The Choice is Not Principles or Profits, Because There are No Profits Without Principles

Altruism divorces virtue from personal gain, leaving the act of profitable productive achievement adrift in an amoral sea.

For example, after pharmacy chain CVS announced that it would rebuild its two Baltimore stores that were looted and destroyed in this year’s rioting, the New Jersey Star-Ledger lauded the company for being “willing to place principle over profit.” In Amid the riots and rubble, CVS stays righteous, the Star-Ledger editorialized:

"We have a long history of serving inner city communities," [CVS CEO Larry Merlo] said, "and we are 100 percent committed to serving our patients and customers in Baltimore."

And then, just to put his money where his mouth is, Merlo's company donated $100,000 to the United Way of Baltimore and the Fund for Rebuilding Baltimore.

No doubt, this is more than just an altruistic gesture; companies go where they can generate business, and that area of West Baltimore must buy whatever that CVS is selling. That community is a food desert for area residents, who also depend on it for their prescription drugs.

But CVS, which already has 20 other Baltimore outlets, has shown before that it is willing to place principle over profit.

Sure, the company has had its share of missteps over the years, which is to be expected for the second largest pharmacy chain in the country. But in an age when we are jaded by the corporate pursuit of profits, it's fair to say this without hesitation or trepidation: Bravo, CVS.

I left these comments:

“CVS . . . has shown before that it is willing to place principle over profit.”

It doesn’t take principle to earn a profit? Nonsense.

Profit is the reward for successfully producing goods that consumers value and are willing to pay for. We are literally engulfed in the gifts that profit-seeking business corporations deliver, without which our lives would be deeply impoverished.

And what does it take to profitably create those goods? Virtues like intelligence, imagination, long-term planning, skill, ability, problem-solving prowess, dedication, hard work. It takes an unrelenting  principled commitment to the productive purpose of the corporation, which requires management skills able to do the difficult job of integrating all of the factors of production and gear it toward the satisfaction and well-being of the customer—the ultimate source of profits. The customer benefits and the business benefits—Win-Win, a truly noble method of serving the community.

Hopefully, CVS donated their money and decided to rebuild as an act of goodwill with an eye toward producing future profits, rather than as an act of altruism (unrewarded giving, or lose-win). Altruism is easy; a one-shot act to make the giver feel good. It’s easy to give up what you have earned. What’s hard is the creating that makes giving possible. Profit is where the long-term benefit to the people of the community lies. Bravo to CVS for its principled, virtuous, and successful commitment to its corporate pursuit of profits, without which there could be no $100,000 donation, or stores that provide access to the economic values local residents need, desire, and benefit from.

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Unfortunately, my comments came across as seeming to justify the pursuit of profit by benefit to the consumer or community, a collectivist-sounding rationalization. This I realized in preparing this post. Such is the danger of rushing to post a comment. The good of consumers does stem from the pursuit of profit. But that good is a consequence of profit-seeking, not the primary motive of the businessman, or the justification for his profits.

Related Reading:

In Defense of Selfishness: Why the Code of Self-Sacrifice is Unjust and Destructive—by Peter Schwartz

The Link Between "Control, Power, or Socialism" and "What's Morally Right"

NJ's Minimum Wage Approval Highlights the Moral Disease that Afflicts America

Why Capitalism Needs a Moral Sanction

Yes, ‘Big Money’ in Politics Fosters Ideological Debate—and That’s a Good Thing

New Jersey Star-Ledger columnist John Farmer attacked Citizens United, the Supreme Court case that overturned limits on campaign spending by independent groups, in a novel (to me) way. Farmer’s declared, Thanks to Citizens United ruling, we have toxic big money tainting our electoral process.

In what way does big money taint our electoral process? Farmer explains:

[T]he [political] process was tainted even in the era of the sainted Founding Fathers. But what has made it more toxic to our democracy in today's high-cost, technology-driven era is ... you guessed it ... moolah, jack, simoleons, shekels, the green stuff.

