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SOVEREIGN MAN

Socialism on display:3 men, one street corner

September 19, 2011
Franschhoek, South Africa

DSCN1803 1024x768 Socialism on display:3 men, one street corner

Valley near Franschhoek, South Africa (17 September 2011)

I had a really bizarre weekend involving a rather drunk, unkempt, American celebrity who happened to be visiting Cape Town, and also watching a group of Southern Right whales off the Cape of Good Hope. The whales were more interesting, they’re some of the world’s oldest permanent travelers. More on that later.

Now, something peculiar happened on my way out of town that I want to tell you about.  It was Saturday in the early afternoon, and I was stopped at a rather lengthy light on the coast near Mouille Point, just a few minutes from central Cape Town. Three men were on the street, all of them fairly young and able-bodied.

One of them was wearing a bright reflective vest, usually indicative of a local newspaper employee whose job it is to sell papers to motorists. They’re all over the city at major stoplights.

Another was selling fresh fish he had just caught from the sea; his makeshift fishing line was resting on the ground in the grassy median where he was standing. I’m not a fish person so I couldn’t say what he was holding up… but given the size, it seemed a decent catch.

The third man was begging for change. Actually I should correct myself, because ‘begging’ is the improper word. He was -collecting- change, going from car to car without saying a word to anyone. He simply stuck his hand out with the zest of an angry bookie, almost as if these motorists actually did owe him money.

Three men, one street corner… three completely different attitudes.

The first man was in the employ of the newspaper publisher. He has a real job drawing real wages and providing a valuable service for people. He, his employer, and the newspaper customers all benefit from this relationship.

The second man didn’t have a job. But rather than languish on the side of the road, he found a way to create value. He learned a skill (fishing) and used it to generate income by selling fish to motorists who were either too busy to do it themselves, or looking for a bargain outside of the grocery store.

The third man didn’t have a job either. Instead of figuring out ways to add value to people’s lives in exchange for money, though, he adopted an easier approach: doing nothing, and expecting others to take care of him.

The first two guys are out there busting their butts all day trying to create value in the world. Certainly they might not look at it in terms of a ‘value creation’ process, but they’re providing services nevertheless for the money that they’re being paid.

The third man is simply a parasite– someone who routinely lives off the labor of others and gives nothing in return.

Amazingly enough, governments exist to take money from the first two guys and give it to the third. Watching the three of them on the corner together, this was my first thought… the system penalizes people who are creative and work hard, and it rewards people who choose to do nothing at the expense of others.

When put in such a real life context right in front of my face, such a system never seemed more distasteful. Or sustainable. More to follow on this.

About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

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Comments on this entry are closed.

  • CoachCheese

    You mean, “unsustainable” in your last lines.  But what a vivid picture.  I wish every single congress person would read this one article.  If they did, it wouldn’t do much good.  It’s not like many of them don’t understand this.

    • Zetaprime

      “I wish every single congress person would read this one article.”

      With one exception in the House, every one of them is just like the coin collector in the story, only more cunning, better talking, more parasitical, and backed by armed thugs. 

  • Political Athiest

    This story reminds of a time I was in Las Vegas pre-2008 recession. I was walking by one of the many development projects on the strip. Huge construction/infrastructure project I could watch from the fence. An army of workers, the majority I would bet were illegal, busting their asses and working hard. Then I walked over one of the walkways across LV Blvd. and there’s a group of 3 young black men. Really nice guys who were selling their CD of music. You could name your price – basically a donation. I love hip hop, I believe in supporting the arts when it doesn’t suck, so I bought the 3-track disc for $5 and told them to keep making music. Then there’s this white guy pan handling. I don’t know what his situation is that brought him to panhandling but frankly, seeing other people (many who don’t speak the language) who can hustle and flow (literally) to do honest work doesn’t make make me very sympathetic to panhandlers who look like they could easily pick up a job amid all the boom of LV at the time.

  • http://pulse.yahoo.com/_2LFQ4VVIYI63VOURQDUD5LIA74 C H

    I don’t think that is socialism. In fact, as more social programs are removed, desperate people (whom we don’t know and don’t know each individual circumstance) will often turn to begging. Nobody is forced to give this guy a few bucks. However, I am forced to fork over my money to a government that continually bails out the wealthiest individuals in the nation…Now, I call THAT parasitic, especially since many people have lost good jobs due to this action by the government, while these wealthy parasites live off my money.

