We Can All Be Millionaires! (WSJ, Mark Skousen) \ stacker news ~econ

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We Can All Be Millionaires! (WSJ, Mark Skousen)www.wsj.com/opinion/share-the-wealth-dont-redistribute-it-230d1e98

820 sats \ 14 comments \ @denlillaapan 13 Nov econ

I generally like Mark Skousen, and I understand that he wrote this and WSJ published it.

Socialism is in vogue again. Critics of capitalism call the market economy unfair, arguing that big corporations don’t pay low-income employees a living wage. They draw on studies showing that inequality has grown dramatically in both income and wealth. Their solution: a highly progressive income tax, or even a wealth tax, on the superrich, and a minimum wage of $20 an hour or more.

These economically destructive measures are unnecessary and would disrupt the positive changes happening in capital-labor relations. The private sector is quietly solving the inequality problem without more redistribution and wage controls.

According to the National Center for Employee Ownership, more than 12,000 U.S. companies currently share ownership with more than 25 million employees, and that number is increasing. The reasons for adopting profit-sharing plans vary, as do the benefits they offer.

But it's not that convincing an argument:

Don't worry, Mamdani fans, wealth inequality and living standard concerns aren't problems because successful companies have favorable stock programs (look, capitalism working by making workers capitalists!)

What 401(k) plans with matching contributions or stock programs do amount to financially ingenious, tax-favored tricks that spread a company's equity wealth around among tens of thousands of people... Presumably, Mamdani fans are concerned with tens of millions of people, and not those working at Nvidia or Microsoft.

Plus, look at this confession that the system isn't working etc... you can't save your way to the top unless you're getting in at the bottom of the future success stories:

The number one way Americans become multimillionaires isn’t through timely real estate purchases, being early investors in startups, or being paid a living wage. The formula is much simpler: consistent buying of company shares and stock indexes, usually in the form of automatic contributions from every paycheck into a retirement account, or by receiving bonuses through company stock deals.

Democratic socialism is all about taxing successful entrepreneurs and running out of other people’s money; democratic capitalism is all about increasing profit margins, sharing the wealth and growing prosperous together.

Well-intentioned, but a ridiculous own goal I must say.

archive misbehaving with WSJ again so this is a "trust me, bro" post

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21 sats \ 3 replies \ @Undisciplined 13 Nov

Are companies doing these things organically or as a result of state laws?

42 sats \ 1 reply \ @denlillaapan OP 13 Nov

A little bit of both is my guess

0 sats \ 0 replies \ @Undisciplined 13 Nov

mine too

0 sats \ 0 replies \ @Solomonsatoshi 13 Nov

Probably a mix of both but regardless the things described are clearly cherry picked examples. The cases where employees are given stock options in companies that have subsequently failed are not mentioned! Most employers do not give employees stock options and the free market will never provide wealth and security for the majority of workers because it is not in the interests of most businesses to do that in an entirely free market economy. It is only because of organised labour that workers have some of the benefits and security they enjoy today.

31 sats \ 1 reply \ @SimpleStacker 13 Nov

Haha yeah pointing to 401ks as the example of "shared prosperity" is not gonna move any DSAs towards your side.

0 sats \ 0 replies \ @denlillaapan OP 13 Nov

Unfortunately not. Total facepalm

0 sats \ 6 replies \ @Solomonsatoshi 13 Nov

Yes a desperate but entirely unconvincing response from the mouth piece of corporate America to the rising tide of US citizens realising that crony capitalism is not serving their best interests. A mixed economy is capable of far greater wealth creation than an entirely free market crony capitalist economy because there are areas where free markets fail. Areas like the production of strategic industrial materials and resources like rare earths and electricity.

2 sats \ 5 replies \ @satgoob 17h

Why is the free market bad for electricity production? And why is the China chart there? That surge is probably due to catching up as their giant pop moved into the middle class and their economy has ramped up

Market prices in the US have ramped up in response to higher electricity demand for data centers

0 sats \ 4 replies \ @Solomonsatoshi 15h

Electricity generation and distribution is often not a market that is naturally competitive- there are huge barriers to entry and in terms of distribution the most efficient approach is often not a naturally competitive one because lines distribution is not something easily or cheaply duplicated. There are potentially significant inherent advantages in a centrally planned electricity market. China has applied a strategic approach to developing power generation using the states ability to issue capital, direct resources, direct skills and labour.

Electricity is both a major input to most modern manufacturing processes and something that requires a huge investment in terms of steel, aluminium and concrete, labour and engineering skills.

By building an economy where basic inputs are mass produced by the state inputs such as steel, aluminium, concrete, skilled labour/engineers are all available at the lowest possible cost because the state builds the supply chains and can operate without any need to pay tax or pay dividends- the sole objective is to produce the major supply chain inputs for industry at maximum efficiency and minimum cost- only a government can direct such a market.

Private generators and electricity grid distributors tend to acquire regional monopolies or duopolies or cartels form- they are not always incentivised to maximise supply but rather to restrict it and charge a higher price and make a higher profit. Private generators risk undercutting their own profits if they produce too much new generation and are instead incentivised to limit new generation and thus create huge profits for themselves.

The charts show China is now producing more electricity than the USA, EU and India combined and can build new nuclear plants at about 1/6th the cost USA can. While USA has struggled for decades to build one new nuclear generator China has and is building dozens of them at a fraction of the cost.

0 sats \ 3 replies \ @satgoob 13h

Restrict supply? Like cause blackouts? Not really a thing in the USA outside of some grids bc of bad market dynamics.

Look at how PJM has had new entry of billion dollar projects funded by private funds - its structure has done quite a good job of spurring prívate investment to meet grid needs

There’s some risk of cannibalization if you overbuild in a certain area but that’s a product of demand

You could pre build anticipating demand I guess (not sure if that’s what you’re saying) but that’s not going to make a return for a while so that would have to be a ton of government dollars

0 sats \ 0 replies \ @Solomonsatoshi 13h

Yes the Chinese do exactly that- prebuild suppl of electricity which then triggers the building of demand- factories and cities- electricity is the lifeblood of the modern economy and the Chinese model of build the supply and the demand will come has proven hugely successful. And yes it is a model that private operators will not adopt because of the risk and the longer term investment- it is a model that only a government can have the mandate and incentive to operate. Private models much more incentivise limited new power generation so they can milk the maximum profits from the limited supply provided by the generators they already own and operate.

0 sats \ 1 reply \ @satgoob 13h

Yes we can’t figure out nukes and it’s dumb

0 sats \ 0 replies \ @Solomonsatoshi 12h

The Chinese took the blueprints for Vogtle, tweaked them and now build them at 1/6th cost Vogtle will cost and 12 times the speed and frequency. A government pushing power generation and supplying it at a low cost can then leave the market to consume it and produce from it- remember the Hoover Dam! China has now begun construction on the Yarlung Tsangpo River of a new hydro scheme that makes the three gorges one look small. Electricity is the lifeblood of the industrial and post industrial economy. 'Free markets' are often inherently inferior to state lead strategies to provide it because of the tendency for profit motivated power generators to operate in a rentseeking cartel manner due to the high costs of entry to the market and lack of incentives to increase supply thus reducing profits.

0 sats \ 0 replies \ @Bell_curve 14 Nov

Sharing the wealth?

Sharing is not caring

"How? Companies both large and small offer generous profit-sharing programs for employees—401(k) plans, stock options and discounted stock-purchase plans."

Don't worry, Mamdani fans, wealth inequality and living standard concerns aren't problems because successful companies have favorable stock programs (look, capitalism working by making workers capitalists!)