We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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Samizdata quote of the day – So how do the billionaires hoard then? That is not how wealth works of course. The people who have piles of money do not in fact have piles of money theyâve got piles of paper signifying ownership of companies and businesses.
Which leads to the third problem with the idea. Which is that taxing these billionaires on their stacks of ownership of assets does not, in fact, free up money into the economy. It doesnât reverse hoarding that is – just changes who hoards.
– Tim Worstall
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, âPorcupinesâ, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty FrĂ©dĂ©ric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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In disturbed times hoarding physical money (gold or silver) may be the least worse option – although every time such as “hoard” is found it means that the owner did NOT come back for it (which means that the hoarding was pointless).
However, in normal times money is invested – either in the farm or factory of the rich man, and in bank accounts – money in bank accounts, as opposed to safe-deposit-centers, is also invested – it is lent out.
Bitcoin has supporters and should be easier to hide than physical gold and silver – but I do not really understand the “special numbers” or why anyone should value them, so I will leave the matter to those who do understand it.
Way too many people think that Elon Musk sleeps on an enormous heap of gold – like Smaug.
I blame Disney because of the character Scrooge McDuck đ
It is also worth pointing out that these valuations are extremely misleading. So let’s say Elon Musk owns $100 billion dollars in Tesla stock. That is the number of shares he owns times the current stock price. But it isn’t that he could sell that stock for $100 billion dollars. If he began to sell it the price per share would immediately start to go down. For two reasons: basic laws of supply and demand, and if the chairman of the board is cashing out, everyone else will run for the exits.
And BTW, the idea that the government hoards money could not be more wrong. The government can’t keep five dollars in its checking account. Any money that comes in gets spent on buying votes, favors and electoral support the minute it arrives. The amount of money I have paid into social security means that even at a modest 5% return my monthly payout as an annuity should be something like six times what SS will actually pay out. Why? Because that money the government took from me was not invested, like I did in my 401k. Instead it was stolen and used to buy votes.
Although Tim is right, of course, he is missing something.
Imagine Musk, Bezos, etc really did have giant vaults with huge stacks of money in them.
Imagine the government were to confiscate say, half of this “wealth” and spend it.
How would the effect on the economy be different from the government simply printed an equal amount of money and spent that?
An excellent speech – now turned into an article – by Kristian Niemietz of the IEA nails the nonsense of the rich hoarding all the wealth and forcing the rest of us into penury. Excerpt:
So if wealth inequality is not the issue â what is?
It is something extremely mundane and unexciting: we have made it too difficult to build anything in this country. We are not building houses, we are not building business premises, we are not building infrastructure, we are not building power stations â we are not even building water reservoirs.
Britain is 4 million homes short of the European average. Similar data for office buildings, retail and hospitality venues is harder to come by, but there has to be a similar gap for those. The road network is about a third below EU average. Electricity output is about a third below the EU average. Britain needlessly deprives itself of some of the key input factors of a prospering economy, much like the pot of a Bonsai tree deprives the roots of the tree the space it needs to grow.
And that, ultimately, is the main problem with this obsession with wealth inequality. It is not just that it lends itself to bad policy prescriptions, like the wealth tax. The bigger problem is the opportunity cost. Every minute we spend talking about wealth taxes and wealth inequality is a minute we no longer spend talking about how to build things. It is a minute we can no longer spend developing an agenda of âAbundance Yimbyismâ applied to a British context.
This ought to be utterly obvious to anyone. I suspect those who don’t get this are not getting it deliberately. They are evil.
Rich, very rich, individuals are people with economic independence – without them, the rest of us would have no chance to stand against the bureaucracy – both government and corporate.
Historically the difference between England and France was that in France the independently wealthy lost all power to limit the state, partly because they were militarily defeated, partly because they were bought off by immunity from most (not all) taxes – and the state became “all in all” – till its total power turned to imbecile weakness (as total, absolute, power always does – eventually).
@Johnathan Pearce (Quoting the IEA)
And that, ultimately, is the main problem with this obsession with wealth inequality. It is not just that it lends itself to bad policy prescriptions, like the wealth tax. The bigger problem is the opportunity cost.
As I have said here a couple of times, although I wholeheartedly agree with the excerpt you linked, it is important to know that not everybody shares the same values. To say that we should not have a wealth tax because it means Britain will not prosper is to assume that the primary goal is for Britain to prosper. But for many people the idea of large wealth inequality is intrinsically a bad thing, in fact intrinsically evil. By their lights a “fair Britain” is more important than a “prosperous Britain”, whatever “fair” means.
