It’s an interesting rhetorical device. I do, in fact, disagree with this almost completely, because these aren’t truths, but twisted half-truths.
Let’s do a little semantic unpacking.
Wealth isn’t really about piling up money, but let’s let that ride free for a moment. Let’s say that “the wealthy” are, in fact, those who have piled up money: money that could be taken from them by something like, say, taxation. It’s the common definition of “wealth,” and seems the one obliquely referenced here.
In that case, wealth and prosperity are entirely opposed to each other. Prosperity can be loosely defined as “well-being,” more specifically “financial well-being,” and certainly, piling up money does not make anyone healthier, wiser, or happier — though it may temporarily relieve the anxiety suffered by those with a hoarding disorder. It’s been said that “money is like manure — it’s no good to anyone until you spread it around.” Any analysis of the purpose and function of money shows the truth of this. So when money is piled up, it ceases to be spread around, and hurts everyone’s prosperity.
So this first statement is sleight-of-hand. You can create prosperity by breaking up hoarded wealth. Not just for the poor, but for the wealthy as well. Though it will, admittedly, cause great anxiety for the wealthy with a hoarding disorder.
The second point is in fact true, though it is utterly contrary to the Capitalist Creed. Most capitalists believe that you can create wealth: it’s an essential part of the shell game that is capitalism. But in reality, economics — like thermodynamics — exists in global balance, and you cannot acquire wealth in any form without taking it from somewhere else.
The ironic thing is that this point falls unwittingly but directly upon the heads of the wealthy. They have much more “wealth” than other people, which means they have taken it from other people. Nothing could be clearer.
The hand-waving enters at this point to say that — somehow — the wealthy “deserve” this wealth that has come from other people, and I’d agree with unequal distribution to a point. Certainly, someone who works a forty-hour week should be paid more than someone else, doing the same job, who puts in a twenty-hour week. Twice as much seems fair.
Six hundred times as much? Hmmm. So they make in four minutes what the other person makes in a full week. They get eleven years worth of work done in a single week.
Then, of course, we have “investment income.” Investments involve no work at all: that’s what makes them so attractive. You take a wad of cash, turn it over to someone clever and industrious, and he “doubles your money.” Doing what, isn’t entirely clear. Playing the stock market. Building companies. Exploring the Amazon. Assassinating foreign heads-of-state. Piracy. Something. What’s clear is that the investor isn’t doing anything at all — except taking the fruits of someone else’s labor.
Point three is technically false. Our government long since gave up trying to balance the books. So it is continually giving away fresh-made money that it never took from anyone, and in huge — I dare say, mind-boggling — quantities. The statement is more true if you substitute “business” for “government,” since businesses cannot print money.
It’s true that businesses like to pretend that they create wealth, but they can’t. They can only move wealth around. They can, for instance, take “unowned” rubber from the Amazon using slave labor — in principle, it’s free, though there are incidental overheads in whips and chains and dragoon squads — and turn it into “profitable” tires and O-rings. They can take “unutilized” old-growth forest and convert it into “profitable” cardboard boxes. The can create wealth for themselves by privatizing their profits and socializing their costs.
But this is simply an accounting trick, and in the end, nothing is created; ultimately, nothing is lost, either. The forest moves to a landfill: in a hundred thousand years, it will feed the roots of a new forest.
No one can give anything that they did not take from somewhere. Even the labor they supplied required that others provided for them while they were learning how to do the labor. When the government gives away money that it manufactured out of nothing, it only serves to devalue the money — it creates more of an abstract quantity that is worth less. Nothing is really created or destroyed.
So in the bigger picture, this is a true statement, but has nothing to do with government. It’s a simple statement about reality.
Point four is clever language, but isn’t meaningful. You can’t multiply wealth by adding it, either. The only way to multiply wealth is by multiplying it, which means geometric (as opposed to additive) increase, also known as proportional growth, or doubling growth. That’s how banking interest works. However, nothing in nature sustains doubling growth for more than a short burst, and it’s a good thing.
Yeast, in the early stages of fermentation, doubles its population every eighty minutes. If it sustained that growth rate, a bouillon cube of dried yeast, dropped into a jug of grape juice, would be a cube of yeast one foot on a side within twenty-four hours. It would be bigger than your house by the end of the second day. By day three, it would cover eighteen football fields packed together, six wide by three long, and stand a thousand feet tall. We don’t want to talk about day four.
Doubling growth in nature always flattens out quickly. It has to.
Banking interest does multiply wealth geometrically, at the cost of devaluing it. All of us can double our income overnight, but if that happens, it will simply cost twice as much to live. It’s called inflation, and we’ve been living with it for a century.
We don’t want to multiply wealth, because it’s also called slow-motion currency collapse.
Finally, we have the charming fifth point. I’m one of those second kinds of people: the kind that works and creates and works some more, and watches the fruits of all that labor go into other people’s pockets: corporate CEOs, dishonest salesmen, government officials, and of course, the worst of the lot: the lazybones, spoiled, entitled investment class.
You know why they call it “entitlement?” Because it was historically collected by those with titles. In olden days, this was the landed gentry, the nobility, which held the titles to the land and were therefore entitled to the bounty produced by other people working the land. Princes, dukes, earls, and barons. The upper crust.
Not much has changed. The US framers redesigned the political system when they wrote the Constitution, but they did nothing about the economic system. It’s still landed gentry and a privileged class, and they’ve long since overthrown the political system.
So let’s total up, shall we?
Point one – false equivalence of wealth and prosperity used to imply a falsehood. Prosperity is enhanced when the government breaks up hoarded wealth.
Point two – true but misdirected: this is how the wealthy accumulate wealth, by taking the fruits of others’ labor.
Point three – technically false when applied only to government, but tautologically true when applied generally.
Point four – cute but meaningless, and hides a true economic horror.
Point five – too true. The sooner we get rid of the entitled class, the better.