It’s important to understand a basic fact hidden under a bunch of complicated details. The stock market is bet on the future. The people it makes rich do not have money in their pockets, they just have racing slips. It’s the same as a bunch of people gambling on horses, except the race never ends.
Tesla is worth more than bigger car makers because it might overtake them in the future, not because it actually has. And most of Elon Musk’s wealth is tied up in Tesla stock. So Musk is not actually rich, he just might become rich, and people are betting on his electric horse to come in.
That’s all the stock market is. Behind the terminals and PR about efficiency and competition, it’s just a bunch of gamblers watching corporations run around a track. The stock market is more accurately called ‘rich people’s feelings’. We—people with feelings for our children, for the planet—we should not feel good about that.
How Do You Tax Feelings?
The basic fact that stock market is a bet on future performance leads to a lot of confusion. For example, people say the resolution to capitalism is to ‘tax billionaires’.
OK? Tax what?
As ProPublica says about these oligarchs, “Their wealth derives from the skyrocketing value of their assets, like stock and property. Those gains are not defined by U.S. laws as taxable income unless and until the billionaires sell.”
Therefore their wealth is all untoucable within the rules. In fact, they can borrow against their assets at low rates, and even show negative income sometimes. So you get the richest people in the world often paying no tax at all, or getting refunds.
In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the second-richest person in the world, also paid no federal income taxes.
Michael Bloomberg managed to do the same in recent years. Billionaire investor Carl Icahn did it twice. George Soros paid no federal income tax three years in a row.
If these rules still aren’t good enough, they change them. Oligarchs can buy politicians and bureaucrats like so many nickels and dimes. In legally corrupt places like the US and UK this is done quite openly. Still not good enough? Just move. Capital isn’t like people, it can fly across borders easily, instantly, and all the time.
In this rarefied air—where rich people feel good about you—you are experiencing capitalism in the cloud. You are the cloud. Humble people just look up and see whales, or cars, or rockets, or whatever you say you are. They’re so far below you, what would they even know? You can change the shape of your wealth largely at will and float wherever you want.
If the hoi polloi decides they want to tax you, you can just change form. Oh look, I’m not a whale, I’m just a little minnow, there’s nothing here. Or you just blow away to Ireland or the Cayman Islands. Like a puff of wind, you just disappear. Or you can turn grey and angry, and threaten a deluge on those below.
The truth is that you can’t tax wealth without, well, hurting rich peoples feelings. And when rich people cry, the poor bleed. As the modern saying goes, when the stock market goes up, I lose my job. When the stock market goes down, we all lose our jobs.
Honestly what we call ‘the economy’ is not much different from a household where the wife does productive work and the husband spends all day drinking and gambling. If he loses they lose fucking everything, and if he wins he just goes back to the track.