Lots of people think billionaires are selfish for not sharing their wealth with the others. But it is thanks to billionaires that civilization has had some of its most important innovations from utensils, cars, and even space travel.
Here’s a transcript of our conversation:
Brittany: Hi, Emma.
Emma: Hi, Brittany.
Brittany: So people love to hate rich people, which we’ve talked about a lot in the show. That’s, that’s a big, you know, theme when we talk about socialism, communism, people just love to hate the wealthy, and part of the reason for this hate is that people believe the rich have too much money that they need to be forced, you know, through taxes to give some of their money to the less fortunate. And, you know, that’s rooted in some good intentions, right? People want to take care of people, but it doesn’t always go that way. So, Senator Elizabeth Warren, she’s been a big proponent of this, like billionaire taxes taxing the wealthy. So is Senator Sanders. And people seem to think that basically, they have the right to everyone else’s money. And Warren, even chassis people, she’s like, how dare you buy yachts, which are expensive boats and, and jewelry when, you know, when they’re in, well, women and children and families going without food. But there’s a big problem with this, and the first one is telling people how they should spend their own money is not okay. That’s not how we foster an individualist society. And second, when billionaires and millionaires are allowed to spend their money, how they want, sometimes they use it to actually make our lives better. And, we’ve talked about that with entrepreneurship, you know, and recently Elon Musk, who we love, Jeff Bezos and Richard Branson, they’ve all used their money, and these are all rich men. I’ll get into what they do in a minute. They’ve been using their own money to race, to make space tourism a thing. And space tourism is like, you know, you and your family take a, take a plane ride to Hawaii or something. Well, imagine taking a rocket ship into space and back. I mean, this is something that has never been done before. It’s, crazy to think about it. It makes me think of like futuristic cartoons like the Jetsons, which
Emma: Yes. The Jetsons.
Brittany: Just probably don’t even know what that is. Oh, I’m surprised they haven’t rebooted it into a terrible new show yet.
Emma: They’ll, now that you said that.
Brittany: Give it time. So last summer, Elon Musk meet history when his SpaceX rocket completed its first successful mission. And that was so fun to watch, especially since the whole world was dealing with covid and protests. So that was the first space expedition to be mostly private. And I wanna make sure that that is very clear because NASA did play a role. The government did play a role, but it was the first one that was in any way, shape, or form, private. So then we have, Jeff Bezos, who is the c e and founder of Amazon, and Richard Branson, who’s the founder of Virgin Airlines. And honestly, he’s a serial entrepreneur, listeners might remember we did an episode on him before. So we’ll link that and you can go look at all the things he started. He’s amazing. But they decided to start their own space missions and Branson’s was called Virgin Galactic Holdings, which very original. All his stuff has, Virgin and it’s like, all right, think of a new name. And then Bezos was Blue Origin, LLC Rocket, and they both launched within two weeks of each other. And obviously, a lot of us were very excited about this. Right. Ah, because this is two men proving, or three men proving that they can all go to space, this means that we could go to space sooner than we ever imagined it happening. now it wouldn’t be cheap. I believe they’ve estimated that the tickets are gonna be like 250,000 a ticket at first. Right. But we don’t know. It’ll happen later. Yeah. But not everyone was as excited as people like you and I are Emma. So do you wanna tell us a little bit about people’s reactions to this Billionaire space race, as I call It?
Emma: Oh, yes. Yeah. Twitter was not, happy about this. Lots of, politicians and people weighing in and saying, this is super unfair. a former employee of Bill Clinton during the Clinton presidency in the nineties, his name was secretary Robert Reich. Gosh, that’s a mouthful. He tweeted that no one needs Bezos to launch rockets into outer space. We need to pay, we need him to pay his fair share of taxes so people can thrive here on earth. And then Bernie Sanders added, Of course, he retweeted it and added his own 2 cents. Of course, he’s gonna be in on this one. He said, here on earth, the richest country on the planet, half our people live paycheck to paycheck. People are struggling to feed themselves, struggling to see a doctor, but hey, the richest guys in the world are often in outer space. Yes. It’s time to tax the billionaires. So, that’s another, you know, thing that got thrown in there. Bernie Sanders saying that billionaires shouldn’t even exist.