    • http://www.facebook.com/people/JamesnPhyllis-Burke/100000328712077 JamesnPhyllis Burke

      Glad you brought that up CH. Al Gore has made a fortune on the Greening of the planet and nothing substantial has yet developed and some Green businessess have received Government money from the Obama Gov’t knowing they were going belly-up.  But Ole Al,
       he just keeps pluging away and raking it in.

      • http://twitter.com/issue313 Christopher Connolly

        Somehow I doubt OP was talking about the money paid to Al Gore and the Greenies, deplorable as it is, its negligible next to the bailouts.

        I hope you’re at least getting paid to post these dumb, pro-bailout comments, I see a lot of commenters around using social media enhancement software, I hear its good work if you can get it, I’d love to go into the field myself.

  • Nope

    Atlas Shrugged.

  • Brent Craig

    Simon,
    you don’t strike me as being naive, but this parable is certainly that. Is this example really what governments exist for?

    Let’s for a moment image there was no government in the place you were visiting. Would you have had a “rather lengthy” stop at a traffic light? Would there have been a traffic light at all? Would one of the men be a “local newspaper employee” with a “real job drawing real wages”? Would the second man be able to make a living selling fish to “motorists who were either too busy to do it themselves, or looking for a bargain outside of the grocery store”?

    You’re on the continent; why not go visit some places that barely have a government and absolutely no “socialism”? I hear Somalia’s nice this time of year…

    • John Shrugged

      The whole continent of Africa is a basket case. Civil wars, AIDS, famine, jihad, you name it…This is sadly a reflection upon the people, as the state of every nation is. If you think socialism and/or big government will redeem the situation, than you, my friend, are indeed naive. Europe’s dire straights are a testimony of that. You mention Somalia, but what about Singapore and Hong Kong? There are many examples of countries with minimal government and great prosperity. A lack of government is fine and even desirable as long as there is a market alternative. Hence there could be private police and traffic light companies and I assure you the world wouldn’t fall apart…Somalia doesn’t have any sort of market economy hence the chaos. I find it amusing how you see the government as being so crucial. Belgium hasn’t had one in over a year and has posted above average growth. No more regulations and taxes can go a long way towards prosperity…

      • Brent Craig

        Singapore and Hong Kong don’t have governments? Belgium isn’t a member of the European union? Not one of these examples has minimum government, particularly in the example of Singapore.

        Come on; I was criticising  the weakness of this parable as a lesson in socialism, not talking about how crucial a government is. And yes, I suppose there could be private everything and no government, in theory at least. I just can’t think of any good examples.

  • Tim

    In my opinion, this all comes back to choice. The guy who had his hand out expecting money had a good thing going, because the idiot motorists gave him money. The motorists had CHOICE about whether they were going to give money or not. It was they who were uncomfortable about NOT giving him money…otherwise they wouldn’t have don’t you think?

    Parasite?

    I don’t think so…the man is just asking a question by holding his hand out.

    Nothing wrong with that.

    It’s when the government TAKES the money from you…when we have NO choice in the matter, when the government want something for nothing, and take it.

    Quite a distinction there…

  • Tim

    I was contemplating my previous post as I was having a shower, and something else occurred to me. Let’s eb honest, we have no idea who this man is who stands on the corner holding out his hand for money.

    He may be a father of 3 who has become a victim of circumstance, and is relying on the help of passing strangers to get him by…maybe for a little while. 

    He also might be a shrewd business man who spends only 3 or 4 days on the same street corner, because after a 3 or 4 days, the money he collects starts to diminish because he has outstayed his welcome and people are starting to wise up that he is indeed taking people for granted…

    Let’s not also forget, just how good it feels to give something for nothing…however small…

    Very powerful indeed…

    Having something TAKEN from you is another story…

  • TW

    “Simon” or “Matt”, 

    Recently in your Sovereign Man Confidential you had a detailed report about banking in Andorra and “numbered accounts” – and until recently had sales copy about it below each email sent out and blog post.  

    Shortly there after – another long time Live and Invest Overseas expert who has been publisher of several well known newsletters, books, and reports said numbered accounts in Andorra no longer existed – to her knowledge.  

    This past weekend – another well known expert on the topic – Bob Bauman from the Sovereign Society – was asked this below and gave this reply in their S.S. free weekly round up:

    - – - 

    1) Why is Andorra not mentioned as an offshore banking place? Do you feel that Andorra is not a good choice for an offshore bank account? 

