The Capitalist Conundrum: Carnegie and Rand's Views on Wealth

Our recent podcast episode embarks on an intellectual journey, unraveling the wealth philosophies of two influential figures: Andrew Carnegie and Ayn Rand. Their radical ideas on wealth and money have significantly shaped societal expectations, stirring debates on philanthropy, capitalism, and the responsibilities of the super-rich.

Andrew Carnegie's 1889 essay 'The Gospel of Wealth' is a cornerstone in philanthropy, highlighting his belief in the moral obligation of the super-rich to use their wealth for societal good. Carnegie argues that the accumulation of wealth by those able to produce it is not evil but good, leading to the progress of the race. However, this notion challenges the argument that life is better for everyone due to the industrial revolution's increased wealth.

Contrastingly, Ayn Rand's Objectivism, as showcased in Francisco Denconia's 'Money Speech' from her novel 'Atlas Shrugged', fiercely defends the concept of individualism and the importance of money. Rand's philosophy stresses that individualism should be motivated by what is in one's best long-term interests and values, even if it implies selfishness.

As we delve into their ideologies, we navigate the murky waters between the individual and collective good, their relationship with wealth distribution, and philanthropy. We examine both Carnegie's 'The Gospel of Wealth' and Ayn Rand's Objectivism, exploring their perspectives on the responsibilities of the wealthy in managing their wealth for societal benefit.

A compelling part of our discussion revolves around the argument of capitalism. Carnegie, in 'The Gospel of Wealth', defends capitalism, stating that the accumulation of wealth by those capable of producing it has led to the progress of humanity. We dissect this argument, considering the role of the wealthy as patrons of the arts and the moral basis of money and its impact on our perception of wealthy individuals and their behavior.

On the other hand, Rand's Objectivism views individualism as a self-motivated force, emphasizing long-term interests and values. This perspective significantly differs from Carnegie's views, challenging the value of an individual's drive and willingness to create something for others.

In conclusion, the debate around wealth distribution and philanthropy is a complex one, intertwined with individualistic and societal perspectives. The views of Carnegie and Rand continue to be relevant, offering fresh insights into the dynamics of wealth and philanthropy. Whether you lean towards Carnegie's philanthropic ideals or Rand's staunch individualism, it's essential to recognize the influence their philosophies continue to wield in shaping societal views on wealth.

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Transcript:
​Jake Nuno: 0:00Today, on this episode of the Money Series Jake of All Trades show , kirk and I are gonna explore the viewpoints of two philosophers and philanthropists, andrew Carnegie and Ayn Rand, and we're gonna talk about what does money mean to them and what should money mean to you. That's coming up on the show next.
Kirk Barbera: 0:19From the streets of San Antonio straight to your walk. It's Jake's Two Cents on Jacob Altraids. All right, welcome back. My name is Kirk and I'm not quite yet a financial expert.
Jake Nuno: 0:36And I'm Jake I am the financial expert but not the literary expert and today on the show we're gonna talk about both of these concepts.
Kirk Barbera: 0:44Yeah yeah, we'll be exploring some literature writing, and in this case we're going to be talking about two essentially essays. One of them is an essay by Andrew Carnegie, who was, of course, one of the great philanthropists, but before that he was a steel magnate and he became one of the wealthiest men in America, I think. I don't know the world or what his wealth level was, but very high, right, he was very rich. He became one of the wealthiest men in the world for sure. And so he wrote, in 1889, an essay called the Gospel of Wealth, which is considered a foundational document in the field of philanthropy. So he had very strong views about how, particularly how wealthy, super, super wealthy men such as himself, and women although he didn't say that what they should do with their wealth, and they had a view of specifically, and he breaks down why he has that view, what's going on with his arguments for that, what it's based on and why it's important. And then we're gonna talk, also in this vein, very different essay, quote unquote. I put that one in quotes because it's actually a speech made by a fictional character in the book, if you're watching the video over the side, that side Of Atlas Shrugged by Ayn Rand. So it's a speech by a character by the name of Francisco Denconia, who's always a popular favorite, by the way. He's a character favorite and it's actually given at a party of wealthy people, government bureaucrats, businessmen, philosophers and things like that, and there's a conversation about and somebody says that something along the lines of money is the root of all evil, type thing, which is a common Christian saying like money is the root of all evil. And then Francisco goes into what's famously called the money speech and where he defends what money is and why it's important. Obviously, ayn Rand's very controversial, so I don't know if we're gonna go into everything of her philosophy or anything, but I think it's interesting contrast to look at these two pieces, cause there's some similarities to some degree and there's some core, very important differences. So first let's start with the gospel of wealth. It came first chronologically, I think it's probably the more prominent view among people in a lot of ways and in terms of what it's based on.
