Historically that's never been a requirement for people to make children. Poor people have tended to be pretty prolific.
> hoarding more and more of the wealth
In a free market society, wealth is created, it is not "concentrated".
I’m probably not old enough yet to share my opinion on societal change across generations, I was a kid until recently.
(A relative worked out our family tree. Lots of families with 8 kids in them.)
In theory there should be tons of childless people and some balancing number of 10+ kid families. Then the average numbers work out, everyone is from a large family, but the means of production are centralized and efficient.
That is incorrect
In a free market wealth has a definite tendency to clump together, to concentrate.
A moment's thought will make clear why.
Take a moment and elaborate, please.
But another example, equity: If I am raising money for my startup, and I have no traack record (I'm poor in this context) and Sam is doing the same after Sam made a successful exit from their last startup, who would you invest in, all else equal, Sam or me? Sam if you are rational
Thus the rich have more access to equity than the poor
This is a pattern that repeats over and over in free markets
That's a theory from economists. Economists have a lot of theories.
And where did Musk's money come from? Who did he transfer it from?
Some wealth is just transferred, like rent or interest.
It would be nice if everybody had somewhere to live for free, unfortunately, most people have to pay rent or interest on a mortgage to those that came before them.
Both of those are an exchange, not a transfer. Taxation is a transfer.
We are arguing whether wealth flows to people who already have it, rather people who "create it". My augment is both.
At no point was wealth "transferred" to the artist.
McDonald's creates wealth by designing and building a system to deliver hamburgers. McDonald's then exchanges that wealth for cash from its customers.
BTW, who gives money to people who already have it? Not me. I doubt you do, either. I don't know anybody who does. The transactions are always exchanges - you are getting something in return.
Also, yes, transaction are exchanges. Nobody is arguing that. You pay rent and in exchange you may use the land (productively or not)
My argument is that people are forced to pay rent to people who didn't create anything, but because they hold a piece of paper that says they own it.
The argument is, did the person who owns the land "create" anything. My argument is no.
The person who bought it then manages it, maintains it, organizes it, advertises it, pays taxes on it, etc.
And there's nothing wrong with that.
If rentable places were not allowed to be sold, very very few would exist. This is because people specialize - some build rentals, some manage them. Both are productive enterprises.
You can become a landlord if you want. Borrow the money, buy a rental, and rent it out. But you'll find out it's a lousy business.
Although developments of the land do improve the value, and thus land ownership has significant utility economically by incentivizing this, there isn't really an economic justification for the owner receiving value for the land itself- why should someone have exclusive rights to a piece of land they didn't create? They bought it, sure, but why did the previous owner have perpetual exclusive rights?
I'd advocate for a small property tax as a replacement for other taxes, because the component that does tax "land value" won't cause economic harm, but all of income tax causes deadweight loss. (Note, Land Value Tax is great in theory, but impossible to define practically- property tax good enough, much harder to game!)
Note that in practice, the biggest abuser of land hoarding is local governments with extremely restrictive zoning that stops productive development of the land- from an economic perspective they own the land, and have sold (or in reality, seized) some but not all of the rights from the 'landowner'. Although this can have advantages to help with coordination problems, in practice it's caused enormous economic damage to many cities by preventing development. At its heart, it's a problem with land hoarding.
The land was not created, it existed long before humans. It was taken by force and the strong began extracting rent from the weak.
"Free market" economics does not capture this destruction of value. It only cares that some value was extracted out of the trees in the form of a new home sale, etc.
I'm sure all those slaves brought over to the New World created tremendous wealth, but I'm also pretty sure they would have rather preferred to stay in Africa.
Madagascar is the obvious example here highlighting both issues, but it's certainly not unique.
Oh, but it does. It turns out that people who own land take care of it, so that it keeps producing. People who own timber land tend to manage it so it continues to be productive.
Destruction happens with government owned land.
For a related example, why are we not running out of cattle, hogs, and chickens, despite slaughtering them on an epic scale? And why are we running out of fish?
Musk's wealth is mostly notional. Most of it is based on people's guesses about the future of electric cars and so forth. It's not clear yet whether that is creation or transfer or what.
When wealth gets "moved around", that is not the market doing that. It's force. Like social security payments.
That's why I prefaced it with "free market".
Maybe Musk will turn out to have created 10x more wealth than he has now. Maybe he will screw up and go broke.
Maybe both.
Where did Bernie Madoff's wealth come from before he got caught? Where did Sam Bankman-Fried's wealth come from? We can't just point to a unit of wealth and automatically applaud its legal owner as having created it. Maybe they created it. Maybe they stole it. Maybe we all wigged out and handed it to them voluntarily. It's case by case.
We all read Ayn Rand back in the day. And I can groove with that at a certain dosage, but you're taking way too much.
Note that I remarked that free markets did not include fraud.
This 'free market' is a bit like clean matter-antimatter power stations. They sound like a great idea. We could build them if we knew how.
There is no such thing as a perfect free market. However, history shows that the closer we are to them, the more prosperous the country is.
BTW, when the Soviet Union was formed, the communists did away with the police because there would no longer be a need for them. Oops.
No body (?) is contending that in a free market wealth is not created.
The contention is that when wealth is created it tends to head to other wealth.
When a bank lends capital and has a choice of lending to, say, Elon Musk or me, I think the bank will make that rational choice and lend to Elon. Thus once you have some wealth attracting more wealth is less difficult than from before you had wealth
This pattern is repeated over a d over.
See Captain Grimes' boot theory of economics: https://en.wikipedia.org/wiki/Boots_theory
This is clear when one does accounting. Accounting is based on the idea that (Equity = Assets - Liabilities). When one takes out a loan, the assets go up by the amount of the loan, and the liabilities also go up by the amount of the loan. The Equity stays the same. That this balances out is literally called "balancing the books".
BTW, banks are happy to lend out money to people that have a track record of paying it back. This includes poor people. Poor people have credit cards, too, which is how they borrow money.
Let me explain.
Access to capital is key. If you have it you can do business, if you do not you cannot, in general terms
There is more than one way to access capital, debt is very common.
And to get rich you have to do business
So if you are already rich getting more money, in a free market, is easier than getting started, in a free market
That is the point, and one small example,e. This pattern repeates o er and over. Once you have money getting more money is much easier than getting the first money
So in free markets the wealth divides tend to increase.
This is very elementary, stage II economics
A Ferrari costs far, far more to maintain than a Ford, and doesn't last as long. I drove my used Ford Bronco II for 32 years before giving it to a scrap yard. Best bang for the buck car ever.
Expensive shirts wear out just as fast as cheap shirts. They just look nicer (and are often less comfortable).
P.S. I still regularly wear the combat boots my dad bought me 50 years ago. The boot black on them has long since disappeared, but they still keep my feet dry and warm.
That is the exact opposite of my (and Cpt. Vines) experience
No
> Is it infinite?
Yes
> Are there any limits to its creation?
Government trying to crush it.
> Is there any inherent value to it without being able to "transfer"?
The only value it has is what someone else is freely willing to pay for it. There is no such thing as "inherent" value.
The free market hasn't figured out how to create more land. Especially arable land.