Money. Big money, as ushered in by the five-man conservative Republican majority on the U.S. Supreme Court in its Citizens United decision.

The court opened the flood gates for unlimited campaign cash when it equated money to speech in Citizens United and endowed corporations with standing in law as persons. (Where in the Constitution did these self-styled strict constructionists find that one?)

Let's say, for argument sake, that money is speech. If that's true then there can be no political equality in this country. For while those with mountains of cash for politics - giant corporations and individual billionaires (a.k.a. the Koch brothers) - have a megaphone, the rest of us are, by comparison, mute.

Yes, mute! I’ve addressed that ridiculous, commonly advanced claim in detail. But Farmer doesn’t stop there. He goes on:

The new cash crop has also helped fuel something else relatively new in American politics - the growth of ideological fever.

Ideology - an issue or cause-based politics independent of parties or old political alliances - was a European thing that included communism, fascism, Nazism, and radicalism of many stripes. Sure, we've had a form of socialism here, but a mild inoffensive strain. Mostly, we've been spared the kind of ideological excess that plagued Europe.

Today, however, a kind of radicalism exists beneath the surface of both major parties - a no-limits liberalism among Democrats that brooks no restraint on social spending and a cranky, constipated conservatism in the GOP that sees only villainy in the federal government, a "great Satan," you might say.

The emphasis is mine. I left these comments:

Let me translate this column: “Fresh, unregulated cash” feeds public discussion of ideas, often fundamental ideas. Fundamental ideas leads to “ideology,” which only means “communism, fascism, Nazism, and radicalism of many stripes.” Ideology only supports totalitarianism. There is no ideology to support a free society.

And that is complete hogwash.

Ideology—a coherent set of fundamental ideas and principles—is not the enemy. Bad ideology is the enemy, and the only defense against bad ideology is good ideology. Without an antidote to bad ideology, we are at the mercy of it. Fortunately, there is such an antidote. This country was Founded on a radical set of fundamental ideas, or ideology; individual rights, a government of the people constitutionally limited to protecting those rights, and by logical extension a democratic process that limits the power of the majority. For the first time, the individual as sovereign over his own life, and government as his servant. That is the antidote to communism, fascism, Nazism, and any other ideology that holds that the individual is subordinate to the state—including today’s Leftist brand of state supremacist ideology, which holds that anything the government does is good, as long as a majority votes for it.

So who is really threatened by “fresh, unregulated cash?” Leftist politicians who govern according to bad ideology—that is, statism, the antithesis of the good ideology this country and a free society depends on. Protecting the power of statist politicians is the real motive of anyone who preaches that money in campaign politics is the enemy of “democracy.” The worst ideology is the one that smears all ideology as bad.

Money is not speech. It is a means to speech, and it requires lots of money to reach a mass audience. When those with the means bring ideas to a mass audience, they don’t “mute” anybody. Far from it. They empower those with lesser means, because they speak for all that agree with the message. They expose their ideas to rebuttal from those who disagree. They foster public debate in coffee houses, around kitchen tables, in social media, in online debate forums, in newspaper letters sections—anywhere ordinary people gather to chat. Big money doesn’t “taint our electoral process”: It fosters a more dynamic, informed, idea-filled process.

There is, however, a cabal for whom big money is toxic—the political class and their backers in the media and university intelligentsia. It is this free flow of ideas that the anti-money crowd wants to mute, so the statists can have a freer path to legislate, tax, control, and regulate without having to answer to those pesky constituents. They smear all ideology as bad in order to stop good ideology—and the “big money” that helps spread it—from getting in their way. I would call this crowd the anti-ideology ideologues.

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Farmer’s argument amounts to: Free speech leads to totalitarianism. Therefor, the First Amendment’s absolute ban on Congress’s abridgement of free speech must be repealed, thus taking the first step toward totalitarianism.

