Once oligarchy takes over, the possibilities for economic democracy and/or free markets are dead
After the takeover, if collectively we can't cost the oligarchic rich any significant amount of money (by way of enormous mass protests that are sufficiently large and frequent), why should they let us have any of the surplus of society beyond the bare minimum we need to remain useful to them? As the savage cutback in food stamps in the US recently showed us, the survival of all of us is not a priority for the oligarchy. Yes, highly talented professionals will continue to be paid well, to ensure their co-optation, and loyalty (to the oligarchy), but by far the largest part of America's great middle class will continue to slip into powerlessness and poverty. Why, exactly, will that hapapen? Because once the oligarchy takes power (as it already has in the USA), the distribution of goods and money in the economy becomes ever more unrelated to any idea of merit or deservedness. Example: Banksters, being some of the best-compensated people in the world, have recently destroyed far more wealth in the US than they've earned, and yet they are still paid billions of dollars in bonuses every year. They receive the money they do because they've been allowed to take power over our government. What power, for example? The power to make the government make them whole after they recklessly gambled and lost spectacularly. And then they acquired the power to make the government make them richer still.
How can this be, you ask. The answer is that they control a bundle of invaluable rights that are granted by the government -- a government which they now indirectly own and control. I refer of course to their right to borrow at the prime rate (very low), the right to huge leverage (i.e. "borrowing' huge sums of other people's money to use for investment and very high-stakes gambling, e.g. derivatives); and the right to lend billions (and charge staggering amounts of interest). These then are the methods by which ever more, if not most, American money is actually "earned" these days. In reality these folks -- who "earn' billions in the stock market and by way of bonds, various scams, and derivatives -- are like a colony of parasites feeding on an ever weakening host.
Parasitism is why they're rich -- not because they produce net value. In fact they destroy net value. They're rich because they have the power to: a) make the government do what they want it to do, b) make it not prosecute them when they break the laws, and c) change the laws so they can take even more money from the system (of which they are by now the clear masters).
The distribution of income and wealth in an economy is therefore based, virtually entirely, on political power. With such an arrangement, some groups can (if they play their cards right over a long-enough period of time) receive goods and money because they find ways to cleverly force others to release it to them, often without many of these others even understanding the details of the arrangements whereby they are being systematically robbed.
The libertarian fantasy of free markets and free choice is exactly that, a fantasy. Free markets don't exist today, they have rarely existed in the past. And to the extent they have existed, they have owed their existence entirely to a government . . which must take steps to make sure that said free markets continue to exist! However, as soon as any group or class gains enough power to take control of the government, such a group, if not stopped by the larger body politic, will do precisely that (i.e. take control), and free markets will then cease to exist. These groups make the government give them special rights, whether those are rights to create money out of nothing, borrow low and lend high, "borrow' other people's savings with which to gamble on derivatives, or thrive on the basis of so-called intellectual property rights, which let them continue to profit obscenely from ideas and inventions created many years ago, often with thanks to government funded research. Link
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