Capitalism has a marketing problem!
We all need to own this problem. If there is one area where socialism kicks capitalism’s ass it’s in marketing.
Frankly, it’s embarrassing. At age 20 Mike Tyson knocked out Marvis Frazier, son of legendary heavyweight Joe Frazier, in a mere 30 seconds. For anyone watching politics in Latin America over the last week, the results have been the same with the exception that it’s not a victory won by a young beast like Mike Tyson it’s like getting knocked out by a 100-year-old man with diabetes.
Chile is a mess. Argentina is back on their merry go round and Colombia puked on itself in its mayoral elections paving the way for complete destruction in its future presidential elections.
When you have to make risk-based investment decisions over several decades you learn a few things not taught in academia. Here’s 25 years of experience put into cliff notes.
- Capitalism is experienced by the populace as soulless. It may be efficient but it feels cold, mechanical, and tilted to benefit the elite. Capitalism at its heart is a method of mutual voluntary cooperation. Rooted in liberty. Sadly it never gets marketed that way.
- The populace cannot distinguish between capitalism, corporate statism, and socialism. Corporate statism which involves the flow of government resources to the private sector, such as bank bailouts, is merely the ugly twin sister of socialism. Capitalism believes in death and rebirth without resurrection from the state. Everyone is permitted the opportunity to succeed, fail, and try again but not at the forced expense of the public.
- Taxes are extortion. Our belief is that taxes should be abolished. In the absence of full abolishment, the only tolerable tax system is one with a low rate based on consumption. And only enough to sustain a small government with competent courts and an appropriate military.
- If an economy doesn’t have stable money it’s robbing its citizens and sowing its own future demise. This observation is so obvious it’s painful to watch it being ignored.
- Fractional reserve banking is legalized counterfeiting. The circulation of credit created out of thin air is the single largest factor creating wealth disparity between the rich and the poor.
- Private property starts with self-sovereignty and then extends into material possessions. Society cannot cooperate with one another voluntarily if humans don’t own the right to the fruits of their own labor.
Everything above is classic and yet currently relevant. There are however some things that are specific to this particular moment in human history that are also worth noting.
- Money doesn’t move like water it moves like lightning. Don’t believe me? Ask Macri. He went from free-market policies to IMF bailout in a blink. He should have abandoned Argentina’s paper currency when he had the chance.
- Education systems require an outright overhaul. They are archaic and expensive. Online, ultra low cost, private education is the only way out of this problem. Governments stop wasting your money and open the doors to innovation to solve these problems.
- Climate risk is as real as it gets. The problem is not nearly as complicated to solve as governments would have us believe. Here’s the biggest culprit: fiat money plus fractional reserve banking dramatically over stimulates consumption and thus the misallocation of natural resources. Fix the first two and you’ve tackled a huge part of the problem. And here’s the bonus; when you fix the first two it shifts temporal decision making across society. What the hell is temporal decision making you might ask? Let’s look at Venezuela for the answer. What happens to consumption when a currency is going through devaluation? It becomes immediate and focused on today. When currency is stable over long periods it makes long term planning possible. Countries in Latin America complaining about not finding enough long term financing for infrastructure there’s your answer. You’re welcome.
- Double environmental bonus. Mix fiscal policy with monetary policy and get a truly sustainable economy and planet. Carbon credits are crap. Anything that relies on an arbitrary group of bureaucrats to dole out permission to pollute is a dumb idea. Instead, use full life cycle certification on goods and eliminate their sales tax when certified fully sustainable. Now the consumer AND producer have their incentives aligned. Market signals can move faster than anything else to effectuate these changes — that’s true capitalism in action!