milton Friedman and the Chicago School are outdated relics of the past and need to be updated to recognize changes in our macroeconomy
- We should be concerned about how technology disrupts existing workers
- We should educate the younger generation that they should have lower expectations
I understand where these thoughts are coming from but I don’t think they are correct.
Is wealth concentrated in too few hands? The 1% certainly got richer over the last 15 years than the 99%.
Why, and is it a problem?
For the entirety of human history, there have always been fabulously wealthy people. Sometimes it was enforced by caste systems. Other times by monarchy. Other times by dictatorship.
In each of those situations, the opportunity for people was missing. How can you get out of grinding poverty when you are enslaved in one way or another? In the case of many since the founding of the US, they simply left.
It’s clear that it is significantly harder to build wealth in European countries or countries that follow European customs, laws, and policies than it is in America. European colonization might have civilized a lot of the world, but it sure left in place some bad policies.
Asia has been dictatorship after dictatorship. Only Japan after WW2 offered some opportunity for class movement.
Even today, countries outside of the US are dominated by huge conglomerates. I discount anything going on in China due to communism. If the government can’t wet its beak and control the company, you won’t be successful.
My biggest worry in the US is that the opportunity to build wealth is dropping. It’s not dropping due to anything except terrible public policy. Covid lockdown policy ensured that we saw the largest transfer of wealth from small business to big business we have ever seen. But, it’s not just a dumb policy like lockdown.
It really goes back to a few things. The first is education. The US government-run education system totally sucks.
It’s more concerned with force-feeding social justice and socialism than it is teaching math. If I had kids in government-run schools, I would pull them out and figure out an alternative.
Fortunately, technology is making that easier.
Parents are waking up to the fact that government-run schools and the teacher’s unions that run them aren’t there for the children.
Photo credit: Jason Richard on Unsplash