By Alejandro A. Tagliavini *
According to the conservatives – to call them somehow – characters like Warren Buffet, are models to imitate. You have to compete – stepping on the heads of others – to win and be like the “kind grandfather”, a paradigm of capitalism. But the truth in that he achieved his fortune thanks to some irritating state privileges -violating free market rules- literally “exploiting” the poor and so achieving a fortune that is not natural.
Socialism is not egalitarian, since it impoverishes the people and enriches the rulers. But instead, the market is really egalitarian because, due to the supply and demand curve, when a businessman earns a lot, immediately – if the state does not prevent it – competitors surge and achieve an equilibrium and matching everyone’s fortune.
And yes there is competition, but it is not worth it all like living on state privileges – using the state monopoly of violence – at the expense of impoverishing the rest, but the healthy and free one where each player is a colleague who encourages the other To strive and win.
Marx is known for his fables that resist no scientific analysis, and certainly science exists and has no ideology. And I don’t think this poet has done much harm. Although it is true that a lot of harm was made by those who, in the name of Marx “ideology”, organized violent revolts in order to enslave millions of people, forcefully imposed themselves from a central power.
Warren Buffet has done a lot of damage, because he does business, and gives an image of “capitalism,” which is very impopular. In two articles – one from the Wall Street Journal and a recent one from the Financial Times (FT) – he shows his contempt for the market, and his elitism: the rich would be “more valuable.”
“The capitalist grandfather”, for example, won a popular referendum after investing fortunes promoting the government to sustain the electric monopoly of his company, NV Energy, against the liberalization that would lower the rates given the competition. This is how he makes his fortune: earning money with a monopoly “exploiting” the people, who have to pay exaggerated fees.
In another of his “brilliant businesses”, he invested US$ 30 billion in wind turbines and, without any hesitation, confessed to the FT that “we would not do it without the tax credit to the production we obtain”. That is, it is “financed” by the State, which covers that with taxes, paid by the poor since the rich necessarily derive them by raising prices or lowering wages.
According to Buffet, the rich deserve it because they have “contributed brilliant innovations.” It will surely include his friend Bill Gates, who made his patrimony thanks to the monopoly granted by the State with the laws of “copyright”, or “geniuses” such as Thomas Edison who was a “serial patenter”: he patented some thousand inventions and is not credible that he was so creative.
In fact, the incandescent lamp was only perfected by him. Earlier, Joseph Swan, obtained a patent in Britain, in 1878, and took his plagiarist, Edison, to the British courts, who proved him right. The mobile phone, on the contrary, was “invented” by nobody in particular since it is the result of thousands of brains working anonymously, and that is how inventions are really made.
Finally, Buffett showing his ignorance ensures that the gap between rich and poor is a “market consequence” and proposes to increase state aid that, by the way, the poor pay via tax in an impoverishing vicous cycle. “The government”, he said, “has to … modify the market system.”
* Senior Advisor, The Cedar Portfolio