Of course I don’t think that at all, in fact I think one of the greatest responses at PMQ by Margaret Thatcher, deals very concisely with exactly this subject. So, I think it is worth pointing this out so that we can better understand the mindset of those who oppose us and be better equipped to convince or counter them.
Same here in the US.
I used to have a viable side business, rehabbing old houses and building new small houses. A few friends and rels.
We shut it down last year. The planners and the regulators and the taxers just made it into a waste of time.
In about 1900 (not that long ago) John Bullogh bought the island of Rum, evicted all the tenants from the island and built himself a castle presumably so he and his mates could disport themselves in complete privacy.
How is it that in a few generations it is now impossible to even give the castle away due to the restrictions and âwishes of the communityâ that have been imposed. The cost to restore the castle is multiplied by a factor of about 10 due to it now having a category A listing, so every fucker in the country is going to look over the shoulder of the new owner and direct what work may or may not be done.
Consequently, the castle is being allowed to quietly fall victim to entropy.
The perfect metaphor for the UK and much of the western world, sadly.
As I see it, the only money a wealthy person really has is the wealth he consumes, the rest is wealth he controls. And of course the government believes that only the state and its friends should be controlling large sums of money.
Ah, but in the 50’s, they sold the island to the Nature Conservancy. In my experience as a builder, I know to never try to deal with “The Nature Conservancy.” đ
Later, in the 2000’s, the NC allowed for the residents to form a Trust, and gave them some authority over land use (as a way to forestall the gov from trying hard to take the land away from the NC.) So now, everything that happens has to be approved by the Homeowners’ Association From Hell.
@bobby b
This one always has me in stitches.
I still have a “sort of” viable food business, that I started in 2020. It’s a mix of publishing recipes on a “pay what you want” model, and a more literal “ÂŁ5 per meal” model.
I’m very, very careful to note any allergens, etc. I’m very, very careful to note in my recipes and meal planning recommendations when I’ve used pork, beef, alcohol or other “prohibited” ingredients.
Why?
Because, you know, I don’t actually want to kill people, like? I don’t have any allergies myself, and neither do the majority of people I cook for, but I still make a point of noting when I’ve used peanuts, because…I’m not a psychopath. Or, I note if something has a white wine reduction in it, because I’m also not a wanker (ok, I am, but not in that sense)
It makes me very angry that I might need some kind of government regulations to tell me that if it wasn’t for them, I’d “obviously” be feeding peanut butter to people who I know it’s going to send them into anaphylactic shock. Good christ. What a dismal view of humanity you must have if you believe that!
This ought to be utterly obvious to anyone. I suspect those who donât get this are not getting it deliberately. They are evil.
Or just plain crazy. I have seen a few oafish defences of wealth taxes along the lines of “well it will reduce the price of homes” without stopping to think about the consequences of a tax-induced fall across the market.
There is also the basic immorality of these taxes to consider, and I wish the Tories and Reform did this more, and confronted the “looter” mindset – as Ayn Rand would have put it – on these sort of issues.
If someone’s granny who lives in a big house that she and her husband bought 40 years ago for a modest sum, and worked their arses off to pay for it, is now worth ÂŁ2 million, then the assumption is that the State is entitled to a chunk of this because some the rise in its value is somehow “unearned”. Well, maybe. The “unearned” bit ignores the fact that this granny and husband took the risk of buying a place rather than renting; there was no sure-fire knowledge in their minds that the house would rise in price as much as it did.
By buying a home and putting down a deposit, they had to forego the money that they would otherwise have spent. That is what capital is, and what risk-taking in economics is. Yet everyone assumes that if the risks pay off, the whole “community” – however defined – has a claim on it, but does that mean the same community should bail out those who fail?
That said, if I am 6 foot-plus in height and blessed with good eye-hand co-ordination, and live in a country that puts a premium on these attributes (US basketball) I can, with a bit of luck, earn a lot of money. Does that mean I should be hit with a “talent tax” to cover the “unearned” aspects of this, and how can the unearned bit (physical attributes) be separated from the “earned” bit (hours of practice under the eagle eye of some bastard of a coach, etc)? So many of the assumptions about “fairness” that many – even those on the “right”, have are remarkably shallow and don’t withstand much scrutiny.
A few weeks ago I re-read Robert Nozick’s Anarchy, State and Utopia, and one of the many brilliant things about that book is how he dissects the very baseline assumptions of justice that people have. In all too many cases, we have not progressed far beyond tribal groups with a zero-sum outlook.
