Tuesday, June 5, 2012

Where Jobs Come From, Part Deux

So, according to my more liberal friends, jobs apparently come from the people. The people generate demand, which causes businesses to need to expand, which creates jobs. Thus, it is not the business owners that create jobs. It is the consumers that create jobs.

I get what they're trying to say. There's a symbiotic relationship between the business and the public. Without consumers purchasing businesses' products and services, there are no businesses. This is true.

What they fail to understand is that without the risk takers and the driven, who's going to start these businesses even with massive demand? Without venture capital, who's going to fund the entrepreneurs who usually don't have the capital on their own? Without a friendly political/economic system, who's going to risk everything if the rewards are to be dispersed, but the risk isn't?

I've mostly done the "right" things in my life. I did well in school, have two college degrees, and have a good paying, white collar job. However, without the above scenario driving entrepreneurs and business, I have little to nothing. I have gotten to ride the coattails of some excellent capitalists. Don't get me wrong, I have provided them with more money than they pay me. However, I would not have near the amount of pay I do without their vision and drive.

If I'm making 50% of a solid revenue number driven by my labor, I'm much better off than making 95% of a tiny one. Free market capitalism provides incentive to the dynamic visionaries in business. It provides growth to an economy. It provides jobs for those that are the worker bees.

My liberal friends confuse free market capitalism with much of the crony capitalism that goes on in this country today. Buying influence with the government to fatten your wallet at the expense of others is not free market capitalism. However, free market capitalism probably breeds crony capitalism when the government becomes large, powerful, and pervasive within the economy. People chasing money will often do what it takes to make more. If "legally" influencing government in their favor is possible, the incentives are too strong to avoid.

If the left wants to hit those of the "1%" that are abusing the system, they need to look at Washington D.C. and not Wall Street.

If you want growth and jobs, empowering the entrepreneurial spirit is what's needed ... or at least just get out of their way.

(I will follow this with a bit of a devil's advocate argument with regard to outsourcing)

4 comments:

There are some who call me... Tim said...

"Buying influence with the government to fatten your wallet at the expense of others is not free market capitalism."
- WRONG - that is EXACTLY what "free market" or "caveat emptor" capitalism is. Buyer beware and no holds barred. If the price of buying a politician is less than the profit earned from it, then do it. If that purchase is legal, then the price is of course lower than if the purchase is illegal.

Free market capitalism allows for crony capitalism - if you can boost your earnings by propping up a buddy, do it.

Your liberal friends are not confusing anything. You, however, are confusing free market capitalism with free and FAIR market capitalism. That one word "fair" keeps crony capitalism to a minimum by placing restrictions on unethical an illegal activities. It allows consumers to have full information on what their purchase options are. It allows for transparency in the marketplace.

I am a diehard capitalist - no other economic arrangement allows for true economic success. But to push for this type of Randian capitalism is, as we have seen, detrimental to society.

As for correcting for that 1% perverting the system - allowing them to buy Washington via Wall Street IS the perversion. Wall Street buys Washington, Washington pushes to allow Wall Street to spend more in Washington. You cannot fix one without fixing the other.

Rob said...

Government is too pervasive in the economy, creating an environment for impactful crony capitalism. I may not have made that point well - I sometimes rant at the expense of clarity. I did include this in it:

"However, free market capitalism probably breeds crony capitalism when the government becomes large, powerful, and pervasive within the economy. People chasing money will often do what it takes to make more. If "legally" influencing government in their favor is possible, the incentives are too strong to avoid."

Rob said...

I am not a Rand-ite, but I have read Atlas Shrugged. The crony capitalism going on now is similar to much of what was railed against (no pun intended) in the book.

I'm not excusing Wall Street for their often unethical behavior, but the problem is a monstrous government available to the highest bidder. It's for hire via the ballot box as well.

The trick is how to make capitalism fair via a government that is for hire. Changing certain behaviors from legal to illegal would help.

Dr. Kold_Kadavr_flatliner, M.D. said...

God bless you, dude.