Should we forcibly eliminate wasteful spending?
“It is obvious that two elements are essential to material progress—saving and applying the savings to some useful enterprise.”
William Bonner and Addison Wiggin, Financial Day of Reckoning
“One of the greatest marvels of life is not that fools and their money are soon parted, but that they ever get together in the first place.”
William Bonner and Addison Wiggin, Financial Day of Reckoning
Initial grumblings
Be honest. You, as have I, at some point in our lives—probably many points—saw an example of someone’s extravagant spending that made no sense. The television shows Lifestyles of the Rich and Famous and MTV’s Cribs are classic examples glorifying fools parted with a shitload of their money in exchange for something stupid. We’d be lying to ourselves if we didn’t admit envy on our part, which accompanied the fascination that someone actually would purchase an air-conditioned dog houses or sable-fur toaster cozy. Massages for pets? Louis Vuitton lunch boxes for kids? What the hell is with that shit?
Surely, the money could be better spent. And, by God, it would be if we were running things…
Setting the stage
Ask a hundred economists for an opinion and you’ll likely get one hundred different answers. Not necessarily because they’re dumb—though in some cases this is true—but because economics is a hugely complicated topic to study. It’s like studying chemical reactions among countless swirling atoms; only imagine the atoms are subject to political interference and wider geopolitics and are imbued with human emotions such as greed and irrationality.
Rather than atoms, economics involves the billions of people on Earth, each with his or her own wants and needs, skills and motivations, plucked down within countries whose economies are interconnected to the entire world. Making sense of it is at least as challenging as trying to understand the complex interactions which give us the weather and climate, but with an important caveat: Primitive tribes and hippies anthropomorphize nature in their religions and folklore; but the non-human components of Mother Earth (as far we know) do not wantonly exhibit emotions such as the aforementioned avarice and foolishness. In fairness to humans, Ma Nature can’t build an MRI machine, but people can.
Most of us are not economists; but, nevertheless, it is important that we think about how economies work and understand the government we either choose or have imposed upon us is what provides the foundation upon which commerce operates and can have a tremendously disruptive or beneficial impact on a people’s prosperity.
A busy port implies that a society both produces goods another society wants to buy and has itself the money to purchase goods from somewhere else. Goods are raw materials, components, or finished products. A government that builds a port has, therefore, provided crucial infrastructure for such trade, especially if the facility is well-run and designed for modern container shipping rather than the outmoded breakbulk method. A government that builds a port, but inflates the construction cost due to corruption or inefficiency, adds an unnecessary burden to its economy, and by extension its populace—the people are deprived of the full benefit made possible by this port. A government that makes off with the construction funds or whose port officials are shameless grifters is a kleptocracy which dooms its people to misery. In the latter two scenarios someone received wealth they didn’t deserve, to the detriment to others.
Many things work against economies operating efficiently and fairly. These include bad governance, wasteful spending, and our parasitic betters. In the United States we don’t have a kleptocratic dictator, but we are afflicted with economic tapeworms in the form of Wall Street, a rapacious military-industrial complex, and our other meddlesome betters. These folks disproportionately extract wealth for themselves while burdening society with an inefficient use of resources, excess debt, and unfunded liabilities. They also sow the financial landmines that result in boom-and-bust cycles—and to which the woe is disproportionately (if not entirely) foisted upon the poor and middle class. Our betters rarely suffer the consequences borne of their fiscal asshattery; in fact, they’re often bailed out at our expense. Or worse: COVID showed us that they can become fabulously wealthier, even as the lesser folks have their livelihoods and financial well-being crushed.
Governments are certainly wasteful spenders. For us to delve into that mess would require a tome or ten. There is always a constituency that shamelessly justifies any particular example of government waste—or demanded it in the first place. An economist or ten can be readily found to agree with them. One economist suggested during an economic depression it behooves the government to hire the unemployed to dig holes and then fill them up again, as long as it provided paid work; though he did admit these same laborers building roads and schools is a better use of their time. I snarkily classify government workers into one of three categories: Good (the taxpayers should be proud of these ones); Good Enough (they get the job reliably done); and Good for Nothing (the cost of these employees’ salary and benefits are a colossal waste of tax dollars). Absent a miracle, the taxpayer is forever burdened with the latter type, which all too often impedes or negates the productive or adequate work done by the first two.