Jake Nuno: 3:23I think.
Kirk Barbera: 3:24more people think that you should do what Andrew Carnegie says, so let's break down a little bit about what Andrew Carnegie is talking about here.
Jake Nuno: 3:34So in the gospel of wealth, the foundation of it is that there's inevitably going to be sort of wealth disparity between rich and poor, or successful and non, and part of that inevitability is because as humans, as a society, there are people that naturally have abilities that will result in greater monetary fruition for them over others, and so that should be acknowledged and recognized. Then he goes into talk a lot about. There's basically three ways of passing on or disposal of that wealth. One is it remains in a family, goes to their kids and passed on generation after generation. The next one is it's given away at death. And then the third way is it's used throughout the person that derived all the wealth. It's used throughout their lifetime to give back to their society in the form of opening libraries or supporting new investment in businesses, or just providing opportunities for people, not as handouts, right, but as ways to enhance the world around them, and it's important to do that during the lifetime. So and he's a firm believer that that is the most effective way for super wealthy people to make the most of their wealth, because if you leave it at death, he says you're no I don't remember the exact quote, but basically you're no better than anyone else because you would have taken all that wealth with you. Could you have been able to do that at death? Right, you just waited until the very last minute. And then you're like, oh, I can't use it anymore, so I guess somebody else can't. And the argument with keeping it in family generations is that you potentially ignore the, the negative consequences of having families inherit money when they don't have the, the right perspective or the drive or the entrepreneurial ability to do what's right with the money or do good. They may squander it right. And so just because the in absolute terms, you're part of the family shouldn't really entitle you to always being the next to receive the handout. And so the third that third aspect is really what he Believes and what he lived in his lifetime. So he gave away 90% of his wealth before he died, which translates to about five point six billion dollars in in current dollars. So that's the kind of the framework behind the gospel of wealth, because he makes absolute statements that that's the approach that he, he believes is right with with the money.
Kirk Barbera: 6:31Yeah, and the, the money speech that begins. So you think that money is the root of all evil is actually a moral defense of production as the core meaning of what money, money is, the core source of what money is that it's you, at the end of the day, you know what money is is. It comes from a societal advancement of when we came from bartering a cow for six chickens. But I don't need six chickens, I only need one chicken. So how do I die if I cut up my cow? I can't get as much for the chick, you know. So, like it becomes this complicated thing and as this bartering system becomes advanced, you you can raise more cows, you become good at farming, and then you need shoes. But you know the the cobbler doesn't need your cow, he needs the chicken. So how do you cooperate with all those types of things? The core of what a money is is Trading. It's trading what you produce. So I Kirk, barbara to produce a certain kind of media production for for Jake, for Clients that I work with, for my work, which is a nonprofit and we'll talk about you know. So philanthropy is part of what I do in terms of raising funds for that, but it's toward a specific kind of value that I'm creating in the world and trying to enhance that value in the world, and that's what I get compensation and money for. It's obviously a 100,000 times more complex than it was a thousand years ago or 2,000 years ago. When it's, you know, you're talking something basic in terms of you know, again, you're having I, I need, I need shoes, so I'm gonna go get some coins for my cow. I'm gonna sell my cow or sell the milk from my cow. I'll get five coins. It takes two to buy the shoes and I'm good, right, that is the essence of what money is, and All the way up to our complex thing where I'm able to buy a house. So people are, you know, on credit, which is a part of it. You know, it means that somebody with a lot of wealth is able to loan out money that they don't need right now in the hopes that they will get more money in the future from me, as I'm capable of producing, and that's why, you know, there's there's a lot of complicated things We'll talk about on this series as we go, but I think, at the core of it, it's important to understand what money is, which is just a tool of exchange. It's a medium of exchange at the at its core. And so what I ran is arguing in her money speech through Francisco Danconio, the character who is an industrialist, a very good, successful industrials like Andrew Carnegie and Excuse me and and he is arguing that it's moral to have money to make money. In fact, at the, toward the end of the speech, francisco says that what makes America the greatest country in the world is that it invented the term To make money and that throughout all of history, money has always been distributed or conquered, and that doesn't mean people weren't making it, but they didn't make it the moral ideal of the culture, and America often gets, you know, lambasted for being the money makers in that sense, to to have that as like the ideal, like our