Is everything just asset allocation? And I don’t mean portfolio management, I mean all of society. Like anyone who is even vaguely interested in these topics, I’ve been daydreaming about the strange world of stimulus payments, UBI, MMT, crypto, stock market bubbles, $13 dollar two by fours, that strange apparition inflation and so on. And lately the idea playing in my head is that all of society, well maybe not all but an awful lot of society is really just asset allocation.

We make laws but in the end what the laws do, most of them, is determine who owns what, how much freedom one group or another has (if you consider freedom an asset), almost everything government does affects who ends up with what. So while we don’t view the laws as specifically determining who ends up with what assets, that, in the end is what results.

Maybe I am also influenced in my thinking by the issue of white supremacy in our society. Obviously the founding of the country was based ideas of white supremacy, although I don’t think those ideas are as mainstream for most people these days as the woke movement believes. But what is undeniable is that the whites have ended up with the property. Is this reality just the legacy of laws that allocated assets to light skinned people? Seems that way to me, although I’m sure I could be shouted down by people who think it is the ongoing result of white supremacist culture. Anyway, that particular rabbit hole isn’t one I want to explore right now.

I’m thinking more broadly. What do laws really do? In most cases they determine how the pie gets sliced up. I make my living selling renewable energy, electricity, a necessity as fundamental to modern life as water, so you would think that what I do, generating electricity, would be a primary function in society, and in some ways it clearly is. But I and every other entity generating electricity does so and profits therefrom on the basis of the laws that govern our business. And it is no less true for any other business. But even deeper, if you imagine some sort of primitive economy, the assets are allocated somehow, tradition, religion and religious hierarchies, or, in a modern and complex society like ours, by a quasi religious ideology we call free markets (or communism in another part of the world). In any group of people living together in any kind of organized society, asset allocation is the very organization of that society. So when the government decides to send checks directly to individuals is it, fundamentally, doing anything different than when it changes the tax code to favor one business, or regulates the pollution or production of some other business? The end result, always, is to slightly change the asset allocation. And, to the extent that things like freedom or control over one’s body are assets, the law determines the allocation of these assets as well.

Having gotten my head into this idea, it now permeates everything for me. I see society as a big mechanism for deciding who gets what. Or, I should say, who gets what is the result of society. The society sees itself in different terms, as open, free market, socialist, communist, a caliphate, pick your ideology, but the result is always the same, to determine who gets what–that’s what society does. The ideology is simply a disguise to make it seem fair, or at least a justification for the unfairness. In our society we justify the unfairness based on the ridiculous notion that we are a meritocracy and other cultures have other justifications, but in the end it is really about asset allocation.

It has to be said that some structures and their motivating ideologies seem to have been much more effective at creating wealth than others. I’m not arguing at all that societies are all the same, just that the end result is always to determine who gets what. And if determining who gets what is the end result of all societies, wouldn’t we be better served by acknowledging this up front, deciding what results we wanted and structuring a system to achieve those results? As it is now, the results we get, massive wealth inequality, climate change and so on, are taken to be the inevitable outcome of a combination of our ideology and technology, and so we set out to regulate the society to ameliorate these bad results. But this results in all sorts of unintended consequences and perverse incentives. We’re trying to modify the system so that it doesn’t produce results we don’t want, instead of designing the system to produce the results we do want.