Rather than the government’s wasteful spending, the goal of this thought-experiment is to think about the wastefulness associated with a single consumer item and see where that brief journey takes us. Unlike real economists, we’ll do so sans equations. The “brilliant” quants hired by Wall Street create fancy equations and algorithms, yet manage to fuck things up regularly, so they shouldn’t look down upon the rest of us applying a qualitative rather than quantitative approach to economics. Perhaps the quants should on occasion look up from their computer screens and muse likewise. In regard to economic matters, common sense and prudence are often better than fancy equations.
The first challenge is defining what we mean by economics. For our purposes here, we can broadly define economics as the study of how and why human beings go about producing and exchanging goods and services (AKA stuff). The why is important because that gets to the heart of our myriad rational and irrational decisions. Adam Smith believed the prime motivator (the why) is our own self-interest. The medium of exchange may be fiat money, precious metals, or barter. The economic systems within (or between) which economic activity occurs are capitalism, socialism, communism, or some hybrid of the three, but essentially economics is the study of how we get our stuff, which usually means each of us in turn provides stuff we produce to other people. These other people could live down the street. Thanks to the miracle of intermodal transportation and the Internet, they might live ten thousand miles away.
An economy is a nexus of innumerable threads, each one leading from the nascent stages of production for each good or service which finally ends up in the hands or service of an ultimate consumer. Some goods and services are ephemeral: a massage exists only at the moment it’s received. Other goods are longer lasting: refined aluminum ore lasts forever; it may start its finished life as a beer can and go through many subsequent rebirths via recycling. Also consider that some goods are used to make other goods, e.g., a machine lathe.
We can agree there are goods and services essential for life: food, water, shelter, primary healthcare. But even with these items it gets dicey. Water is absolutely necessary for life. With apologies to the citizens of Flint, Michigan, who were horribly victimized by those entrusted to look out for them, municipal tap water in the United States is safe and cheap—a beautiful example that shows collective action has its place. Yet by choice we spend billions of dollars on bottled water each year in the United States. (I buy it.)
Is bottled water a wasteful use of resources and even more so if it’s imported (e.g., from Fiji or an alpine glacier)? I guarantee you that if it were feasible for someone to commercially mine a comet for water, our betters would eagerly pay a huge premium for the privilege of drinking it…and scold us peasants about our carbon footprints while sipping it.
Other goods and services are considered nonessential or, if costly enough, luxury items: Halloween costumes, expensive wines, exotic vacations, boob jobs. Each good and service, essential or not, is part of the overall nexus; the endpoints were preceded by any number of steps, each of varying lengths of time and input of contributing resources (labor, energy, raw materials).
A lengthy and costly series of steps are inherent to a boob job. Twenty-five years is required to train the surgeon from kindergarten through a residency program and perhaps as many years of life for the patient to grow up, learn a trade, and earn the money to pay for the procedure. The other members of the surgical team, the scalpel used, the anesthesia administered, the janitor who cleans the surgery center, all of these are a cost, a resource, an integral part of the nexus. What ultimately brought patient and doctor together in the exchange of money for a good and service (goods being the implants themselves) is the miracle that is an economy, particularly a relatively free-market one. Adam Smith would say that the self-interest of everyone involved made it happen. In a free-market economy we are as individuals free to make good financial decisions or bad ones, spend our money prudently or questionably or downright foolishly. It is, though, illegal to burn money (per United States Code, Title 18, Section 333).
Putting potential jokes aside, we must ask ourselves if the boob job benefits the economy or is it wasteful spending. It’s counted in our gross domestic product (GDP), along with new built cars and steel beams. A $10,000 boob job counts the same towards tallying our nation’s wealth as does an equivalently valued truckload of steel beams. The person who underwent the mammary enhancement was motivated to put in the effort to acquire the necessary money. She likely has a job and, therefore, provided a good or service to the economy. If the motivation resulted in more than a $10,000 increase in value to the overall economy, one could argue the economy came out ahead. Imagine if the newly endowed woman is the inventor of practical nuclear fusion for use as our energy supply. In which case, we should not begrudge her those DD’s—though I’m tempted to remind her the French consider a perfect breast size as one that fits into a champagne glass. Before we move on from breasts, we should also consider the bosomy stripper now earning increased tips. In her situation, a literal investment was made whose rate of return a hedge fund manager might envy.