heroes. Some of our heroes are like these businessmen, like Steve Jobs and Jeff Bezos and Elon Musk, who make billions, or Andrew Carnegie, rockefeller people, bill Gates, yeah, and those are the types of people that so she provides in this Speech and I think in the whole book. I was pointing to the wrong side that that speech, and I think there's important clashes to be understood between these two speeches. I think in some degree iron renders, almost adding or negating in or Trasting purposefully with some of what Andrew Carnegie is saying, because he wrote that before her writing this, of course, like 80 years before. Uh-huh, and he, he has a very common view of what money is in America in particular, or what the view of money is in America. Right so I didn't. So I thought we could talk a little bit about the specifics of what he believes. So one, let's talk. Let's talk a little bit. I have a couple quotes. Yeah we could discuss from each one each of this the essays so early on in the gospel of wealth and, by the way, I think it's important that he says it calls it the gospel of yeah right, like he's still couching this in Christian terms and the art he the foundation he says of why we should do this in my like. My core argument against his view Is that it's not tenable. People will not agree with it long term and his basic argument is that it's somewhat practical, that it leads to more money and for everybody, which is true. Capitalism does lead to more money for more people, I mean we've seen that Include, you know he makes that argument over and over again. What's like the, the the rich are richer, but the poor are also richer. Like the poor have things that the rich in the past Didn't have, which is true poor people, I mean, you can look at some, you know there's things that just didn't exist, like people have poor people have microwaves that didn't exist. Right there's things like that. But that's a bad basis for, in my opinion, that's. That's gonna be one of my core arguments, but here's one quote, and you know, get your opinion on it. So it is well may essential for the progress of the race that the houses of some Should be homes for all that is highest and best in literature, in the arts, and for all the refinements of civilization. Rather than that, none should be so much better that this great irregularity, then, much better this great irregularity than universal squalor. Okay, without wealth there can be no my sin, my Sineas, my Saneas. That's, by the way, the, the, he was a patron of the arts during the time of Augustus, responsible for supporting Horace, the famous Poet, and Virgil, another famous. But, and then Carnegie goes on to say the quote-unquote good old times were not good old times. Do you agree with that? The good old times were not good old times.
Jake Nuno: 13:05Yeah so I guess what he would be referring to is the conquering of Civilizations and wealth right, and so that was the genesis of good times for those that conquered right.
Kirk Barbera: 13:20Well, but also like in Roman times, when you had this patron, life in general was not very good.
Jake Nuno: 13:29I think it's another thing that he said yeah.
Kirk Barbera: 13:31Yeah, I mean.
Jake Nuno: 13:35Yeah, I would agree with that like wealth is.
Kirk Barbera: 13:37So one of his core arguments is that life is better for everybody. And remember, this is 1889, so right, this is even you know. We're way beyond that now and we could see that, I think, even clearer, with more people being lifted out of poverty all over the world. Even a non capitalist society is because we're so wealthy, we could feed people so cheaply. Now that we've, you know, really lifted all of, or a lot of, humanity. I think that's part of what he's saying. He's also saying something about the core of Cultured civilization, and the past relied on these people like these patrons like messainess. But but that you know much better. But it's better to have that than universal squalor, I think right.
Jake Nuno: 14:25One thing is arguing, right yeah, which I would agree with. I think that's still relevant today. I yeah to have. That's the argument of we need billionaires, right, because those are the patron saints of the current environment, because they provide necessary resources, products, companies, that yeah, as much squalor.
Kirk Barbera: 14:50Well, and, interestingly, he doesn't really talk about that in his whole essay. He doesn't really talk about what, where his wealth came from, what he did to produce his wealth. And you actually see this with a lot of wealthy billionaires, you see this with, like, bill Gates, you know you, and this is why the moral is very, the moral basis, like moral behavior of these individuals is important how we view it, and there's a. So here's another. There's a quote a little bit later on that I think is important To these who propose to substitute communism for this intense individualism. The answer, therefore, is the race has tried that. So his again, his argument of why we cannot do what may be the moral ideal is because we tried that. And what did not work about it? Well, we weren't wealthy. Essentially we didn't. We didn't produce quote, what he calls the, the societal fruit At the level that we do today or in 1888, right, right, which is true, like we stack, like, if you look at the line of you know wealth, and over all the time it was pretty stagnant, right, people will argue that, well, but that's, we were all happier and better when we were all stagnant, and he doesn't really have a great answer to that that's. That's one of the problems. He's not defending that right.