Farmer evades or ignores the fact that behind the “mild inoffensive strain” of socialism that has been eating away, termite-like, at the foundations of American liberty for several generations is the drip-drip-drip of the same radical socialist ideology that led Europe down the path to communism, fascism, Nazism—or that the only antidote to this inexorable drift is radical capitalist ideology.

Related Reading:

Ideas and Debate, not Disclosure, "Make for Better Voters"

Extremists vs. the Moderates: Why the Left Keeps Winning, and the Right has been Powerless to Stop It

The Great Achievement of Christopher Columbus

As my tribute to Christopher Columbus on this, his day, I present selected excerpts from selected articles by other writers:

Excerpt from an op-ed in the Bucks County Courier Times, October 11, 2007.

Columbus Day Celebrates Western Civilization

By Thomas Bowden

On October 12, 1492, Christopher Columbus discovered the New World.

We need not evade or excuse Columbus’s flaws--his religious zealotry, his enslavement and oppression of natives--to recognize that he made history by finding new territory for a civilization that would soon show mankind how to overcome the age-old scourges of slavery, war, and forced religious conversion.

On Columbus Day, we celebrate the civilization whose philosophers and mathematicians, men such as Aristotle, Archimedes, and Euclid, displaced otherworldly mysticism by discovering the laws of logic and mathematical relationships, demonstrating to mankind that reality is a single realm accessible to human understanding.

On Columbus Day, we celebrate the civilization whose scientists, men such as Galileo, Newton, Darwin, and Einstein, banished primitive superstitions by discovering natural laws through the scientific method, demonstrating to mankind that the universe is both knowable and predictable.

On Columbus Day, we celebrate the civilization whose political geniuses, men such as John Locke and the Founding Fathers, defined the principles by which bloody tribal warfare, religious strife, and, ultimately, slavery could be eradicated by constitutional republics devoted to protecting life, liberty, property, and the selfish pursuit of individual happiness.

On Columbus Day, we celebrate the civilization whose entrepreneurs, men such as Rockefeller, Ford, and Gates, transformed an inhospitable wilderness populated by frightened savages into a wealthy nation of self-confident producers served by highways, power plants, computers, and thousands of other life-enhancing products.

On Columbus Day, in sum, we celebrate Western civilization as history’s greatest cultural achievement. What better reason could there be for a holiday?

In another op-ed on Fox News.com, Let's Take Back Columbus Day, Bowden said this:

We’ve been taught that Columbus opened the way for rapacious European settlers to unleash a stream of horrors on a virgin continent: slavery, racism, warfare, epidemic, and the cruel oppression of Indians. 

This modern view of Columbus represents an unjust attack upon both our country and the civilization that made it possible. Western civilization did not originate slavery, racism, warfare, or disease--but with America as its exemplar, that civilization created the antidotes. How? By means of a set of core ideas that set Western civilization apart from all others: reason and individualism.

Excerpts from an op-ed in Pittsburgh Tribune-Review, October 10, 2008

Columbus was a hero

By Dimitri Vassilaros

Christopher Columbus could not have discovered a better spokesman than Thomas A. Bowden.

The accomplishments of Columbus should speak for themselves. But thanks to political correctness, the moronic multicultural mob keeps talking them down. Mr. Bowden has been speaking passionately and forcefully about Columbus for years.

"My ancestors were savages," says Bowden matter-of-factly. Everyone can say the same, depending on how far back one is willing to look at lineage. "It's nothing racial or ethnic; it's historical fact."

"Columbus critics have a disguised criticism of Western civilization because Europeans replaced Stone Age Indians. They believe that this continent would have been better off without Europeans, that industrial civilization is an evil that is to be lamented and regretted.

"That is the real criticism of Columbus. I reject it completely."

Indians typically were widely scattered Stone Age tribes, he says. "They had little agriculture and lived in poverty, fear, ignorance and superstition. They had no concept of government, ownership or private property rights.