People are obviously motivated to obtain life’s necessities. After all, their very lives depend on it. For most of human history getting enough food to eat took up a huge portion of a person’s daily life. With the advancement of technology and economies, things got better. Much better. A stunning example of this is the fact that modern agricultural practices produce staggering amounts of food and with far fewer farmers or ranchers, when compared with our ancestors. Because of this there are many more humans today. Billions more. Most of them adequately (or overly) fed. The interconnectedness brought about by modern transportation methods, literally the circulatory system of economies, means that a crop failure in one part of the world does not necessarily result in famine for those unfortunate enough to live in the afflicted area—barring a disruption of trade (e.g., civil war, kleptocracy). That the risk of famine is far less likely is the great undersung achievement of the human race. Yet some think otherwise; there are among the Woke those who want far fewer of us, and they look upon these transportation and agricultural successes as a terrible thing. They’re afflicted with a curious pathology; among its many symptoms is their demented hellbentedness on undermining modern agricultural and transportation practices.
We humans have indeed come far as a species. Our bellies are reliably full. We’ve put men on the moon. Now we have the luxury of spending money on things such as Halloween costumes for our pets! According to patchpets.com, “How much do people spend on Halloween costumes for their pets” (September 23, 2022), Americans spend 509 million dollars on these, an amount that increases each year. Is this a dumb purchase? Yes. Is this a misuse of society’s resources, which could be better applied elsewhere? Yes. Should it be illegal? No. Would I buy a costume for my pet? Under the right circumstances…possibly.
We can argue about the silliness, foolishness, even harm, of spending money on nonessential things. But we could also point out that purchases such as these exemplify how far we’ve come. We went from a daily backbreaking struggle for food to the ability to make profoundly frivolous purchases, indulge our whimsies, impress our friends and strangers alike. Scholars speculate the ostentatious demonstration of wealth—even if the actual cost is minimal—is in many cultures a means of demonstrating one’s status. A pet costume or grotesquely extravagant wedding, a ridiculously expensive and impractical car serve their purpose in this regard. People in certain cultures see the restaurant owner’s fancy car parked in front of his business and think to themselves, “This must be a good place to eat. The owner is successful.” In other cultures, the response to this display of wealth is quite different: “Look at his car! This bastard is overcharging us!”
At this point we should ask ourselves what we mean by the term wasteful. We must keep in mind that one person’s wastefulness is another’s unquantifiable joy. Wasteful spending can take many forms. Both expensive and inexpensive items are candidates for wasteful spending. But how do we actually define wasteful?
When I think wasteful, I think of profligate or ostentatious spending. The destined-to-be-bankrupt football player blowing his money on tons of jewelry. I think of something impractical or unlikely to provide a level of joy or satisfaction commensurate with its cost. The Honus Wagner baseball card which solid for 6.6 million dollars in 2021 comes to mind. I think of a purchase that is an economic dead-end, which is to say a good or service whose chain of production is only with great difficulty redirected to other, more productive uses. Perhaps an art history degree falls into this category. We’ve barely scratched the surface of our thought-experiment and already have identified several terms whose definition would surely result in a lively debate among economists: economics, wasteful spending, more productive uses, essential goods and services, profligate, ostentatious, impractical, joy, economic dead-end. Hell, coming up with the methodology used to accurately calculate GDP is itself an undertaking fraught with controversy.
The silly pet costume, though likely irritating to the animal so adorned, provides a measure of joy to the owner and affords the rest of us the pleasure of seeing humorous photos or videos posted online. The people at the pet costume factory have jobs and bills to pay. Since earliest times the human race is compelled to express itself through art. Innately so. A work of art may be worth millions. The fact it’s assigned extravagant value in some cases is not the fault of the artist, but of those who later speculated on his work. Keep in mind the artist must be supported in his work by the rest of society which provides the food, shelter, medical care, gallery space, art supplies, etc. There are no full-time artists in a hunter-gatherer society; nor are there web designers, coders, movie stars, fashion models, sommeliers, or hedge fund managers.
We don’t begrudge a person buying a bag of beans to feed his family. But we grumble about someone else’s dumb or wasteful spending. We’ve all seen a purchase someone else made and told ourselves, “What a freeking waste of money!” These tend to be expensive items of little or no practical use. They may be gussied up with jewels or precious metals or inflated status. A jewel-encrusted purse that retails for several hundred thousand dollars. These exist. We tell ourselves the person should’ve instead donated the money to charity or put it to wiser use; invest it or buy something more practical.
The rich take such foolishness into rarified air, but the middle class aren’t blameless. It’s not just the wealthy who treat themselves to collagen-ballooned lips, the latest cell phone, and the aforementioned pet costumes (don’t forget the Christmas ones). These purchases give the buyer joy—yes, I know the pet looks cute as hell. But is this spending detrimental to the overall well-being and economic health of a society, even if it’s of no financial consequence to the middle class or rich person buying it? These dollars if placed into a retirement account might be a more prudent notion, but that assumes the investment is better put to good use in the long-term by the Wall Street tapeworms—which is certainly not a given—and actually redeemable as retirement funds in thirty or forty years hence. Hey, why not enjoy a stupid purchase rather than defer to an uncertain future?
