Robert Reich has some new "inequality" material for us:
“Unless more of the gains are shared, the economy will not work. It will become so top-heavy that it can’t sustain itself because there will not be enough purchasing power in the middle class and among the poor. We need candidates to be bold and specific as to what needs to be done.”In real life, the "economy" is nothing but an abstraction composed of millions and billions of individual exchanges.
In other words (A) exchanges something with (B) and both value what they receive more than what they give away. Everyone "gains," and nothing needs to be "shared".
Sure, you can share whatever you want voluntarily, but Reich's use of the word "share" is as a euphemism. It sounds much better than "steal and redistribute".
Left free, the "economy" can "sustain itself" without the guidance of the professors.
The problems begin when an outsider obstructs the exchange between (A) and (B) in some way. It is the outsider that tilts the tables so that some gain, while others lose. With those kinds of powers, the outsider becomes very popular. Now everyone wants to gain the friendship of the outsider.
The outsider takes donations for its friendship.
Eventually, the outsider gets so big, that what used to be an "economy" of millions of peaceful exchanges turns into a big pile of planned chaos.
Ultimately, it is the outsider that becomes so "top-heavy" that it croaks. History's graveyard is filled with outsiders.
(A) and (B) keep trading though, and forever will, no matter how many outsiders come along.
Chris Rossini is author of Set Money Free: What Every American Needs To Know About The Federal Reserve. Follow @chrisrossini on Twitter.
