Getting capital goods accumulation in the hands of the right people within lower socio-economic groups is really the key to the just society. It would also put us in a position where many Australians would be a lot more relaxed and comfortable about taking more migrants. I’m not relaxed and comfortable about new migrants. Because the policy expert (ho ho) incumbency has set up a situation where each migrant is a threat to us through welfarism. Instead of massively high income tax free thresholds to help struggling families along, we actually have to shell out money too these people. We have to supply family income support with all the poverty traps that this implies. Of course the Catallaxians will go on believing, out-of-context, that more migration is good for us no matter what. This is because they are not real smart, and so think they can interpolate the benefits of migration, as they would accrue under free enterprise, to the situation we find ourselves in. Like I say they are not real smart.
But nonetheless from a moral point of view we want policy settings that make it in our interests to take more migrants, and no doubt when we get these policy settings, it will be easier to convince Australians to let in more migrants.
Back to funneling capital goods down the chain to the fellow starting with nothing but the willingness to work hard and established good character. This is the key to the just society also, because it takes one more person off the list of the proletarian pool, doing more or less entry-level jobs.
Job-rigging due to credentialism adds to that proletarian pool. Anything that makes the average size of the firm larger than it ought to be adds to that pool. There are incredibly many things about our current crap policy settings that add to this pool. And this is one reason why we have such an unequal society. This thread is taken from a post of mine on this forum. Its not a step by step guide as to how to get capital accumulation at the lower socioeconomic levels. Rather it is a display of the sort of thinking necessary to do so:
Further thoughts on this article: It hardly seems like a den of wealth-creation does it; this milieu he is describing.
Wealth-creation in finance is all about making a loan to buy capital goods to increase cash-flow. By its nature banking ought to be a local business, where the main requirement of the banker is his ability to judge business proposals, and even more importantly; character.
Where does this all fit into the picture painted by the article? It doesn’t fit in at all.
We see here also that the sort of capital development needed at the bottom levels of society is all but incompatible with an income tax, where the tax free threshold is not high enough to shield most of society from its effects. Since once you’ve borrowed, to pay back the money, you will have to earn more income and that will throw you into paying more income tax. So you will be hit with interest AND extra tax.
Also from the supply side one ought notice that banking for wealth-creation, is really incompatible with any monetary situation other than growth-deflation. An inflationary environment will have the bankers cutting corners and sending money to real estate flipping, or to whatever bubble is running at the time.
We need to get rid of most of these government departments, and most of the family income support, and substitute instead high tax free thresholds and growth-deflation. That way the local 100% banks will funnel money to authentic wealth creation at the lower levels of society.
We also want to take a page out of the Thai business creation book. In Thailand you can create a new business on the footpath with extremely low startup costs. This is to be encouraged. It will bring down commercial rent prices, and the cost of prepared food at retail. The costs of other retail goods as well.
When I was staying at my brother-in-law’s condominium, across from the marvelous-looking Bangkok University……..
……. I would wander down to the main road in the mornings to get breakfast. An incredibly wide array of astonishingly cheap dishes were available. But what I liked most was this speciality drink that one fellow would prepare. He used canned carnation creamy milk of some sort. Coconut juice. Pieces of fruit and some sliced coconut as well as ice.
Ice is ubiquitous in Thailand. That people now have fridges hasn’t dented the early morning delivery of ice produced on an industrial scale. Ice is cheap even in terms of the Thai price level.
So he would make this creamy juice drink by grinding up all this stuff together. He took up probably less than a square metre of footpath. He only seemed to make one drink. And the equipment and supplies he needed to start up this business was minimal.
So many Thais are working for themselves in these small businesses. Another brother-in-law was running a shop out of his house. He would open at 6.00am and close at 9.00 pm or so. But if he wanted to get anything done away from the house, there was always someone else to mind the store. So me and him and a friend could bugger off on a couple of motorbikes to visit some mountain, or caves, or hot springs.
In Bangkok a friend of my wife, got sick of her job and was attempting to start up a coffee-vending outfit from out of her front porch. But she would leave her new fledgling business just to drive us around to different places.
There is not enough of this going on in Australia. And the fact of it leaves too many of us in the proletarian stream, bidding lower level wages down.
Our wages have stagnated. Now part of this was due to the breaking of union power with workchoices and so forth. And this was necessary to bring typical unemployment down from high single digits to mid-single digits.
But part of it is also this dysfunction in banking, monetary policy, business regulation, and taxation … part of this is also this myriad dysfunction we have, that is preventing capital goods flowing into the hands of these tiny businesses at the lower economic levels of society.
Quite naturally these inbuilt disadvantages to lower socioeconomic capital accumulation are twinned with the ugly phenomenon of big-shot executives essentially voting themselves higher and higher salaries such that now these salaries are at obscene levels. They can do this with impunity chiefly because they face very little in the way of competition from below.