"Slavery was perfectly common.

Well, didn't Indians at least live in harmony with nature?

"No," says Bowden. "Man should not live in harmony with nature in the sense of simply keeping it pristine. We live by impacting the environment. The environment has no intrinsic value. Our civilization is more in harmony with nature by making it serve our ends."

Well, what about all the land supposedly stolen from the Indians by European settlers?

Indians did not own the vast reaches of land that they traveled on, Bowden says. Ownership of land is deserved, he says. By that, he means a settler can acquire property rights by making the land more valuable by, say, digging it up for farming. Or to build his homestead or business.

Columbus essentially was an explorer and discoverer bringing Western civilization's cures, science and technology, he says. The philosophical legal process was another gift the Europeans gave to the Indians, he says. "Indians got all that for free."

Columbus' critics should fall down on their knees and thank the Founding Fathers for creating a nation based on the moral principle of the individual's right to life, liberty and, Bowden stresses, the selfish pursuit of happiness.

"It's the only nation that came about in such a way. Anyone who has humanity's interest at heart should love America," he says.

Excerpts from Man's Best Came With Columbus—Michael S. Berliner

Did Columbus “discover” America? Yes, in every important respect. This does not mean that no human eye had been cast on America before Columbus arrived. It does mean that Columbus brought America to the attention of the civilized world, i.e., the developing scientific civilizations of Western Europe. The result, ultimately, was the United States of America. It was Columbus’s discovery for Western Europe that led to the influx of ideas and people on which this nation was founded and on which it still rests. The opening of America brought the ideas and achievements of Aristotle, Galileo, Newton, and the thousands of thinkers, writers, and inventors who followed. What they replaced was a way of life dominated by fatalism, passivity, superstition, and magic.

Happy Columbus Day

Related Viewing:

Columbus Day Without Guilt—Thomas A. Bowden

Does Unlimited Campaign Spending Allow "the Rich to Buy Politicians?"

One of the dumbest arguments in favor of strict limits on campaign spending is the idea that big money donors corrupt the democratic process. I addressed a version of this argument in the comments section of New Jersey Star-Ledger columnist John Farmer’s article attacking the Citizens United case, in which the Supreme Court declared political spending limits unconstitutional. (For my assessment of Farmer's article, see my upcoming 10/14/15 post, Yes, ‘Big Money’ in Politics Fosters Ideological Debate—and That’s a Good Thing.)

Correspondent Peanut Santiago wrote: “[The Supreme Court] made it super easy for the rich to buy politicians.......I mean right in your face and dare you to stop it kind of easy.”

I left this reply:

This is a hollow argument.

First, donors don’t elect politicians. Voters do. All the money in the world won’t get a politician into office. A politician must first convince enough individual voters, each of whom must make up her own mind based on her own judgement on issues and character.

Second, there is no evidence of a correlation between electoral or legislative results and campaign donations. As Seton Hall University assistant professor of political science Heath Brown, a supporter of campaign finance reform, argued on these very pages:

   The research is clear that the simple notion that campaign donations lead to electoral victories and eventually to legislative favors is not valid. Research by Christopher Witko of the University of South Carolina shows that campaign financial support may lead to increased legislator attention and effort on certain policy issues, but not typically to changing a vote on a single piece of legislation or disregarding the views of constituents.

   There are many reasons for New Jersey voters to worry about corruption in politics, but the corrupting influence of money is much more complicated than we often think, and stricter caps on outside spending won’t solve this complex problem.

Related Reading:

Who Really Has Something to Fear From Unrestricted Campaign Spending?

Democracy for All: The "Drown Out the Voice of Average Americans" Amendment

Money is Not Speech, but a Means to Speech

Money, Politics, and the First Amendment

Does Walmart ‘Cost’ Taxpayers $6.2 Billion in Public Assistance?

