Friends don’t let friends become commies

It’s incredibly difficult for human beings to properly determine the value of our possessions, we seem to be incredibly bad at this and it causes enormous pain, suffering and waste for us. There is the classical schoolbook example of the ground under the palace of Tokyo, that was valued at more than all the land in California during the heights of the Japanese economic bubble.

Another more recent example is cryptocurrency. You buy and sell tokens that other people created out of thin air, by wasting electricity. Right now Bitcoin uses as much electricity as the Czech republic. The entire scheme requires throwing 3.5 billion dollar into an economic black hole every single year. Yet, this phenomenon continues, because people think this is an “investment”.

In reality, this is a combination of three things. On the one hand, there’s an economic scandal that resembles Wirecard on steroids. Wirecard is the Germany company that collapsed after it turned out two billion dollar it claimed to have never existed. In the cryptoworld there’s a digital currency called Tether, supposedly backed by 13 billion dollars on a bank account somewhere. Nobody ever came up with a convincing explanation why anyone would be willing to let 13 billion dollar sit on a bank account somewhere doing nothing. Second, there’s the problem that you can’t properly bet against Bitcoin. Betting against Bitcoin requires you to trust one shady party or another with your money. Third, the Chinese millionaires have a problem: They can’t easily move their wealth out of the country. Many of them thus use all sorts of dodgy routes, like cryptocurrency.

If you have the rare gift of being reasonably competent at properly determining the value of possessions and have the opportunity to use that gift, our society rewards you with incredible wealth by the time you’re old. That might seem unfair, but it’s actually in everyone’s benefit: If you possess more stuff, you have more power to help us discover the true value of our possessions. Someone like Warren Buffet is incredibly talented at figuring out whether a company is undervalued by society. This is very useful for society, because it helps us properly allocate our resources.

Here’s how this works. Imagine there’s a shortage of corn coming up. Speculators will anticipate that corn prices go up, so they will buy corn in advance of the shortage. In response to their purchases, the price goes up. Farmers will then respond to the rise in prices by planting more corn. As a consequence, the shortage becomes less severe than anticipated. In communist nations, where these type of things have to be determined from above, speculators are killed or thrown into prison camps and people go hungry.

In corrupt societies like Russia, to become a billionaire you merely need to be friends with the politicians in power. In Western civilization, you actually need to be smart enough to be capable of delivering a substantial contribution to society. What happens as a consequence is that Russian billionaires buy billion-dollar yachts with their money. On the other hand, Warren Buffet has lived in the same house for over half a century. When he dies, 99% of his money will be going to charity.

Capitalism is relatively efficient, because it gives money to our society’s smartest people. Our society’s smartest people then figure out how to use their money in an efficient manner. Their judgement is not perfect, but it’s definitely better than the judgement of a cultural anthropology student with a nose-ring or a power-hungry tyrant like Stalin or Mao.

If you want to earn money, you always have to look at places where people are behaving most irrationally, because that’s where it’s easiest to earn money. The obvious example right now is Tesla: Tesla has a higher valuation than the world’s biggest auto manufacturer. If it wasn’t obvious yet, that’s ridiculous. Less than a year from now it will trade at less than half of where it trades today.

I think it’s useful to ask yourself when you’re young what you enjoy doing and what you’re good at. Those don’t always overlap, but when they do, the next question becomes how you can do them for a living. I enjoy looking at how the world develops and whether human beings are under-appreciating the value of certain ideas. Through investing, that’s something you can relatively easily turn into something you can do for a living. With a bit of luck, by the time I’m in my thirties, I will live off my investments.

There’s a game I used to play as an adolescent called Wall Street Raider. The game was unrealistic, but not in the way you might expect. It was generally a good move to buy companies that were trading at a price below their book value, provided they were not at risk of bankruptcy. Let’s say the company has 100 million in assets and 20 million dollar of debt. That means its equity is worth 80 million dollar. In Wall Street Raider, such a company would never trade at less than 80% or so of its book value (ie below 64 million). In the real world, companies quite regularly trade at 50% or less of their book value, even when they don’t have any significant debt. Get this: The game requires markets to behave more rationally than they actually do, because under realistic conditions it would be too easy to win the game.

It’s impolite to talk about money. People consider money a dirty word, power is considered even dirtier. The reality remains however, that Warren Buffet and George Soros are going to have a bigger influence on how the world will evolve than a guy blocking traffic by protesting with a sign somewhere. If I asked someone “what are you focused on in life?” and he told me “I want to become rich rapidly”, I wouldn’t consider that to be in poor taste, I would just consider that to be honest. Upward social mobility is a very normal human desire. What determines your taste is what you do with the power you gain.

“Capitalism is inefficient!” You might say. The answer to that is that I don’t disagree with you. We have more empty houses than homeless people in many countries. We have cars in front of our houses that are used perhaps 5% of the time. Capitalism is inefficient, because human beings are inefficient.

