Capitalism and the Fate of Kings

===originally published 11/2012===

Allow me to illuminate for you the failure point of Capitalism. I am convinced that when Capitalism's greatest advocate Ayn Rand realized this conundrum it destroyed even her, she self destructed in drink and bitterness and despair. A shame, really, she came closer to getting it right than any other, she almost had it, and the final point to be resolved is not at all impossible. It simply requires thinking a bit outside tradition for society to implement a correction that keeps all of capitalism's benefits and dissolves the problem.

Consider if you will that ultimately a society lives or dies on the degree of ethics in the morality practiced within that society. I give you that from an ethical perspective these two events are identical: the year is 1795 and a man goes to Savannah to buy himself a slave to work his farm; and, the year is 2005 when his direct descendent goes to his stock broker to buy 1/10,000th of a ten thousand man corporation. What both men have purchased is the surplus productivity of another human, the ultimately unethical ownership of another man's accomplishments. Both men have imbibed exactly the same poison. The mechanism of the poison they imbibed is the covert evil of slavery, the evil that has in fact been responsible for destroying every slave holding society known to history.

But please note from history, and mark this point well: the society does not fail and fall because it is the slave who becomes weaker, degenerate and debauched, it is the masters who suffer those reductions generation after generation until inevitably the society collapses. Most who hear this argument miss my point, in compassion they focus on the total and complete injustice endured by the slaves even though it is not the slave I'm speaking of. The slave is a man defrauded, his life of no value, his existence reduced to a commodity somewhere between cattle and horsepower. When considering a society as a integral unit any slaves (be it bondage by force of arms or the golden handcuffs of modern capitalism) are of no consequence in and of themselves, they're slaves, they don't decide anything of consequence. A fact of life. Not an ethical state of affairs, but a fact.

No, what I am speaking of is the hidden evil of slavery whose existence is universally denied, the multi-generational miscarriage of the logic upon which capitalism is founded. This evil impacts not on the slave but on the master side of the equation, the masters who do decide things of consequence. This evil is intimated, implied, in the classic saying "poor little rich kid."

But what happens when the poor little rich kid grows up to inherit command of something larger than he is? What happens when the poor little rich kid is called on to make judgments impacting many lives, many fortunes, judgment calls beyond the temper of his experience, beyond the depth of his wisdom? What of the poor little rich kids children? What measure of human will they be, compared to the parents or grandparents whose proven competence compelled such potentials for evil onto his life and the life of his descendents? The fortunes of the wealthy include their slaves, be those slaves literal or the slave-by-proxy of common stock, and those fortunes are inherited even as were the crowns of kingdoms. What kind of track record do the Royals have at maintaining true greatness to sit the throne of a land? One king in three? One in five?

Those who put the poor little rich kid in this unforgiving situation were proven successful and competent people, able to acquire on their own merits matched against all others competing, able to endure the covert evil of slavery without their personality, their ethics and their judgment degrading and failing beneath the burden. They after all were formed, evolved, as a great people before the evil entered their life. Their competence provided to the common man a better life than he could have had without them, their wealth was earned and deserved in the surpluses it provided to all. The grandfather is the man Ayn Rand wrote of, the Hank Rearden's and the Eli Wyatt's. But when the building of the land is a century deep in history it is not the greats who built it who are running it, it is their children and grandchildren where entropy takes its' toll.

I think this is what Ayn Rand realized, that the laws of inheritance would subject Capitalism to the same fate as plagued the kingdoms of old, that soon enough the laws of inheritance and human nature would cause Capitalism, now empowered with the wealth of the world, to deliver humanity back into the same state it had known in the days of the feudal kingdoms. She saw how the example the grandchildren would portray to those not born to such wealth and power would play out, how it would effect the perspective held by the common man: that wealth is not a matter of personal competence (since anyone with eyes and a mind would be able to see the grandchild wasn't that much of a much, just born lucky), but rather that wealth is to own a larger share of your fellow man's abilities than the next guy. She saw how should that attitude became the opinion of the majority the result would be that competence would no longer be measured in terms of productivity and wisdom but rather by parasitic prowess violently demanding to be provided with slaves by whatever name they might be known, exactly as it had been in the days when ignorant brutes ruled by the edge of a sword rather than by wisdom.

But the cure for this is not so very hard, not really. It is actually rather simple, and it draws from another old and well known folk saying, to wit "A fool and his money are soon parted." The solution is to change the laws of inheritance to where the child or the grandchild will inherit the cash value of any stock on the day it's owner passes away, but is prohibited from inheriting the stock itself or reinvesting the cash back into the same industry for one full generation. Let the money test the man, make it law that by court order and under court supervision the inheritor and only the inheritor may invest the inheritance into any other industry of their choosing, but not pass control of the money to a professional investment firm or banker to be handled for them. Let the money test the man.

If they have built themselves into the same caliber human as the source of the money the result will be that the money will be invested with good judgment into several diverse industries that it might continue to grow where opportunity presents, they will continue to prosper as will the health of the economy. But if they are weak or foolish, if they allow themselves to be swayed and manipulated by the predatory and the parasitic then they will be the only ones impacted by their poor judgment, their poor judgment will not have the ability to impact the successful industries from which the wealth was acquired, the most basic properties and characteristics of the parasitic will cause that money to evaporate back into the society by other channels. Likely less savory channels, likely causing damage to the lives it passes through, but still and all it will be just money and will only impact a few lives. It will not have the power to influence the overall health of the economy and the lives of the innocent and the honorable as it did when it was in the form of the slaves-by-proxy which is common stock. Let the money test the man, do not let the money set one human lower than another human who has not proven themselves the superior in fair and open competition. Problem solved.