Money and wealth

Let's take a concrete example. Suppose that class warfare rhetoric utterly wins, and as its first scalp The People decide that the filthy rich Bill Gates needs to have 100% of his wealth confiscated for the good of The People. For simplicity, let's assume that 100% of his wealth is in Microsoft stock. So, The People United take all of his stuff. What do they get? Well, they don't several billion dollars. They get "several billion dollar's worth" of Microsoft stock. Well... that didn't accomplish much. We can't clothe or feed the people Microsoft stock. We need to liquidate it into money to get anywhere, and The People aren't too happy about the filthy capitalist stench of suddenly owning that much stock anyhow, so they immediately sell it all. Of course, dumping all that stock on the market at once immediately sends the price plunging; depending on how foolish The People in terms of wanting to be rid of it immediately it could well plunge to nearly zero. The People destroyed billions of dollars of wealth to obtain probably hundreds of millions of dollars, and quite possibly destroyed Microsoft in the process, hardly a net gain. The stock was as valuable as it was partially because it was in Bill Gates' hands.

In practice, you can't just "claw" wealth from the wealthy and hand it to "the poor" and have the effect you're expecting. You can certainly destroy large amounts of wealth, and yes, the poor will come away with something, but it's far less efficient than the "it's all just money" model leads you to believe. You aren't taking "$100 dollars" away from the wealthy and giving "$100 dollars" to the poor; at scale, you're moving a $100 asset out of the hands of "the wealthy" and into the hands of "the poor", and that's not going to produce the results you were looking for. And again, let me emphasize, it does work to an extent, it just doesn't work as well as you might naively think.

Politics being what they are, people are going to assume that I'm a fan of this truth because I'm saying it. I'm not. It would actually be really cool if redistribution worked as easily as people thought it does! I mean, seriously, awesome. How wonderful it would be if equality could be engineered so trivially! And let me be clear, no sarcasm there. However, it is still true, and it is something we ignore at our own peril. Also, does that mean all our social engineering schemes are hopeless? Well, no, again regardless of whether I'm a fan of them or not, but it does mean that, again, it's harder than we'd like to produce the results we're looking for, and it's a lot easier to overestimate the benefit to the poor and underestimate the damage to the wealthy and the general societal wealth (and even if you don't really care about the wealthy, you ought to care about the general societal wealth) that such schemes can have.

Instead, read Warren Buffett's letters to shareholders and take it from there.

Health is extremely valuable, but fickle. You can lose it for no good reason and through no fault of your own. One just has to do the best one can. As for education and intelligence, I'm not sure I agree. Those resources are the wealth of the world. It's intelligence and creativity and just raw fucking grit that keep the fucking place from imploding. But many intelligent people end up as excess capacity, unused and maltreated. You need connections and credibility to unlock them. Education used to deliver that, out of the box; that's no longer true.

Ultimately, the best security is to be able to reliably get paid, well, for doing something that doesn't harm you to do it. That shouldn't be hard for programmers to arrange, but the age discrimination in our industry is disgusting, so I wouldn't count on being able to get quality jobs at 70, even with full capability and intelligence intact. When you get to that point where you the narcissism of the career world and its perverse (chickenhawking, see here: http://michaelochurch.wordpress.com/2013/12/14/vc-istan-6-th...) age obssssions go against you, it helps to have a wad of cash.

[I]t seems to me that the idea that the best preparation for retirement is to save up a load of money is a horribly noxious lie that has likely led to the bitter disappointment of hundreds of millions if not billions of people.

Well, it shouldn't be "money". It should be a portfolio of bonds, stocks, and commodities. (Real estate shouldn't be trusted; there are too many ways for misbehaving neighbors or politicians to fuck it up.) However, the idea that one can keep living off one's talents at the age of 70 is a fantasy. I wish it were that way; ageism is fucked-up and if it affects me in 30 years I am taking a Second Amendment Solution type approach to finally drop a pipe on that shit. Many people have their talents and ability intact at and beyond that age, but I would not want to be applying for programming or business jobs at that age.

Also, if the rich are sitting on wealth which loses values as soon as it is spent, perhaps quite a lot of the "wealth" was never really there in the first place? (although there we are perhaps getting into philosophy)

edit: Just thinking further on it... I tend to approach things by thinking of pathological cases. In the case of a deflationary or flat currency, I think currency hoarding is a rational response economically even though it's unproductive and leads to high concentrations of wealth. On the other end, inflation that's too high will lead to an economy that is very illiquid and prone to solvency crises. There is a high incentive to minimize cash on hand and maximize debt. In my lifetime I've really come around on the value of a managed and low inflation to having a productive society.