What to Do Instead of Money

This year we will sail past the point where 1% of the population controls as much wealth as all the rest of us. We may already have passed it. What we have learned of late is that this is a bit like an atomic reaction, or a muddy avalanche: once you reach a critical point there’s no stopping it; the wealth continues to accumulate with the very rich.

Karl Marx was prescient in seeing the flaws of capitalism a century and a half ago. Regardless of the historical developments that followed, his fundamental understanding remains unchallenged.

Just a year ago, the English translation of Thomas Piketty’s Capitalism in the Twenty-first Century created another spark of enlightenment by fleshing out Marx’s theory with real data. But the most significant thing Piketty showed us is that the continuing concentration of wealth and the resulting gross inequality is the inevitable consequence of capitalism itself. Moreover, there doesn’t seem to be any simple way to bring it under control. The 1% own half of all wealth, but that will continue to increase inexorably.

Piketty shows us that continued growth
of great wealth is inevitable.

The reasons that the very richest continue to accumulate wealth are essentially two. First, the very rich never spend any of their capital. That is, they have so much wealth that they can easily live in great luxury on just a small part of the annual earnings on their invested wealth, leaving most of those earnings to be reinvested. Second, the rich are able to invest in ways that simply aren’t available to anyone who isn’t very, very rich. These include, but are not limited to, investment requirements in tens of millions of dollars. These rarified investment mechanisms earn consistently greater returns than other types of investment, thus continually widening the distance between the very wealthy and the rest of us.

The question, which arose long before Piketty came to town, is what to do about this malignancy. This wealth grows without limit, like a cancer, but the total quantity of money is finite. Therefore, the more of it that accrues to the most wealthy, the less there is for everyone else.

Many people are trying to find a successor to capitalism, but a clearcut heir is nowhere to be seen. Until answers are found, it seems to me that the best strategy for individuals is to sidestep the capitalist trap. There are a number of ways you can do that.

The best plan for individuals
is to sidestep the capitalist trap.

Whenever possible, earn your living via a worker-owned business or cooperative, or at least a company you can buy into. In worker-owned enterprises the benefit of the work performed, the profit, is not removed to further enrich a wealthy owner, because there is no owner other than the workers themselves, who are also the investors. Every benefit accrues to the worker-owners.

Take your money away from the big capitalists. Put it in a credit union or small local bank, most of which are able to provide nearly all financial services you might need. Consider also mutual benefit organizations, “brotherhoods”, such as were common during the early part of the 20th century, and are still strong in several parts of the country. These include large family associations as well as associations of ethnic, national, professional, and interest groups.

In saving for retirement, look for investments in funds that share your values, usually called “socially responsible” funds. Be willing to miss out on gee-whiz investments in favor of less exciting investments that actually do some good and do not particularly benefit the very wealthy.

True wealth needn’t mean only cash in a bank.

Don’t stop there. Avoid dealing with dollars entirely when you can. Trade and exchange your goods and services such as garden produce and painting skills. Use a local currency if one is available, which helps small businesses and keeps the wealth in the local area and out of the clutches of Wall Street.

Redefine wealth. True wealth needn’t mean only cash in a bank. Most people who have gained a good education consider themselves to be richer for it, regardless of their income. Owning unimportant expensive possessions provides limited satisfaction at best. Having leisure and enjoyable activities is just as important for a rich life. Gardening is always a satisfying activity in itself, with the added benefit that you can eat what you grow, or at least enjoy looking at it. Make and enjoy music, dance, acting, sports.

The poor should especially be encouraged to be proactive, because to do so will provide additional real wealth for them. Yet it is the poor who are least likely to seek out such opportunities.

While various problems have arisen on the way to the “sharing society”, it’s still a concept worth working on. Some of the difficulties have arisen with informal ride sharing services, which don’t so much share rides as take business from taxi workers by neglecting crucial things like liability insurance and vetting of drivers. It seems to me that a good part of the problem is that such services are far too large to qualify for the local sharing that is most important. They have become just another extension of capitalism, minus consumer protections.

The best we can do for now may be to sidestep capitalist clutches, and be rich in other ways. The very rich will get very richer until we figure out a better way.


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One CommentLeave a comment

  1. Reblogged this on Citizens, not serfs.


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