Jake Nuno: 16:12He's saying that wasn't the case. But now, as we are in, when he's writing this, the cusp of the industrial revolution, wealth has been created, so he's. I thought I took it as he is arguing that increased wealth amongst few will result in prosperity for all.
Kirk Barbera: 16:33That is what he's arguing, but then the question is is prosperity for all the more the ideal to strive for individually? And I say yeah, so that's what he's not defending.
Jake Nuno: 16:43Because?
Kirk Barbera: 16:44because he's not saying like you know again, this is something I ran talks about in her, the money speech is what's the moral basis of money? And it's that your, her argument is that what you're being productive is noble, and he has a quote here. I'm going to keep going. All progress from that Barber straight day. This is Andrew Carnegie. All progress from that Barber straight day. This is Andrew Carnegie. All progress from that Barber's day to the present time has resulted from its displacement. That's, I think communism essentially Not evil but good has come to the race from the accumulation of wealth by those who have the ability and energy that produce it. So he's saying I think this is a good statement Not evil but good has come to the race by those able to produce it. I could say more about my. I have a slight issue or issue with that, but we'll move on. Here's, I think, of the most important part. But even if we admit for a moment that it might be better for the race to discard its present foundation, individualism, that it is a nobler ideal that man should labor not for himself alone but in and for a brotherhood of his fellows and share with them all in common, realizing Sweden Morgue's idea of heaven where, as he is a philosopher at the time, whereas he says the angels derive their happiness not from laboring for self but for each other, even admit all this, and a sufficient answer is this is not evolution but revolution. It necessitates the changing of human nature itself, our work of eons, even if we were good to change it, which we cannot know, and that's a huge disparity between yes him and I'm Rand right there. Yeah, and I, I.
Jake Nuno: 18:40what I'm saying is I think of individualism versus individualism versus the collective good of all.
Kirk Barbera: 18:48Yeah. And so, even though he's claiming in the essay overall to be an advocate of the, the era which he calls our present, discarded, our present foundation, which is individualism. He claims to be an individualist but he's not. He's basically saying even earlier, when he says you know, not evil but good has come to the race from the accumulation of wealth by those who have the ability and energy to produce it. What he means by good is the good for others, that that, in effect, billionaires like you, like they, have produced something for others. It's not. He's good for himself for creating this thing and we should give Bill Gates credit for being the type of human capable of organizing that company and developing that product that put hundreds of millions of computers on on every desktop in the world. That he doesn't get credit for that. He gets credit because what he was able to do for like that, not for other people, for, yeah, it's it's always other focused. It's not like what he's using his mind as the root of success, and that's what I and Rand is arguing in her essay.
Jake Nuno: 20:06Yeah, yeah it's. It's like I don't like to use the word selfish because I don't, because selfish also isn't really a bad word, but the what was it's it Okay. So let's take the example of like. When people give donations to a charity, right, sometimes people get a bad rap because they do it for themselves, because it makes them feel better, whereas they should be doing it exclusively for the good of the organization that they've been given giving the money to, right, then it should be a selfless act all the time. And so I guess my and I'm not super familiar with the work of Einrand. I know it most through Kirk, because that's he's the one that introduced me to it. But it provides an interesting perspective. And so I just wonder, like am I understanding it correctly in the sense that the priority of Einrand and Objectivism is always supporting my individual ideals first, whatever the ramifications of what I've done or accomplished is secondary.
Kirk Barbera: 21:13I think it's also like the motivations for that, that that's what, when you're motivated by that, by not just so. Selfishness has a complicated, long term perspective, right, and so part of what she is trying to defend is not just pursuing your own irrational desires that are self-destructive to you or in the immediate or long term, or destructive to others. So when she says selfishness, she means your what's in your best long term interest and values based on your chosen values that you've thought through and learn from as you go to make the best life you have, because you only have one life. What Andrew Carnegie and everyone like him, and pretty much everybody today, is arguing is that the core reason why you should be motivated at the end of the day is because you're providing something for other people. You're providing a better culture, you're providing a value. That and so other people become the dominant reasoning, the dominant motivation to you, and that's destructive, in Einrand's view, and I definitely agree with that. That's destructive to your mind, to your life, to your ability to enjoy your life, to not be guilt-y because you're enjoying something Right, like you buy something for yourself a nice car and like, well, I could have given more of this away.
