On “Anti-Billionaire B.S.” and The Monopoly on Violence

“A government is an institution that holds a monopoly on the legitimate use of violence.”

– Max Weber

Addison WigginDear Reader,

“The role of government should be that of a referee. But not a player on the field.” We begin today’s episode with these comments made by Elon Musk during an interview with the Wall Street Journal this week. They seem fitting given our round about discussion of the idea of America and the assault thereon by progressives with Joel Bowman.

“Government should just try to get out of the way and not impede progress,” Musk continues. “There’s a general problem, not just in the U.S., but in most countries, where the rules and regulations keep increasing every year. Rules and regulations are immortal. They don’t die.”

To fund the ever growing list of rules and regulations, you get a behemoth monstrosity like the Build Back Better bill. Those are my words, but Musk makes this comment about the bill. Musk:

It might be better, honestly, if the bill doesn’t pass. Because we’ve spent so much money. The federal budget deficit is insane. Federal expenditures are $7 trillion. Federal revenue is $4 trillion. If this was a company, it’d be a $3 trillion loss.

So I don’t know if we should be adding to that loss. That seems pretty crazy. Something’s got to give. You can’t just spend $3 trillion more than you earn every year and don’t expect something bad to happen. I think, you know, this is not good.

And in fact, if I may elaborate on that, the deficit is more than $3 trillion when you look at the future obligations. So it’s $7 trillion of current expenditures, but it’s much more than that if you look at future obligations for social security, Medicare and so forth. So we’re running this incredible deficit. Something’s got to give. This can’t keep going.

In general if we don’t cut spending, something really bad is going to happen. This is crazy. Our spending is so far in excess of revenue… It’s insane. Like you could zero out all billionaires in the US. There’s all this anti-billionaire B.S. Well, if you zeroed out all the billionaires, you still wouldn’t solve the deficit.

Musk, an epic entrepreneur himself, is on the frontline of the “something bad” that could happen. His concern is with asset and capital allocation to the most productive members and components of society. If you think of assets beyond a certain level, then let’s say, somebody’s ability to consume, then what you’re doing is capital allocation.” The money quote:

It does not make sense to take the job of capital allocation away from people who have demonstrated great skill in capital allocation and give it to an entity that has demonstrated very poor skill in capital allocation, which is the government. You could think of the government essentially as a corporation. The government is simply the biggest corporation with a monopoly on violence. And where you have no recourse.

Although we’ve spent the week discussing Joel Bowman’s fictional narrative, Morris, Alive, it’s worth remembering, Joel’s day job is as host of his own podcast with Bonner Private Research. And, as you are no doubt aware, we have been making similar comments as Musk for over twenty years.

With the pandemic and the social agenda of the current political environment… well, we wonder if we’ve just wasted a lot of time and spilled too many words. Our efforts to build a palisade around individual liberty and a free economy are consistently and increasingly crowded out of any kind of sane debate.

Musk spends a fair portion of the interview talking his own book on Tesla, SpaceX and his new project Starship, but it’s worth a few minutes of time to hear an active participant in the marketplace with a functioning brain.

Hmn.

Follow your bliss,

Addison Wiggin

Addison Wiggin
Founder, The Financial Reserve

Addison Wiggin

Addison Wiggin

Addison Wiggin is founder and executive publisher of Agora Financial LLC, an independent economic forecasting and financial research firm. He and Bill Bonner began writing the firm’s flagship Daily Reckoning in the midst of the tech boom and bust. It was one of the first widely distributed email newsletters on the Internet. The publication’s critical eye on finance and economics continues today. He’s also creator and editorial director of Agora Financial’s daily missive The 5 Min. Forecast.

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