There are few experiences more frustrating than debating economics with someone who is illiterate on the subject. I recently had a discussion with a loose acquaintance from Germany, who has come up with a Really Smart Idea(tm) to achieve social justice and economic equality. I shall now attempt to relate the main points of his theory without stabbing myself in the ear with a cocktail fork at the pain of the recollection.
His Really Smart Idea:
The government needs to seize all the private cash in the country–bank accounts, savings, and especially corporate assets. All essential industries and businesses need to be nationalized. Once that’s accomplished, you’ll have a gigantic pile of cash. Now you divide up all the money between all the citizens, and give everyone a million Euros each. (Why a million? Because our Really Smart theorist considers this “all the money a person could ever need for the rest of his or her life.”) Bingo! Everyone has everything they’ll need, and there’s equality all around.
At that point in the discussion, I asked how he thought all that money would influence prices of consumer goods. I mean, with eighty million people sitting at home with their newly flush bank accounts, what happens when people go on eBay and start bidding on stuff they want? Say there’s a really nice designer purse. With a million Euros in everyone’s accounts, where’s the bidding going to stop if there’s only ten of those things on the ‘bay, and three thousand people get into a bidding war? And never mind luxury goods–what about any consumer good in limited supply? The money situation is going to adjust itself according to supply and demand, and your million Euros aren’t going to last you very long if your tank of gas costs two thousand, and people buy purses for a hundred grand off eBay.
His Really Smart Solution (and he has one for every scenario I threw at him): pass a law that makes it illegal for anyone to sell stuff for more than it is worth. How do we determine what something’s worth? Easy! The government freezes the prices of raw materials, and people can charge the exact price of the materials that went into the product, plus the exact labor that went into it according to a pre-set hourly wage table. No more evil profiteering, and those million Euros will once again stretch from cradle to grave.
Then I brought up individual money management skills. If Citizen A blows his million Euros in his lifetime, and Citizen B saves half a million to pass down to his kids, won’t we have economic inequality starting in the next generation again?
The answer is simple, of course. His plan: confiscate all personal assets at death, and put that money “back into the pot”. That way, everyone starts out at the same position in life, and there’ll be no more unfair advantages bestowed on upper-class kids via unearned inheritances.
At that point, I excused myself from the debate, realizing that we were inhabiting separate realities. I mean, linguistically speaking, we were communicating in the same language, but it felt rather like trying to talk trigonometry with an automated customer service recording.
I don’t know what’s more frightening, though: the fact that this is an adult with full voting rights, that quite a few of his twenty-something college-educated peers think along the same lines, or that I could turn that theory into a lecture and *not* categorically get laughed out of the lecture hall?