Jake Nuno: 22:42Yeah.
Kirk Barbera: 22:42Like that kind of view, that's right. Yeah, and that makes it very difficult to enjoy your life and build things you know like, again, andrew Carnegie. I'm not an expert on all the things that Andrew Carnegie says, but you know what he's written in his viewpoints, like I've read a little bit about him. But, yeah, I know that there's a view that he has in many other super wealthy people have that, again, they seem to not really understand that they and the use of their minds is a unique contributor to the wealth that they create, accumulated that. They did that by trading value for value, which is a quote from the money speech that they. It's not as though Steve Jobs accumulated billions of dollars of wealth by tricking people. He did it by creating a product that hundreds of millions of people were willing to take out their cards and their cash and give it to him to get that $1,000 phone because it was more valuable than the thousand dollars they had. Like that's why you buy things. When you bought that microphone for this podcast, it was like $100 or whatever it was, because it was more valuable to you than that hundred dollars. Yeah that's why you buy things and that's the core of buying anything, whether it's a book, a picture, a painting, house, couch, whatever, right so that. But in your country he doesn't really talk about that value for value perspective on it, and that, to me, is the issue.
Jake Nuno: 24:26I see, because he addresses, he almost states it. Well, he doesn't almost, he does state it as though it's an inevitability as a result of skills, but not really like a yes, yeah, like an acknowledgement of Drive or willingness to. You know, like my yeah, like driver willingness to create something so good because you wanted to create that right and yeah, the world is better for it. So be it. But I wanted to do this, or I wanted to make this business, or I wanted to invest in this, because that was what my outlook was for my life. And I think that's rooted a lot I mean, it is rooted a lot in religion, fundamentalist Christianism, because that's always the, the basis of that is always selflessness. Right, giving to others until you can't give any more is always the foundation. So there's certainly a fusion of those underlying tones of of devotion to a higher power and your role on the earth under that context. That I think is not present with Einran's writings.
Kirk Barbera: 25:45Yes, and I think interestingly about Andrew Carnegie is he is when he that quote that I read earlier about the nobler ideal. That's that that man should labor not for himself alone but in the brother. That's communism. To labor for your fellow man, all in communal, that's. And I think Carney is very confused about the fact that communism and Christianity actually share that core belief. Both of them do that. Yeah, the idea of living for your brother man or your sister woman or whatever like in humanity. That that's the purpose of morality, is that's what. That's what living a moral life is. That's what the ideal is. He even has a statement in his again a very, I think, a very confused one, where he tries to re conceptualize the image of Christ, and I don't remember exactly where it was, I'm trying to find it now, but he says something like you know, we can't live like Christ in the sense of how he lived in his foundational era, which was, you know, I found it, yeah.
Jake Nuno: 26:58Go ahead. The high, the highest, the highest life is probably to be reached not by such imitation of the life of Christ as Count Tolstoy gives us, but while animated by Christ's spirit, by recognizing the changed conditions of this age and adopting modes of expressing the spirit suitable to the changed conditions under which we live, still laboring for the good of our fellows, which was the essence of his life and teaching, but laboring in a different manner. Yeah.
Kirk Barbera: 27:32Again, I think that's like he's trying to grapple with his religion. How? I don't. Again, I don't know enough about his philosophy. I assume he's pretty religious on some level. But even if he's not, even if he explicitly rejected religion on, you know, on philosophical grounds, he clearly still accepts it. And what he's basically doing there, I think, is he's saying you know, we live in you know. His overall argument is we live in this new era. It's proven fruitful in terms of material wealth, right.
Jake Nuno: 28:04Essentially right.
Kirk Barbera: 28:06And we can see it's materially wealthy for everybody. And so you know, he uses the Jesus argument as he was a change agent in his era, which was a Roman era of, you know, slavery and injustice and conquest and poverty, and so he tried to make a statement about brotherhood, sermon on the Mount. That's what that's all about. All truism is all about living for other people. That's what Jesus said, and and then he said you know, he's trying to change the world, and but today we have this new era which is individualism, and we should base it on that. But the reason to do that is because it provides the most for the most people. Right, egalitarianism, essentially. And so, but again one I don't think most Christians would agree with that, because that's not the point of Jesus. It's not as though, because then you're saying that well, he's only right in his own era, and then what's the point of agreeing with him? So he's only subjectively true, his, the truth, is only true in his own era, so that means it's not applicable here. So do we not follow anything of Christ? Like that's, yeah, that's against. Like Christianity is a universal truth, is their belief. So that, like again, so he's going to be Carnegie will be rejected, which he is in that sense, right. And because, again, that's why you're going to get the Occupy Wall Street people, that's why you're going to get, you know, people who are saying, no, you down with the wealthy, give back more. You know you didn't build. All those things are based on the same ideology of the purpose of your wealth is to give it away or to, or other way other people.