In response to the Quora question “Why do individuals or families (such as the Walton family) need or deserve millions and billions of dollars in personal wealth?” (See my post of 10/7/15), one correspondent answered:

The question is badly worded and badly asked, but this does deserve some explaining as to why the Waltons, in essence, are getting 6.2 billion dollars in assistance to pay their workers.

Report: Walmart Workers Cost Taxpayers $6.2 Billion In Public Assistance

The linked article refers to a Forbes report, which claims:

Walmart’s low-wage workers cost U.S. taxpayers an estimated $6.2 billion in public assistance including food stamps, Medicaid and subsidized housing, according to a report published to coincide with Tax Day, April 15.

I left this reply:

Where does that $6.2 billion come from? Taxpayers, that’s who. Wal-Mart paid $8 billion in corporate income taxes in 2012, 5th highest among U.S. companies. But that’s just the start. WalMart enabled much more in taxes paid by the employees, supplier businesses, and stockholders its business success supports, not to mention other taxes collected and paid to government, such as sales and property taxes, etc. Who funds “public assistance?” In large part, Wal-Mart itself.

Who is it that seizes the $6.2B “assistance” money by legalized aggressive force, and immorally redistributes it from those who earned it to those who didn’t? Let’s be honest, and put the blame where it belongs. Wal-Mart is not seizing this money. It is the government that imposes this cost on taxpayers. Wal-Mart is falsely blamed for the government’s forced redistribution of wealth, euphemized as “assistance”. This is their reward for creating jobs that people willingly fill.

Related Reading:

A "Liberal" Newspaper Acknowledges the Welfare State Dilemma

Contra Slate's Jordan Weissmann, the Government "Safety Net” is Not Necessary—Nor Moral

The Moral—and Ultimately Real—Chains of the Welfare State

All Earned Wealth, No Matter How Big the Fortune, is Deserved Whether ‘Needed’ or Not

Quora is a social media website founded by two former Facebook employees. According to Wikipedia:

Quora is a question-and-answer website where questions are created, answered, edited and organized by its community of users. The company was founded in June 2009, and the website was made available to the public on June 21, 2010.[3] Quora aggregates questions and answers to topics. Users can collaborate by editing questions and suggesting edits to other users' answers.[4]

You can also reply to other users’ answers.

One recent question was “Why do individuals or families (such as the Walton family) need or deserve millions and billions of dollars in personal wealth?”

Why do we allow and justify this level of wealth accumulation? Why is it possible in our economy?

There's a stat that reports that 85 people in the world collectively possess more wealth than half the human population. That's seriously disturbing.

Here is my answer:

In short, because they earned it.

But first, we must distinguish between political fortunes and market fortunes. (Let's leave aside, for now, inherited fortunes.) Political fortunes are appropriated through political power and connections. Market fortunes are earned through productive work and trade. It is market fortunes that I will explain and defend.

Trade is the voluntary, mutually beneficial exchange of value for value. Money earned in this fashion enriches everyone and harms no one. Successful producers (capitalists, entrepreneurs, businessmen, workers, and the like) earn their money in the market by creating value that others are willing to buy. The size of the fortunes of successful capitalists is a measure of the value they create and disseminate through trade.

Surveys such as the one cited above (“85 people in the world collectively possess more wealth than half the human population”) are grossly misleading because they don’t distinguish between money and wealth. Money is not wealth: It is a store of value waiting to be exchanged for wealth. When you trade your money for Microsoft Word, you get wealth. Bill Gates gets money (leaving aside, for simplicity’s sake, that the cost of the product must first cover employee compensation, suppliers’ bills, raw materials, and other costs of production, as well as stockholder dividends, corporate taxes, and other company expenses). Contrary to that survey’s implications, the value of the wealth gained by consumers typically is immeasurably greater than the monetary fortune gained by the producer. For example, Microsoft founder Bill Gates is worth some $80 billion. But what is the sum of the value, in dollar terms, of all of the Microsoft products bought by consumers? Just in 2014 alone, Microsoft earned $86 billion in revenue; that’s how much consumers valued Microsoft products by their voluntary choice to buy them—more in one year than Gates’s entire fortune. And that doesn’t tell the whole story. Consumers typically value the products they buy more than the money they surrender for it. Otherwise, why spend the money? Those products bring years of use to consumers—for business, education, personal finance, or just plain personal enjoyment (I’m using Windows 8.1 right now, and enjoying it immensely). How do you put a value on that? Gates’s fortune is small next to the tens of trillions of dollars in direct and indirect economic value spread through the economy over the decades resulting from the creation of his fortune.