Thomas Sowell is also really good at unpacking the assumptions that people have, such as in his book, A Conflict Of Visions.
Fraser:
As I have said here a couple of times, although I wholeheartedly agree with the excerpt you linked, it is important to know that not everybody shares the same values. To say that we should not have a wealth tax because it means Britain will not prosper is to assume that the primary goal is for Britain to prosper. But for many people the idea of large wealth inequality is intrinsically a bad thing, in fact intrinsically evil. By their lights a âfair Britainâ is more important than a âprosperous Britainâ, whatever âfairâ means.
I agree. As per my comment immediately above this one, the “vision” of justice, as spelled out by Thomas Sowell, etc, is a zero-sum baseline one for the Left. The assumption is that wealth must cause poverty. The idea of mutual enrichment is literally closed mental territory. It is of course idiotic – the massive rise in human living standards since the 18th Century is impossible to understand without understanding the power of innovation, division of labour, specialisation, entrepreneurial risk-taking, etc. A predation model would not have explained how a small, damp island such as the UK, menaced by far greater continental European powers, got to be as rich as it did. This model has no place for the importance of ideas (such as about liberty and property rights.)
Unfortunately, predation assumptions cripple people’s understanding of what is needed to foster growth. Our “tall poppy” syndrome weighs on us like a bad cold. https://www.forbes.com/sites/traversmark/2025/01/02/3-signs-that-youre-battling-tall-poppy-syndrome-by-a-psychologist/
And in my darker moments I think a lot of so-called social justice warriors are not even all that interested in justice, but a sort of crazy desire for vengeance, a “burn it all down” mindset.
This con trick, the claim that dragging down the rich will help the poor, was recently tried on two groups of people.
In New York City the con trick worked – and Mr Mamdani (soon to be Mayor Mamdani) got a million votes.
In Switzerland the con trick failed – and about 80% of voters voted AGAINST an inheritance tax on the “super rich”.
New York City is going to die – murdered by the new voters (most of the Mamdani voters were no more born in the city than he was). But Switzerland may well live.
Going back to the question of how the super-rich can hoard their assets; there is no easy way. It will require constant adaptability. Most of their assets are in the form of commercial enterprises and their own entrepreneurial talents. It would be wise for them to constantly evaluate the environment where they are located . . . and be willing to quickly move them in the face of confiscatory threats and physical danger. This happens to a certain extent if you look at the highest taxed, most incompetently regulated, and dangerous places to live/work in. It is not an accident or coincidence that the cities where all these factors are worst are Leftist run. As an example the US cities with the highest crime and murder rates [both in absolute and per capita terms] are generational Democrat fiefdoms. And we are seeing businesses move to more congenial parts of the country, but perhaps not fast enough. But keep an eye on New York City, Chicago, Los Angeles, San Francisco, Seattle, and Portland metro areas [roughly in that order] and watch their economies collapse [first slowly then rapidly] as business and the wealthy leave. In the absence of talented people and businesses to leach off of, the cities will collapse and become feral.
There is, of course, a larger sense of hoarding. Civilizations, cultures, and commerce have risen and fallen countless times in human history. If the underlying culture is not such as to allow prosperity, it will not exist. At that point “hoarding” by the rich consists of preparations for a reasonable lifestyle . . . and the means to protect it. I am not an optimist.
Subotai Bahadur
I would agree the very wealthy could provide an independent ‘rival castle’ to the state. I strongly doubt the current crop of global billionaires will though.
For a start, the majority of contemporary billionaires are quite contented to be part of or a cog of the current ruling classes. The likes of Larry Ellison, Zuckerberg, Gates, Rupert Murdoch etc are hardly dissatisfied with their lot, not the society they helped create.
Even apparent rebels keep at least one foot in the establishment. Elon Musk’s companies for example received at least $6 billion dollars in government funding last year. Musk has been quite well contained – look at how DOGE was quietly abolished. Donald Trump may be the President, but he has to collaborate and work with the old Republican party elites and often delivers more for them than the MAGA masses.
Wealthy nobility from previous centuries in Europe has strong local loyalties and networks of allegiance they could draw upon as support. People would be willing to lay their lives on the line to support their local natural elites against a perceived abusive central authority. Today’s very wealthy may have networks of allegiance but they are more likely to be spread across the place and the loyalties may be just largely based on money and careerism, so when tested the purely self interested will not risk their own necks.