I am as ardent a supporter of capitalism as there will ever be.
I largely view the majority of people's circumstances in the developed and free world as a product of their work ethic and drive. I largely view the developed world as meritocracies where you get what you deserve. I was dirt poor and I couldn't care less about your problems because I've been there and chances are you haven't.
But then this happens.
And it becomes insanely difficult to defend my position to be against the redistribution of wealth.
At what point does your moral compass kick in and say,
"You know, for $210,000 I could do a LOT of good in the world. I could put some poor kids through college. I could get some tutors for some kids that have trouble at school. I could pay for single parents to get some training or college or have their children get day care while they get some schooling." Or something of noble worth you could do with $210,000.
But $210,000 FOR DRINKS?????
Come on!!!!! WTF???? Wouldn't you feel a bit better about yourself if you donated it to a charity? Or heck, just threw it out into a street and made a bunch of normal schleps happy? Hell, I'd pay somebody's mortgage off just for kicks. But no, you're going to spend it on booze. And on booze, that frankly, probably tastes no better than a cold Sam Adams.
Forgive me while I feel a little socialist for a while.
Have you ever thought that the man's incredible wealth was probably legitimately earned by the services he gave that benefited countless people? It'd be like me inventing a cure for cancer, becoming the richest man in the world and then having to give all that money away. But, of course, I understand what you mean. It's just that the man may be more moral than you think, just not 100% so.
ReplyDeleteLet the people who receive that money make that decision. Feel happy for the champagne people. They'll be able to invest more in capital, hire more workers, etc. Those transactions are nice and quick, so I don't worry about them much.
ReplyDeleteI'm sorry captain, but you have to hand over your license to publish.
ReplyDeleteEven if I were Bill Gates, I would not spend 210K on drinks in one evening. However, my morals include not judging how others spend their money, as long as they are optimizing their own arbitrary utility.
Au contraire, my dear captain, unrestrained consumption by wealthy capitalist prevents a monopoly of wealth from arising, so I encourage such gestures (as opposed to investing in the SP500, say).
Obviously giving the money away to the best charity would optimize the utility of the world, but that choice is entirely personal. How dare you question it?!?
C'mon Cappy, bar tenders gotta feed their kids too...
ReplyDeleteThe freedom of the market includes the freedom to be an ass with your own money.
ReplyDeleteInterestingly enough, examining the story more closely and without wishing to cast aspersions, it appears the principal actor comes from a geopolitical area not known for its developed meritocracies that foster a capitalist system. Perhaps the moral compass simply wasn't there to kick in (again, no aspersions to cast)?
Why don't you console yourself by thinking about how many people made money off this guy's drinking binge, and how many people made money off of those people when they spent their money. Now take a deep breath, put your do-gooder irrationality back in the closet, turn on your brain, and come back to reality.
ReplyDeleteBut it is their money, so who cares how they spend it. Is that any different then buying a Hummer or a four million dollar vacation home? Stick to Capitalism.
ReplyDeleteThe $210,000 *was* redistributed, in the fashion of capitalism. It was given to the club (in exchange for drinks and services). The club used the money to pay for supplies, employees, taxes, rent, debt service on equipment and fixtures. The club owner(s), who presumably can manage to show a profit on a $210,000 sale, can now use the profits to: pay for their childrens' college, pay for house, car, furniture, etc.
ReplyDeleteExcuse you for feeling socialist? Never.
ReplyDeleteAlthough I have to admit that I spent many of my early 'stupid' years feeling exactly the same way - as in 'how dare so-and-so spend/earn so much money when so many in the world are suffering'. Of course I later realized it was because I viewed the world in zero-sum terms: one person's gain was another's loss. Once that evil spell was broken I saw capitalism and economic freedom for the glorious thing that it is - the best thing mankind has ever done for dragging people out of poverty and misery.
Don't give in to the emotional repuliveness you are feeling about the wasted cash, call on your cold-hard economist within and recognise that the same economic freedoms that allow this bozo to blow loads of cash on booze is the same system that allows wealth to be created in the first place.
And regardless - money being spent at a private nightclub is a whole lot better then giving it to the government.
Sheesh! I wake up and I have 50 e-mails blasting me on this!