Mega-billion dollar market fortunes are, in essence, no different from anyone’s savings nest egg. The Bill Gates’s of the world use some of their money to buy their extravagant personal wealth (yachts, mansions, etc.). What is not spent on personal purposes is savings, which is Gates’s own surplus production. It’s essentially the same for everyone up and down the income scale. Anyone who does honest work exchanges some material value, be it a service or a product, for money. He then spends his money covering the costs of living and generally satisfying his needs and desires. To the extent one spends less than one makes, one acquires savings—surplus production—just like Bill Gates. Whether $1 or $80 billion, the source is the same; it is surplus earned by the worker through trade in the market. The capitalist tycoon’s surplus is monumentally greater than the average worker’s surplus only due to the tycoon’s ability to create much more material value for many more people.

If you measure only monetary accounts, the great capitalist fortunes seem outlandish. But, in reality, fortunes like those amassed by the likes of John D. Rockefeller, Henry Ford, Bill Gates, Steve Jobs, et al, are not disproportionately large. They are the small tip of a vast iceberg of wealth creation that benefits millions and billions of average people—the sum of which dwarfs the creators’ fortunes.

Market fortunes are not merely economically practical. They are moral and noble, and rightfully belong to the capitalist entrepreneur who built it. A nation’s or the world’s wealth is not a tribal product. It is the sum of the efforts of individual producers trading in the market. “Society” has no claim on fortunes large or small, and no right to determine whether or how much the creators may keep of their fortunes, any more than it has a right to determine how much of anyone’s earnings he may keep. Only the market—the cumulative voluntary choices of consumers—can justly make the determination on the proper “distribution” of wealth. Monetary nest eggs, no matter how large, rightfully belong to those who earned it so long as it really is market-earned.

Remember, we’re talking about market fortunes—fortunes built by enriching others’ lives. In pre-capitalist ages, fortunes were acquired mainly by theft and conquest. They were political fortunes. Today’s version of the political fortune are those appropriated in our mixed economies by businessmen who gain by using political connections to get government economic favors or legally hamper competitors. (Political fortunes—or the political parts of hybrid political/market fortunes—are definitely unfair: But political fortunes are a consequence of the mixed economy, not a capitalist economy.) As to inherited fortunes—assuming the original fortune is rooted in the market—it rightfully belongs to the heirs based on the original creator’s right to dispose of his property as he sees fit. If Sam Walton wills his fortune to his family, it’s his right, and the inheritance is rightly the Walton family’s, regardless of whether they continue to productively grow the fortune or are worthless parasites. (If the Walton kids have no claim on the inheritance, then who does?)

“Why do individuals or families . . . need or deserve millions and billions of dollars in personal wealth?” Because, assuming it’s a market fortune, they earned it, and deserve it every bit as much as any average person deserves his modest bank account.

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One thing I didn’t directly address is the issue of need vs. deserts. In a capitalist society, justice reigns. Justice doesn’t consider need, which is undefinably subjective anyway (one person may need a loaf of bread, while another may say he needs a yacht). In justice, the only thing that matters is how you acquired your wealth. If you received it through your own effort and in voluntary dealings with others, such as through trade, inheritance, or voluntary charity, you deserve it no matter what anyone judges to be your needs. If you got your wealth through rights-violating activity, such as armed theft, fraud, murder, or government favors, you don’t deserve it, no matter how much you may think you need it.

