INEQUALITY OF WEALTH
THE WORDS OF PLATO
“The form of law which I propose would be as follows: In a state which is desirous of being saved from the greatest of all plagues — not faction, but rather distraction — there should exist among the citizens neither extreme poverty nor, again, excessive wealth, for both are productive of great evil . . . Now the legislator should determine what is to be the limit of poverty or of wealth.” (PLATO)
“Any city, however small, is in fact divided into two, one the city of the poor, the other of the rich; these are at war with one another.” (PLATO)
3,000 years ago, Plato, probably the world’s wisest man, recognized that inequality of wealth would lead to war in the same society.
Throughout history learned people repeated his words over and over. Entire economic plans were devoted to remedying inequality of wealth. Communism and socialism are basically designed to bring equality of wealth to everyone. That both of these systems have failed time and again is a tribute to the fact that given the desire of entire nations to distribute wealth equitably no group, no nation or no individual has been able to achieve that goal.
Observation of national economies indicates that inequality of wealth is the norm towards which society has turned repeatedly throughout history. The recent failure of the USSR is an historical example of the inability of a large nation of people who wanted equality of wealth failing to achieve it.
In the USA today, evidently the Democratic Party feels that it can achieve equality of wealth by taxing the rich and re-distributing this money to the poor.
In Europe today we are seeing the collapse of a currency system, the Euro, as banks, the holders of great wealth, compete with a population that wants the benefits of that wealth.
The banks of Europe are the tools of the wealthy. The new paradigm is to use corporations to prevent the public from knowing where the wealth is hidden. The European banking system is a conglomeration of holding companies that uses the wealth of their owners to make their owners wealthier. The average citizen sees only the names of the banks and their buildings; he is completely unaware of who owns these corporations, how much taxes they pay and what is their relationship with their governments.
One thing is quite obvious, the governments of Europe and the USA are very defensive of the health of their banks. The health of these banking system is today equated with the economic health of the nations in which they reside.
And yet, it is evident that all private banks are owned by private individuals. There may be millions of stock holders of the banks, but if one looks closely, a few stockholders own the majority of that stock which provides dividends. Frequently, this is a Preferred Stock, not even listed with the common stock in the European and American stock exchanges.
When Plato defined his city as consisting of poor people and wealthy people, he was not thinking of the present day society where wealth is camouflaged in the form of stock ownership.
The most unfortunate result of wealth inequality is the fact that as the inequality gets greater the economy becomes weaker. It is as though we had two motors that tended to supply power to two parts of a machine. As more fuel is given to one motor that motor makes its part of the machine move faster ultimately causing the machine to break down.
An economy, like a machine, needs a complete balance of in the movement of all its parts. If one part moves slower than the other part the machine will shatter and an economy will also shatter.
When an economy shatters, we call the result an “economic depression.”
HOW DO THE RICH GET RICHER?
The imbalance between the rich and the poor is always exacerbated over time. There is one simple reason for this: INTEREST.
Since the wealthy have excess wealth, more wealth than they need to survive, that wealth is given to banks to invest. The banks then lend the wealth to businesses and private individuals and collect interest. Part of this interest is returned to the investor, who sees his original grow in numerical quantity.
The wealthy automatically become more wealthy simply by depositing their wealth in a bank which in turn lends that wealth to those who need it and are willing to pay the interest costs.
The end result of this activity is that the poor have less and less money and the rich have more and more money.
PURCHASING POWER
Purchasing power is dependent on wealth. The more wealth an entity has the more purchasing power it has. Conversely, the less wealth an entity has the less purchasing power.
Any individual can only use a limited amount of its purchasing power in order to purchase ones daily necessities no matter how extravagant they are. The remainder of its wealth is then diverted into investment.
As the poor become poorer their purchasing power decreases. With this decrease the companies that supply goods and services become weaker and finally fail.
This is the inner mechanism of a failed economy. The masses of poor people have insufficient purchasing power to keep companies alive. The companies fail and unemployment grows. As unemployment grows the entire dynamic of the economic equation becomes exaggerated and accelerates.
THE USA AND EUROPE TODAY
In the USA and Europe today, we are seeing the banking system which represents the very wealthy, take over the governments and draw more and more money into their coffers. This is greatly reducing the purchasing power of the public in the USA and Europe.
The end result has to be an economic depression in both areas.
Popularity: 1% [?]