Brittany: Surprise, surprise.
Emma: That’s a surprise, surprise. And people seem to think that if people aren’t forced to spend their money on helping, the less fortunate that they shouldn’t be allowed to spend it on other stuff, or just that they won’t even care to donate or to help other people, which is completely false. So to these people, they don’t see the possibility of billionaires taking these risks to pioneer something great like space travel. And it reminds me of Bastiat who was a French economist. He’s the one who wrote the law, which if you’ve ever read the Tuttle Twins Learn about the Law, that’s what that’s based on his book. He talked about false philanthropy. And this is basically the idea that people like to take other people’s money through taxation, to put it into government programs, and then brag about how virtuous they are. And Bastiat said that the state is that great fiction by which everyone tries to live at the expense of everyone else. And basically, he’s saying, you know, the state, which is the government forces people to spend their money in maybe ways that they wouldn’t have normally, just so that everyone can feel good about themselves and we can pat ourselves on the back and say, we’re solving all these problems even if we’re not really solving them. Unfortunately, when you look at the government and how it works, most of the time overwhelmingly, these things do not work, even though everyone likes to use them to make us feel all good about what we’re accomplishing.
Brittany: Exactly. And you know, that would be bad enough on its own. But there is another problem with this hatred of the wealthy. And Emma, when you use a fork each night at dinner, I hope you use a fork. It depends on what you’re eating. do you think of yourself as being, you know, a privileged upper class, you know, person bathing in the lap of luxury? As they say?
Emma: Not unless I’m eating pizza. If I ate pizza with a fork, that’d be pretty weird.
Brittany: Well, you know, I don’t believe in the death penalty, but maybe, yeah. I’m kidding. So, there was once a time when using a fork was viewed as very lavish and unnecessary as you know, just as private space travel is looked at today. And economist, Ludwig von Mises, who we’ve talked about in episodes before, he wrote about this in his book Liberalism. And he talks about a Venetian woman who married a very rich man during the Middle Ages. And she used what was an early version of the fork. And the people were so enraged by this, they called her lavish and godless. And then Wow, she right. And then she later died of an illness and people were cheering because they believed it was her punishment for being what kids call today bougie. Which is like, oh yeah, Bourgeoisie. Which means like fancy. Basically.
Emma: It was, that reminds me of, real quick, the Little Mermaid, how she’s like combing her hair with a fork.
Brittany: With the fork dinglehopper.
Emma: She’s like, it’s a dinglehopper.
Brittany: Yes. That’s, probably.
Emma: What they called it back then. That is.
Brittany: So, as Mises points out, and I love this quote, the luxury of today is the necessity of tomorrow. Now, people may not think that forks, you know, we’re only sorry. People may have thought that forks were only for the mega-rich back then, but today everybody uses a fork, you know, maybe not, maybe not a homeless person. But even then, I still think I see them using silverware sometimes.
Emma: Yeah. It’s the same thing with indoor plumbing. It used to be only the wealthiest of the wealthy who had access to indoor bathrooms. And now everyone in the developed world has access. It’s not like some fancy feature. If you’re renting a house or buying a house, they say, oh, by the way, there’s indoor plumbing. They don’t list that as a feature because it’s become so common. But that used to be only for the super, super wealthy.
Brittany: Exactly. And you know, the luxury items start with the rich, but they eventually trickle down to regular people like you and I, cuz I don’t think you and I are billionaires, maybe someday. You know, when the first car came out, people couldn’t understand why anyone would need it. Right. It was a toy for the rich. There was no necessity for it. Then Henry Ford comes along and we’ve done an episode on him as well. And he creates, you know, this production line, he found a way, it’s called Economies of Scale. I’ll link to that episode as well. He found a way for the common person to be able to afford cars by being able to make more of them with cheaper supplies, basically. So now people rely on their cars, you know, for their daily life. They drive to school, they drive to work, and they go to their doctor’s appointments. None of this would’ve been possible unless the wealthy had pioneered at first.
Emma: that reminds me of another Mises quote where he said, every advance first comes into being as the luxury of a few rich people, only to become after time the indispensable necessity taken for granted by everyone. And boy, that sounds exactly like what we were just saying with, with indoor plumbing and with toilets, it’s like, that used to be such an unthinkable luxury. And now you cannot imagine not having a toilet in your house.
