By Kevin Meyer
At the risk of creating another firestorm from the paranoid lemmings who blindly equate asking a question with being in denial, I came across another article that those of us with wider, thinking minds might consider. Thankfully on a different subject.
We hear a lot these days that those with more – or too much in the opinion of some – should "give back." Of course they are thinking purely in financial terms without understanding the larger picture. And I should add that there are many circumstances where my opinion does not align with the premise of the article. More on that later. The relation to lean and manufacturing? The dramatic improvement in productivity. Well, sort of. Maybe I'm simply interested in the subject.
Andy Kessler has a great column diving into how many people, and companies, have already given back – before they've been asked to give back more. Read it, then reconsider the so-called evil of wealth.
Wilson Greatbatch, 92, died this week a wealthy man. Investing $2,000 of his own money way back in 1958 and tending a garden to feed his family, Greatbatch invented the pacemaker. He licensed it to Medtronic, a company now valued at $36 billion that sells and continues to improve pacemakers and defibrillators. Greatbatch did his part to improve society, create wealth and increase, quite literally, our standard of living. But apparently that's not enough.
I'm directly involved in the pacemaker and overall medical device manufacturing industry, so Mr. Greatbatch creates a bit of a personal connection.
Steve Jobs gets taken to task for his lack of visible charitable giving—"no hospital wing or an academic building with his name on it," wrote the New York Times's Andrew Ross Sorkin recently. Never mind how much more productive and wealthy we all are because of Apple. Jeez. The old "I already gave at the office" has never rung truer.
Google founders Larry Page and Sergei Brin have saved all of us hundreds of billions of hours of research and driving around, far more value than their $20 billion each in wealth. They can give to whatever alternate energy project they want and it won't match the wealth they have already created for me and you.
Of course some would argue that those nouveau rich dudes that created Angry Birds pretty much destroyed that Google-inspired productivity gain. I'm convinced that game is a drug, which is why I went cold turkey and took it off the iPad.
Yes these guys are ridiculously wealthy. Far more than they could ever spend. Sure flyng around on private 767s looks a bit austentatious. But look what they gave us. Shouldn't that be rewarded?
I'm all for charity. I give, but those who collect it and spend it need to appreciate both where the money comes from in the first place and that they can never match the power of free enterprise to improve lives. Never.
Sorry, but the egg comes first. The welfare state doesn't exist without productive businesses and workers to pay for it. Yes, we need bridge builders, park rangers and even a few postal workers, but our economic policies need to encourage wealth-creating productive industries, not crush them with the burden of an unproductive state.
Bingo. I know several very wealthy people. They put everything on the line, sometimes multiple times intersperced with incredible failures, to create their wealth. They gave up decades of even comfortable living to take a wild chance on creating something new. That's why I don't begrudge them their wealth in the slightest. Instead I admire their perseverance and guts.
This is also where I beg to differ a bit from the article. There are those that created incredible products that have enriched our lives… and thereby driven more dollars into the tax coffers to spend on programs that enrich lives in different ways. But perhaps along the lines of the creators of Angry Birds, although that's a bit unfair, there are those that have become enriched without creating. The offspring of wealth-creators who simply rest on their wealth without creating. The CEOs that destroy rather than build… sometimes over and over again… and still get hefty severance packages. Those financial middlemen who siphon off capital in exchange for… I'm not sure what. We could come up with a decent list of those less scrupulous types.
Two groups. One deserves the wealth, the other, quite frankly, doesn't. One adds value, the other simply sucks potential value-creating capital out of society.
So how do we change the discussion from "give back more… and more…" to "let's reward improvement and creation"? Wealth itself is not evil – but it can be.
Just as we chastise those that simply live off of entitlements and handouts, we should find fault with those that don't leverage capital resources for social good. And just as we should applaud and reward success with worthy endeavors instead of asking them to "give back more," we should support and promote those at the other end of the wealth spectrum that are trying to improve themselves and others in their own way.
It's not as simple as just saying "give back more" or "we've given enough."