    2) What are the benefits (if any) of having a ‘numbered account’ as opposed to a traditional account? There are a bunch of different resources and sites on numbered accounts, but I of course want a quality and trustworthy opinion from Offshore Confidential on the matter. If there are any benefits to having a numbered account, my research has led me to believe that Andorra, Austria, and Liechtenstein are three of the main countries that offer them, is that true?”

    Bob Bauman replies: Andorra is no longer a tax haven. In April 2011, a new government introduced a 10% tax for non-residents on local-sourced income. This tax is being extended to resident individuals who have incomes of 30,000 euros (US$42,000) or more per year. 

    Since 84% of Andorrans earn less than that each year, this was a popular soak-the-rich measure. 

    Until 2007 there was no capital gains tax, but a 15% CGT is now imposed on a sliding scale in what was said to be an attempt to slow real property inflation. The tax is reduced by 1% for each year of ownership when property is sold. Employees now pay national insurance contributions and there are municipal property taxes. There are customs duties on some imported goods and a number of sales taxes on various classes of goods and services.

    A friend of mine, a long time U.S. expat resident of Andorra, observes that all these taxes condemn Andorra to implode because “…two real attractions for foreigners, no income tax and banking secrecy, have been eliminated. What remains is a very ugly place to live with a proposed low initial tax rate that may not be low enough to attract a very appealing class of new residents.”

    Andorra used to offer strict banking secrecy guaranteed by law. That is no longer true. Local banks continue to mislead non-resident customers about secrecy in order to retain their deposits as long as possible, talking about “numbered accounts” that no longer denote secrecy. After all, every account has a number.

    Under pressure from the OECD, France and Spain, Andorra has adopted a broad definition of “money laundering.” That includes having an account here that has not been declared to the tax authorities of the country where the account owner lives and is taxed. If an official foreign tax authority, such as the U.S. IRS, tells the Andorran government that one of its nationals is suspected of foreign tax evasion in Andorra, banking secrecy is automatically suspended. The local Andorran judge orders the Anti-Money Laundering Police Unit to demand information about the person from all the five banks in Andorra on all present and past accounts held in the banks or in money management or investment vehicles. That information is turned over to the foreign tax authorities before the suspect is ever tried, much less convicted. 
    The Andorran socialist party that governed in 2009 successfully stamped out Andorra’s welcome of foreign depositors who were taking advantage of banking secrecy. Locals quietly admit that, as deposits flee, the country is now financially bleeding to death. They predict that sooner or later most of the banks will disappear. No country with a population of 60,000 needs five banks. The banks here made all their profits from the business of non-resident clients, the vast majority being Spaniards. Now the bank secrecy is gone the foreigners are closing their accounts. 

    - – - 

    As you were just there within the last few weeks to months and met in person with these same banks – are 2 of the most well known and versed on the topic wrong – and you right – or did you mis-speak?

    I would find it hard to fathom that if you met face to face with these same bankers – that this topic would not be discussed.  

    If needed – I would be happy to give you the “Cliff Notes” of what you wrote to jog your memory here.  

    Paid Up Subscriber, 

    TW

  • John Lloyd

    You can’t blame the guy for trying. Call panhandlers and politicians parasites if you want. I agree with you, they are…but at the end of the day they’re simply maximizing their self-interests. It’s almost admirable. Look at politicians for instance, they possess virtually no skills that are desirable in the market place yet they manage to enrich themselves enormously with a fraction the work! The proof is in the pudding. Look at the net worth of the average small businessman compared to that of say… a city councilman. Bet you every dime I’ve got, that the latter is worth more..

  • Zedweiller

    Amazingly enough, you’ve just made a completely bullshit argument based on a very narrow perspective of the world.
    Congratulations!

  • http://www.the-urban-survivalist.com Urbivalist Dan

    Great post-way to get some discussion started.

    Tim made some good points, although I would point out that perhaps one of the biggest goals of SM is to show us all that we DO have a choice of whether or not we pay taxes to the government.

    Maybe we came into the world as tax-obligated Americans by birthright, but we don’t have to live and die that way. That’s why PTs do what they do.

  • Betcsbirds

    The main difference of course, is that systemic socialism is forced by government taxation and redistribution of wealth whereas panhandling is someone asking (albeit, obnoxiously and intrusively) for something which can be denied by the holder of the money. I think everyone has had someone ask them for money (I can think of many pastors who have panhandled while one is captive in a pew)…..you can simply say NO get the hell out of my face.  Interesting thread and food for thought!

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