Whatever Conduct Your Society Rewards Is The Conduct You Will Get

Unrestrained, unbalanced bargaining power produces a concentration of wealth in massive corps and the top 1% of families — a plutocracy

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By David Grace (Amazon PageDavid Grace Website)

Reality Point Number One — Many If Not Most People Are Motivated By Money

You can dislike it all you want, but a large percentage of the population, if not a majority, wants more money, something that every single experiment in operating a society under a communist system has proven.

Whatever conduct your political and economic system financially rewards is the kind of conduct your society will produce.

Stated differently, many if not most people will do whatever their political and economic systems will allow them to make money by doing.

  • If people can make a lot of money by selling child pornography and if your society allows people to sell child porn, your society will have a lot of people selling child porn.
  • If your society allows people to sell addictive, recreational drugs then lots of people will sell addictive, recreational drugs.
  • If your society allows stealing, your society will have a lot of stealing.
  • If your society allows cartels and monopolies, your society will have a lot of cartels and monopolies.
  • If you can make a lot of money by throwing homeless people into wood chippers and selling the proceeds as dog food and if your society allows you to throw homeless people into wood chippers and sell the proceeds as dog food then a lot of people will start throwing homeless people into wood chippers and selling the proceeds as dog food.

People will engage in whatever money-making conduct their society allows them to do.

The Type Of Conduct An Anarchist System Produces

One end of the political spectrum is anarchism.

Set up a country with no rules, no laws, no government, and no police and you will get what you see today in parts of Mexico, Africa and other areas where the police have little to no power to enforce the law: Gangs, warlords, cartels, criminal organizations, private armies, theft, violence and extortion.

Violence and raw power are the tools people can use in the pursuit of wealth in an anarchist society and therefore that’s the conduct that an anarchist society will generate.

The Type Of Conduct A Libertarian System Produces

Instead of anarchists gaining wealth from the exercise of superior physical power (violence and threats of violence), a libertarian society’s combatants — employers vs. employees, lenders vs. borrowers, sellers vs. buyers, landlords vs tenants — gain wealth through superior economic power, superior bargaining power.

The greater one side of the transaction’s relative bargaining power, the more wealth that side of the transaction can obtain.

Because a libertarian society allows and rewards unlimited economic power — bargaining power — people in a libertarian society will pursue ever greater bargaining power.

One of the most effective ways to gain overwhelming bargaining power is to secure a monopoly on your product or service or become a member of a cartel that buys or sells your product or service, or control a high percentage of the market for that product or service.

When one side of a transaction has massive control of the subject of the transaction or material control of a societal choke point through which that product or service must pass, that party’s bargaining power is almost absolute.

The more vital the commodity and the more people who need it, the more wealth those in control of that commodity can gain.

The more tightly a party can control the creation of or delivery of fundamental products and services like energy, transportation, capital, health care, communication, food, etc. the more bargaining power that party has and the more money it can get.

Instead of a pure anarchist society’s guiding principle being Physical Might Makes Right, the anarchist-adjacent Libertarian’s society’s guiding principle is Economic Might Makes Right.

While an anarchist society will end up with sometimes feuding, sometimes cooperating gangs and violent cartels, a libertarian a society will devolve into an economy largely controlled by monopolies, cartels, and massive corporate giants buying up or simply crushing their competitors plus rich and powerful families and organizations becoming ever richer and more powerful.

The Type Of Conduct A Communist System Produces

On the other end of the spectrum from anarchism is communism.

The communists realized that the profit motive creates an inherent, adversarial relationship between sellers and buyers, employers and employees, lenders and borrowers, and landlords and tenants.

They also knew that the side of a transaction that has the fewest members, by default, has greater bargaining power.

Unless workers are united under a union there are almost always fewer employers than there are employees; fewer sellers of most products than there are buyers of those products; fewer lenders than there are borrowers, and fewer landlords than there are tenants.

By default, sellers, employers, lenders and landlords usually, inherently, have substantially greater bargaining power than buyers, employees, borrowers and tenants.

The profit motive drives these more powerful sellers, employers, lenders and landlords to obtain as much money as possible from the inherently less powerful buyers, employees, borrowers and tenants.

The Communists’ Answer

The communists’ answer to this profit-motive-driven adversarial relationship that favors sellers over buyers, employers over employees, lenders over borrowers, and landlords over tenants was to remove the profit motive itself.

If sellers, employers, lenders and landlords had no profit motive then their superior bargaining power would be irrelevant and sellers, employers, lenders and landlords would no longer seek to enrich themselves at the expense of buyers, employees, borrowers and tenants.

How could you have sellers, employers, lenders and landlords who no longer cared about making more money?

Simple, they thought. Just make the government the sole seller, employer, lender and landlord and decree that the government would ignore whether or not transactions between sellers and buyers, employers and employees, lenders and borrowers and landlords and tenants generated a profit or a loss.

But they forgot that the profit motive drove product allocation, innovation and hard work. Their solution eliminated the disease but killed the patient.

Consequences Of The Communist System

But if the government controlled everything then the government was the access point for all wealth. That meant that the path to getting more money was by becoming part of the government. The higher your position in the government the greater power you would have and the more money you could get.

