Posts tagged Bill Gates
Markets aren’t Zero Sum Games
Tibor R. Machan
The more I read about “Occupy Wall Street,” including the pundits who apologize for it, the more I find that people still believe that market exchanges are zero-sum games wherein for someone to gain, someone must lose. But this is plain bunk, as economists since Adam Smith have shown conclusively.
But consider–is a marathon race a zero-sum game? Does someone’s running really fast make all others run slow? Clearly not. How fast the winner runs doesn’t slow down or speed up the losers. When a person buys a watch at the mall, both the merchant and the costumer are getting what they want from the other, no one is being ripped off. And the same applies to all honest deals on Wall Street. I buy some shares in a company and it is doing well with its products or services and so the monetary value of the shares increases. Those who didn’t buy these shares do not make the gains I did but not because I prevented them from doing so, only because the purchasing public didn’t want the services or products of the companies in which they bought shares, unlike in the case of my choice of company.
Like marathon races, market processes do not involve what happens in a boxing ring–no one is knocked out so that another may be triumphant. Yet it seems nearly all those who sympathize with the people marching in the Occupy Wall Street parades, as well as the people who speak up for them in their midst, fail to see the difference.
Put bluntly, Bill Gates billions do not make me or anyone else poor. In fact, his billions make it possible for a lot of folks to improve on their economic circumstances. Bill goes out and buys a lot of stuff or just gives his money away in Africa and people will then go out and maker standard purchases with these funds. No one has lost anything, not a dime.
All the wealthy folks in my neighborhood who live on lakes in fancy homes and have yachts and Bentleys aren’t making anyone poor. So resenting them is nothing but sheer envy, a filthy vice! Like hating someone with a great voice when one cannot carry a tune! Or a tall basketball star when one is too short to play the game.
We are often very different from one another–indeed we are all individuals and then gather into groups–and some of this means that what we have stuff and opportunities that others do not, whether they badly want it and even need it. But those who have it aren’t guilty of any wrongdoing except in the fantasy world of egalitarians which is, being a fantasy world, a distortion of the real world in which problems need to be solved. This is, however, a welcome thing to most of us who give it but even a little thought. After all, since you aren’t like me, you will want different stuff from what I will and that way we can trade quite fruitfully, with both of us ahead once the trade is done. Yes, sometimes the market value of what you get from the trade is much lower than of that which I get from it. But so what? If I badly want to have your worn out gloves and am willing to give you my fabulous sunglasses for them, some will see this as a huge rip off but who are they to tell? In most cases they wouldn’t know and in any case they have no business butting in. (They may offer some advice but that’s all.)
Ever since I arrived on these shores many, many moons ago, I have had zero sympathy for people who insisted that we should all enjoy equal wealth, equal advantages, etc. Why? No reason. Maybe what such folks missed out in their education is the study of Orwell’s Animal Farm, Vonegut’s Harrison Bergeron, and Rand’s Anthem. I see get thee back to the classroom and off the streets, especially Wall Street.
Business Versus Business
Tibor R. Machan
One can think of business as a profession, like medicine or engineering, and ask whether it is worthwhile or valuable. Should people in their communities welcome business or not? Or one can think of business as the collection of commercial institutions, such as the banks, corporations, shops, and so forth that are active in one’s community.
It is one thing to oppose the former, quite another to be critical of the latter. One may well find business valuable as an institution in a human community, something to be embraced and supported, even as one considers the great majority of existing businesses guilty of innumerable types of malpractice. The same can be so with any other endeavor, such as medicine or entertainment or farming. While as properly understood all of those could be assets in a human community, their actual manifestation at any period of time could also be highly lamentable.
In America, just as elsewhere in the world, it is arguable that too many businesses are engaged in malpractice even while the institution of business, sans the malpractice, is something very much to be prized and in considerable need. The malpractice I am referring to involves mainly getting into bed with politicians and bureaucrats whereby too many businesses are actually attempting to subvert the very nature of their profession. These outfits run to Washington and other centers of political power to gain favor against their domestic and foreign competitors and thus flagrantly betray the institution of business. Of course this is not too difficult to understand, even to excuse, given that government has become thoroughly corrupt by involving itself by picking winners and losers, in favoring various businesses and disfavoring others, with special legislation, regulation and other policies that undermine free and open competition in the market place.
Consider as an analogy professional sports. If the organizations that administers the rules of a given sport were to have established as a routine practice favoring certain teams over others, if referees and umpires took bribes as a matter of course, it would be no surprise that the various teams would try to outdo each other with their offer of bribes to these officials. Or if a judge in some criminal jurisdiction established a record of corruptibility, it would be no surprise if litigants tried to approach their case not with good arguments, not with facility with the law but by way of coming up with the most attractive bribe for the judge. Those making use of bribes would, of course, be complicit in the corruption of the system but the main fault would lie with those in the administration who make a practice of selling out, of in effect betraying their oath of office.
When Bill Gates’s Microsoft Corporation was being hounded by the Department of Justice for allegedly violating antitrust laws–supposedly by means, for example, of bundling its products, something that should never be deemed objectionable let alone illegal–he was reportedly advised that his practice of staying away from Washington, of refusing to fund politicians running for election, was the source of how he was being treated. In time Gates learned his lesson and began to game the system. Instead of remaining independent of politics and relying mainly on technological and market savvy, he followed the practices of his competitors by supporting politicians of both major parties running for office. By now, of course, Microsoft Corporation is there with all the others who take part in what some call crony capitalism or what is simply the corruption of capitalism. (If the sport of tennis were administrated similarly, would we call it crony tennis or simply corrupt tennis?)
One can be an enthusiastic supporter of business as an upstanding institution in a human community but at the same time be vehemently critical of how actual firms are being managed vis-a-vis their ties with politics. But the main source of the problem is how the system of government in a society makes it not just possible but nearly imperative for people in business to become corrupt so as to be able to survive and prosper.