Do “pen-pushing” billionaires really deserve their wealth?
I recently reread Marx and Engels’ “Communist Manifesto” and was reminded of the absurdity of the fact that their ideas permeate the culture today, despite the complete failure of communism as an explanation of economic phenomena, and as an economic system.
Their long-discredited ideas saturate traditional and social media, from Paul Krugman and Robert Reich, to Jessie Ventura, Elizabeth Warren, and Alexandria Ocasio-Cortez.
There is little, if anything, that is original in Marxism. It is in essence a fusion of Christian self-sacrifice, with Hegel’s dialectic, and Feurerbach’s materialism.
It says the ideal is the sacrifice of the individual for the “common good,” that history is a deterministic playing out of opposing forces, and that the mind is ultimately a passive and impotent spectator and rationalizer.
And yet, today, after millennia of grinding poverty and short, miserable lives, we now enjoy unprecedented comfort and longevity. You can have virtually anything delivered to your door in days, with just a few taps on a device you can hold in your hand.
This incredible turnaround is thanks to capitalism.
Of course, none of this was predicted by Marx, because his devotion to materialism and determinism meant he missed the fundamental force that moves human history.
Despite this incredible improvement in the lives of virtually everyone who lives in a free or semi-free society, intellectuals and politicians stoke envy and hatred against the people responsible for this explosion of wealth. They dredge up the false and malicious ideas of Marx, ideas that have led to over 100 million deaths around the world.
They condemn the so-called “one percent” as “exploiters,” and demand they “pay their fair share;” and belittle them as “lottery winners.”
For example, the now former Governor of Minnesota, Jesse Ventura, attacked billionaires:
“The older I get the more flaws I see in capitalism. What exactly is one doing to ‘earn’ a billion dollars? … Do billionaires work harder physically & mentally than someone on a jackhammer 8 to 10 hours a day? Of course not. They earn their money by pushing pencils. They don’t even need deodorant. None of them have a reason to sweat at work.”
The older I get the more flaws I see in capitalism. What exactly is one doing to “earn” a billion dollars? You're telling me that billionaires who doubled their wealth during the pandemic actually worked hard for it & deserve it?! #fridaymorning [WATCH] https://t.co/KJCYweFe7S pic.twitter.com/glGSDtchIl
— Jesse Ventura (@GovJVentura) January 29, 2021
Where Does Wealth Come From?
In the fantasy world of Jesse Ventura, Marx and others, wealth metaphorically oozes from the pores of laborers, like sweat. It is proportional (or should be) to the amount of labor one exerts. Yet, so they claim, these evil, “pencil pushing” capitalists and entrepreneurs exploit workers by siphoning off vast sums of wealth created by the workers’ labor.
It was a great step forward when [we] came to see the source of wealth not in the object but in the activity of persons, viz. in commercial and industrial labor.” -Karl Marx
The truth is, wealth is not the product of mere physical labor, which has been abundant throughout history. Wealth is a product of the mind.
“[W]ealth is the product of man’s intellect, of his creative ability, fully as much as is art, science, philosophy or any other human value.” -Ayn Rand
For millennia we have had ample muscle and sweat, and yet the vast masses of people have been dirt poor, stricken with disease, and had to work long hours to stave off hunger, while always vulnerable to disease, famine, and the whims of the weather.
Grinding poverty and an early death has been the default norm for us throughout history.
Wealth Ebbed and Flowed with the Era’s Attitude to the Mind
It was only during relatively brief periods when reason and logic emerged and were respected that humans were able to rise above subsistence level. Thus, we had brief periods, such as the Golden Age of Greece and the Renaissance, where life improved to some extent. Then came the Enlightenment which again brought reason and the mind to the fore, and helped kick start the Industrial Revolution.
With the industrial revolution came a rising standard of living and life expectancy.
The signature machine of the Industrial Revolution, the steam engine, was clearly a product of the mind, developed and improved by the curious and persistent minds of the men such as Thomas Savery, Denis Papin, Thomas Newcomen, and James Watt. The invention of the steam engine outsourced manual labor from man to machine. And so it began, with more and more physical labor being outsourced to machines, culminating in the outsourcing of significant amounts of mental labor to computers, thanks to the intellectual work of people like the British mathematicians Charles Babbage and Ada Lovelace.
