Thoughts Aloud

In a recent speech in Roanoke, VA, Barack Obama said:

“If you’ve been successful, you didn’t get there on your own. … I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something — there are a whole bunch of hardworking people out there.”

He went on to bray about how “successful” people and businesses depend on common infrastructure, like roads, bridges, power lines, schools, etc. that were supplied by all of us as if those things were not just as accessible to the “worker” as to those who capitalize, plan, organize and direct.

There is a simple fact of economics that we seem loath to bring into the ongoing arguments about ‘fairness”, the distribution of the rewards of production, etc. And, we who support the basic morality as well as the efficiency, and even the fundamental “fairness” of Capitalism and The Free Market System are consistently losing these arguments. This is partly because an increasing number of our citizens simply lack the education necessary to understand the underlying facts and that the emotional reaction to the progressive argument seems to ring true. After all, what could possibly be more fair than to have the rewards of production distributed equally to all?

But, the larger reason is the we Free Market Capitalists simply DO NOT effectively argue our position. Far too often, we don’t even try – we let the progressives win the argument by default.

I will not use your time with a repeat of the obvious reasons for unequal outcomes – different skill levels, different expenditure of effort, underlying incentives, pure luck, etc. Surely by now all readers of this blog know these by heart.

What I do wish to discuss is why so few of us are bold enough to put the facts on the table and discuss (and defend) them rationally?

First, there is no direct correlation between “working hard” and “being productive”. For “hard work” to result in “productivity” requires that said “hard work” be organized, focused and directed effectively.

For centuries, humans have transferred as much “hard work” as they could to beasts of burden, be they mules, horses, asses, elephants, llamas, oxen, dogs or whatever other beast may come to your mind. And, while we tried to take good care of our beasts (to keep them in working shape as much as out of any sense of compassion or gratitude), the fact is that the human directing the “work” of the beast in question profited considerably more from the “work” than the beast, although the beast was usually better fed and better cared for than it would have been in the wild.

OK, this concerns animals – what does it have to do with human “fairness”?

Simply this… the basic pattern in use here changes little when we switch from considering the “work” performed by “beasts of burden”, to the “work” performed by one human under the direction of another. The only real difference being that we usually accord other humans with a higher consideration that we do to most animals, whether the human has earned it or not.

The simple fact of the matter is that some creatures, beast of burden or human, are capable of doing certain very useful things but only when directed by and entity capable of capitalizing, planning, organizing and directing the underlying effort in an effective way. And, the one(s) doing the capitalizing, planning, organizing and directing “fairly” deserve a greater portion of the rewards of the resulting production because that production would not have occurred without them.

Why are we so loathe to make this argument? Do we ourselves think the arrangement unfair? Do we think that it is somehow more fair for humans to struggle and suffer in a subsistence lifestyle than to have people of wealth, talent and ambition organize their efforts such that they gain more than they otherwise would have?

Might I be so bold as to suggest that the real question of ‘fairness” should be whether any given human in an organized work environment is realizing a reward for his/her work that is commensurate with the value added by that work?

So long as the relationships between the “worker” and those who capitalize, plan, organize and direct are voluntary relationships, how can the underlying system be anything but fair, moral and ethical?

And, is this not still true even if the “worker” trades his/her labor for less than he/she might have gained by other means, so long as he/she does so willingly? I suspect that many “workers” do exactly that because, they do not want the added stress and/or responsibility that might come with an otherwise more rewarding option. Is making such a choice anything other than an exercise in personal liberty?

Why then are those who capitalize, plan, organize and direct so disinclined to argue the rightness and fairness of what they provide? Instead, they all to often try to dodge the question as if they are somehow admitting that the hiring of willing “workers” is really not that different from involuntary servitude.

Why then are those same “capitalists” also so disinclined to show how government intrusions that increase the “transaction frictions” involved in the employment of human workers causes the “capitalists” to seek to decrease these “frictions” by seeking other solutions, such as moving the work to locations where the “transaction frictions” are lower, by investing in machines and robots that will do the work instead of humans, or, worst of all, simply by letting an opportunity to create new wealth go unrealized.

Why then can none of us step right up to the Obama’s of the world and respond “Yes, I probably do work harder than many of the people I employ. I often work smarter as well. I take much greater risks and assume infinitely more responsibility. And, anyone I employ is free to quit and start their own business anytime they choose – if they have the ability and the willingness. Tell me Mr. President, why do so few people achieve high political office? Could it possibly be that some simply choose not to, many more don’t have a clue how to and even more than that are unwilling to put forth the effort and take the chances required to get there? So, a few get to govern while the many are governed. Why should the world of business be any different?”

Think about it.

Troy L Robinson

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