You know what’s even more inefficient than capitalism however? I’ll tell you: Communism. Mao Zedong ordered China’s entire cultural legacy to be destroyed during the cultural revolution. Now the Chinese billionaires organize robberies of Chinese art that was preserved in European museums. Communists will severe your culture’s ties to your own history. In the Soviet Union, gorgeous old cathedrals were demolished. Capitalists won’t destroy a gorgeous old cathedral, for the simple reason that we know it will earn us tourist bucks.

There are other communist practices that are inefficient too. Example, the Soviet Union refused to believe in Darwinism because it did not fit the egalitarian communist philosophies, so they came up with their own alternative in the form of Lysenkoism. They based their ideas on Lamarckism, so they came up with dumb stuff, like the idea that rye will spontaneously transform into wheat under the right conditions. Hint: This is how you die of hunger.

Another inefficient communist practice is killing sparrows. Mao Zedong ordered Chinese peasants to kill all the sparrows, because he thought the sparrows were stealing grain. In reality of course, the sparrows are a vital part of the ecosystem. Without the sparrows, locust populations boomed and the harvests began to fail. People began dying of hunger in droves. You would think that such a monumental act of communist stupidity would forever cure human beings of believing in communist delusions. For whatever reason, it doesn’t. Elderly Chinese still have posters in their houses of this genocidal madman who made their family members die of hunger.

So yes, we in the Western world have more empty houses than we have homeless people. But let’s make a thing clear: I eat like a medieval king, while locusts eat your food. And while we’re at it, you know what else is inefficient? Slavery and genocide. Hitler lost the second world war because he killed the Jews. The Jews were successful because they were competent, not because they were conspiring against the German people, just like the Kulaks were successful because they were competent.

In collectivist societies, people hold your success against you, they see your success as evidence of you being inferior or morally corrupt. You can read Anne Frank’s diary, where she describes her family members in an accurate and overly honest manner. She has scathing criticism about just about everyone. Her dad however, looks like a good guy. He was a successful wealthy businessman before the war, but he’s also just a genuinely nice warm-hearted guy, who takes good care of his employees and happily makes sacrifices for his family. After the war he had no real desire for revenge, he simply wanted to make sure no such thing would ever happen again. It’s extremely painful and difficult for people to accept that successful people are often just nice and smart people, rather than evil villains plotting against unsuccessful people.

The big mistake that people make however, is believing that Hitler was some sort of right-winger. In reality, if you listen to Hitler’s quotes, he actually sought to create a system similar to Bolshevism, but with preferential treatment for white Germans over Jewish people. Similarly, Mussolini was a communist before he became a fascist. China and North Korea today put people in concentration camps, particularly when they belong to ethnic and religious minorities. Given enough time, communism almost always mutates into a form of fascism. Nazism is simply a form of communism for white trash, just like Maoism is a form of communism for Chinese trash and Juche is a form of communism for Korean trash. The ego of the communist leader is always too big to carry out “real communism”, they always have to turn it into their own thing which ends up looking like fascism.

Why does this happen? Because these are all collectivist ideologies, that don’t respect the rights of the individual, but judge you based off what group you belong to. Collectivist ideologies appeal to people with low self-esteem. In Western universities, you see the same phenomenon come into existence, with endless whining about “people of colour”, “black lives matter”, “black voices and spaces”, “white privilege”, etcetera. They take it for granted that your life is determined by whatever group of people you happen to belong to. In the process of course, they continually resurrect racial tensions that were disappearing.

That’s always the first poison pill that communists will try to feed you: As an individual you are utterly incapable of rising up above the average person’s mediocrity. Rather, you need us, the communists, to give you dignity and prosperity. Western civilization of course demonstrates that the exact opposite is the case. You can look at black American billionaires and you’ll encounter the same story all the time: They grew up in poverty and abuse, but they were determined to make something out of their lives. They were initially met with failure, but they persevered and in the end people recognized the genius of their creations.

You can look up Oprah Winfrey for yourself, I want to focus on Tyler Perry right now. You might know him from the Madea movies he made. Tyler Perry was abused as a child. What did he do when he turned 22 years old? He wrote a play called “I Know I’ve Been Changed”, that addresses Christian themes of forgiveness. He performed it at a community theater, financed by his $12,000 life savings. It failed to attract any real attention. So what did Tyler Perry do? He said fuck it, he started working in retail and in his free time he began attending communist meetings where they made jokes about killing their landlords and sending people to the Gulag.

No, that’s what losers do. Perry rewrote the play a number of times. It continued getting poor reviews. Then at age 28, it finally started to get popular. That’s when he broke through, allowing him to make movies that would appeal to a much wider audience. Now he’s fifty years old and he lives in an enormous mansion. Good for him. He’s more competent, more talented and more intelligent than the average individual. He delivered a much greater contribution to society, than the average individual. As a consequence, he reaps a bigger reward than the average individual.

How far would Perry have gotten, if he had listened to mediocre academics who preach that your entire life is determined by your circumstances of birth? Not very far. He might have been blocking traffic somewhere right now and seeking out fights with the police. Instead he embraced his Christian religious heritage and worked on figuring out how to deliver a constructive contribution to society on an individual basis.