The Role of the Entrepreneur
And behind it all were the entrepreneurs. They figured out how to put these inventions to work to improve people’s lives, and set about accumulating the capital and resources to do it. It’s a mammoth task that relatively few can do, and even fewer can do exceptionally well. But those who do, bring massive value to the market and to consumers.
So, while billionaires don’t operate jackhammers, they do something much more demanding and valuable. They do something that few are capable of at the level required to launch and run a successful company that serves millions of customers.
They think.
They form a vision of a better world.
They convince others of the feasibility of their vision.
They then marshal resources, the capital, buildings, materials, machines, and labor, and coordinate it all.
They must hire the right people to help oversee a complex network of managers and workers, machines and fuel, in facilities around the world, working with hundreds even thousands of other businesses that are similarly coordinating their affairs, to maximize efficiency, improve the value of their products, and increase their profits.
All successful businessmen and entrepreneurs, whether billionaires or not, are both effective thinkers and productive doers, from Elon Musk, to Martha Stewart, and from Henry Ford and Annie Malone, to the millions of lesser and unknown small businesses.
They work under challenging conditions.
They don’t merely push pens or shuffle papers. They oversee and coordinate all the parts of an organization, and relationships and transactions with trading partners, to maximize the company’s profits, share price and market value.
And all the time they must challenge themselves to do better and outperform their competitors. They conceive of new designs, entirely new products, and new ways of delivering them.
The Labor of the Entrepreneur
In a broad sense, this too is labor, but it is mental labor, rigorous intellectual work that few can do well. (Physical labor is of course a necessary element in such a complex endeavor, but the more that is done by machines and computers, the better off everyone is.)
The most successful entrepreneurs must have uncommon vision, incredible foresight, and take massive risks, devoting much of their careers to making their dreams a reality. They often work long thankless days and nights, for years, and suffer countless setbacks and yet persevere in the face of likely failure.
If and when they do attain success, it is only because they’ve created products and services that huge numbers of people crave, and willingly hand over money for. Customers get goods and services that they want and believe will enrich their lives, things like appliances, cars and computers, iPhones, entertainment and game systems.
It’s thanks to these geniuses, you can hold in your hand, a catalog of goods that would be the envy of the richest kings, and you can have almost anything in days with the click of a button.
Instead of backbreaking labor in the fields seven days a week, our modern miracles of cars, computers, the internet and many other technologies, have made us hundreds of times more productive, and enable us to enjoy a much safer and more comfortable world than at any time in history.
You could take all the muscle you like, and all the jackhammers in the world, and labor for days until you drop dead, and not produce a thing that anyone would want.
Thus, profits and wealth are a mark of virtue, the virtue of sustained and effective thinking, and realized through effective execution. A company’s profit sums up the estimate of the billions of people in the market who vote with their dollars for products and services. Billionaires are voluntarily “voted” rich by their constituents, their customers, customers who are free to spend their money elsewhere.
These entrepreneurs are supremely creative. They create new and improved products and services on a vast scale. They earn their money, in a way that their critics and most of us couldn’t match.
In a free market, billionaires make their money they don’t take it.
They produce enormous value, and thus enormous rewards. They deserve every penny. And they deserve our respect and admiration.
References & Resources
- Rand, Ayn. “The Money-Making Personality.” The Objectivist Forum, February (1983): 2.
- Rand, Ayn. 1967. Capitalism: The Unknown Ideal. New York: Signet.
- Hull, Gary. 2005. The Abolition of Antitrust. New Brunswick: Transaction Publishers.
- Watkins, Don, and Yaron Brook. 2016. Equal Is Unfair. New York: St. Martin’s Press.
- McLellan, David. 1977. Karl Marx Selected Writings. New York: Oxford University Press.
- Feuer, L. S. and McLellan, David T. “Karl Marx.” Encyclopedia Britannica, Accessed 09/02/2023. https://www.britannica.com/biography/Karl-Marx.
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Mossoff, Adam. 2012. “Saving Locke from Marx.” Social Philosophy and Policy Vol. 29, no. No. 2 (2012).
