Paying Tribute To The Vital Entrepreneurs Who Grow Rich
Last week at our annual meeting a speaker emphasized that 92% of GDP depends on something being sold. The message was clear: Our company will prosper only if we add value to customers. We must become indispensible to their success.
There was also a moving tribute to the founder of the company I work for, who is set to retire. He rose up from poverty by virtue of improving the lives of those with whom he dealt. His creation was a boon to hundreds of workers and thousands of customers. Each profited, living better than we otherwise would have had his vision never materialized. We worked there because we saw the opportunities presented as superior to whatever was our next best option.
Likewise, customers patronized the business because they too thought it was in their interests. And many must have picked wisely because they returned for more, making him a legend in the industry.
He was one of the “vital few,” those exhibiting the ingenuity, vision, perseverance and drive to create. America, with her protections of property rights, the rule of law and respect for the profit motive has historically been blessed with many such entrepreneurs. They grow rich by developing products or performing services that satisfy their customers’ needs.
Morally, riches are irrelevant other than how they are acquired and for what they are used. Life isn’t defined by possessions and those who worship wealth will never have enough, but there is a moral imperative to produce.
Economically, successful businessmen make the world a better place. They are essentially voted rich at the cash register poll. We pay them to add value and they reciprocate with jobs, goods and art. The top ten percent of earners pay most of America’s taxes, account for the majority of charity and half of retail sales.
It is thus baffling that wealth has become such an object of derision. Even decades after communism collapsed we are inundated with Marxist agitprop. Intellectuals and politicians — teeming with a hypocritical combination of envy and self-righteousness — pontificate incessantly about the rich “not paying their fair share” or bemoaning that the “rich get richer while the poor get poorer.” But as class antagonisms manifest in progressive income taxes and other policies built on covetousness, we risk stunting the essential entrepreneurial spirit.
Hopefully, the last election reflects a shift, but America has experienced a troubling trend where politicians derive power (and wealth) by demonizing success. President Obama stokes such animosity with, “We’re not trying to . . . begrudge success that’s fairly earned. I mean, I do think at a certain point you’ve made enough money.”
An ironic statement considering he makes millions writing books attacking the wealthy and has parlayed this blatant demagoguery into political power. If as senator he had determined enough was enough we’d be better off.
Class warfare rhetoric implies that riches are gained by depriving others and that we live in a static social order. However, in America, the classes are not fixed and those generating wealth expand the pie. By rights, then, they ought to retain larger shares.
Over 80% of millionaires are self-made. Most never become millionaires, but we benefit immensely by those who do. We might work hard but lack the vision, the confidence to take risks or the willingness to devote ourselves to career at the expense of all else. Others lack the discipline to delay gratification, thus squandering earnings before they become wealthy. Yet, because of those seeking riches, we lead comfortable lives basically riding on their coattails.
Here, poverty is not permanent. Many start poor but realize the American Dream, ascending to new heights. Every year recent immigrants and fresh graduates gather on the lowest income levels eager to ride the American escalator to higher prosperity. There will always be a bottom rung for liberals to complain about even as its prior inhabitants advance into higher strata that don’t repopulate automatically.
Entrepreneurs power this escalator using capital for fuel.
The poorest Americans enjoy world class medical care, an amazing array of dietary choices and technologies such as cell phones, televisions and appliances. Even if you don’t own a car, you have access to wonderful transportation options. You likely live in the comfort of an air-conditioned space with access to ample energy supplies. In a material sense, even manual laborers are phenomenally wealthy by historical standards.
Don’t take America’s economic prowess for granted. It’s an unprecedented achievement. Only an ingrate complains that those who brought us these incredible advances prospered. We all gain from the products by which they earned their riches and the wealth they accumulate. Abusing them will backfire.
Innovation and jobs require investment. In wealth lies the necessary capital without which there is no production and no opportunity. It is vital that the rich find America a welcoming place to invest. They must sense the ability to gain. Limiting choices through over-bearing regulations or punitively raising taxes stunts the motivation for those still astride the escalator endeavoring to become rich.
Investors achieve returns by planting the seed capital that sprouts into new companies, better goods and rising living standards. Raising the cost of investing means less capital available to create jobs, fund innovation or produce things which beautify and sustain life.
The top one percent of earners already pay about 40% of income taxes. This reduces capital availability and proves dual taxation on capital gains or dividends are counter-productive. Worse, we steer investment into the public sector via tax free government bonds.
The government wastes more than it creates. Politicians merely siphon production to redistribute their largesse to favorites. They confiscate wealth by making promises that go unfulfilled. If government programs were subject to market discipline most would starve for lack of investors or customers. If a business performed like our public schools it would expire quickly.
Businesses, aka job providers, enrich society by adding value to their customers. We buy something because we consider it worth more than the money we spend. Businesses can only extend the choices available. If customers don’t buy, they part ways peacefully. Not so with government. We pay for public services even if we see no value or would choose differently. We comply with bureaucratic mandates or suffer fines or imprisonment.
America needs more entrepreneurs and less government.