We can distill this down into fundamental economic questions: Would the world be better off without such wasteful individual spending? Would a redirection of these resources to “better” uses help further improve our lives in meaningful ways or improve the life of the world’s poor or otherwise less fortunate? Define meaningful ways. Define improve the life of. The definition of poor is controversial.
A presumptuous patronization inherent in many do-gooders often reveals itself in the form of charitable intentions imposed on behalf of others. Perhaps the poor African prefers a cell phone to an extra dose of Vitamin A. A homeless person may prefer a beer in exchange for his cadged alms, instead of a new pair of socks. The same can be said of our knowitalledness aimed at those who aren’t poor and whose spending behavior we disapprove of…so what if a retirement account is somewhat lighter someday—today that designer purse looks fabulous! (The African would certainly love a coal-fired power plant to provide his hut a single lightbulb, but the virtuous, largely White eco-colonizers sure as shit ain’t allowing him that.)
The obvious answer to these questions is yes. But not so fast. Is it really that simple? These questions lead to many more, our initial inquiry quickly resembling a nuclear reaction that spirals out of control. Even if we come up with a generally agreed upon definition of what we mean by wasteful, what is our methodology for determining if subsequent improvement in our lives is made by spending more wisely? Who decides what spending gets redirected and to where? How is the decision enforced?
Forcible redirection already occurs to a large extent. Taxes are money taken from people and businesses and then redirected elsewhere, ostensibly on our behalf. We hope it is used wisely and ultimately toward a greater benefit collectively than would’ve been possible singly. But we’ve got eleven aircraft carrier battle groups to show for it. We subsidize at public expense stadiums and arenas for professional sports teams. Are these a good use of money?
How about this definition: Wasteful spending—not necessary to directly sustain life; serves no reasonably useful purpose; or costs grossly more than comparable items with the same utility. But the builder of aircraft carriers insists his product is necessary to sustain life by protecting us from enemies who want to kill us. The billionaire team owners swear the economic “benefits” of their welfare checks outweigh the costs. The maker of comic books points to his employees and those in the factory who make the colorful inks and asserts that “Their livelihoods depend on it.” Cannabis growers make the same claim of their product’s salubriousness as did the first Europeans introduced to tobacco. (One could argue the European settlers paid for their sins many times over through hundreds of years of lung cancer.)
In a free society, there is no committee set up to decide who gets to buy what goods and services. Or is there? There are luxury taxes implemented by some governments that provide a modicum of discouragement. More expensive homes typically pay higher property taxes. Yachts are subject to a special tax. Cigarettes are taxed and taxed. These are financial speedbumps; we’re largely free to make choices, prudent and foolish, practical and whimsical.
The interference with the consumer’s freedom can be far more blatant and is becoming increasingly so. The Woke intend to decide on our behalf—good and hard (to cop a term from H.L. Mencken)—whether or not we can buy a myriad of goods and services. The list is long and proliferating like kudzu. California banned the sale of new gas-powered cars, starting in 2035. Jurisdictions are banning new natural gas furnaces and appliances. Voters in California did it to themselves by voting for a ban on the sale of menthol cigarettes—a further patronization of our black brothers and sisters. Some school districts require meatless days—the Woke really, really want to ban meat outright. There is among the Woke a pathological compulsion with banning stuff, akin to that of the joyless, sexually repressed Puritans of old.
There are always people who think they know better how to run our lives than we ourselves do. They’re eager as hell to put this delusion into practice. It is justified as “for our own good.” On page one of The Dictators’ Handbook it says, “No matter the outrages or atrocities imposed upon the people, tell them it’s for their own good.” Should you dare protest, they shall use any means to silence you. Keep in mind that the Woke want far fewer of us, and the ones who’re left must heat their water with electricity, not natural gas.
I’ve mentioned water. Food sustains life. Food provides calories and nutrients. Wine provides calories. Calories are necessary for life. Is it okay to buy a $10,000 dollar bottle of wine when an equivalently caloric $5 bottle is available? The person giving up the $10,000 may be a preening fool, but it’s his or her decision.