ReplyDeleteYes, yes, I know, he has every right to do what he wants with it.
And yes, I know the multiplier effect of him spending the money will go to staff, allowing them to buy things (though, if this were the case, then just printing money and losing that first round of efficiency in lost wealth production would result in inflation, but regardless).
And yes it would be better than giving it to the government.
I'm just saying when I get a billion dollars I won't be blowing $210,000 on booze. And what the consequences for wealth production and employment would be if people like this would be a bit more efficient in their spending (though I am ardently against the government or anybody else telling them how to spend it)
And Mahan, duly noted, I'm thinking he inherited his wealth from a wealthy oil family.
Captain:
ReplyDeleteYou could say the same thing about someone who smokes a expensive cigar or buys a fancy car. Wouldn't the money be better spent on charity? The only reason you are outraged is one of degree. But you should be focused on the difference in kind, not degree.
What transpired was a person spending his own money freely on things he found worth the money. The alternative is distribution of wealth. (Not redistribution--it wasn't distributed in the first place. If it was, I missed the call to get into line.) And distribution of wealth requires the force of the government.
So the choice is between freedom and force. Not the choice between the money being used for something you approve of or the money being spent wastefully (according to you).
It's all relative. If your worth a billion dollars it would be like me going out and spending 100$ on dinner.
ReplyDeleteI have always enjoyed your site but I continue to be amazed at where I find overt socialist tendencies.
Ug, I love you guys. It's the only blog where I'm regularly called a racist, fascist nazi, mysoginist, capitalist by internet trolls and then a socialist by my loyal readers. ;)
ReplyDeleteHey Captain,
ReplyDeleteI know what you thought when you wrote this. I think this can happen to all professional economists out there. It's one of those moments when you question the moral and intelligence of human mankind and forget about all economic theories.
Just cool down and keep going!
Best Blog Ever
No I know, the right thing to do is to let this person spend his money however he got it as he pleases. I've never questioned that, as the alternative is infinitely worse.
ReplyDeleteI just wonder what good is capitalism with out a little bit of humanity. Not authoritarianship, but some voice of guilt to say, "hey, WTF are you doing??? Don't you think you could do something better with that money????"
Again, I don't care how rich I get, I will never spend $210,000 on booze. If for any other reason the sake of society. This ability to make that decision is what makes us human and above animals.
Cappy said: "I just wonder what good is capitalism with out a little bit of humanity. Not authoritarianship, but some voice of guilt to say, "hey, WTF are you doing??? Don't you think you could do something better with that money????"
ReplyDeleteMaybe that's the other part of the story that we're not getting? This article is only about one incident. I'm certain that this individual continues to exist outside of this one event, and in the rest of his life, perhaps he has given $420,000 to charity, maybe more. Who knows? And more importantly, who cares?
You're right, just makes me wonder what Paris Hilton spends her money on.
ReplyDelete"Ug, I love you guys. It's the only blog where I'm regularly called a racist, fascist nazi, mysoginist, capitalist by internet trolls and then a socialist by my loyal readers. ;)"
ReplyDeleteWell, when you wander towards the middle of the road, you can get run over by cars going both ways. :)
How hard was it to produce the booze to supply this guy's little party? I mean, if I buy an extremely rare hot rod that costs a million dollars, my consumption wouldn't divert nearly as many resources as buying a million dollars worth of new cars.
While cost is usually a pretty good indicator of how much it takes to make something, in the case of rare vintage booze or collectors' items it gets pretty useless pretty quickly.
I guess I'm just trying to say that the opportunity cost of producing $210,000 worth of vintage booze isn't actually equal to the other stuff you could buy with the same amount of money. The scarcity of the item in question and the fact that it's sold to people with enormous budgets makes the prices a little crazy.
"I just wonder what good is capitalism with out a little bit of humanity."
ReplyDeleteTHIS coming from Mr. I-Love-Communist-China himself??? Those same fun dudes who dissolved the Hong Kong Parliament as soon as they took over in '97, and decided that the most appropriate response to student demands for reform was "Send in the tanks!"?
There appears to be a moral disconnect at work here. You simultaneously cry out for a humane, moral impulse in an individual's spending, yet support a regime based on authoritarianism mixed with capitalism. Interesting.