Every time you pay a profit margin, or pay taxes that cover bond interest, or pay inflated asset prices (real estate), you put money into the system. Every time your stocks, bonds, and real estate holdings go up, you receive money from the system. How good of a deal this is depends on how rich you are and how good you are at picking assets. And your luck at timing, of course.
The Fundamental Theorem of Capitalism -- on expectation, rich people get paid for being rich in proportion to how rich they are and how good they are at capital allocation -- is both great and terrible.
It's great in that it gets you skin-in-the-game capital allocation decisions. Everyone gains 50 IQ points when they have skin in the game and capitalism is how you leverage that to run a society. It's terrible in that it does tend to establish, reinforce, and perpetuate a class hierarchy where the people on the bottom must constantly pay to exist while the people on top constantly get paid to exist. It's great in that it maximizes the money available to accountably chase exciting new prospects. It's terrible in that it creates extraordinary incentives to enshrine old prospects whose time should have passed long ago. It's great in that it can democratize wealth and power away from a King or Party, but it's terrible in that it tends to concentrate wealth and power around the Wealthy. It's great in that damage of capital misallocation can generally be contained to the balance sheets of those most capable of bearing it, but it's terrible in that the wealthy and powerful have the means, motive, and opportunity to bend the entire system towards bailouts, monopolies, and asset-pumping.
It sucks, except for everything else we have tried. Shrug.
The Fundamental Theorem of Capitalism -- on expectation, rich people get paid for being rich in proportion to how rich they are and how good they are at capital allocation -- is both great and terrible.
It's great in that it gets you skin-in-the-game capital allocation decisions. Everyone gains 50 IQ points when they have skin in the game and capitalism is how you leverage that to run a society. It's terrible in that it does tend to establish, reinforce, and perpetuate a class hierarchy where the people on the bottom must constantly pay to exist while the people on top constantly get paid to exist. It's great in that it maximizes the money available to accountably chase exciting new prospects. It's terrible in that it creates extraordinary incentives to enshrine old prospects whose time should have passed long ago. It's great in that it can democratize wealth and power away from a King or Party, but it's terrible in that it tends to concentrate wealth and power around the Wealthy. It's great in that damage of capital misallocation can generally be contained to the balance sheets of those most capable of bearing it, but it's terrible in that the wealthy and powerful have the means, motive, and opportunity to bend the entire system towards bailouts, monopolies, and asset-pumping.
It sucks, except for everything else we have tried. Shrug.