No alarms and no surprises
Wealth works—if we can get it
No alarms
What kicked this series off was an appreciation that we’re still—even with all our science and technology and media and mature democratic politics—very naïve about the nature of money.
A bit of naïvity in things is often good. Provided you are aware there might be gaps in your knowledge, you’ll find life is more interesting and the possibilities more endless. If we had nothing left to know or argue about, we’d effectively be cows in the paddock or bees in a hive, in simple instinctual motion.
I certainly don’t claim to know it all and, in fact, none of the things I mention in this series are especially new ideas; they are just things most people don’t see much, like the texture on your cotton shirt, or the letterboxes down your street. The nature of money wealth is a thing that is unapologetically there, but such a part of the backdrop of life that few of us take a moment to consider what it represents for us now, and for the ‘us’ that will arrive in future years.
Wealth can be a lot of different things
It can be found in a strong community, in diverse viewpoints, in knowledge, or in health. Or, it can be the system of incentive, law, and temporal value that money characterises.
Each of those things can represent human progress, and therefore can be counted as a store of human wealth, it’s not as simple as just saying ‘more’ of them is always objectively good: Money, in particular, is designed to be neutral. Unlike knowledge, for example, the point is not to have more of it, but rather to have the right amount of distribution to most efficiently signal preference and ease interaction.
Capitalism works via by leveraging the neutrality of money to provide a universality that can’t be matched by the others. So—for now—money, and any magic and meaning behind it, needs to be at the centre of any conversation about growth and progress, distribution, diversity, and community. And money-wealth needs to be part of any conversation that might hope to challenge how we do our best in those spaces.
Earlier in the series, I talked about how work and the money you earn from it, provide a kind of actualisation trade—driving innovation and risk and productivity in ways that serve us all.
If you apply your genius and time to building jetpacks and sell them at a fair price, you are turning your energy into collective actualisation (you get money for what you want; your customers get to actualise their dreams of flying). But allowing wealth to concentrate and accumulate really only delivers actualisation to its beneficiaries—because it starts to make more sense to buy the jetpack design, patent it, and profit from suing anyone else who tries to make one. Essentially, your motivation changes from building something people want, to arranging things that build more wealth.
This is the danger we’ve slipped into, unawares, by measuring human progress with money: Things that are unproductive, pointless, and selfish can be just as lucrative (or more!) than worthwhile things. And, the bigger the pile of money-wealth in your bank account, the more you’re incentivised to simply buy stuff and inflate its value with things like rent-capture and monopolisation. When money-wealth becomes a synonym for human-progress—given equal billing as other, more objective, types of wealth like knowledge, health, or diversity—you even have a certain obligation to do unethical things with it.
This is obvious if you look at the hidden-away great artworks, the land monopolisation, the financial tricks, privitisation, and the exclusive deals available to the ultra-wealthy. These things form the backdrop of modern capitalism, and become things we both detest and strive for anyway: There Is No Alternative.
And so, laws are not really broken and outrage is not really triggered, and we simply sleepwalk from dreams of private planes and human achievement and ‘lifting people out of poverty’, into a molasses mess of grumbling inequity, underemployment, exploitation, and populism.
No surprises
All this has very cliché ‘frog in a pot of boiling water’ vibes of course—like a lingering cough that you put off seeing a doctor about or, you know, climate change!
It wouldn’t be fair to have put you through weeks of newsletters about what’s wrong with our relationship with wealth, without at least tossing a few suggestions into the ring for how we might address it. Fair warning though, there’s nothing especially novel here. We already broadly know what we need to do in order to prevent the worst outcomes from concentrated and accumulated wealth; the problem is building enough concern to get some consensus on them.
So, here’s my four:
Tax wealth overall, or at least, land. Taxing land has the advantage of it being hard to flee the tax-region with. Taxing overall wealth has the advantage of being more adaptable to new Alternative Universe tricks that wealthy people will use to hide their accumulation.
This, frankly, is the most organic of these suggestions, because as inequality grows—which it does—you eventually just naturally hit a tipping point where 1% of people have 70% of the wealth or whatever, and Democracy starts to become a serious contender in the fight against Manufactured Consent.
I should say, I’m of the opinion that we have now got the means to tax wealth (including land) in ways never before possible, thanks to the marvelously-ironic use of the wealthy’s own tools of artificial intelligence, blockchains, and digitised financialisation. Basically, we just need to pass policy, then fund the tax collection department really properly—see also ‘follow the money’ below.
Taxing wealth solves two important, immediate, concerns for me:
It discourages money out of unproductive shit like private equity funds and into productive private investment, like R&D, construction, and labour. And anything that’s left to be taxed after that can be spent on essential public goods like climate mitigation, job guarantees or UBIs which we’re going to need shit-loads of dosh for in the not-too-distant future.
It makes democracy work, by evening up the influence of a single person.