In a communist society the source of wealth, therefore, was not physical power and not becoming a powerful seller, employer, lender or landlord through having more bargaining power, but rather advancement in the organization that controlled all the sellers, employers, lenders and landlords, namely, the communist party.

It’s the same in every authoritarian country — If the government controls everything, then wealth flows to the group that controls the government.

Because membership in the organization that controls the government is rewarded with wealth, people in an authoritarian country will pursue membership in and advancement within the organization that controls the government.

The control group might be the communist party, the Nazi party, or the inner circle of the person or the families in charge, e.g. Putin.

In a monarchy the path to wealth would be getting into or as close to the aristocracy as possible, marrying an aristocrat, being friends with an aristocrat or working for an aristocrat.

Summary Of The Conduct Generated By Anarchist, Libertarian & Communist Systems

An anarchist society rewards physical power with money, and thus it incentivizes gaining physical power.

Rewarding gaining and exercising physical power produces a society with widespread violence and threats of violence.

A libertarian society rewards bargaining power with money, and thus it incentivizes gaining bargaining power.

Rewarding greater bargaining power produces a society marked by economic concentration, economic centralization, and a concentration of wealth in the hands of a few families and massive corporations, a plutocracy where 1% of the population owns 90% or more of the country’s privately-held wealth.

A communist/totalitarian society rewards gaining and increasing your position within the ruling group.

Rewarding greater power within the ruling group produces a society rife with nepotism, cronyism, insider trading, uncompetitive businesses, and corruption.

What’s Good For Some Individuals Is Not Necessarily Good For The Country

In anarchist or libertarian societies, gaining greater physical power or greater bargaining power is beneficial to those few individuals or organizations who are successful in obtaining physical or economic power, but their greater physical or economic power creates an economy and a society that is bad for the country as a whole.

Communism rewards and bestows benefits on a small number of individuals inside the Party while creating a disastrous society for the country as a whole.

We Want A System That Will Motivate Conduct That Is Good For The Country As A Whole

I suggest that we want a political and economic system that rewards intelligence, talent, creativity and hard work (“Human Value”) with more money, one that incentivizes Human Values instead of incentivizing physical power, bargaining power, or membership in powerful organizations.

While the anarchist and communist societies may sometimes indirectly reward Human Value to the extent that Human Value is sometimes collaterally useful in obtaining physical power, bargaining power or advancement in the control group, none of those societies directly rewards or incentivizes Human Value.

Prior to 1970 when you didn’t need family connections or a quarter of a million dollars to get an education, we in the United States thought we had this all figured out.

Academically-oriented, talented people, smart people, hard-working people would pass an entrance exam, go to a relatively cheap government-operated college, get a good job, buy a house, raise their kids, repeat.

Non-academically-oriented, hard-working people would join the union, get a good-paying job, buy a house, raise their kids, repeat.

Then the government-operated colleges massively raised their tuition and filled themselves up with rich-people’s kids from other states and other countries.

The unions were beaten back and the good-paying jobs were shipped off to Mexico, China, Korea and India. The service jobs that were left were more or less immune to unions and didn’t pay enough to live on, leastwise buy a house or educate your kids.

Americans believed that when the bargaining power in a transaction got so one-sided that the other side was faced with a “take it or leave it” proposition, that the government should step in and at least put a floor on the terms of the deal — that the employer had to pay for on-the-job injuries and pay a minimum wage; that the lender couldn’t charge unlimited late fees or add massive penalties; that landlords had to provide a minimum of heat and sanitation and couldn’t bar tenants of disliked races or religions, and so forth.

Now the anarchists have reappeared, arguing that the landlords should be free to keep Jews and Blacks out of their buildings if that’s what they want; that sellers should be allowed to form cartels and quintuple the price of insulin or gasoline if they can get away with it; that employers should be allowed to pay as small a wage and impose as harsh working conditions as their workers are desperate enough to have to accept, and so forth.

The System Should Motivate Human Values & Counter Imbalances Bargaining Power

I think that we should have a system that does not reward more physical power or large imbalances in bargaining power, but rather one that rewards intelligence, talent, creativity and hard work and that automatically discourages rather than encourages huge imbalances in bargaining power between sellers and buyers, employers and employees, lenders and borrowers and landlords and tenants.

What sort of economic and political system would automatically provide a path to more wealth to ALL citizens with intelligence, talent, creativity and hard work instead to just those whose families have enough money to buy them a higher education?

What sort of system would automatically deter or offset huge imbalances in bargaining power between sellers and buyers, employers and employees, lenders and borrowers and landlords and tenants rather than rewarding greater bargaining power?

What sort of system would automatically prevent a society from becoming a plutocracy instead of encouraging it to become one?

What would be the rules of that kind of a system? Let’s figure out how that might work.

By David Grace (Amazon PageDavid Grace Website)

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David Grace

David Grace

Graduate of Stanford University & U.C. Berkeley Law School. Author of 16 novels and over 400 Medium columns on Economics, Politics, Law, Humor & Satire.

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