Welcome to the man economy here is a quote from actress Jodie Foster
attacking the rich is not envy it is self defense the hoarding of wealth is
the cause of poverty the rich aren't just indifferent to poverty they create
it and maintain it I want to explore this idea because this is an assertion
and we live in a time where we have statistics and data on many things so
it's a time where opinion can be driven by fact rather than ideology which is of
course what drove Karl Marx to say these kinds of things that Jodie Foster was
just quoted as saying I will compare left-wing and right-wing ideology
pertaining to the potential to class jump and then introduced data to test
which ideology is correct or which is more correct the above comment is based
on the idea that wealth and future income is allocated at birth the amount
of wealth in society doesn't change and there is nothing people can do to change
their level of wealth from the level that they have inherited in other words
we have the classic socialist or far left wing theory and as I'm increasingly
referring to a matriarchal view on the world this ideology leads to the idea
that all people should have equal income regardless of how productive educated
smart or hard they are working let's contrast this ideology with the right
wing idea where you are your own destiny you take risks work hard become
productive get some education you can determine your future we can all be rich
together if we deserve to be and of course by deserve the right means that
you make or contribute to making products that people actually want then
if you are successful in this endeavor you will get to take out from the
economy ie you are paid or more valuable work this is just market economics now
common sense tells us there is going to be some truth to both sides but let's
try to see which side is more true I'm going to explore these ideas using
various data I'll concentrate on the USA because they probably have the flattest
Inc tax system in the Western world however
their system is clearly still progressive this more moderate
progressiveness makes it more difficult to class jump so we know that whatever
happens in the USA that other Western countries will probably be more mobile
ie will be easier to change income levels compared to your parents in other
Western countries compared to the USA let's start with the big money first the
billionaires according to a new report sixty-two percent of US billionaires are
self-made that is the right wing theory of personal effort being the primary
cause for almost two-thirds of billionaires eighteen percent of
billionaires have a mix of inherited and self-made wealth which is a center wing
idea which I assumed would be the most common but I was wrong while twenty
percent of billionaires inherited their wealth which is the left-wing socialist
idea so it looks like the right is well right
however the absolute number of billionaires is quite small so let's
look at the proportion of millionaires who are self-made sixty-seven percent of
millionaires in the USA are purely self-made which is surprisingly high now
after my reaction to this being surprised I considered why I found this
so surprising I've never looked into this data before but I realized that
I've been exposed to constant socialist ideas like that from Jodie Foster my
whole life and had internalized this left-leaning idea which is perpetuated
by the West that your future is more or less determined by your parents as
income so the constant passive absorption of comments like Jodi's do
affect people and we do absorb this information and adopt opinions based on
this information in a passive but definite way this is very concerning
when extremely unqualified people with no knowledge of the problem are so vocal
and influential with their emotional and factually baseless commentary again we
live in a time where the data is out there we don't need ideology to drive
these ideas we have the facts let's zoom right out now and look at income
quintiles in the USA in particular look at intergenerational influence on your
income what a chance of you having an income in the
top 20% in the USA if your parents did and what's the chance of you dropping
out of this income bracket 39% of people in the top 20% of income earners had
parents who earned in the top 20% while 61% of people earning in the top 20%
didn't have parents earning in this range when you consider that random
chance says that 20% of high earners will have high earning parents there are
only an extra 19% of high earners with higher earning parents so in effect over
three-quarters of the non random high earners jumped up to the highest income
quintile meanwhile 42% of people in the bottom income quintile are from families
that were in the bottom quintile as well remove the random chance and it's only
22% more that remain in the bottom 20% of income with 58% dropping down from a
higher income quintile I have to say that changes in income from parents to
their children are remarkably common in fact for three-quarters of people it's
normal of course it's hard as a jump from the very bottom to the very top or
to drop the very top very bottom but nonetheless the idea that your life
circumstances are primarily determined at birth are simply untrue one further
point to note is at the level of real net wealth in the USA meaning that I
accounted for inflation and for changes in debt levels has increased from 18
trillion US dollars in nineteen sixty to ninety three trillion u.s. dollars in
2016 and given the performance of markets
since this time total wealth is almost certainly increased to over 100 trillion
US dollars this shows that wealth is not a static
value to be shared amongst people like savages fighting over scraps wealth
grows and shrinks over time based on the productivity and factors of production
in the economy this is the exact opposite to what is implied in Jodie
Foster what I want to dig a little deeper here so back to Jody's quote
again now I have to say that being poor in a country full of rich people is
awesome why because rich people buy so many things so I can sell things to them
and we share the wealth it's a
win-win at the very least I'm able to get a job in a company that is making
things for them and get a higher wage than if there were no rich people to
sell to this is how an economy works and an embarrassingly simple concept that
the Socialists don't seem to understand I feel like the average ten-year-old can
grasp this comment every time you buy something the sales revenue is split
into wages profit and even taxes for the government wealth creates wealth which
is why so many all countries stay poor because no one has money or wealth to
spend having rich people in your country is a true blessing and remember chances
are these rich people were not born rich they engage in the economy the added
value to other people by selling goods and services or working in a company
that did Jodie Foster also said that rich people want to keep all people poor
why would they again if we are all rich it's easier to get even richer because
the overall purchasing power within the economy is so much higher so the exact
opposite of what she is saying is true if she made her money in a less
privileged way she would understand such a basic economic concept the only come
back that socialist will have to this is you need money to make money in general
people who are rich borrowed money whenever big firms expand they borrow
money an insider tip it will get rich from borrowing other people's money if
you have a credible idea investors are fighting themselves to throw money at
you aside from this in the current year we have a thing called the Internet in
the Internet era people can start online businesses with no capital you literally
need about 50 bucks the barriers to enter business are basically zero
nowadays it's a perfect storm for those wanting to try their luck take a risk
and work hard to increase their income you look at the risk and potential
reward and you make a decision should I go for it or not I'll leave you with a
quote from Murray Rothbard it is no crime to be ignored of economics which
is after all a specialized discipline and one that most people consider at
dismal science but it is totally irresponsible to have a loud and
voracious you know in economic subjects while
remaining in this state of ignorance very well said Marie the sheltered
Hollywood elite should probably stick to their knitting which is ironically
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