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Friday, April 15, 2011

The Benevolence of Greedy Capitalism

There is a principle I discussed with a Christian friend of mine who was lamenting the "greed" of a specific employer, who did not contribute to charity, who did not seek to do good in the world, who only sought to make money and scrimp on every expense. The greed, however, from my point of view, was on his part. It was this other man's money that he had plans to divide and with which to do good. He wanted to do his good with someone else's money. (of course the parallels to government cannot be missed here, but that is not my point)

After listening to my friend for a period of time, I realized it was time to point out a few facts that he had obviously not taken into account. Here is the point I related to him. It doesn't matter if the employer wants to do good, or not. It is not his choice. It is his choice to do evil, but not good. There are dynamics at play in the economy that cannot be denied. In my mind, capitalism is the very hand of God being revealed to all who would pay attention and follow the bouncing balls.

It is literally impossible for a person to amass a fortune and not do good with the money he has accumulated. Yes, there are those like Bernie Madoff who stole millions from the unsuspecting and blew it on who knows what, but he is the exception and that is why he is in prison. Theft by deception is not the sort of wealth creation I am talking about, it is the old-fashioned, build-something sort of wealth creation I am describing.

The first thing any enterprising person must do in order to accumulate wealth is to start something, take a risk, put some of his own hard-earned money down and begin something. Once he does that he contributes to the tax roles, helping the city, county and state maintain the roads and buildings and administration that we use every day. He can try, but vehicle taxes and fuel taxes and sales taxes are paid along the way. I'm sure the greedy capitalist doesn't want to pay for these things, but he recognizes that to stay in business they need to be taken care of. While I might agree that it doesn't always have to be taxes that provide these things, the general agreement among the less strident libertarian is that government is the appropriate place to secure roads, buildings and administration.

The second thing the greedy capitalist must do is hire the services of other businesses, rent space, have the printing done, hire a CPA and a lawyer to get the ball rolling. Inventory, and/or advertising must be purchased in order to let others know of the business and to stock the shelves with something to sell. All of these things enhance the profits of any number of other businesses or manufacturers.

The third thing the greedy capitalist must do, if his business is successful, is hire someone to handle the less-important, but necessary duties like drafting letters, sweeping the shop, invoicing, etc. This person didn't have a job a week before and now is able to contribute to society which reverses the flow of cash to this person through unemployment benefits, welfare, etc and turns it around to where that person is contributing to those funds from which they had recently been drawing. The newly hired is also thinking about the things that should be purchased in the future.

So, as it goes along, here is what we come up with  from the greedy capitalist: 1) his investment in his business all with the purpose of amassing a fortune unto himself helped to pay for the roads, buildings and administration of the government; 2) it helped to grow other businesses and to make the owners and manufacturers more wealthy and perhaps have to hire one or two more people; 3) he hired numerous people over the years as he grew rich.

The crucial question often unasked is what did those who benefited from his company either through taxes, or sales, or employment do with those funds? You know what they did? They started a homeless shelter; they contributed to churches and charities; they bought things that supported other businesses and increased employment. Their goodness is not undone by his stinginess. Their charity is not fraudulent because it started from a person who did not support it. Their success is not diminished by his.

No, I would suggest to anyone reading this post that it was the government that took the greedy capitalist's money with the premise of "doing good" who wasted it on bloated bureaucracies and duplicated efforts and payoffs to political supporters who more closely resemble Bernie Madoff.

Graciously linked at Arctic Patriot.
Graciously linked and quoted at Green Mountains Homesteading.
Graciously linked at Doug Ross.

9 comments:

  1. Quoted and linked at http://greenmnts.blogspot.com/2011/04/god-works-in-mysterious-ways.html

    Too many folks are way too worried about others people's business, and this is why we find ourselves in the mess we are today. With envious hearts, folks have looked for a power to get even with those who's goods they covet. The have created a government with these black intentions who is picking the winners and losers. Unlike with the creation of wealth, there is nothing coming out of the black pit of statism that is healthy for human liberty and freedom.

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  2. They(We) do not teach our children the truth... and this is why the basic principle of charity (among man, many others) has been twisted into the unrecognizable morass it is today. When we rebuild this country from the ashes of the coming War, let's make sure we learn to teach and teach the truth.

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  3. Linked at AP and posted along with an excellent related Walter Williams video.

    Good post.

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  4. I agree with your assessment, TL.
    What others do with their money, or what I do with mine, is no one's business but the posessor's.
    And as you say, the money does eventually result in 'good' being done, so there's no reason to lament what 'the boss' did. "Greedy Capitalists' are what make the wheels go 'round.
    The problem comes in when we surrender (at force of arms) our money to a government and that government blows our money- our government, our money- and we then do have a right to say where it should go. We have the right to question and alter if necessary. Especially when the gov't as now is wasting the money in more than piggish ways.
    Shy III

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  5. On your Bernie Madoff example, he did not create Wealth, he made lots of money in the form of Federal Reserve Notes.
    Yes, no one creates Wealth without doing at least some good.

    Google the book "The Alpha Strategy" (it's free on the internet). The first half of the book is a fabulous treatise on what wealth really is and how it is different from money. Towards the end he sort jumps the shark tank in my mind, but still a good read.

    Great post. THanks for writing it.

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  6. Best explanation of how Capitalism "spreads the wealth" I've heard yet.
    When I worked for DirecTV (*the* most "PC" place I've ever worked at!), one of the young guys was bemoaning "Big Business" and how evil it was. I pointed out to him he was working for a "Big Business" entity, and that "Big Business" made it possible for him, with only a high-school education, to be making almost $80,000 a year, with excellent benefits, yearly profit sharing bonuses for all employees of four figures, and a lot of other fringe benefits like a nice, clean, safe place to work.
    A day or two later he came back to me and admitted I was right, and that he really hadn't thought that much about it, but rather was repeating things he'd heard other people say.

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  7. When I worked at Costco, a customer tried to bait me by bringing up our CEO's new home that was under construction. It was sort of a "hey peon, what do you think of that?" question.

    My answer?

    "God bless Jim Sinegal and I hope he enjoys his lovely new home. If it wasn't for Jim I wouldn't be earning over $15.00 dollars an hour (and this was over 10 years ago) with generous bonuses, free premium health care, and a big chunk of change going into my 401K every year, just for pushing your crap over a scanner. I'm sorry Jim didn't build an even bigger and better home. He earned and deserves it."

    Wish I had a picture of his face...

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  8. The greedy capitalist likely put all of his money into the bank... which then loaned it out to young families or expanding businesses, a far more noble use of the money perhaps than simply paying higher taxes or donating it to political candidates or campaigns.

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  9. Wonderful comeback, Adrienne!

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