Posts
If you have a Facebook account, you've more than likely seen someone link to a picture from left wing political website www.moveon.org that details "The Elizabeth Warren Quote Every American Needs to See." The quote itself follows below:
"There's nobody in this country who got rich on his own. Nobody. You built a factory out there - Good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory... Now look. You built a factory and it turned into something terrific or a great idea - God bless! Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along."
I copied and pasted because I really didn't feel like giving moveon.org any more hits than were necessary, but if anyone wants to double check me and verify my transcription, be my guest. It's copied verbatim from here.
Most of the people I've seen linking to this quotation seem to be in support of it. After all, what isn't to support. The greedy, evil factory owner making millions of profits off the sweat of the brow and the back of the overworked, underpaid proletariat of Karl Marx. It's a good story; which sadly is ruined by Mrs. Warren's completely ineffective word choice, sentence structure; ideology; and of course, those silly little things called FACTS that always ruin good stories.
Because it would be far too cumbersome and probably devolve into gibberish to respond to the entire statement at once; let's break it down into pieces and go from there.
"There's nobody on this country who got rich on his own."
This of course, is a true statement, if in no other sense but the literal one. It's quite the safe assumption that (insert rich person here) was brought into this world by way of his mother who copulated with his father, and of course the birth was performed by a doctor and a medical staff; so that's at least 3 or more people that already the rich person is aided by; never mind a life long journey from crapping in a diaper and napping to becoming a titan of industry assisted by professors; friends, family, business partners, whatever. It is literally impossible to do anything in this world with out the assistance of one other person; because frankly, you come into this world indebted to at least 3 people. So the appropriate response to this statement is "Yeah, so what?"
"Nobody."
Don't sentences need to be at least two words long? A noun and a verb. Granted I don't have a law degree from Rutgers; but I do remember 3rd grade English.
"You built a factory out there - Good for you."
Actually, good for everybody. The factory is presumably going to make things right? In order to make things we need to purchase raw materials and equipment from distributors so that's good for them. We need to hire skilled labor to transform those raw materials into said final product so we can sell it; so it's good for the new employees' family who were living on the breadline yesterday. We're going to sell our product to someone right? That's good for either the merchants who sell our goods AND the general public at large who now has another product choice in an open marketplace. More choices generally means higher elasticity; higher elasticity means LOWER PRICES. In the grand scheme of things, the owner of the factory is actually the guy who gets hurt the most in the short run; but we'll come back to that later.
"But I want to be clear."
Sounds like a plan to me Beth; I'm assuming what follows will be very basic, simple premises that will not at all be contradictory or confusing. Let's see what you got.
"You moved your goods to market on roads the rest of us paid for."
I'm more than half way through my second year of business administration studies and I've studied the different forms businesses can be formed under many, MANY times at this point; I completely missed the type of business that not only was completely exempt from state and local taxes; but also granted the FOUNDER of the company the same exemption on a personal level.
Roads are considered a common good. They are non-exclusive and rival. This means that essentially an entity cannot provide them to one without providing them to many; but as anyone who has sat in rush hour traffic in a major metro will tell you, the more people that use them, the less surplus each individual has in terms of their usage. To put it another way, I enjoy using the roads more when it's wide open and I can do 80 miles an hour with nobody within a half mile of either bumper than I do sitting at a dead stop for half hour boxed in by cars on every side of me. Though my usage of the good can be affected; my costs are not. . . .regardless of whether or not I build a factory.
"You hired workers the rest of us paid to educate."
Oh, you want to recognize that fact now do you? You are acknowledging that my factory does in fact create those jobs that you love to harp and screech about because you think the world owes you a living? Okay, just checking.
The argument in general remains the same; I'm still not sure how opening my factory means I'm not paying my state and local taxes that go to pay for these schools. However, I am more than a little curious what makes you think that Education should be a common good in this country anyway.
By definition; "education" is a private transaction. Think of it this way; you want to learn karate, the piano, salsa dancing, etc; you enroll in a class, you pay the instructor, and you have gained the skills. Very simple, very basic, very PRIVATE transaction. Education is of course in a free market, a private good in that I can provide the service/have it provided to me (exclusive) and rival in that the quality of education I'm going to receive has correlation to the amount of persons I am sharing the good with; meaning my use of the good effects someone else's use in another way. Given that you work at Harvard (a private school), you should certainly not need me to explain this to you.
The fact that our employees not only WANT, but given our economy now; we NEED skilled labor is the major reason we've transformed education from a private good to a common one. The simple fact of the matter is that there is a massive correlation between the education level of our workforce and the performance of our economy; that correlation is only growing as the competitive advantages grow for China, Japan, India and all the other countries we have make our cheap crap while we're busy building Space Shuttles, Airplanes and providing services to the rest of the world. Those workers need we hired not only went to school, they performed, went further than they had to, developed a skill set, and continued performing AFTER they were hired. However, without my factory here to hire them; they would just be very educated people still living in log cabins and foraging for food in the wilderness.