Jake Nuno: 29:48Right.
Kirk Barbera: 29:50Now the the money speech is, you know. So they both talk about inherited wealth, and so here's why I have some agreement, I think, with Carnegie as well as you know, I ran of course. So when he talks about his three aspects and I don't remember everything he said in terms of his defense, but he essentially is saying that you shouldn't. You know, giving to your descendants is a negative thing because it won those people, those kids don't really deserve it. Pretty much Right Like and it could destroy them and it really could just be making you feel better. By the way, I ran would agree with that, like I. Selfishness does not mean just doing what makes you feel good in the moment. Right, that's not. That's not what it is.
Jake Nuno: 30:40Huge misconception about the word selfishness, because that's how people associate being selfish. Always, yeah, exactly.
Kirk Barbera: 30:48Like I'm going to do something that will harm Jake because it makes me feel good in the moment, or I make a couple like I could trick him and give me a couple extra dollars, but then of course there's that's a silly view of something, of selfishness. Really, what's in my best interest is to develop a relationship to work long term, to like those are the more smart moves, right, and that's what selfishness really means. And there's a cut, but in inherited wealth. There is a causal issue here about if you inherited a billion dollars but you have a lavish lifestyle or a cocaine habit, let's say it's just going to kill you, right, like you haven't earned it, you haven't deserved it. Money is, you know, iran puts money as noble.
Jake Nuno: 31:37And.
Kirk Barbera: 31:38I think that's that's important. So here's a line from a quote from Iran on this Only the man who does not need it is fit to inherit wealth. The man who would have, who would make his own fortune, no matter where he started. If an heir is equal to his money, it serves him. If not, it destroys him. But you look on and you cry that money corrupted him. Did it or did he corrupt his money? Do not envy a worthless heir. His wealth is not yours and you would have done no better with it. Do not think that it should have been distributed among you. Loading the world excuse me with 50 parasites instead of one would not bring back the dead virtue which was the fortune. Money is a living power that dies without its root. Money will not serve the mind. That cannot match it. Is this the reason why you call it evil, evil?
Jake Nuno: 32:39I marked that same section. It's a good one Because I wonder if? What if the person that's angry with that heir is angry because perhaps they weren't going to be the recipient of a handout, but it could have been used to create a university in an area where there's no reasonable education program and, as a result, people who are less fortunate financially could have had an opportunity to improve their life outcome if that wealth had been distributed in a different way.
Kirk Barbera: 33:26Yeah, and so that that reveals to me a psychology of money that I could have chosen better to do with money that I'm not capable of earning than you are, and so that, to me, is the core issue. Right, it's like why a university? Why not cancer research? Why not a school for mentally handicapped individuals? Young kids, why not a charity for young artists to have housing? Like, who chooses? That's the question and that's, and so the issue is who has the right to choose? Is it you know people vote on what to do with your money? Is it you give it to after death or during your life? You give it to the government and they figure it out, and what do you think the government's going to do with that? You think the government I think Andrew Carnegie has a much more benevolent view, and wrongly benevolent view, about what the government will do with excess money. They get Like that they're going to.
Jake Nuno: 34:29That was also like the 1800s, but yeah, it's 1889. But still, I think there's enough.
Kirk Barbera: 34:34Yeah, but there's enough information. They had time that like, okay, I'm going to give this money to the government and they're going to be efficient with the way that it's distributed and they're going to distribute it properly. I mean, look at our socialized medicine and our social security and it's a disaster. Right, we're paying out way more than we're putting in. It's a and you and me, we're our generation's going to have to figure out how to pay this. You know what is it like? $800 billion, a month of interest or some credit or something insane. I don't know the number, don't ignore that number, but like it's a insane number of interest. It's like 1.7 trillion in actual debt every year, yearly, yearly.
Jake Nuno: 35:15And so it's like to a deficit, yeah.
