Collateral Damage

The wealthy need to pay their fair share. There is no way in the world that the lower classes will ever be able to improve their standard of living if the wealthy people do not help them. The wealthy do not need private jets or personal Yachts while so many people are impoverished. We need the government to take things away from them on behalf of the common good. The market just can’t do it and there is absolutely no proof that a market, without government regulation and high taxes on the wealthy will ever improve the life of the masses.

I had you there for a minute, didn’t I?

It seems these days there is something wrong with being wealthy. You are somehow obligated to pay some arbitrary ‘fair share’ where of course, the majority decides what the ‘fair’ share is.

We seem to forget exactly how wealthy even the lowest of classes are today, compared to the super-elite rich only a hundred years ago.

The automobile used to be an item of luxury. It was the historical Yacht or private jet. You had to be extremely wealthy to be able to afford an automobile. Not just that, but to afford the fuel for it wealthy as well, as gasoline was the equivalent of around $5 a gallon in 1906!

“The ordinary ‘horseless carriage’ is at present a luxury for the wealthy; and although its price will probably fall in the future, it will never, of course, come into as common use as the bicycle.”
-Literary Digest

“Nothing has spread socialistic feeling in this country more than the automobile. To the countryman they are a picture of the arrogance of wealth, with all its independence and carelessness.”
-Woodrow Wilson, 1906

Today we see the same thing, but instead of it being automobile, it’s simply high end automobiles. Examples such as 500HP Mercedes Benz automobiles which are being called ‘anti-social’ by some government bureaucrats. Don’t forget yachts and private jets. (Never mind all of the middle class people that must be employed for the upkeep of these luxuries).

If we were to fast forward a hundred years, and you saw that the average person had their own private Yacht and private jet, and could easily afford to travel with it anywhere in the world with it, would you consider it to be silly for them to be complaining about people having more higher end Yachts than they do, or more higher end private jets than they do?

Of course you would.

The free enterprise system has a natural redistribution of wealth. When the wealthy purchase new products at exorbitant costs, it allows the producers of these goods to re-invest the profits into increasing production, resulting in lower prices and more advanced products as they improve on their designs.

Today you can buy a new car for $15,000 that is far superior, faster, safer, and with more features than an automobile in 1906 that would have cost a very rich man the equivalent of $200,000 brand new. In fact, for $15,000 you can buy an automobile that a rich man could not buy at any price at all in 1906, because it simply didn’t exist.

This same rule applies for most everything. For example, look at the computer industry. Today you can buy a computer for a thousand dollars that has more processing power than computers that used to cost tens of millions of dollars only a few decades ago.

A cell phone used to cost you the equivalent of $9,000, had monthly charges about the size of a mortgage payment. Yet despite costing the equivalent of $9,000, they didn’t even have a camera. Today you can get a cell phone with an assortment of features for a measly $200, even as low as $50 if you want something a little older that still beats the pants off the first cell phones.

You didn’t need government bureaucrats or government regulation of the industry in order to accomplish this. It was done automatically by the market. So, rather than everybody making more money, the purchasing power of their wages increases instead.

These are what we can call “real wages”. You can buy more products and services with your income than you used to be able to, you are therefore, wealthier as a result.

And this was all accomplished simply because of the profit motive. Things actually get cheaper when people are pursuing profits.

But why doesn’t this happen in all industries?

The answer to that is simple. It’s usually due government interference in the industry. You’ll notice that the most unregulated industry there is, the technology industry, expands at mind boggling rates. There is absolutely nothing special about this sector that doesn’t apply to other sectors. The difference is if you want to make a new innovative product, you don’t really need to jump through endless minefields of red tape.

Google or Yahoo didn’t exactly need to get permission from the government for them to index the internet. They didn’t need to get their new and innovative programs approved by government bureaucrats before they were allowed to deploy them. Adobe didn’t need to get approval from the government in order to make Photoshop or Flash. They didn’t need to wait two to three years to get government approval of their changes before they were allowed to market their products.

