Capitalism is admittedly an imperfect system when judged by an absolute comparative criteria; that is, to a theoretical abstract. However, on a relative comparative criteria; that is, in relation to existing alternatives, it is the best game in town, or in effect, the best the world has to offer.
My academic pursuits were in the field of macroeconomics, and in particular Austrian Economics. This is the field firmly grounded in free market principles…the very basis of capitalism if you will. The writings of Adam Smith, Ludwig Von Mises, Henry Hazlitt, Friedrich Hayek, and others greatly influenced me as did the seminal work of Ayn Rand titled Atlas Shrugged. This 1957 treatise, considered by many as her magnum opus, warned of the threat of government over regulation on the business enterprises of the free market. When delivering my doctoral dissertation at a management conference at the Harriman Estate (Arden House) in New York (just down the road from the United States Military Academy at West Point), it was my great honor that Ayn Rand was in the audience, as she was the keynote speaker for the conference. These early teachings have influenced the way in which I live my life, guide my family, and lead an organization. An organization which by the way has posted 104 years of consecutive profitability — a record purportedly unmatched in the U.S. steel distribution industry. It has influenced my classroom teachings and provided the financial wherewithal to create jobs, assist others, and fund numerous charities. Of late, it breaks my heart to see the unmitigated assault and denunciation of capitalism. How quick we are to repudiate a system that has given so much to so many.
They say you truly understand a foreign language when you start to dream in that language. I can get through Spanish-speaking countries and nail the Catholic mass in Latin but not yet dreaming in anything other than Chicago English. They also say how well you know a particular subject is determined by the lowest level to which you can explain a complex subject. We hear of the well-known musician who dresses incognito and plays on a street corner to remain grounded. In my own attempt to stay grounded, I periodically will present to grade schools, middle schools, boy scouts and even brownies. A recent highlight included my being the mystery reader at my granddaughter, Brecken’s kindergarten with Ms. Schneider, where the unexpected and unrelenting probative question was: “Okay, so what’s your third favorite color?”
While explaining to high school and college students’ capitalism vs. socialism, I simply give the following example: “In a capitalistic system, everyone gets the opportunity to purchase (invest in) a shovel and dig dirt. At the end of the day, you get to bring home all the dirt that you, yourself dug. In socialism, you’re given a shovel, and you are allowed to dig dirt all day, and at the end of the day, all the dirt is thrown into a big community pile and divided equally.” The intent is for someone in the audience to come to the epiphany and ask the question, “Well then, what is the incentive for one to dig harder than the next (or go to medical school, or law school, engineering school, or launch an industrial distribution business, or …)?” You see, in the generation that is now emerging, socialism and egalitarianism are growing in popularity. However, it’s not due to any profound, deep embracement or even understanding of the principles of such, but rather by default. The media continues its assault on capitalism, and as such, people embrace a more socialistic agenda out of default. Sad but true, that too many no longer think for themselves, but rather abdicate their own thinking to the media.
Capitalism has, in just 240 years, with just 4% of the world’s population, rendered us the most prosperous and charitable nation in the world. Most importantly, the profits from capitalism have funded additional job growth. Notwithstanding the castigation of capitalism and the insulting labels such as one-percenters or the despicable capitalistic pigs, we have also funded charity and medical research from those capitalistic profits which, in turn, has provided us an enviable quality of life. Low infant mortalities, long life expectancies, the elimination of plagues, epidemics and threats that jeopardize the very existence of a society if left unabated. The insightful message of economist, Art Laffer, who cautioned: “You can’t love jobs, but hate the job creators.” In the earlier example of capitalism, understandably some of our dirt is surrendered to taxes. In effect, these taxes are the price of admission to play in our arena, the greatest arena of all…America! Those taxes fund much needed defense, infrastructure, and APPROPIATE (notice the emphasis on appropriate) social agencies. However, when taxation and regulation are excessive, it is confiscatory, and tends to mitigate the motivation to start or grow a business. It attacks the very “thing” that made us great. The very “thing” that has provided a middle class and upward social economic mobility which is nonexistent in so many other countries. My experience is that profitable businesses and investors who accept risk and reap the resultant reward of profits, reinvest them in more job creation! By any measure, job creation is rather important, especially in a country of growing population.
So here we are:
Elizabeth Warren announces her presidential platform centered around making the rich (that would be the job creators) pay their fair share, the implication being they never have. Please listen to the CBS-60 Minutes interview with the newly elected Congresswoman Ocasio-Cortez while she attempts to explain the progressive tax system…scary! In my home state of Illinois, $250 million was spent on our gubernatorial race which pitted billionaire vs. billionaire. That’s a quarter of a trillion dollars! The victor, JB Pritzker, self-funded $146 million of his own campaign. His platform is that he will protect the middle class by making the wealthy pay their fair share. Of course, who better to relate with and advocate for the middle class then a billionaire!…sarcasm intended! You may have heard the city of San Francisco’s Proposition C, which passed placing yet another tax on business to specifically fund the homeless. This will increase taxes on businesses with over $50 million in revenue by $300 million. This poster child of a sanctuary city will be funding homeless with the proceeds exploited from business. The resultant unintended (or is it intended?) consequences will be: fewer business start-ups, (employers) and more homeless (unemployed). If such is the desire of the community’s voters, then perfect! If not,…then not so good.
Anyway, let me spare you a hundred more examples and those you can add yourself. I simply want to thank you, industrial PVF owners, who invest your time, talent, and capital to create jobs, to pay taxes, and to support our charities. Yes, the odds are stacked against you, and the criticism will only elevate, but please know that you are vital to the success of this great nation! “Ask not for whom the bell tolls, it tolls for thee” — John Donne
“The good you do today, people will often forget tomorrow; Do good anyway.” — Mother Teresa
Who is John Galt?