Related Reading:

Justice, not Need, is the Proper Standard for Government Tax Policy

The Worship of Need: The Path to Communism

The Shadow of Marx Blankets the "Fiscal Cliff" Fight

How is it Possible that ‘1% control over 95% of the wealth?’ It’s Not, and They Don’t.

The New Jersey Star-Ledger noted in an editorial (Obama is to blame for income inequality? Puleez, which I referenced in my last post) that “The richest 1 percent has captured 95 percent of the income gains since the Great Recession.” That figure comes from a chart based on data compiled by Thomas Piketty, Emmanuel Saez, and National Bureau of Economic Research, and covers the period 2009-2012.

However, correspondent SHAPE, commenting on the Star-Ledger editorial, wrote that “1% control over 95% of the wealth.” That’s something altogether different. I left this reply to SHAPE:

RE: “1% control over 95% of the wealth.”

This is absurd on its face. Statistics like that are grossly misleading because they don’t distinguish between money and wealth. Money is not wealth: It is a store of value waiting to be exchanged for wealth. When you trade your money for Microsoft Word, you get wealth. Bill Gates gets money (leaving aside, for simplicity’s sake, that the cost of the product must first cover employee compensation, suppliers’ bills, raw materials, and other costs of production, as well as stockholder dividends, corporate taxes, and other company expenses). Contrary to that stat’s implications, the value of the wealth gained by consumers typically is immeasurably greater than the monetary fortune earned by the producer. For example, Microsoft founder Bill Gates is worth some $80 billion. But what is the sum of the value, in dollar terms, of all of the Microsoft products bought by consumers over the decades? Just in 2014 alone, Microsoft earned $86 billion in revenue; that’s how much consumers valued Microsoft products by their voluntary choice to buy them—more in one year than Gates’s entire fortune. And that doesn’t tell the whole story. Consumers typically value the products they buy more than the money they surrender for it. Otherwise, why spend the money? Those products bring years of use to consumers—for business, education, personal finance, or just plain personal enjoyment (I’m using Windows 8.1 right now, and enjoying it immensely). How do you put a value on that?

Gates’s monetary fortune is small next to the tens of trillions of dollars in direct and indirect economic value spread through the economy over the decades resulting from the creation of his fortune. If you measure wealth only in liquid monetary accounts, the great capitalist fortunes seem outlandish. But, in reality, fortunes like those amassed by the likes of John D. Rockefeller, Henry Ford, Bill Gates, Steve Jobs, et al, are not disproportionately large. They are the small tip of a vast iceberg of wealth creation that benefits millions and billions of average people—the sum of which dwarfs the creators’ fortunes. Measured correctly, the vast majority of wealth is held by the middle class. It’s just mostly held in material, rather than monetary—i.e., savings—form.

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As the data cited by the Star-Ledger show, that 95% income gain figure applies only from 2009-12, a period of massive inflationary monetary expansion, including the lowest-ever interest rates and so-called “quantitative easing.” As financial market expert Jim Brown observes in his essay Monetary Fascism, this Federal Reserve policy features a massive government-engineered transfer of wealth from the lower and middle income groups to the upper income segment.

Furthermore, the data shows that, during the 1980s and 90s, the period of “Reaganomics”—lower tax rates and partial deregulation—the 99% did quite well, accounting for well over 50% of income gains. But after 2000, a period of resurgent regulatory welfare statism, the 99% did less than half as well as it did in the previous two decades. This statistical correlation between bigger government and greater income inequality is backed up by empirical data, as Reason’s Ronald Bailey observes in Less Economic Freedom Equals More Income Inequality.

Related Reading:

Monetary Fascism—Jim Brown

Piketty's "Capital" and Obama's "You Didn't Build That": Perfect Together