Sunday, May 19, 2024


The strategy of most investment books is to leverage your resources to get more growth easier.  Whether one is conscious of it, pretty much all of us are looking for ways to get more benefits with less effort. 

I plead guilty.  Companies use their resources for the same thing.    Both companies and individuals have restrictions  Most of this history is based on the U.S.  Some of the trends are in Canada.  More directly we deal with many of the same companies.

An early example of misunderstood history comes from the Boston Tea Party of 1773.  We have been told that Boston citizens were outraged they were being taxed without representation.  The author gives another version.  The British East India Company had been given the right to transport tea to America without any taxes.  Independent businesses involved with tea were expected to pay taxes.  Thus the big British company would gain a big advantage over the little guy and virtually put them out of business.  By today's standards the Boston citizens dumped about one million dollars worth of tea which the British government demanded be repaid.  The Bostonions refused.

Thomas Jefferson was involved with both the Declaration of Independence and the Constitution  At the time England was the only country that allowed protection for inventors.  Jefferson set a patent procedure up.  In effect inventions helped develop monopolies in that inventors after registering and describing their invention could sell to others.  Jefferson himself had been an inventor.  Check

A contrast to our western modern economy is provided by Richard Borsha Lee who spent two years studying the !Kung Bushmen in Botswana.  He learned the average Bushman spent a maximum of about 32 hours per week getting food.  With increasing automation it had been projected that the modern western man (or woman) would spend less and less time working and earn more money. 

Presidents like Republican, Theodore Roosevelt and Democrat, Franklin Roosevelt helped keep the middle class vibrant despite efforts to give the wealthy more power.  

In 1971, Lewis Powell wrote a confidential memo planned how the wealthy could gain more power and dominance.  His first priority was to penetrate the education system not only by favoring sympathetic staff and also at the textbook level to blunt progressive ideas.  Gaining control of the media was essential. He noted that the courts could have a strong influence and became a Supreme Court judge.  

A key element for conservatives in winning over the majority is to encourage distrust of the government

Ronald Reagan accelerated efforts to concentrate wealth.  Productivity was roughly linked to wage increases until Reagan's initiated changes.  Most famous for saying "Government is not the solution to our problem.  Government is the problem".   He was proud to break the Air Controllers Union and criticized unions in general.  He suspended the Fairness Act which had restrained misinformation.  Of course a reduction in taxes, especially for the wealthy.  He also championed de-regulations claiming they inhibited the economy, overlooking  the role they play in protecting consumers.  See

Fox News was considered an investment by deep conservatives.  Rupert Murdoch realized they would initially lose several hundred million dollars.  After five years they began to dominate news broadcasting, although eventually admitted they were an opinion network.  Criticizing the government, particularly Democrats is a major strategy.  Studies have shown that areas that have access to Fox do better for the Republicans than those areas that do not have access.

Donald Trump's again lowered taxes which not only dramatically increased the deficit, but also increased inequality.  De regulating was also very strong minimizing consumer protection.  He botched the Covid 19 pandemic for which many paid the ultimate price and also gave opportunities to big companies to take over small companies.   

Monopolies by concentrating wealth to a privileged minority increase inequality.  Some effects of inequality:  more teenage pregnancies, more crime, more obesity, lower rates of social and political engagement, more suicides, less empathy and altruism and ironically decreased worker productivity.

One concern of big business has been the cost of labor.  At one point some people were to take advantage of slave labor and legislated to protect the practice and fought a war to maintain it.  In modern times a few conservatives have advocated for private prisons and others in turn used prisoners as cheap labor, at a time when the U.S. seems to have a heavy percentage of prisoners a high percentage of which are minorities..

Governments have been accused of  monopoly and it is true.  The author feels one kind of monopoly that is good--a natural monopoly.  Examples are water, electricity and sewer services.  The public services have proved to be more efficient and reliable than private companies.  One example used is from Pacific Gas and Electric at its failure to maintain power lines in California thereby contributing to a forest fire that killed people.  The underlying factor was the profit motive. 

Here in Canada I see signs of similar efforts to develop concentrated wealth.  Pierre Poilievre is noted for his slogan "Axe the Tax".  First it seems like an effort to stop an effort to deal with climate change which would benefit fossil fuel providers.  Second it amounts to the theme that the government cannot be trusted.  He has no solution to climate change which will cost more as time goes by..

What can be done?  Individuals have a vote and buying power that may seem inadequate, but do have a cumulative effect.  It is really the government that can make changes.  The majority should have voting leverage with taxes that are supposed to be progressive.  The author thinks the core problem is a relative lack of competition and suggests laws need to be modified to limit how big a company is allowed to get.  The voting system does make a difference.  I have blogged on proportional representation in Canada and elsewhere, but the American system could also be made to better reflect what the voters really want.  Check

Corporations are run by investors, but there are other stakeholders that should be given a voice.  Workers are obvious even though unions do negotiate wages and working conditions, they don't have any voting power.  The community where the corporation is located has a big stake, but usually has little say in corporation decisions.

In reality one way or another there will be a breakup of the status quo, but it may not be nice.  Check

This book is only 147 pages, but packs a lot more than should be summarized.  Well worth the reading.

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