"You were safe in your factory because of police forces and fire forces that the rest of us paid for."
Again with the us vs them. You know Beth, a more cynical person would think that you were subtly hinting that because I decided to create a business that I cease being a private citizen of the state and town I live in. Of course, this is rubbish; I'm still paying their salaries (and in some cases, I'm doing so voluntarily) as both services could be considered private goods under the right circumstances. If you don't believe me, pick out any Bond movie at random and consider the amount of evil henchmen surrounding the villain at all times. As for the fire department; there literally is nothing stopping them from ignoring the alarm; or even better yet, driving to the fire in question, and watching it burn. What I'm getting at Beth is that this statement is absolutely irrelevant rubbish and you know it.
"You didn't have to worry that marauding bands would come and seize everything at your factory..."
Yeah; it's called an alarm system at least and a completely competent security force at most. The only people I'm worried about seizing anything from my factory are the government who are hell bent on making it impossible to conduct business in a profitable manor; if for no reason then I get a lecture from some Harvard dingbat lawyer who wants to make sure every American person gives me a guilt trip for having the audacity to think that I should be entitled to see a return on my investment of time, resources and risk; because we all know that if *I* should see a profit, that makes me a whole other kind of evil. . .
"Now look. You built a factory and it turned into something terrific or a great idea - God bless!"
I told you earlier, my factory didn't have to be "turned into something terrific" it just had to meet its intended purpose. The "great idea" is not a product of the factory, the factory is a product of the idea. If I create a factory to produce tuna fish flavored gummy bears; I'm probably not going to be in business very long. My responsibility as an entrepreneur is to create, develop and bring to market something that people want and need enough that they will pay for me to continue making it. That would be how an economy WORKS. People are willing to pay Y for good X; I need to be able to MAKE AND SELL Y for some number greater than X and less than or equal to Y. If I can do that, I can stay in business. Not a real difficult idea. And don't get me wrong, as much as I love God and appreciate the many blessings he bestows upon us all daily; a good idea and sound business plans can succeed in spite of him (remember, it's data kids, not ideology).
"Keep a big hunk of it."
Thanks, I appreciate you letting me keep a bunch of my earnings after I'm the one who came up with the idea for the product. The one who obtained, budgeted and utilized the resources in an efficient and effective manner. The one built the team around me (after all, nobody gets rich alone, remember) who implemented and perfected this plan. Finally, I especially thank you for letting me keep a "big hunk" of my earnings because I'm the one who takes all the RISK!
If I'm a small entrepreneur and my idea tanks; I still owe the bank for my start up loan. I still owe rent to the landlord for my office for the terms of my lease. I still have to make payments on my equipment that I used. If starting a business were as easy as you make it out to be Mrs. Warren; then everyone would send in an application, file their DBA tomorrow and just wait for the checks to roll in, and based on the current unemployment numbers, that's NOT how it is. So again, thank you so much for giving me permission to keep a big hunk of my money that I earned; now kindly feel free to kiss my ass.
"But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along."
I'm curious as to why the quote cuts off here, because frankly I really want to see what her ideas for "paying forward" include. Whatever they are, they seem to be inferred that the societal positives of creating unemployment and lowering prices on a good/service that (by definition) people want and need. It also has to be something in addition to the LONG RUN cumulative benefits that come from the free market. . .
Suppose in my factory I hire a machinist who was previously working as a part-time fry cook at McDonald's. My full time position doubles his workload and quadruples his pay. Now because he was skilled labor who has left an underemployment position to one that is commensurate with his skill level; he has more income to spend and save in his personal budget. Because he was diligent with his budgeting and savings; his son goes to Georgia Tech instead of Pellisippi State and earns his masters degree in engineering; then HE opens his own factory; meaning the process continues.
The Tank Says This:
Like most others who share her world view; Mrs. Warren is more than content to espouse class warfare and jealousy than to face the simple fact that we all make choices in our lives and that the greatest correlation in the history of statistics is the one between risk and reward. The one major criteria in the fry cook example above is that he has to have the appropriate skills to take the machinists job in the first place. This means he took RISK in educating himself in a skill that might someday not be marketable. This means *I* took a RISK (in addition to all the others listed above) in hiring him even with the skill set, because how do I know his skills are still applicable; or he's not become resentful or turned to drugs and alcohol? If he works out, great! If not, I risk ruining my product, or creating a poor work environment on my production floor. If it works out, we both win; if it doesn't we both lose.
So for all of her bile, venom, and (in this case, LITERAL) "us vs them" propaganda; there is actually more teamwork in the workplace than there is in this mindset. The next time you cash your paycheck; remember exactly what you did to EARN it. It's not charity, your employer isn't giving it to you because of some "social contract" they are giving it to you because you traded your time and your skill set for an agreed upon amount. If this makes you mad; then don't be mad at the bosses who are providing you with a way to earn a living and put food on the table; be mad at yourself; then take action to do something about it so you can help yourself, and really pay it forward by helping everyone else too.