Kirk Barbera: 35:18Yeah, so it's like that's the result of giving the government excess cash, of wealth and what's to do with it, right, and that is problematic.
Jake Nuno: 35:26Well, so I guess, like my argument is that in in Carnegie's viewpoint, like under that context, I feel like his, he's putting the obligation of the wealth creator, the obligation on the wealth creator to make the decisions for their wealth but for the benefit of society. Right, and so that was where I was coming from is like it's not up I shouldn't be up to people to vote on it or whatever. It should be that person who created the wealth. Where I do agree is that if you have the capacity and you have the motivation and you want to do whatever it is, you may do a hospital for handicapped, any one of these things that would benefit a society or a community for some reason. I feel like that's not a bad sort of mantra or perspective to have for a really wealthy person.
Kirk Barbera: 36:27Yes, and you know, you and I had a debate a long time ago about billionaires, and one point I try to always stress is that billionaires, like in our enter Carnegie's for some reason doesn't seem to understand this either. But billionaires, when they hoard, quote, unquote, hoard money, that money is still productive Because it's, you know. Again, I always use the example of, like the Scrooge McDuck in his vault Right, and that's the image, I think, on some emotional level, that people think is what Elon Musk is doing with his $150 billion or whatever. No, that $150 billion is tied up in companies that are producing something. It's not sitting in a vault somewhere, so it's not like he's accumulating it and putting it in you know some again, some vault that he's just swimming around in because it feels good to be so wealthy. No, even even the most lavish billionaires, they're like. The vast majority of their wealth is is being invested. It's somewhere out there being sent out to more people, buying land, developing land, which is all productive. So my point is that even in the acute like, even in the holding of that kind of wealth, they're still producing value and they're still being productive.
Jake Nuno: 37:47Yeah, I agree with that. I definitely agree, yeah.
Kirk Barbera: 37:50And that's really important. When it comes to like, then the next step is, like. You know, one thing I do agree with Carnegie here for sure, is I I mean, I do have a few again I believe you should do what you want with your wealth at the end of the day. But that's my personal view. But I also think that it does make sense to you know, put your money into the places that to shape the world in the values that you see it. So that might be giving to nonprofits. And you know, I remember one of the early nonprofits in America, or research institutes in America, was founded by Rockefeller because his daughter died of some disease and so he put a lot of money into that research and because I was valuable to him, he wanted to try to make this not happen again. And that's that, to me, is what it should look like, is that he earned it. The money that Rockefeller did was through his productive effort, that he brought a value of kerosene to the world at a cheaper and cheaper price. That's why he became wealthy, is he refined it. He made it safer, more efficient and affordable for more and more people, brought light to the world before, of course, the invention of the light bulb, and that's how he became the richest man in the world. What does he do with that? Well, well, I mean, yeah, he gives a lot of it away as Christian, but he also, you know, again, he's supporting values that he believes in, which, even if I don't agree with his values, is a good thing.
Jake Nuno: 39:27Right.
Kirk Barbera: 39:27And that's that's the issue is, like the person who says I want a university, they have a different value. Like what if I say I don't like, I'm Peter Thiel, I don't like universities, I think universities are detrimental, you're going to take my money and give it to universities that I think are actually destroying young people's lives and abilities? That's not again. That's then you have, like this conflict who makes the decision? Well, the person who makes the money.
Jake Nuno: 39:52Money.
Kirk Barbera: 39:53Right, and that's why you need to understand that money is created. It's not a pie.
Jake Nuno: 39:58Right. It's created, yes, and that's the core of it, and that's something I need to know more about from Ann Ryan. Philosophy is like cause the money speeches a lot about defending money and individualism as it relates to making money right and and trying to eliminate the the idea that money is evil, which is a really good argument. There wasn't very many things, if any, in the money speech that I could disagree with, I think. Where I was curious is in Carnegie's essay. It goes to the next step of like here's how you should manage that wealth over your lifetime, and I don't know what that looks like, but maybe you just illustrated it to me right now. Like if it the focus should still be on, obviously, investment and not hoarding, but the investment of that needs to be based on your vision of the world you want to create, right.
