At Christmas time, my mother-in-law claimed that the word greed best described the 1980's because of all the activity in the stock market. When I questioned her about the 1990's, when the market set annual all time highs and people were taking out second mortgages to invest more money in the NASDAQ, she had no answer (how good the 90's be about greed? Bill Clinton was in office and Bill Clinton's not greedy, not like Reagan).
The following is from John Stossel, co-anchor of ABC's 20/20 and author of the book Give Me a Break: How I Exposed Hucksters, Cheats and Scam Artists and Became the Scourge of the Liberal Media:
The wailing about "corporate greed" goes on endlessly. Protesters sneer at the "selfishness" of capitalism.
From the press we learn there are two worlds: the nonprofit one, where everything warm, caring and devoted to the "public good" happens; and the for-profit one, where opportunists cruelly exploit the weak. In the movies, the person most likely to be portrayed as a murderer, child molester or destroyer of the environment is not a Nazi or member of Al Qaida; it's a businessman. According to a study by media watchers Lichter, Lichter and Amundson, business people represent 12% of all TV characters but commit 32% of crimes and 44% of murders.
Reporters equate capitalism with greed. They look down on it as bourgeois and point out that free markets produce dramatic inequality. When Ralph Nadar says that America has an "Apartheid Economy" where "corporate greed" exposes poor consumers to "frauds and hazardous products" reporters nod in agreement.
Let's calm down here a moment.
I too am repulsed by greed. I hate the wretched excess of the avaricious. People whose materialism knows no bounds and those who try to get ahead by stepping on others deserve condemnation. But what do we mean by greed? I make a lot of money and I've never turned down a pay raise. Does that make me greedy?
The truth is that greed, when exercised in the private sector is useful. Yes, the inequality can be gross; some business executives make a hundred times what their subordinates make. But there's usually a reason for it. Those manager's decisions make a huge difference and they can create more wealth than other workers create. A company's directors don't pay the executive big bucks out of generosity. They pay it because they think he/she can make shareholders (and them) the most money. If big bucks are what it takes to get those services, then they'll hand over the big bucks.
It's hard to believe that a manager's contributions could be worth so much more than the rank and file, but they often are. Presumably, John Sweeney is worth $200,000 to the AFL-CIO. Ford Motor Company wouldn't be worth anything were it not for Henry Fords innovative use of the assembly line. I envy my own boss' compensation. Disney CEO Michael Eisner has taken home over a billion dollars. That seems ridiculous and yet, after Eisner took charge Disney's net worth climbed from $2 billion to as I write this $42 billion. Forty two billion is $41 billion more than Eisner got paid. Not every CEO's contributions are valuable - there are clueless and venal boards of directors who shoved money to their friends. But they are generally the exceptions.
Governments do not enlarge the pie. When government doles out $1 million to a favored group, the rest of us do have $1 million less. If a country's rulers can use the power of government to feed their greed, then greed is nasty indeed. In Haiti, Jean-Claude Duvaliers tax collectors funded his shopping sprees. His wife had the nerve to tell Barbara Walters, "I don't believe the money was badly spent".
In the Philippines, Imelda Marcos spent her loot on thousands of shoes. She needed them, she said, because she had to change clothes a lot. This kind of greed does take pie away from the poor. But only governments can do that, because only governments can use force.
Capitalists like Bill Gates may be just as greedy as Imelda and Duvalier, but to get rich, they have to do things for us because they can't use force. To get our money, they have to persuade us, entice us to buy - willingly. If the transaction doesn't benefit both of us, it just doesn't happen. This is why everyone wins under capitalism. Unless someone cheats.
Cornelius Vanderbilt and his fellow tycoon John D. Rockefeller were often called "robber barons". Newspapers said they were evil and ran cartoons showing Vanderbilt as a leech sucking the blood of the poor. Rockefeller was depicted as a snake. What the newspapers printed, eventually stuck - we still think of Vanderbilt and Rockefeller as "robber barons". But they were neither robbers nor barons. They weren't robbers because they didn't steal from anyone and they weren't barons, they were both born poor.
Vanderbilt got rich by pleasing people. He invented ways to make travel and shipping things easier. He used bigger, faster ships and served food on board. People liked that and, the extra volume of business he generated allowed him to lower costs. He cut the New York - Hartford fare from $8 to $1. That gave consumers more than any consumer-advocacy group ever did.
It's telling that the "robber baron", name calling didn't come from consumers. It was competing businessmen who complained and persuaded the media to join in.
Rockefeller got rich selling oil. First competitors and then the government called him a monopolist, but he wasn't - he had competition. No one was forced to buy his oil. Rockefeller enticed people to buy it by selling it for less. That's what his competition hated. He found cheaper ways to get the oil out of the ground and to the gas pump. This made life better for millions. Working-class people who used to go to bed when it got dark could suddenly afford fuel for their lanterns so they could stay up at night and spend more time with their families.
Rockefeller's greed may even have saved the whales because when he lowered the price of oil, he lowered the demand for whale oil. The mass slaughter of whales for this purpose was substantially eliminated. But you probably won't hear about his contributions in a grade school environmental science class.
Rockefeller and Vanderbilts goal might have just been to get rich. But to do that, they had to give us what we wanted.
Anybody heard anything good about Wal Mart lately?
No comments:
Post a Comment