Regulate financialization out of the economy. A bunch of things like high-frequency trading, complex debt instruments, share buybacks etc. only really serve to turn wealth into more wealth, so we should get rid of them. We need to get out of the mindset of “more wealth is good for its own sake”, because money should do something.
I don’t know quite where we draw the line, because some tricky aspects of the financial world do serve as ‘signals’ to enhance efficiency (shorting, for example). But, if I had to come up with a definition of shit to outlaw, I’d say: If you can describe it 10 seconds to an average-Jo, and have their response be something like “ok, that makes sense” then it’s probably ok.
Remember, money is a human-scale technology, designed to incentivise human behaviour, so it should operate in human-scale transactions. I just can’t see how we collectively benefit from computers on-selling old car-loan debt to each other in fractions-of-seconds for fractions-of-cents.
Acknowledge community wealth and share it. This is pretty broad but, basically, it is putting into practice the truth that wealth is created communally. So, we might like to incentivise worker co-ops which equitably share their profits with their workers, rather than handing it to people with no real skin in the game. We might also like to entrench the right of an individual to trade their attention and privacy for money rather than just give it away for opaque use by global behemoths. Essentially, this is about creating modern commons to share common wealth.
I understand investment is still often needed to get things off the ground, but there’s no real reason that investment needs to come from ultra-wealthy individuals simply looking to make a buck: Banks can be ‘encouraged’ to offer loans to certain cooperative business structures; local pension funds can be forced to own a portion of local-development bonds which fund community initiatives and businesses, and so on.
The other aspect of this is understanding that community wealth will only surface if other needs are first met. So, better-distributed wealth should aim to put a minimum livable floor on a person’s lifestyle; ensuring everyone has basics like quality food, shelter, healthcare, connectivity, transport, and education. That way, their potential is not hungrily-wasting in some worn-out old sleeping bag in a doorway, parked car, or drafty converted garage. Meet human need first, and independently of human aspiration.
It’s worth pointing out, my other hope is more community-oriented policies would extinguish the current ‘industry disruption’ nonsense being facilitated by concentrated wealth, and typified by companies like Uber and WeWork. This is where wealthy-investor money is leveraged to destroy established community-centric industries by undercutting them (at a substantial loss), then on-selling the resulting ‘promise-of-a-monopoly’ (at an enormous profit) to naïve new investors, and finally, cutting services and ramping prices way up to try and become a “real business”, shedding trust, customers, and the functionality of the market in the process.
Follow the money. I saved this one for last because it’s the longest-shot, for all sorts of (geo-)political reasons. This one is simply the idea that we should keep better track of where all our collected wealth is. It seems to me that, if money is genuinely what those that have it say it is—job creating, innovating, economic-pie growing—then why hide it?
There’s been a bunch of leaks in the past few years, including the Panama Papers, Pandora Papers, Paradise Papers, and more, which reveal how much money is hidden and, essentially, removed from circulation. Legality-aside (because, much of this stuff is not strictly ‘illegal’), it just doesn’t make sense for us to allow this: Even the citizens of the tax havens themselves benefit far less than they would from legitimate businesses in their region, and locking trillions of dollars in vaults, encrypted ledgers, and freeports is just such a ridiculous use of a technology civilisation invented to invisibly guide progress: It’s like using the latest generation iPhone to use as a soap-dish in your guest bathroom.
There’s this half-truth half-joke about how porn is the thing that picks winners and losers in media tech, but finance is even better at picking winners in its sector. The difference between leadership from porn and the finance industry is that anything porn does is whispered about openly everywhere; while the finance guys loudly high-five and celebrate their genius tricks, behind carefully-closed doors.
The result is many of the tools and structures we’d need, to track unproductive wealth hoarding and hiding are known and well-refined. All finance now is digitised—you can't hide $1b under in a mattress, but you can certainly hide it on a spreadsheet somewhere if we allow it.
So, what I’d propose is we use the digital tools the finance sector have developed for their own wealth management, tax “optimisation” and so on—blockchains, ETFs, REITs, offshoring, shell companies, charitably foundations etc—and make concentrations and of wealth completely transparent. After all, if you genuinely believe that “greed is good”, and “concentrated wealth is a human right and virtue”, you should have absolutely no concerns about showing the rest of us the money!
Back when Radiohead gave the world ‘No Surprises’ on their 1997 album “OK Computer”, we were already well aware of the growing gap between haves and have-nots. The song spoke, however, not to the fear and urgency of that situation, but the mundanity of it. A Dot Com bubble, 9/11, subprime mortgage crash, COVID-19, and uncountable other regional crashes and crises later, we still seem to find the organic danger of wealth pretty dull. It’s time we started worrying about it.
But that’s just my two-cents.
-T
All valid suggestions but I won't hold my breath waiting for someone to muster the political will required to enact it.