What gives anyone the right to criticize what someone else buys with his or her money? Exactly. That’s the point of a free market economy. We get to decide as individuals. In North Korea the expensive wine is reserved for the ruling elite. The peasants are lucky if they get unstomped grapes, let alone lovingly fermented ones. Rational folks can agree a free market economy is far better for its citizens than North Korea’s system—for rich and poor alike. The person envious of North Korea’s way of life—and these fools certainly exists in the United States—does so for one reason: a desire to tell others what to do. Economists should study this malevolent busyibodiness, since its influence permeates every economic system.
We could also tackle the concept of wasteful spending by considering its opposite. If we think of nonwastful spending as that which directly and demonstrably improves our lives, then life expectancy and overall health are the gold standard. Physical health made better by vaccines, chlorinated water supplies, and adequate nutrients is readily quantifiable. We live longer. Those extra years would’ve been priceless to those who lived hundreds of years ago. We foolishly take these years for granted. Polio is unheard of in the United States. Yet the value of longer lives and bodies unravaged by polio do not show up in our GDP. Boob jobs do, though. Mental well-being is harder, perhaps impossible, to quantify. Maybe the happiness experienced by those who collect Beanie Babies is worth the retail price, and by extension is worth it for all of us if we are decent people who don’t begrudge another person his happiness; that is so long as the total amount of money spent is not deleteriously disruptive to the overall economy. Damn, another term to define, deleterious disruption!
We could say the money spent making Halloween costumes for pets is better directed toward manufacturing more steel or concrete, graduating additional medical doctors, funding scientific research. But who then decrees the extra steel is not used to build a factory that is then used to manufacture pet costumes or other useless things, or the doctor does not open a Botox clinic, or the laboratory does not fritter away its talent in search of a cure for baldness. A nation that only makes steel and nothing else is unlikely a better place to live than our free-wheeling America.
As you see, getting to the point of adequately defining wasteful spending is hard. Now let’s consider a specific example of wasteful spending at the individual level, one most of us can agree is an insane purchase: the jewel-encrusted designer purse costing $250,000. Purses do have utility. Utility that can be readily replaced with a much less expensive purse and serve the same purpose, at least as far as containing and transporting typical chick stuff.
We could dump out the contents of the purse and apply our thought-experiment to each individual item one-by-one…lipstick…mascara…wallet…tampons…cell phone…chewing gum…but we won’t. We’ll stick with just the purse.
The experiment
You, dear reader, are made absolute ruler of the world. Congratulations.
Every decree you make is followed. You sincerely want to create the best economy possible for your people. You lack evil intentions, but you also assume to know more than the free market does, a trait all tyrants have in common.
Your reign beings with a speech broadcast worldwide. You request (nicely) that everyone go about their normal lives. People are asked to go to work, drop the kids off at school, shop, etc. You announce that you’re going to work on improving the world’s economy in such a way that everyone benefits, especially the less fortunate. One of the first things you plan to do is redirect resources from wasteful spending. The money “wasted” on these frivolous goods and services is to be put to better use elsewhere. You assure people that you’ll handle everything and nobody is to be left unemployed or poorer than before. The anticipated increase in wealth resulting from your plan shall be shared fairly.
Lucky for you the world finds itself in a patient and accommodating mood toward its new ruler. They’re willing to allow you a shot at your plan and eagerly await to hear it. You tell them it will soon be forthcoming.
Before you subject yourself to a roomful of economic advisors, you decide to ponder matters in solitude. You’re confident you know wasteful spending when you see it and prepared a lengthy list of these. The first question you ask yourself is an obvious one: Where on this list do I begin?
Do I close down high-end restaurants, yacht builders, stores that sell baseball trading cards, or something else? Do I tackle them all at once or one or two at a time? Do I close everything associated with a particular type of wasteful spending immediately or incrementally?
With these questions, you’ve identified a key decision: The proverbial yanking the bandage off quickly versus allowing a transition period of some sort. A long transition, even if prudent, gives ample time for mischief to those intent on undermining your goals. It’s like broadcasting an invasion plan to the enemy well in advance. But tossing incrementalism aside is also fraught with risks; untoward results or unintended consequences could explode into a full-on conflagration instead of a small, easily contained fire. Working at a smaller scale, an initial plan is easier to reevaluate and adjust accordingly should something untoward pop up; the same result on a widely rolled-out plan might cause such an uproar that the entire thing is needlessly derailed, if not outright canceled. A host of other questions start to swirl in your head, one question leads to another or two or three…
What if every yacht builder in the world is ordered immediately closed? You imagine the squawking of the rich and famous but are prepared to deal with that. How many yacht builders are there? How many people are directly employed by this industry and upstream in the supply chain? Does the infrastructure used by these suppliers also provide other goods and services that are deemed unwasteful? The company that makes marine paint for the yachts may also manufacture paint applied to a hospital or school or orphanage. Does the lost business from a shuttered yacht manufacturer put the paint company at risk of going under unless you quickly ramp up a commensurate need for other paint uses? You realize there are a lot of things in the world that need repainting—taking care of that task alone would spiff up the world nicely—but this requires painters who could perhaps be trained from among the displaced workers; assuming labor, paint, paintbrushes, drop cloths, etc. can be effectively and efficiently brought together where needed. (Don’t forget the out-of-work yacht crews, the marinas, etc. impacted if there are someday no more yachts.)