Jim Fernandez says
Right on.!! Great piece.
But I disagree that we should “find fault with those that don’t leverage capital resources for social good.” That’s still a judgment call. And who’s going to do the judging?
I think we need to remember that all wealth will be spent. Some day and somewhere it will be spent. Lets somehow make sure that the wealth is spent in our neighborhoods, in our country. Lets reward the spending of the wealth. Lets make sure that when the wealth is spent it, (hold on to your political emotions) “trickles down”. For example if a billionaire buys an ice cream cone from a street vendor, who cares where he got his wealth and how much wealth he has. Lets make sure we don’t prevent the street vendor from selling ice cream cones. And that we don’t impede the vendor from opening a chain of ice cream shops.
Kevin says
Jim – I hear you but disagree a bit that “all wealth will eventually be spent.”. Theoretically true, but perhaps not in the practical sense. I read a great article a couple days ago on the impact of inflation when combined with taxes. In effect wealth has to be put to meaningful use to avoid losing value – and “investing” for returns greater than inflation doesn’t necessarily do this. Especially some types of investments that don’t create true underlying value.
John Buzolic says
There is a simple test to use here. Replace the word “customer” with the word “Society” and then apply all the lean thinking you want.
Is what i’m doing creating value in the eyes of the society?
LITNE says
John–I couldn’t care less about most of “society” so why should I let some amorphous group of strangers determine whether or not I am creating value? Unless those people are actual true customers of mine, I don’t have to worry about that and I’m not going to give them any power to judge me or my “societal value.” You can not replace the word “customer” with the word “society.”
Peter Reynolds says
Why is the New York Times’s Andrew Ross Sorkin bent on visible charitable giving? “No hospital wing or an academic building with his name on it” – does one have to be seen to be giving? Like hob-nobbing with the rich and famous at those nauseating gala events for charity. The bible tells us to give in secret!
david foster says
If a billionaire buys a $200 dinner every day, that’s fine. (Changed it from ice cream cones to make amounts a bit larger) He enjoys the dinners, and the restaurant owner and his employees (and their supply chain members) have useful work.
If he spends the money instead on an angel investment in a company with real potential, that’s better, because the wealth will return manyfold.
If he spends the money on an angel investment in an “alternative energy” company with political connections, he is quite likely doing positive harm to the overall economy, by furthering the misdirection of resources.
Dave B says
You might find this article from the Washington post interesting
http://www.washingtonpost.com/business/economy/cozy-relationships-and-peer-benchmarking-send-ceos-pay-soaring/2011/09/22/gIQAgq8NJL_print.html
speaking of “Unearned” CEO Pay.
John Rackell says
Hopefully, I’m not in the category of paranoid lemmings or a Johnny-one-note for that matter.
And I certainly don’t begrudge Mr. Greatbatch some of his wealth, or Sergei Brin, in as far as it wasn’t taken from me. But some of it was.
The government grants a legally enforced monopoly by way of patent protection which amount to a tax. In the economic parlance, the owner gets a “rent” which is an unearned economic privilege and a use tax just like any other use tax the government forces us to pay. And I don’t like the alternative of paying one tax over another. And if the government taxes the wealthy then it beats me getting taxed a second time.
I don’t begrudge the medical device company getting rich off its innovation. The company can use its first-mover advantage, employ lean in their manufacturing and create an unassailable advantage over newcomers to their market. But don’t get a hand-out from the government by way of a 20 year monopoly. That is pure privilege.
It’s true that a medical device company helps people who would perhaps pay 10 times more to avail themselves of its products. Yet at the same time the legally enforced monopoly prevents new entrants into the same space and deprives consumers of possibly lower priced alternatives. At some cutoff point, some poor schmuck couldn’t get a pacemaker at the artificially inflated price.
You yourself working in an IP industry probably don’t see it this way, more like “copying” is stealing. But in my mind making things is a fundamental human right and once the pacemaker idea cat is out of the bag, let other competent designers exercise their god given talents and make knock offs.