Last month, Travis Kelce got married at Madison Square Garden, where presumably he scored the first Madison Square Garden touchdown of his career.
Sorry. Couldn’t resist. Like almost everyone, I’m thrilled and excited. It was a fairy tale come to life. Sends chills up my spine. At the same time, and despite the smile on my face for these two, seeing the line-up of mostly identical black Cadillac Escalades that were almost certainly rented by Swift for the occasion, I’m reminded of George Carlin’s description of the elites that run this country: “It’s a big club and you ain’t in it.” And, yeah, my mind sees that and thinks, wow, they shut down six blocks of Manhattan for this, and I don’t know anyone who could afford to rent Madison Square Garden for a private party.
But despite all that, I wish I’d been in one of those limos. Who wouldn’t? Really, this is one of those moments when America works at its best. Capitalism that’s aspirational and inspirational.
In other columns I have remarked about the problems that concentration of wealth causes in our society. These are very real. But today, I’m going to look at it another way.
By design, capitalism creates concentration of wealth. It’s the engine that makes the whole system work. When Thomas Edison was trying prototype 3,000 for his electric light bulb, he was driven by curiosity—but also by profit. His company, Edison Electric Light Company, and his financial backers (including the Vanderbilt family and J.P. Morgan) all hoped to make a lot of money from this new idea.
They changed the world, and they made a lot of money in the process. Edison died a very wealthy man.
The great American experiment combined a representative democracy with individual freedoms. This allowed people with grand ideas to get financial backers and provided everyone with the possibility of making money.
This is a theme played out over and over again in the last 250 years for mostly young, adventurous people with big ideas and not much else. Wilbur and Orville Wright changed the world and ended up very wealthy. Steve Jobs changed the world and became a billionaire.
There have been far more failures than successes, but despite the odds against succeeding, people keep trying because the potential rewards are so great.
When looking back on the history of humanity, what strikes me is that while people have had great ideas over the millenia, capitalism has provided so much incentive that it has accelerated the rate of progress.
Where we’ve ended up—with wealth in the United States now more concentrated than in pre-Revolutionary France—is more or less an inevitable outcome produced by the very incentives that are the engine of progress.
The Book of Leviticus describes a practice of Jubilee. The year of Jubilee happened every 50 years. The idea was to keep inherited wealth from causing others to fall into poverty, or at least to correct that every 50 years. So if after 50 years someone had fallen into poverty and was forced to sell their ancestral land, it was restored to them in the Year of Jubilee, which is probably why we associate the word “jubilee” with happiness!
While that mechanism was adopted for an agrarian society, I can think of a host of reasons why it would be completely impractical today. But it’s also clear that some kind of economic reset is needed.
Today, it’s becoming more common that people earning what used to be good wages can no longer make ends meet. But if the problem of not making ends meet extends out to a majority of people, history shows things don’t end well. Change happens, and it can be violent and difficult for everyone.
Our president, who is one of the haves, wants to scare everyone by telling us that the Democrats are communists. They clearly are not. Communism is a failed system, but if we reach the point where most people can’t pay their bills, then capitalism has also failed.
We are seeing the hunger for change in the rise of the Democratic Socialists. These are not communists. These are people who want help making ends meet. The U.S. is the only country in the G-20 (the wealthiest 20 nations in the world) that does not have free healthcare for at least part of the population, and in the G-7 the U.S. is the only country without universal healthcare. Many countries also have free university education. In other words, what Mr. Trump wants to label as communism is really just the norm in most of the wealthiest nations on the planet.
Reverend Ike once said, “The best thing you can do for poor people is not to be one of them.” I agree. I love the great engine of capitalism and what it has done for the entire world. But it also seems to be past time for some modern version of the biblical Year of Jubilee.
Hal Masover is a Chartered Retirement Planning Counselor and a registered representative. His firm, Investment Insights, is at 508 N 2nd Street, Suite 203, Fairfield, IA 52556. Securities offered through, Cambridge Investment Research, Inc, a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Investment Insights, Inc & Cambridge are not affiliated. Comments and questions can be sent to hal.masover@emailsri.com These are the opinions of Hal Masover and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal. Past performance is no guarantee of future results.