You are particularly astute, drill down even deeper: Does the manufacturer of any of the yacht components make something else which is of strategic value to the military, and the yacht-related business helps keeps the business in a healthy condition (i.e., does the lost yacht-building business put the strategically important company’s existence at risk)? You suspect that those in opposition to your plan are going to assert that every company is of strategic value, from combat boots to cotton candy.
The more you think about it, the more uneasy you feel. You’re not quite sure of yourself; such humility is wise in any leader; you finally decide to start small. A single store that sells only high-end purses is to be closed and those resources directed elsewhere. This store is a dress rehearsal for the wider implementation of your wisdom.
The store sells purses that retail for up to $250,000; one of the particularly fancy ones is personally signed by the designer with her own blood! You believe the loss of a $250,000 purse no longer made is not an equivalent loss to the world’s wealth because much of the price is based on a vastly inflated value not commensurate with the actual resources used to make it. Its value is largely phantom equity, so to speak. Besides, the redirected resources will generate wealth…real wealth. (Has our leader defined and communicated what he means by the term real wealth?)
Deciding the high-end purse is a waste of money is the easy part. Starting with one store appears to make this a manageable start. But as you look into this one store, more and more considerations plague you…it’s like a game of whack-a-mole but with much higher stakes.
- The store employs a manager, an assistant manager, and five sales clerks. The clerks clean the store as one of their duties, so there’s not a janitor to worry about. These seven people need reassignment elsewhere in the economy. To where exactly? You find it hard to imagine them put to work on a road paving crew. What are their interests and capabilities? Do they work (or want) full-time or part-time? Do these employees need retraining for a new job? What is the extent of the necessary retraining and the resources required to do so? Would they need to move somewhere else? How is training and relocation paid for? You’re the Big Enchilada, so these questions must be answered by you. The people are waiting. These specific employees are waiting.
- We now have an unused storefront to deal with. What do we use the space for? Is it better left vacant? How does the vacancy impact other nearby stores? Is it readily repurposed for another use? How do you determine what this new use should be? Does it best serve your master plan in this location as a drug treatment center, insulin factory, spay and neuter clinic, or some other noble cause? Is remodeling required, and if so, what resources are required for that task? Where do workers come from to staff any new use? What does the local jurisdiction think of your plan, especially if you’re intending to override local zoning or other regulations?
- The store has a supplier of its purses. Though only one store is closed, it is assumed your beneficence eventually leads to the closure of the factory making the stock. What happens to this business if it is no longer allowed to produce these purses? Can the factory space, which might be thousands of miles away in a different country, be repurposed? If so, to what use and what is required to make this conversion? (Switching from designer purses to lower cost purses seems like an obvious option, but the facility making the costly purses is likely set up for boutique or artisan type production rather than the mass scale method used to manufacture reasonably priced purses.)
- The same issue with the out-of-work store employees applies to the factory workers: where they go, the new work they do, any training required, etc. Keep in mind, the purse-makers may be poor people in a Third World country who are thus made jobless unless you find them work elsewhere, work which fits into your plan. As supreme ruler who decided to micromanage the world’s economy, you’re ultimately responsible for their well-being.
- The purse factory has its suppliers of leather, lining, thread, clasps, etc. Do we close or redirect their activities? Leather and thread seem easily redirectable to other uses (e.g., shoes for the homeless—assuming these components are not expensive high-grade leather or thread woven of gold or silk). But what of other types of “upstream” places that make stuff considered wasteful spending? Should things go well with your plan, they’ll eventually get the same treatment. If you eliminate the production and processing of precious stones, these facilities involved are not redirectable. A diamond mine is a diamond mine. This mining infrastructure is likely to remain abandoned, though the space is perhaps repurposeable, though for what new use is unclear.
- A rancher raises cattle hides for the high-quality leather maker…he has suppliers of feed and veterinary care…and on and on. Perhaps he can switch to cattle used for beef and average grade hide. If not, what do we do with him and his ranch hands?
