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73 <h1><a href="index.html">Another man's poison</a></h1> <h1><a href="index.html">Another man's poison</a></h1>
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77 <li>This post was meaningfully revised at 2024-09-13 @ 12:15 AM EDT. The previous revision is <a href="index-oldcommit-66fbfad790d809e24266ef13862ba79b7a6654fd.html">here</a>. (See <a href="index.html#update-history">update history</a>.)</li>
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83 <p>I don't think a sovereign wealth fund is a thing one can intelligently be "for" or "against", generically. That's like being asked to take a position on chlorine. I'm against chlorine if the proposal is I should breathe it. I'm for chlorine as part of a water purification process. You really do need to be more specific. There are versions of social wealth funds that I'd oppose, others about which I'd be enthusiastic. I did <a href="https://t.co/GIs4TKGnV8">a talk</a> on the subject several years ago, if you have an hour to kill.</p> <p>I don't think a sovereign wealth fund is a thing one can intelligently be "for" or "against", generically. That's like being asked to take a position on chlorine. I'm against chlorine if the proposal is I should breathe it. I'm for chlorine as part of a water purification process. You really do need to be more specific. There are versions of social wealth funds that I'd oppose, others about which I'd be enthusiastic. I did <a href="https://t.co/GIs4TKGnV8">a talk</a> on the subject several years ago, if you have an hour to kill.</p>
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100 <p>If you think it is a good thing to let the "miracle of compound growth" cumulate endlessly in wealthy private hands — creating permanent, ever-expanding gaps between the rich and the less rich, entrenching a system of wealth-stratified caste — then yes, you should oppose the state <span style="white-space: nowrap">"[r]edistribut[ing]</span> equity returns from the citizenry and toward itself".</p> <p>If you think it is a good thing to let the "miracle of compound growth" cumulate endlessly in wealthy private hands — creating permanent, ever-expanding gaps between the rich and the less rich, entrenching a system of wealth-stratified caste — then yes, you should oppose the state <span style="white-space: nowrap">"[r]edistribut[ing]</span> equity returns from the citizenry and toward itself".</p>
101 <p>If, however, you think letting compound growth continually expand the advantage of the already wealthy is not great, if you dislike living in a society whose economic, political, and cultural life is increasingly <a href="https://zirk.us/@interfluidity/113117432692163672">vandalized and held for ransom by mad billionaires</a>, then perhaps it would desirable to divert equity returns away from "the citizenry" and towards purposes whose benefits will be much more widely shared.</p> <p>If, however, you think letting compound growth continually expand the advantage of the already wealthy is not great, if you dislike living in a society whose economic, political, and cultural life is increasingly <a href="https://zirk.us/@interfluidity/113117432692163672">vandalized and held for ransom by mad billionaires</a>, then perhaps it would desirable to divert equity returns away from "the citizenry" and towards purposes whose benefits will be much more widely shared.</p>
102 <p>The state, of course, is corrupt as fuck. But in its worst corruption, nothing that the state does at scale results in benefits as lopsidedly plutocratic as the dollar distribution of investment returns when they compound in private hands.</p> <p>The state, of course, is corrupt as fuck. But in its worst corruption, nothing that the state does at scale results in benefits as lopsidedly plutocratic as the dollar distribution of investment returns when they compound in private hands.</p>
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105 <p><strong>Update 2024-09-13:</strong> For the record, I would not support a social wealth fund that was financed by the state issuing debt or money to buy up stock in ordinary times, despite the (fragile unless state-supported) claim that "the expected rate of return of the US stock market is <a href="https://archive.is/o/1kax3/https://en.wikipedia.org/wiki/Equity_premium_puzzle">higher</a> than the US government’s borrowing rate". That would create windfall profits for the bloated and parasitic finance sector, and it would give back some of its distributional benefits by bidding up the price of equities which, for the forseeable future, would remain primarily in the hands of the privately rich.</p>
106 <p>I would support an equity-holding social wealth fund financed from progressive new taxation. Taxes that kick in only at high income brackets divert flows that would otherwise have been devoted almost entirely to purchasing portfolio assets. A social wealth fund financed with such flows thus represents a rotation of demand for these assets from the private to the public sector, rather than a new bid that would accelerate increases in the price or rate of issuance of financial assets.</p>
107 <p>Under rare circumstances, I might support debt-financed purchase of securities into an SWF, at collapsed prices and excellent forward-looking valuations, as a component of macrostability interventions. There are always devils in details, but here there are also devils in suits, Wall-Streeters who'd love to use the Federal government as a gigantic source of dumb money, to earn commisions from, and to offload crap to. Overall I treat suggestions to use new debt issuance rather than taxation of private-sector financial asset purchasers very cautiously.</p>
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129 <h3 class="update-history-title"><a id="major-updates" href=""></a>Major revisions:</h3>
130 <ul>
131 <li><span class="update-timestamp"><i>2024-09-13 @ 12:15 AM EDT</i></span> — Add bold update, clarifying that I do not support debt-financed SWF purchases in ordinary times. (<a href="index-diff-66fbfad790d809e24266ef13862ba79b7a6654fd-to-current.html">diff</a>)</li>
132 <li><span class="update-timestamp"><i> <a href="index-oldcommit-66fbfad790d809e24266ef13862ba79b7a6654fd.html">2024-09-12 @ 02:30 AM EDT</a></i></span> — Initial publication.</li>
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135 Timestamps represent "major", substantative revisions. There may have been subsequent typo fixes and language reworkings within a major revision, after the time displayed. For a more complete and fine-grained update history, you can view the <a href="https://github.com/swaldman/drafts.interfluidity.com/commits/main/">git repository commit history</a>.
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