In my last column I mentioned my upcoming debate this week with author Lanny Ebenstein at FreedomFest in Las Vegas.
The resolution: “Can Anything Good Come From Being Super Rich?”
I argued the affirmative.
But it’s worth pondering why the subject needs to be debated in the first place.
After all, studies show that the affluent in this country are overwhelmingly people who developed a marketable skill, capitalized on an opportunity, took substantial risks and – thanks to the beauty of our free market system – reaped the rewards.
And the folks who became super rich? They did the same thing – cubed.
If it’s a good thing to get educated, work hard, seek opportunities and take calculated risks, why would it be a bad thing to do this so successfully that you become one of the wealthiest individuals in the nation… or the world?
It isn’t. Unless, of course, you listen to the merchants of envy.
They peddle a different narrative, one where the super-rich are men and women who are so unethical, so greedy, so selfish and so exploitative that they have triumphed over the rest of us… and at our expense.
This is nonsense on stilts.
Yet it appeals to those naïve enough – or self-righteous enough – to believe that the only thing stopping them from becoming wealthy is their own abundant virtue.
“If I didn’t mind screwing people over,” they insist, “I’d be rich too.”
(Sure. And if I didn’t have this bad back, I’d be a power forward in the NBA.)
The way to get rich in this country is to offer a lot of people something they want or need.
(Former Apple CEO Steve Jobs took it even further. He said his job was to create products that people didn’t even know they wanted – until they saw them.)
It doesn’t matter how great you think your product or services are. As the creator or seller, you’re hopelessly biased.
What matters is how your potential customers feel about it.
We live in a highly competitive world. Discretionary income is limited. People don’t part with their hard-earned dollars unless you offer them something that is better, cheaper, longer lasting… or all of the above.
Economic transactions are entirely voluntary. No one buys goods and services they don’t want.
So if you want to get rich – or, more to the point, super rich – you better offer something pretty darn exceptional.
Like, say, a wide selection of everyday products at dramatically lower prices, like Walmart founder Sam Walton did.
Or an operating system and software that make your life far more productive, like Microsoft founder Bill Gates did.
Or an e-commerce site that sells just about everything under the sun with the convenience of one-click ordering, like Amazon founder Jeff Bezos did.
Or products that are just “insanely great,” as Apple founder Steve Jobs did.
These men became super rich not because they were extraordinarily selfish and greedy but because they changed our lives for the better.
People who work in business recognize this. But for folks in the mainstream media, academia or Hollywood, this reality crosses their heads at 30,000 feet.
The media, for instance, focuses on negative business events: bankruptcies, layoffs, broken contracts, corruption and environmental damage.
This happens from time to time, of course, because businesses are run by fallible human beings, just like those who head political, religious and cultural organizations.
When wrongs are committed, the transgressors should be punished. But that doesn’t tarnish all the positive things businesspeople do.
Likewise, if you are watching a whodunit, place your bet that the culprit is the business owner.
In real life, entrepreneurs commit few murders. But in the imagination of Hollywood writers and producers, a corporate chieftain is generally responsible.
Then we have academia, whose hostility toward the merchant class is legendary.
The explanation here is pretty straightforward.
Academics are, by definition, smart, well-educated people. However, they aren’t particularly well-paid.
When they look at how much money successful people make in the private sector, they reckon it must be due to luck or crooked dealing.
You might imagine this too if you never left your ivory tower.
Yet I learned something about academics during my 16-year career in the money management business. They are ridiculously risk-averse.
Think about it. What do academics cherish above all else? Tenure, the knowledge that their job and income are completely secure.
They invest that way too. Cash, bonds and other low-paying “guaranteed” investments are their preferred path.
Business people are just the opposite. They thrive on taking calculated risks. It is this quality – along with plenty of unappreciated street smarts – that generates their fortunes.
Of course, isn’t it only fair and just that Uncle Sam take a big chunk of these fortunes and redistribute it to the rest of us?
It’s a question worth asking. And we’ll consider it in my next column.