- A key pitfall is those suppliers whose workers and facilities are not easily redirected to other purposes. Retooling a factory or shop, retraining, relocation of people or equipment, all of it has a cascading and expanding impact. The new activities may require more of other types of resources whose production must then be ramped up. In some cases, ramping up improves the production of some items by increasing the economy of scale; in other cases, it may cause disruption by increasing the competition for scarce resources.
- In addition to items directly required for the manufacture of these purses, the employees of the operations involved in each step of the process themselves buy a myriad of goods and services (food, clothes, housing, entertainment, etc.). The suppliers of each of these is impacted unless they either pick up comparable business from elsewhere or they too are deemed wasteful and ultimately put to better use by you, dear leader. You imagine scaling your efforts up to the level of the entire world’s economy. The impact may result in vacant housing, closed movie theaters, grocery stores that are underutilized by there being fewer customers or overutilized by an influx of new ones. Your efforts have the potential of a raging hurricane stirred long ago and far away by the flapping of a single butterfly’s wings. You caused the flapping. The swirling storm is yours.
By now you have a throbbing headache. And over one freeking store! No wonder. You’ve, as one person, taken on the task that the free market does for us. You finally admit that maybe a micromanagey ruler playing favorites or thinking he knows best isn’t such a good idea. The intended consequences are worry enough, let alone the unforeseen ones. You’re haunted by the faces of the store clerk and the seamstress in Vietnam. Even the grizzled ranch had in Wyoming pulls at your heart. You imagine millions or tens of millions of such faces.
You, dear ruler, learned an important lesson in reality: Reining in freedom of economic choice requires the so-called world-improvers take on the responsibilities that the free market itself does largely on its own. (Yes, I just anthropomorphized the free market.) The free market is far from perfect; some of its consequences are problematic as hell, but a freely made bad choice is better than a bad one imposed on a person, and often better than a “good” choice imposed upon a person by a sanctimonious, know-it-all prick.
The thought of scaling up the notions behind closing this one store is terrifying. No one person could ever do it; no government either; though governments of every stripe sure want to give it a try—and have done so in the past with disastrous consequences. This is why it’s best that the government’s role is limited, preferably to crucial basic functions such as public works infrastructure, law enforcement, assuring property rights, a functioning judicial system, among other important responsibilities. Regulatory aspects related to health and safety are also important, but everyone must realize that everything under the sun cannot—nor should—be regulated.
Conclusions
Yes, I consider a $250,000 purse a profound waste of money—and stupid. I don’t care how rich the person is who buys the purse. Christ, buy a fifty-dollar purse instead! But I also realize that freedom comes with responsibilities; one of these is that we must allow others the freedom to buy stupid stuff, as long as it doesn’t directly harm someone else. We should be largely “free to choose” as economist Milton Friedman titled his famous book. Therein lies the rub, largely. Who decides what that word means?
The Woke and our other betters are eager to take on the task of deciding what you can and cannot buy. You’ll then need an electron microscope to view the list of permitted purchases. At the other extreme, there likely exists at least one moron on Earth who believes he should be able to buy an atom bomb if that’s his druthers. Somewhere in between are the many billions of decent people on the planet who go about their lives as best they can, despite the nefarious efforts of our betters to fuck with their freedom and fuck them over.
In regard to the purse store, the free market determined the business type, location, and number and make-up of its employees. It did likewise for every person and facility upstream on the remarkable nexus that led to the purse, from a cow grazing in a field, a diamond waiting to be mined, and so on, until it left the store in the buyer’s hands. The free market did this far better than any autocrat or bureaucracy could hope to do.
A foundational part of the nexus is that the customer (or the sugar daddy who bought it for her) is motivated to earn her income, so that she could buy the purse. Amazingly, there was no grand formal cooperation among these parties—cattle rancher, diamond miner, or shopworker—yet in the end a purse was made and found its way into the display case at this store. They cooperated as if subject to an omnipotent and all-knowing manager; in a sense they were, the Free Market. At this point the term should be capitalized, as it’s an entity in its own right.
No less amazing is the fact your favorite pack of potato chips is in the snack section at a gas station a thousand miles from home; the resort where you vacation has bacon, far away from any hog farm; fruit is never out of season because it’s in season somewhere else far away. Each product or service we buy is a miracle in its own right. Miracles we see each day with nary a thought or deserved appreciation. Next time you’re at the store, pick a random item and ask yourself, “How many hands unknown to each other were involved in making this thing?”