Oh, my goodness no.
Which you do. I wouldn’t. Yeah. You don’t even wanna, to think about that. So it’s, just, you know, the more things progress and the more things move on, the more luxurious our lives become. So we might not be able to see how space travel and getting in a rocket and going up into the atmosphere will become a future necessity for us right now. But no one back in the day could understand how a fork or a car, or a toilet would, would be so important to our daily lives. And Mises also said that luxury consumption provides industry the stimulus to discover and introduce new things to it. We owe the progressive innovations by which the standard of living, of all strata of the population, had been gradually raised. And, but just the meaning of strata of the population basically means like people from all different economic statuses and all different walks of life.
Brittany: Yeah. And just to expand on that a little more, so basically what he is saying is all the things that have raised our standard of living, right? Everybody having indoor plumbing now, everybody being able to have a car or most people, there’s obviously some people who can’t, but people using forks, you know, when they eat, all of this has become possible because rich people were able to use this first because they took the financial risk to use it. You know, iPods used to be that way. I remember there was a kid in my senior year, which was many, moons ago, who had an iPod and we were just like, oh, what a rich kid. Like nobody just had an iPod. Right. I had like a Costco brand Yeah. That could fit like 10 songs on it. And I thought that was cool. So yeah. So I mean, we are very lucky. And I think it’s so funny because we see all these people constantly berating or, you know, chastising these rich people. And you have to think like that’s how you get everything you have. And you know, maybe like you said, Emma, maybe we don’t know today how space travel’s gonna benefit us tomorrow. I don’t like to imagine, you know, a future where we can’t live on earth anymore. I know that’s Elon Musk’s big thing that we need to look for other planets, but I don’t know what’s gonna happen. You know, maybe we will.
Emma: Yeah. And I mean, like you said, the more time goes on, the more luxury items become just a thing that most people have. And that’s not to say that everybody gets those things, but it becomes a lot more accessible and a lot more affordable. Like, a color TV back when those first came out cost a fortune compared to what they cost now. it’s, or even like you said, computers, Or Yeah, computers or an iPod. When I was in high school, that was kind of when iPhones were first starting to come onto the scene. And like you said, the only kids who had iPhones were like the rich kids who, you know, they got whatever they wanted or Oh wow. Did you see so and so, and now, you know, I see most teenagers have iPhones.
Brittany: It’s crazy to me.
Emma: It’s crazy. It’s, kind of weird to me. But, you know, as time goes on, those things become more accessible for everybody. And you know, as long as the government is not coming in and getting involved and ruining it. It tends to naturally progress that way because technology becomes more, accessible and you can get these things out to more people and it costs less. And there’s innovation and there’s new things coming out that are more expensive. So the old things cost a little less. So it’s not something to be scared of when, you know, the billionaires are going into space. And you talked about the economies of scale and that sort of thing. They’re creating a lot of jobs for people. It takes a lot of people to get a plane or get whatever it is, a rocket into space with Jeff Bezos sitting on it. Yes. So he is actually stimulating the economy and creating a lot more jobs than some, you know, a giant tax that would’ve taken away all that money would have. It’s, that’s how the world works. And you know, that’s what this podcast is called.
Brittany: Hey, that’s the name of this podcast is.
Emma: Yep, there we go. Shouting out the name of the podcast. And the more we allow for those things to happen, the more opportunity there will be and also the greater access to these new technologies and luxuries we’re going to have.
Brittany: Yeah. And I think honestly, you know, we should be thanking people. Like I almost said Bill Gates, that’s not who I meant to say, Jeff Bezos. You know, we shouldn’t be angry at these billionaires for doing things like traveling to space. We should pat them on the back and say thank you and realize that so many of these innovations we have are because of them.
Emma: Amen. All right. Well, thanks for listening guys. We’re gonna wrap it up here. be sure to check out the show notes. We will put in some info on how these things happen and some more info on Mises and Bastiat cuz they’re great guys to read into. But thanks for listening and we will talk to you all again soon.
Brittany: Talk to you later.