Furious Friday – Part 1

Give the people what they want; Socialism for the masses & the human economy

Haven’t Liked us on Facebook yet? Show some love

This is going to be a bit of a longer episode in order to unpack this topic fully… You’re probably going to need to relisten

Book – Utopia
Wishful thinking – the story described perfect, imaginary world. A complex, self-contained community set on an island, in which people share a common culture and way of life. Although this book was a work of satire, I was 13 or 14 at the time, so wasn’t quite sure what satire was.

  1. There is no money, no external trade, so… everyone is happy, right?
  2. If your job is harvesting wheat, and another person’s job is to distribute what you’ve produced, how long will it be until you resent them and their job? Even though we aren’t speaking specifically about money, people will still be different!
  3. Times have changed – This book was written in 1516 when the world was ruled by Monarchy and Religions
  4. Once I started investing, studied economics and commerce, and started working – Things changed. This can be summed up best by Frenchman, Anselme Polycarpe Batbie, whose words are oft wrongly attributed to Winston Churchill, “If you are not a socialist (liberal) by 20, you have no heart. If you are still a socialist by the time you are 40, you have no head”.

This makes sense
When we grow up, most things are provided to us. We are, for the most part, taken care of. And, in a wealthy society like ours, many of us don’t get to see just how lucky we are compared to the rest of the world.

  1. If we have been taken care of, why can’t everyone have it that way?
  2. We haven’t experienced the ‘real world’ yet.
  3. I don’t believe that those who lean towards socialist ideas are bad people – they just haven’t seen it play out
  4. The ideologies are born out off feelings and rhetoric – so this episode will be pretty heavy with the underlying issues and outcomes from each

Definition:

  1. Socialism – A political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole (Centralised by the State/Government).
    • It is said that countries like Canada, Denmark, Finland, Norway are socialist, however this is incorrect – they redistribute through welfare, but they are still free market.
    • The only reason they can do this is thanks to their free market and the wealth generated from this.
    • The Prime Minister of Denmark asked Bernie Sanders to stop calling them socialist! They are free market, just have large redistributions of wealth – but still have property rights.
  2. Socialism is characterized in the following ways:
    • The means of production are owned by public enterprises or the state, and individuals are compensated based on the principle of individual contribution.
    • There is equal opportunity for all. Large-scale industries are cooperative efforts, and thus, the returns from these industries must be returned to and benefit society as a whole.
    • Economic activity and production are planned by the central planning authority and based on human consumption needs and economic demands.
    • Socialists believe economic inequality is bad for society, and the government is responsible for reducing it via programs that benefit the poor.

How do we get to that from a free market?

  1. Production owned by state and population
    • Taken by force
    • Exterminate, imprison or just take it from those that have it
    • It happens naturally when you put groups against each other
  2. The return of enterprises and business to the people
    • Well, this doesn’t ever happen
    • The only way you can truly own a business is to buy the shares
    • That is participating in capital – when everyone owns everything, it turns out that nobody owns anything
    • It becomes a public good – Think of air and water… these are available for everyone, but do you own it?
  3. Production is planned by a central authority.
    • This is a problem. Individual needs are ignored in favour of group needs.
    • Land and production is taken and controlled by one group
    • How do they manage to make decisions then?
    • Soviet Union – steel worked well – steel production is consistent
    • But farming – given weather and land/crop differences – impossible to implement one plan for all – as each is very very different
  4. And inequality –
    • Is inequality bad? Well poverty is bad.
    • What happens if we were all equal but all in poverty
    • And how does the government ensure we are all equal?

The argument – it just hasn’t ever been implemented properly yet – I disagree…

  • The level of control the State needs to enforce destroys everything – leaves everyone with nothing
    • Example – If everyone is on UBI of $20k p.a.
    • Someone spends all of it, someone invests $10k p.a.
    • Give it 10 years, inequality again and you have to do another economic reset on society
    • This is exactly what happened under the Agrarian reforms in Russia around 1880 – skip forward to Lenin pre WWI – inequality again

This was a very heavy episode – and part 2 will dig deeper into this. Hold onto your hats!

And remember… shoot through your comments and questions at https://financeandfury.com.au/contact/

Why are some billionaires in favour of a more socialist state?

Welcome to Finance and Fury, the Furious Friday edition. This episode – be looking at the weird combination between socialism and billionaires that is emerging – especially focusing on why billionaires are increasingly becoming in favour of socialism? Or additional...

The Cash Bill – stabilising the financial system for negative interest rates, Bail Ins and more, all at your expense

Welcome to Finance and Fury Last Monday's ep – Cash Restrictions Bill – Went through black economy and outline of regulations Today – Go further into implications of this – along with other considerations such as bail-ins and negative rates why bill needed – not for...

Where to invest in a world where major asset classes are artificially propped up by monetary policy?

Welcome to Finance and Fury, the Say What Wednesday edition. Policies that governments and CBs have implemented that affect asset values Relates back to Ryan’s investment thesis - As a millennial I understand that the government has to do their best to keep the ageing...

What is green energy and what is the future of the energy market in Australia and around the world?

Welcome to Finance and Fury, the Say what Wednesday edition. This week is another great Question from Phuong. “What do you think about the future energy plans for Australia and the world in general? I heard about the Government’s plan to build some gas station? do you...

Printing an unbacked currency to avoid asset price declines. What could go wrong?

Welcome to Finance and Fury. This week we will be looking at the Mississippi bubble. I find it a very interesting story of speculation and devaluation – creating a situation of loss of confidence in an early form of fiat currencies –– Lessons to learn from this – I...

Furious Fridays: Is minimum wage such a good thing after all?

Furious Friday Is minimum wage such a good thing after all? Welcome to Finance and Fury! The main aim of our Furious Friday editions is to clear up misconceptions. We’ve been seeing a lot of news stories lately about companies underpaying staff – 7-Eleven, hospitality...

How do I invest in property in 2019?

Hi Guys, and Welcome to Finance and Fury. Today I have Jayden with me for part 2 in the Mini-Series on the best investments for 2019 Last Monday we went through Shares, and whether it is a good idea to invest in 2019. Today we will look at investing in property in...

Furious Fridays: Why must Governments and Central Banks force inflation on a Nation?

Welcome to Finance and Fury, the Furious Friday edition! I’ve been thinking a lot about what we are taught in economics, the basic ‘101’. Specifically, if you print a lot of money you get hyper-inflation. There are plenty of stories to back this up Germany Weimar...

Artificial Intelligence and Investing: The future is here

Episode 29 Artificial Intelligence and Investing: The future is here Today’s episode of Finance & Fury we’re talking about Artificial Intelligence taking over the ETF and investment market. The discussion was actually started by one of our listeners, Gabriel who...

The “Australian Berkshire Hathaway” – Is there an opportunity to buy in due to recent underperformance?

Welcome to Finance and Fury, The Say What Wednesday Edition I've been looking at Soul Patt (ASX: SOL) recently as I've heard some commentators refer to them as the "Australian Berkshire Hathaway" but noticed they have underperformed the ASX200 index over the last 12...

Pin It on Pinterest

Share This