I hope you see that willfully dismantling this amazing nexus is ill-advised. A thought-experiment about a single good, which a sane person would agree is a waste of money, quickly spirals out of control. Imagine trying to grasp an entire economy and every one of its goods and services. This is why a centralized economy is doomed to failure. Billions of people working on behalf of his or her own self-interest is the miracle that is the Free Market.
The key in any economic system is how to get the most out of workers (our human resources). No good or service exists without labor. How do we get people to work harder, longer, better? How do we get them to work innovatively and productively? The answer to these questions is the bedrock upon which modern economies are built, improve themselves—and survive. Therefore, in addition to the direct incentive of salary and benefits, we must ask ourselves if the desire for stupid things provide a heretofore unappreciated motivator that doesn’t exist in poorly performing economies? These things may in fact make a person work harder, longer, etc., than they otherwise would’ve done, and if so, this may add a net benefit to the world. It is hard to imagine a worker in joyless North Korea being more productive than his counterpart in South Korea who is allowed to buy K-pop music, boba tea, or a boob job. As I write this, North Korea recently executed several of its citizens for illegally selling K-pop movies and music. Wow, that’s not just a fanatical control of an economy, but is actual evil. The Woke are probably envious.
As you can see it’s not a simple thing. Forcing spending changes, even based on seemingly good intentions may not get you the desired results. Furthermore, so-called good intentions are often a smokescreen for the desire to tell others what to do. There is no road upon which people are forcibly marched that ends in an earthly paradise. We must accept that there is only an imperfect world that we struggle to make better and do so within the context of our freedoms.
The only advice I can give is live within your means and avoid gratuitous ostentation, but I leave that choice up to each individual. I would not decree it even if I had the power to do so. Such general guidance may be the best we can collectively do and perhaps as far we should go. An awareness that no dictatorship ever existed for goodness, no matter the protestations to the contrary, is also something to keep in mind. This is why the Woke—and by extension organizations like the World Economic Forum—who would forcibly impose upon us their vision of paradise, are evil. Do not use the term “well-meaning” to describe them. They are not well-meaning at all. If we allow them their way, paradise we most certainly shall not have.
We must each ask ourselves if we have the right to prevent the maker of a gaudy purse form plying his trade or the fool for buying it? It’s his or her money to do with what she will. Our concerns should be restricted to issues related to a properly functioning society: the money spent is not ill-gotten, no fraud is involved in the sale, basic workplace rules enforced, among other generally agreed upon proprieties.
A $250,000 purse is easy to mock. But there many things we could deem unessential for life, but this assessment fails to understand our individual human natures. Think of a child holding her favorite tattered doll. It’s not essential for life. The Taliban would forbid her to possess it, since it’s in human form and thus considered idolatry per their odious theocracy. The Taliban are theocratic fools. Evil ones. That doll has intangible value that no Wall Street quant can hope to capture in a formula, even if using the most powerful computer. The mirthless would-be world-improvers among us do not understand the joy a person derives from a movie streamed or on DVD, a gift of flowers, or a child’s laughter playing with a toy. These things add value to the world. Uncaptured by GDP, but such quantification is a fool’s errand.
Our concern should be that everyone has their basic needs met and the chance at a decent living, as well as some unquantifiable measure of happiness in their lives. The world until recently seemed headed in that direction. Even the poor own stuff the richest folks lacked in the past. Yet there are those who think they know better than everyone else how we should live our lives. They intend big changes that are likely to have catastrophically bad results.
The Woke and our other betters are hellbent on changing our ways. COVID and their manufactured “climate crisis” are the weapons they’re currently using to subdue us. The fact is these people don’t know any better than the rest of us how we should live our lives. No single person does. No bureaucratic agency. No world organization. None of these know more than the Free Market does.
The current Free Market system is the best economic system, with some caveats: We must hold accountable anyone who cheats, steals, or commits fraud, regardless of their station in life. Those who speculate must do so with their own money or from others willing to entirely take on the risk; not money borrowed from the government, directly or via bailouts, or from unsuspecting persons not involved in the gamble. This includes unregulated or poorly regulated financial instruments such as credit default swaps, cryptocurrency, and derivatives.
A productive society without joy is nothing. This includes the joy we get from frivolous things. A productive society without freedom, even if such a thing were possible, is a miserable dystopia. Freedom is not included in calculations of GDP. It along with increased life expectancy and improved health and the joy we get here and there are things of incalculable value.
We’re far richer than we realize. Don’t let our betters take that away from us.
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