What’s the biggest most cruel communist sin of all? Harvesting the organs of Falun Gong practitioners? Raping women? Killing the Romanovs? Demolishing the churches and temples? The biggest communist sin of all is that they crush the human spirit. They create a society where you are altogether unable to make use of your human potential. The only option left in a communist society to rise out above the average man’s mediocrity, is to join the communist party. Here your status is determined by how long you have been a member of the party.

Why does late-stage communism always end up in epidemics of suicide, drug abuse and alcoholism? The most competent people either flee, kill themselves or get killed early on after a revolution. This then leaves the average people, who see no real way to make something out of their lives. A human being needs meaningful goals to strive for, opportunities for self-development. Communist societies take all of that away. As a result, only the dumbest and most pitiable of human specimens end up thriving under communist regimes, just as factory farm animals are a mere shadow of what their wild ancestors were.

You might be asking yourself now: “Isn’t there some third position beyond capitalism and communism? Something like a technocracy, isn’t that a proper alternative?” The answer to that question is a resounding no. Technocracy is popular among modern elites. The problem with a technocracy however, is that human beings still seek power. As a consequence, the technocrats will be in competition with each other, arguing that their particular discipline is more important than every other discipline. They will predict enormous catastrophes, that can only be prevented by giving their particular academic discipline more power.

Here’s how that works in practice. When a new virus emerges, scientific studies will be done that will suggest this virus will kill us all, unless epidemiologists get to micro-manage our lives. As a consequence, the epidemiologists will now have a lot of power. How does this virus spread? Nobody knows for sure, but with a bribe or two, the epidemiologists might have an answer. If the festival industry sends a million dollar to a Swiss bank account, it will turn out that the virus doesn’t spread in the open air. If the airline industry sends a million dollar to a Swiss bank account, it will turn out that the virus doesn’t spread in properly ventilated rooms. If the money now stops flowing into Swiss bank accounts, then it will turn out a second wave is imminent!

The technocrats might genuinely be capable of having all the answers to every human problem in existence. The problem is: They’re still normal human beings, who have a normal human desire for power and fame. Tyler Perry has power and fame, because people decided to give him power and fame by watching his movies. Fauci? Fauci was never elected. Nobody purchased his products. His power is completely beyond human control. The same goes for Ferguson in the UK. Ferguson performed studies that caused our governments to lockdown our societies, but his studies were full of flaws.

Again, this is technocracy in practice: Ferguson takes a bullet for the team, he performs flawed scientific studies that hand enormous power to epidemiologists. Ferguson himself might now be discredited, but the damage was already done, epidemiologists now decide everything in our lives. Why did Ferguson do this? He might be stupid and incompetent, which would be evidence on its own against technocracy. It’s also possible that he has a million dollar in a Swiss bank account somewhere now.

What we should have is a system where you’re free to make your own choices in life, without excessive interference from people in positions of power. It’s inevitable that other people will always have some degree of power over us, but that power needs to be transparent, accountable and subject to constraints enshrined in laws. If we believe that Jeff Bezos has too much power, we have a solution: We can stop shopping at Amazon and dump his stock. If Fauci has too much power? You’re shit out of luck. If Mao has too much power? You will be eating locusts.

I’m not an anarcho-capitalist. You’ll find few anarcho-capitalists in the real world outside of obscure subreddits. I believe in some sort of basic minimal government to protect civil liberties and ensure a social safety net. However, the reason we live happy lives in prosperity, is because we live in a capitalist society. Many of the problems we face, are actually a consequence of authoritarian distortion of the free market.

Why are houses in big cities so expensive right now? Chinese millionaires buy up our houses, to launder money and evade Chinese sanctions on capital. Governments make it easy through laws for you to get huge mortgages, but then they don’t make it easy for us to build new houses. In addition, we have ridiculous zoning laws, that tend to favor government cronies. The government officials know in advance when farmland will be rezoned, so rest assured that they receive their share of the money. A lot of farmers refuse to sell their land in parts of Europe, despite farming near huge cities. Why don’t they sell their land? The government pays for their entire lifestyle, through subsidies!

Similarly, why is college so expensive? To start with, college students can borrow money from the government through subsidized loans. The government could simply give every eighteen year old a lump sum of cash and tell them to do whatever they want with it, but they don’t do that. They decide that you need to use it for college, if you want to borrow money. Second, there’s no real competition among colleges. Universities are centuries old institutions that face very little competition. Why don’t they face real competition? Well, the government jobs people hope to get tend to require university degrees. If it was possible to get a comfortable government job by simply following some online training courses or doing a skill test, do you think young people would pay for expensive college degrees?

Americans got one thing right: Government is a kind of terrible monster, a dragon in a cave that has to be forever distrusted. You can’t kill the dragon: A new more ferocious dragon will simply show up to occupy the cave. Rather, you have to be forever vigilant. The dragon needs to know that when he gets arrogant, escapes from the cave and starts incinerating villagers, those villagers won’t go down without a fight. The best relationship you can hope for between citizens and government, is the best relationship dragons and villagers can hope for: An uneasy peace, where both parties know that nobody benefits from conflict.