Tuesday, February 11, 2014

Who are the Real Job Creators? Hint: It's Not the 99%

Under the heading You're a job creator, a letter appeared in the NJ Star-Ledger echoing a Leftist rationalization for its war on real job creators. The writer, William Bowblis, says, in part:

   What creates jobs is a market for the products and services the jobs create. Without that market, there are no jobs.
    The economy is like a pipeline with two ends: supply and demand. Supply comes from the workers who create the goods and services; demand from huge numbers of average people having enough money to buy those goods and services. That same 99 percent is the people getting paid to produce the products.
    American workers are more productive than ever before, yet their share of the wealth that productivity creates has been shrinking for decades. A vibrant economy requires that everyone get a fair share. That hasn't been happening in this country for a long time.
    The growing wealth gap results in those potential customers having too little money to allow businesses to thrive and create those good-paying jobs. You want to know who the job creators are? Look in a mirror ...

I left these comments:

What's missing from Bowblis's "pipeline" of supply and demand?

The 99% has been around for centuries, living short, hand-to-mouth, back-breaking existences in the kind of abject, grinding poverty that today's "poor" can not even imagine. What changed in the last 200+ years? 

The creator of remunerative, productive jobs is not the person hired to fill the jobs. That makes no sense (except to a Marxist self-dilusionist). The reasoning human mind is the ultimate source of human prosperity. Every material advance starts as an idea in the mind of some individual. This means that the action-oriented thinker, not the physical laborer, is the basic creator of human material progress. It is the person whose intellectual energy exceeds his physical ability to realize his productive ideas and goals. Jobs are created when this person steps out from the 99% and takes action to organize all of the factors of production required to make real his idea of a valuable product that others are willing and able to trade for; from investment capital to the hiring of labor to market analysis to the tools of production to the knowledge behind the production to pricing and myriad other factors. Who made the American worker "more productive than ever before?" Not primarily the worker, who works less hard than ever before. It's the action-oriented thinker, who provides the worker with the productivity-enhancing knowledge, processes, and tools. All of this within the context of the inherent risks involved in productive ventures.

This individual—this action-oriented thinker—is, of course, the businessman motivated by pursuit of his own profit, values, and happiness. What changed in the last 200+ years? What was previously missing through all of the prior centuries of stagnant poverty and misery? Thanks to liberty and rights-protecting government (capitalism), the modern businessman emerged, creating the jobs and products and services.

Philosopher Ayn Rand gave businessmen their proper due:

"The professional businessman is the field agent of the army whose lieutenant-commander-in-chief is the scientist. The businessman carries scientific discoveries from the laboratory of the inventor to industrial plants, and transforms them into material products that fill men’s physical needs and expand the comfort of men’s existence. By creating a mass market, he makes these products available to every income level of society. By using machines, he increases the productivity of human labor, thus raising labor’s economic rewards. By organizing human effort into productive enterprises, he creates employment for men of countless professions. He is the great liberator who, in the short span of a century and a half, has released men from bondage to their physical needs, has released them from the terrible drudgery of an eighteen-hour workday of manual labor for their barest subsistence, has released them from famines, from pestilences, from the stagnant hopelessness and terror in which most of mankind had lived in all the pre-capitalist centuries—and in which most of it still lives, in non-capitalist countries."

She wrote that 50 years ago. Since then, her perspective has only been validated further, as pre-capitalist countries struggle to liberalize (i.e. liberate) their economies. Look around, 99%ers. How much of the technological revolution and related jobs could you have even conceived of, let alone brought into reality? How much of the material advance that came before? You think simply being willing and able to work will miraculously bring into existence the jobs, the tools of production, and the products those jobs help create?  If not for the 1% (or less) of action-oriented thinkers, none of the industries and related jobs that produce the goods and services we buy would even exist.

Yes, every individual who does productive work, on any economic or ability level, contributes his share to prosperity—and, in a free economy (which we don't now have) governed by the laws of economics, earns the money he is paid in accordance with his contribution. But you can't reverse cause and effect. We 99%ers ignore the indespensible link between the theoretical knowledge of the scientist and the worker/consumer at our peril. It is the 1% that makes it all possible. And that 1% is not some elite privileged aristocracy. It is any one of us who volunteers to step out from the 99%. All these action-oriented thinkers need is the liberty to act on their own judgment in pursuit of their own interests. Why today's anemic job creation? Because capitalism is withering before the onslaught of the regulatory, redistributionist welfare state. 

Forget your mirror, Mr. Bowblis. Look at the 1%. It is capitalism that enabled the 1% to flourish and in turn—thanks to the system of trade on a free market—enabled the 99% to rise and flourish.

The writer's focus on supply and demand raises the question: Where does "demand" come from? It doesn't come out of thin air. Supply and demand are one and the same. Supply (what you produce) creates demand (the ability to trade what you produce, represented by the money you earn, for what others produce). No supply, no demand. 

Related Reading:

Atlas Shrugged—Ayn Rand

To Whom Does the American Worker Owe His Prowess?

Productivity, Not Labor unions, Created the Middle Class

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