Metaeconomics points to the human need for balance in Ego&Empathy, Self&Other-interest, as Adam Smith, the first economist, tried to teach us, over 250 years ago. This Blog is about examining the empirical evidence coming forth through The New(s) and other sources relating to balance in our Dual Interests, which is essential (again, like Adam Smith tried to teach us) to a Good Capitalism (For the overall framework and theory for thinking about such matters, see the main website at: https://www.metaeconomics.info ; on the nature of Empathy, see Rifkin https://www.ted.com/talks/jeremy_rifkin_on_the_empathic_civilization )
This Blog watches the latest New(s), especially in the Opinion and Commentary areas, with the hope that in looking for and identifying expressions of Empathy, that we perhaps will nudge more Empathy in the future, down the road of time somewhere. This Spaceship Earth could sure use a bit more of it... Empathy, I mean. We Travel on this Spaceship Earth together... around the Sun we go, once every 365 1/4 days. A bit more Empathy... projecting-ownself-into-the-shoes-of-others, asking "how would I wish to be treated, if in that situation, in those shoes?", and, then, perhaps tempering our behavior and choices accordingly, could make the Travel a lot more pleasant!
“Every Billionaire is a Policy Mistake”
On Taking or Making Wealth: Empathy is About Making Wealth, Ego is about Taking Wealth
The notion that billionaires are policy mistakes is attributed to Representative A. Ocasio-Cortez by Rove (2019), who then goes on to contend that those on the Left Isle like Ocasio-Cortez have a “deep hostility to wealth” and thus are planning, if they can get enough power in Government “to kill the goose that laid the golden egg.” It is pointed out that some on the Left Isle “want these billionaires to stop being freeloaders (attributed to Senator E. Warren)”…and “insatiable greed is having an unbelievable negative impact on the fabric of our country (attributed to Senator B. Sanders).”
Rove (2019) goes on to claim (without empirical test) that those on the Left Isle believe “rich people’s success makes them morally suspect. They are by definition evil, venal and contemptible.” Rove (2019) then counters this view with three empirical measures: Bill Gates, who as Rove accurately points out, helped Make a great deal of wealth through innovations in Microsoft; Steve Jobs of Apple, was also into Making wealth, with the various Apple machines and innovations; and Jeff Bezos, is Making wealth in the building of Amazon. Rove (2019) does not appreciate those on the Left Isle who would vilify these individuals who created several hundred thousand jobs for labor.
He goes on to point out, in addition to Making wealth, how billionaires are also philanthropists, for example, the Gates Foundation, as well as Warren Buffett. Rove (2019) also points to how the very wealthy are also influencing politics on both the Left Isle and the Right Isle, e.g. the Koch brothers working from the Right Isle, and Soros from the Left Isle.
Unfortunately, like Senator Moynihan once said, “Everyone is entitled to his own opinion, but not to his own facts.” And, while Rove (2019) does bring forward some facts, that these three individuals obviously helped in Making wealth, and some of the billionaires are philanthropists, and the wealthy on both sides of the Isle are influencing political outcomes, there is a side to this Story…lots of facts are being left out… that is not being told. So, what is the rest of the story?
Metaeconomics can prove useful here, in pointing to where one needs to go look for the rest of the facts. In particular, due to bringing Empathy->Sympathy->Sentiments->Moral Community into considerations about the billionaires, the super wealthy, it asks about the Moral and Ethical Dimension at work. It points to the fact that Apple (as documented by Mazzucato, 2018) seemingly did everything they could to not pay the Price of the technology they received from Government funded, i.e. taxpaper funded, research, that made possible the iPhone and iPad. They also avoided paying for the services being used in some of the states to which they owe a great deal, e.g. in California, doing such things as setting up ostensibly businesses, but actually just fronts, in Nevada through which Profits could be funneled, paying lower Nevada taxes while avoiding California taxes. And, while this is legal, Metaeconomics points to asking: Is it Moral? Is it Ethical? Is it the right thing to do from the perspective of a shared Other-interest reflected in a Moral Community? It seems some of the Left Isle questioning is really about the kind of Moral Community we support?
The Rove (2019) story also leaves out how the Koch brothers are using their wealth to do things like eliminate public education funding (as documented in MacLean, 2017, in the case of buying the extreme right of Isle politicians that now run Wisconsin, with the public university, and public education in general, in Wisconsin now a shadow of what it was), and the stopping of labor unions (again, the Wisconsin case) from working on claiming a larger share of the wealth being Made by companies like Amazon. Such companies, in turn, often receive huge subsidies from local Government, which when it came to light how much this subsidy was in the recent plans in New York city, Amazon changed their plans, while CEO Bezos personally becomes the wealthiest person on this Spaceship Earth: So, what Moral Community really works best, here? Again, Metaeconomics does not have the answer, but it is good at raising the question.
It is not that every billionaire is morally suspect, as Rove (2019) claims the Left Isle believes; it is the case, though, that the Moral Community, the Moral Dimension of what we do on both sides of the Isle, needs to be made explicit. The extent to which the wealthy are Making more wealth for everyone, rather than Taking it for only Self-interest gain, needs to be openly debated and considered. Metaeconomics further suggests that the matter of the Moral Community cannot be left to the invisible hand as those on the Neoclassical Economics side (and related Right side of the Political Isle) wish to do, or, brought in, hidden in oppressive controls as some on the Neoinstitutional Economics side (and related Left side of the Political Isle) wish to do. Neither perspective has much in the way of empirical validity.
This also suggests an especially important empirical question here: How much of the wealth in the hands of billionaires, at any given point in time, came from the process of Making new wealth and how much of it came from Taking wealth that perhaps would have been better left with others? As Munger and Villarreal-Diaz (2019) point out, it may well be the natural order of capitalism, the end state being all about Taking. What starts out to be active competition often among 100s, perhaps 1000s of firms, all engaged in Making wealth, eventually becomes concentrated in a handful, like in the "rule of 3" notion. Once large enough, such firms find it more profitable to lobby Congress and the Administrative branch, than to higher engineers and others to innovate, Make new wealth. Also, this leads to the tendency to use dark money to put politicians in to office that will help them Take wealth, and, perhaps even ensure certain kinds of supreme court justices are appointed to the Judicial branch, to help in their rent seeking, Taking efforts. Self-interest in both these businesses and in the government... self-interest only in both domains... drives a mutual effort to Take money from both consumers and taxpayers, leading to what Munger and Villarreal-Diaz (2019) characterize as Crony Capitalism. Metaeconomics has both a framework and theory that is helpful in asking about, and discovering if, there is a Crony Capitalism at work, while pointing to ways to nudge it back to a Good Capitalism.
Mazzucato, Mariana. The Value of Everything: Making and Taking in the Global Economy. New York: Hachett Book Group, 2018.
Munger, Michael C. and Villarreal-Diaz, Mario. 2019. "The Road to Crony Capitalism." Independent Review: A Journal of Political Economy no. 23 (3):331-344.
Rove, K. "Every Billionaire is a Policy Mistake." Wall Street Journal (February 20, 2019).