They just did it, and the market determined their success.

This lack of government interference in this industry has allowed anyone and everyone to experiment with new ideas. They didn’t need to spend tens of thousands of dollars on getting permits, licenses that require ultimately useless 2 or 4 year degrees in order to simply just try an idea. They could just go do it and see what the market thinks of their ideas. Bad ideas failed while good ideas succeeded.

Industries that have ridiculous amounts of government interference, make it very difficult for someone to change their profession legally. But in technology you can change your profession at the drop of a hat. You don’t need a license in order to make a program or a website for profit. But you do need a license and cosmetology degree in order to legally cut someones hair for profit.

Say you start off in the technology sector as a web designer, but then decide you rather do programming. You just start programming. No pointless degrees, licenses, permits, lawyers or government bureaucrats involved. Imagine if the industry was regulated and someone had to go back to school in order to get a degree to satisfy government bureaucrats, and spend tens of thousands of dollars in order to legally program. They might just decide it’s not worth jumping through the hoops and remain as a web designer.

Which denies the market their true capabilities as a programmer rather than a web designer.

Participants in the market need to be able to adapt quickly. Government interference slows down the industry, in many cases to a an absolute crawl. It can also drive prices skyward as the supply gets too restrictive, or the regulatory agencies are captured by incumbent suppliers and is used as a gatekeeper to an industry.

Where would Google be today if they had to get permission from Yahoo! in order to legally do business? Where would you be if you had to get past a competitor in order to legally provide goods and services to the market? Of course your competitors are going to try to keep you out of the market.

And usually for completely baseless “safety” reasons.

Look at the amount of government interference in the health care sector, of course it’s all done in the name of providing ‘safety’, but the reality is far from it. The gatekeepers to the health care sector deny small timers the permission to supply the health care market, people who have come up with treatments for cancer are riddled with red tape and persecution by captured regulatory agencies. Just so they can protect their profit margins.

But this is not the fault of free enterprise.

In sectors where you see skyrocketing prices, it is usually the fault of government interference, and when the government interferes even more to combat this, the prices jump even more skyward. So the idea that we can solve it with government, is probably the definition of insanity.

So the next time you wish to blame free enterprise for skyrocketing prices, check and see how much the government interferes with that particular sector. I think it’s fairly clear that sectors that are mostly free from government interference, prices fall over time. While prices skyrocket in industries that have astronomical regulations, and the more regulations, the more prices go skyward.

Contradictions do not exist. Whenever you think you are facing a contradiction, check your premises. You will find that one of them is wrong.
-Ayn Rand

Some people may disagree with me, and think that more regulation is a good thing. Government interference is extremely dangerous, as it typically gives private corporations the power of the government. They all too often use this power to cripple an industry simply in order to protect their profits, and to limit competition and experimentation that may result in disruptive advances. A cure for cancer would be terrible for the chemotherapy industry, their profits would surely plummet. My my, wouldn’t that just be a horrible thing!

A new example of this kind of ridiculous government interference is the new SOPA/PROTECT-IP/E-PARASITE Acts being debated in Congress, it’s mildly interesting to me that people from all political stripes have come out against these laws as they seem to clearly understand the consequences of giving private corporations the power of the government to control of the internet.

But most of these people need to question government interference that already exist in other industries that give other incumbent corporations control of their industries. And they use the power of the government for the same reason that Hollywood wants it: To protect their profits by the use of government force.

With all of that said, if you’re in favor of government regulatory agencies that get stacked with unelected bureaucrats with dictatorial power over a particular industry, tell me where do you find the immortal angels to run these agencies?

It is these government interferences that benefit the elite super-rich and big businesses. It is these government interferences that you should be protesting if you want to see the same kind of good things that have been created as a result of the internet being mostly free from government interference, happen in every industry.

Stop SOPA/E-PARASITE Act