Atlas may shrug

Son James, his wife Kelsey, and I had an interesting conversation about the possible coming collapse of the Euro this evening. I read part of this story to them:

British embassies in the eurozone have been told to draw up plans to help British expats through the collapse of the single currency, amid new fears for Italy and Spain.

As the Italian government struggled to borrow and Spain considered seeking an international bail-out, British ministers privately warned that the break-up of the euro, once almost unthinkable, is now increasingly plausible.

Diplomats are preparing to help Britons abroad through a banking collapse and even riots arising from the debt crisis.

The Treasury confirmed earlier this month that contingency planning for a collapse is now under way.

A senior minister has now revealed the extent of the Government’s concern, saying that Britain is now planning on the basis that a euro collapse is now just a matter of time.

That’s the background. What’s more interesting to me is this article:

About a year ago, I spoke at a conference in Europe that attracted a lot of very rich people from all over the continent, as well as a lot of people who manage money for high-net-worth individuals.

What made this conference remarkable was not the presentations, though they were generally quite interesting. The stunning part of the conference was learning – as part of casual conversation during breaks, meals, and other socializing time – how many rich people are planning for the eventual collapse of European society.

Not stagnation. Not gradual decline. Collapse.

As in riots, social disarray, plundering, and chaos. A non-trivial number of these people think the rioting in places such as Greece and England is just the tip of the iceberg, and they have plans – if bad things begin to happen – to escape to jurisdictions ranging from Australia to Costa Rica (several of them remarked that they no longer see the U.S. as a good long-run refuge).

Of course. Once it is pointed out it is obvious.

Those with money will escape the collapse if it occurs. They will take a big hit and won’t be able to get all of their wealth out but they are generally smart and will generally succeed. The looters (by this I mean to include the socialist governments) will attempt to prevent the wealth from leaving but even if they were successful eventually the looters will run out of loot.

Much of the wealth and nearly all the brain power that generated that wealth will “take a holiday”. There is also a good chance, as in the book, that the escape of these people to another place will hasten the downfall. Rand may have missed a lot of the details but the basic concepts may be close enough that the end result is essentially the same.

Atlas may be shrugging.

13 thoughts on “Atlas may shrug

  1. Atlas is already shrugging. I know a doctor in the US (she’s a personal friend and my family doctor too) who has already said that because of Obamacare and other nonsense imposed upon doctors, that she is leaving the medical field. She has announced that her last day is the day before Obamacare fully kicks in.

    Lot’s of businesses aren’t hiring. Businesses are leaving states like California for more business-friendly locations. The unemployment numbers occasionally go down even though the number of jobs goes down too because people are giving up trying to find work and thus aren’t counted as “unemployed”. Governments are using more and more debt to offer more and more generous social programs. What will happen to society will governments announce they can’t pay for those programs any more?

    The process has already started. The only questions are, “Can it be reversed?” and, “If not, how long will the collapse take?”

  2. I’ve had quite a few political conversations with people – normally apolitical and not given to worry about such matters – shake their heads, lean in and say sadly “There’s gonna be a revolution…”

  3. My wife has been saying “there needs to be” a revolution. I keep trying to explain to her that revolutions generally result in more misery, but . . . .

  4. While the phrases “all the wealthy” and “all the brainpower that created the wealth” sound a little too-specific, they accurately capture the trend.

    That is, a fraction of the wealthy and/or brainpower will not leave, or will not be able to leave.

    And this a trend, not a single event.

    But it is disturbing to see that The Powers That Be are unwilling (and likely unable, short of the political equivalent of falling on their own sword) to reverse or disable the forces driving the exodus.

  5. While everyone around me bought cheap electronics and trinkets on Black Friday, I headed for the sporting goods section and stocked up on valuable metals…

  6. Since much of the wealth in Europe is inherited, that “brainpower that created the wealth” has already left this planet.

    If the Euro collapses, there will be massive unintended transfers of wealth (and I don’t mean by looting).

  7. A collage friend of mine is a family-practice doctor in a rural “under-served” area. He’s gradually quitting the biz (cutting back hours, turning it over to the other doc in the clinic) because he loses money an all the medicaid patients, and lots of the other under- or non-insured; he can make more money as a bee-keeper, with a lot fewer headaches, fewer hours, and no lawsuits. He said he’ll be totally out of it by the time ObamaCare fully kicks in (unless it is struck down).

    Doc with his own practice and equipment paid for to bee-keeper because it makes economic sense. Atlas is indeed shrugging.

  8. @ubu52, I know Australia income taxes are very high. I don’t really know why that was one of the places considered as a refuge but it may be that if you already have wealth you can hold on to it easily.

    Just guessing…

  9. “…they no longer see the U.S. as a good long-run refuge.”

    The U.S. was supposed to be that refuge. It was designed to be that refuge– that one place you could count on for rights protection. It was not only “Bring us your tired, your poor” but also “Bring us your talented, your motivated, your inspired masses wishing to protect their property from confiscation”. Really those are the same thing, aren’t they? The poor came here to make something of themselves they could not have made in their native countries due to the lack of rights protection, and the rich would come here for the same reason. Brain drain was supposed to come here, but we’re now failing, as planned, because of the global “Progressive” movement.

    The Left will argue that the U.S. was never all that great when it came to rights protection, to which I will respond by asking them whether they wish it had been. Their answer of course, though they’ll never admit it, is “No”. They use the fact that the U.S. was never perfect, and that it was even sometimes quite bad, as an excuse for more rights violations.

  10. Lyle,

    Yeah, the lack of “rights violations” and the ease of doing business are why so many companies are moving to India and China.

  11. Exactly. See what I mean? The next question is whether you know what you mean. (not sarcasm)

    There is no more real refuge. Not here anyway, so it’s now a matter of degrees of violation. That was the point made in the OP, that was my first comment above, and I can only infer that such was your point as well, though you may not realize it.

  12. Yes, Australia has high taxes – sin taxes on alcohol, fuel, and tobacco; federal income taxes as high as 48%; federal sales tax of 10% on most goods and services; other smaller bites too numerous to mention.

    It DOESN’T have state sales taxes or state income taxes.

    It also has political stability (handover of government after an election takes ONE DAY, and normally no-one riots), a tradition of western-style democratic government, a reasonable technology base, nett self-sufficiency in food production, nett sef-sufficiency in energy, AND it’s a long way from anywhere else.

    If I didn’t already live in Oz, I would be considering it as a bolt-hole.

    As it is, given the restrictive gun laws, I am still on the look-out for a better alternative.

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