Kirk Barbera: 40:58And I also think, like on a personal level, I do think it makes sense for wealthy people, or people in general, to essentially die broke, but the difference is, I do think that that's a good thing to do, but the difference is that it's your choice to do it, and I do think so. This is where I agree with Carnegie's. He does seem to be leaning toward trying to persuade people that you should be giving. Like wealthy people, you should be giving away your wealth. I don't have any problem with them starting philanthropic you know philanthropic endeavors, but there are specific things he's advocating that I definitely disagree with, such as increase of death tax in order to because this is where it becomes problematic, because he's trying to he's trying to make them do this, and that's where I have a problem. If you want to use podcasts, public speeches, essays to persuade wealthy people like, like, let's do a movement where we're going to put our money toward a certain good, that's great. Let's go to this, you know, let's support the Einrahe Institute where I work, or whatever you know. Give them money so that they can do more intellectual endeavors and try to make a freer, you know, rational society. That's great or not. Or give it to someone who I disagree with. It's your. Again, the core is that it's your money, but yeah, I think that's it.
Jake Nuno: 42:18Don't change laws to punish people, right. Yeah, that's ultimately, if you think about that, that's worse. That's a worse result than having well, not definitely a worse result, but potentially having a worse result, because that ends up with more money in the hands of the government at that person's death than perhaps otherwise it would have been, if he died, you know, with tons of wealth but there wasn't as much tax that was gonna eat away at it, right? Because what if there was the opportunity where his beneficiaries are indeed amazing, intelligent, capable people that we're gonna do a lot of good with that money, but the laws dictated otherwise. So I agree with you there. I think that's it should be based on motivation and interest, but not like punishment for not following the gospel right which is again another tie-in right Like that's very. That's where it has its roots in religious context, because it is about punishment if you don't follow.
Kirk Barbera: 43:25The good? Yeah, exactly, and that's why the underlying view of what the good is is like. He does have a view of like we, you know, giving it to your kids is not optimal. Here's my argument giving it away after death is not optimal because it could be squandered and not done properly. So he wants wealthy people to give away their money in the way that they judge it right. He does want that, which I think is good, but he wants to manipulate them into doing it right, and that's part of the problem. It's the same thing of like I want more educated college graduates, so I'm going to give them free money to do that, or give them money to do that. And then you know, but it's going to, it's going to manipulate the market and individual decisions. That distorts their view of reality, distorts their view of money, distorts their view of what they would normally have pursued, and we've talked about this on a lot of other shows. And you know, I'm a believer that government is good, it's important, but it's not a producer. And we'll stop here because maybe we'll do a part two on these two and we'll focus more on the money speech next time, but that's you know, we'll do the same type of thing, but focus more on that. But that's to me, the core issue here is that it's, you know it's got. The focus is incorrect is what I'm trying to say, and that's part of the problem of, like the government doesn't produce anything, but it is a necessary, essential thing for us to produce, but it doesn't make sense for us to give it productive money for distribution to achieve a certain kind of productive ends we think is noble, because they don't know how to do it. You know it should be more and more. The government should have its lane and individuals should have their lane, and they should do it. And then again, we need a government, we need military, we need police, we need a court system, we need those things. But giving them money to, like, take care of healthcare is like, well, is that the best use of the money? I don't know Right, I don't think so personally.
Jake Nuno: 45:31So far it hasn't really proven to be right. Well, it's on a practical level, for sure, on a practical level, yeah, yeah, and that's a complicated issue though, so it's kind of a can of worms. So we'll leave that alone for now.
Kirk Barbera: 45:42So I think that's part of the problem Okay, parting thoughts for part one, and then we'll maybe go back to this.
Jake Nuno: 45:48I think, parting thoughts for part one, we have some similarities here. I've learned a couple of things about the difference between individualism and selfishness as well, as I do really have a strong belief that the core purpose of Carnegie and what he's trying to encourage people to do over their lifetime is a wise message and something that would benefit the world. Perhaps the means is not the right approach.
Kirk Barbera: 46:19That's the way of putting it. Yeah, I like that Cool. Okay, so that'll be it for part one. I think we can maybe try a little bit more of the money speech next time.
Jake Nuno: 46:28Definitely, definitely All right, guys. Well, that wraps up this episode. Thanks so much for listening. Be sure to check us out on our website at jakes2sensecom. Take care, we'll see you next time. ["suffer"]. Securities and advisory services offered through Commonwealth Financial Network member FINRA, SIPC, a registered investment advisor. Fixed insurance products and services offered through CES Insurance Agency. Actual performance and results will vary. These interviews do not constitute a recommendation as to the suitability of any investment for any person or persons having circumstances similar to those portrayed. Consult a financial advisor regarding your specific circumstances.