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I Win When You Win
I’ve never bought into the belief that capitalism creates winners and losers. I’m no genius but, thanks to capitalism, I benefit by others who are. I’m not Thomas Edison, but his light bulbs mean that my day doesn’t end when the sun goes down. I’m not Henry Ford but I’ve got a couple of cars to get me where I need to go. I’m not Bill Gates, but I’m using Word to write this. I’m not Steve Jobs, but I can read news and books and make phone calls on my iPhone. When an entrepreneur wins in the marketplace, I win.
Yes, the next innovation could cost me my job. But in a free market, as long as any needs or desires exist, jobs exist to meet those needs and desires. Government is the only thing that keeps me from finding a new job. Minimum wage laws, employee mandates, hiring quotas, occupational licensing, monopoly grants all artificially limit my employment opportunities.
And the business cycle? That should be renamed the inflationary boom and bust cycle – yet another government-created lose-lose scenario.
Published in General
Very well said.
When a society becomes free, production shifts from satisfying the wants of the privileged for luxury goods to satisfying the wants of the masses for luxury goods.
In the words of economist Joseph Schumpeter:
There is a logic that at some point you can’t grow the pie any larger. But the history of man is that if you do not stifle innovation somehow the pie keeps growing. There are times when it takes one or two major shifts in knowledge to do so, but if man is permitted to pursue that knowledge it has always come at some point. This appears (to me) to be a part of Nature’s Law just as much as any other event in the ordered Universe. So the forces that constrain liberty and seek to control men and reallocate rather than innovate, are fighting Nature’s Law.
Great post. A lot of truths succinctly put. Thanks.
A handful of loosely related thoughts:
I am a fan of the economist Paul Zane Pilzer.
The world I grew up in was and remains obsessed with “overpopulation.” That obsession comes from finite-pie economics. In fact, socialism comes from finite-pie economics. Add the environmentalists to that equation, people who believe most if not all resources are running out, and you have a recipe for global disaster where people are at war with each other. Everything in me rejects the notion that wealth is a finite pie.
My husband lives his professional life in the world of finance, and he actually got to hear Mr. Pilzer speak at a conference he attended. I’ve never seen my husband become so excited about a speaker. Later we were on a long car trip at one point, and we listened to a recorded talk given by Mr. Pilzer. Everything he said made sense to me. This guy was looking at economics through a lens of faith and goodwill.
If his way is the way we look at the world around us–and I think it was exactly that way in the heady exuberant affluent years in the 1950s–we’ll make the world fit that view. As it did.
That’s the really sad thing about the civil unrest right now. If we look at the world as a racist ugly place, eventually that’s exactly what it will become. It’s a weird human phenomenon but real. It will become just the way we see it.
I’m coming around to the proposition that that is precisely the intention behind the civil unrest. It pains me to consider people in such a cynical light, but it’s increasingly the only way I can make sense of the world.
I feel the same way. I don’t how to fix it.
One person engages in a mutually agreed transaction with another person.
-Or-
One person engages in a transaction with another, while a bureaucrat determines if the transaction was fair, and regulates accordingly.
The first transaction takes two people to implement. The second takes three, or more. Capitalism is the system of efficiency.
Yes. Free Market is probably a better description but some mistake a skewed market like Britain’s “Corn Laws” or our trade with China for Free Markets. With those few exceptions, it is a better term.
Meanwhile, the Left wants to destroy the suburbs and imprison people in the cities.
The other part is private property. Joel Mokyr has an excellent history of technology that describes all the inventions of anonymous inventors. Perhaps the fall of Rome was a consequence of the lack of private property. Ot at least the Rule of Law.
https://www.amazon.com/Lever-Riches-Technological-Creativity-Economic/dp/0195074777/
The next innovation could also create an opportunity for your next job. The postal carrier just delivered to me a few minutes ago a couple of new accessories for my fairly elderly iPhone. Neither of these accessories were made by Apple. Even at a simplistic level, the creation of the iPhone by Apple/Jobs created an opportunity for others to create and to sell accessories to go on and around that iPhone. And of course at the more complex level, the market for “apps” for the iPhone is enormous, and did not exist as recently as 2006.
The widespread availability of personal computers using common software enabled people to do tasks and conduct businesses that were previously impractical or uneconomical.
As a young lawyer in the 1980s working for a company that was involved with Global Positioning Satellites (GPS), I was surprised to discover that some of the earliest adopters of commercial GPS technology were farmers. GPS data allowed farmers to be more efficient at planting and treating their crops, for nearly immediate financial benefit. Taught me not to assume I could predict who was going to benefit from an innovation or how.
I remember reading that, when cellophane tape first came out, no one wanted it. Then someone came up with a tape dispenser and tape started selling like hotcakes.
History or experience trumps logic when it comes to innovation and growing the pie.
Logic can’t predict the future. Neither can any ‘expert’. As Matt Ridley said, no one is an expert on the future.
The worst part about price controls is it stifles innovation.
individual liberty + property rights = prosperity
When did Britain repeal the corn laws? I believe it was 1846
No one knows how to make a pencil.
It’s a very complicated process with many moving parts.
Of course I can’t remember the last time I used a pencil.
https://www.youtube.com/watch?v=xbJ0aAKd0fg
Most if not all innovation has benefited the ‘ordinary’ man more than the ‘rich’ man.
Why did Henry Ford become rich and famous? The model T was priced for the ‘middle class’.
The innovator gets about 3 to 10 percent of the value created by him/her. The rest is consumer surplus.