Not sure how I wound up living in the era where capitalism needs a boost...but here i am and will happily do so.
With modern times of rapid technological advances, I know that not only are folks trying to ¨recreate the wheel¨ in almost every industry....but they are wondering if capitalism also needs some fine tuning.
In my occasional ponderings of economics I am still convinced that capitalism works.
Capitalism, as I understand it, works for one simple reason.....it allows some people.... sometimes....to win.
It is this process of watching the occasional person ¨win¨ that folks on the benches start squirming because they are no longer in control and jealousy begins to raise it´s ugly green head. Watching other people win, when we are struggling is hard... It´s painful.... and at the same time... it is the price of capitalism. We can not all win all the time, in a capitalistic society. But yes, we always have the OPPORTUNITY to win. We win only when we create and develop something that others have not thought of or discovered, or uncovered. We win when we make something that works well.....really really well.
I like to think of the following example often. When a smart entrepreneur walks into a thrift store and spots an ancient painting that he believes was painted by one of the well known masters...he takes it quickly and pays for it quietly, being able to purchase it for only $19.99.
He doesn´t shout in the store, that he has discovered a masterpiece. He does not say anything to staff on his way out of the shop. No, he lays low and takes his new found treasure home. He unwraps it from the bag carefully and examines it closely, hunting for some sign that it is authentic and not a fake.
He does a search online for the painter´s works and sees if the painting he now owns is listed and where it was last sold. Finally, after completing his own due diligence, he brings the painting to a real art appraiser, to authenticate his hunch. He holds the painting every so cautiously as he rides the bus to the office of the appraiser. The appraiser takes her time, her eyes widening as she inspects every aspect of the painting. The stunned appraiser finally asks the young man if he knows what he now possesses? The young man sits quietly nodding his head. The appraiser helps the man understand the true value of the painting to be over 2 million dollars. The young entrepreneur´s hands begin to shake and his heart begins pounding.
The young man pays the appraiser with the last few dollars he has in his bank account. He then goes home again on the bus, and then locates and reaches out to the nearest art auction house. Perhaps the auction house is a Sotheby´s. They agree to put the painting up for auction that very next weekend and the bidding wins the young man a solid 5 million dollar windfall. The tears pour down his face as he realizes his life will never be the same. He thanks God as he asks the auction house to transfer the money to his account.
The young man´s path has been radically altered because of his wisdom, keen eye and ability to take action. Who knows how many shoppers in that thrift store had walked by that painting and ignored it? Perhaps some shoppers even muttered to themselves that this painting reminded them of one they had seen at a museum. But their musings talked them out of taking action.
This is how we are going to protect capitalism for the next generations. We are not going to complain when we see people win. We can not tell the young man to give the thrift shop a portion of his winnings from the auction. We can not tell the young man to give his struggling next door neighbour a portion of his winnings. We can not tell the young man to pay for his sister´s college education. We can not complain that we have ZERO control over what that young man is going to do with his new found wealth. It just isn´t fair.
Bingo. That´s the word I was looking for. FAIR. Capitalism is rarely fair. The fact that capitalism allows people to win is what keeps capitalism alive and compelling. Chasing the possibility of an unfairly oversized prize in life, is what keeps people creative and motivated. Winning is grand. Winning is often rare.
Governments also must resist the temptation to inordinately tax away the power of ¨unfair¨ huge winnings. Does a young tech wizard create a new app that he sells to a fortune 500 company for 2 billion dollars tempt the government to eat more than a reasonable chunk in capital gains tax? Do family members get to sue other family members when one sibling earns a big salary and the other one earns minimum wage?
My friends, we must get over our need to control each other´s wealth. We must embrace the beauty of competition. We must embrace risk sometimes. The greatest innovations occur when individuals have autonomy over great wealth. They build new inventions, and sponsor schools and scholarships. They build hospitals or build better cars. They help to fight disease and fund charitable organizations that fight famines and floods.
Of course, we are all human. We would not be human if we didn´t flinch sometimes when we realize that modern capitalism is creating billionaires that can probably never outspend their wealth in one lifetime. But that does not give us or anyone who loves economic freedom the right to take capitalism away. Do not clip it´s wings. When we allow folks to win, including ourselves.....we give power to our dreams and to the dreams of the future, a future that only great gobs of money can profoundly develop.
So the next time you see a grand yacht floating dreamily down the Bay...thank God for the system that allowed that person to prosper, because next time it just might be your unique idea and relentless ambition that grants you and your family the ability to buy even more than one yacht.
Wealth does not play favourites.
Your opportunity still exists.
Peace,
Carla
