{"id":916,"date":"2021-11-26T23:30:46","date_gmt":"2021-11-27T04:30:46","guid":{"rendered":"http:\/\/commoncents.blogwyrm.com\/?p=916"},"modified":"2023-05-06T16:46:39","modified_gmt":"2023-05-06T20:46:39","slug":"who-profits","status":"publish","type":"post","link":"https:\/\/commoncents.blogwyrm.com\/?p=916","title":{"rendered":"Who Profits?"},"content":{"rendered":"<p>It is a yearly tradition in this blog to simultaneously discuss 1) what makes Thanksgiving worth celebrating and 2) to set the record straight by articulating the first point clearly and refuting the nonsense that tries to drown it out.\u00a0 This year\u2019s column is no different, although the message comes in particularly well-worded argument by Dinesh D\u2019Souza\u2026 but more on that later.<\/p>\n<p>First, just what makes the holiday worth celebrating? (Hint it isn\u2019t a day off, turkey dinner with friends and family, football games, or Black Friday \u2013 although the first three of those are nice.)\u00a0 It is the idea that economic freedom, specifically in the form of private property ownership and voluntary exchange of goods and services, is the \u2018magic\u2019 that makes us all prosperous.\u00a0 Of course, the \u2018secrets\u2019 to this magic are nothing more than the recognition that different people are made differently, have different interests and abilities, and, above all, different drives, and the faith that people, left to their own devices, will generally want to cooperate to the betterment of all.<\/p>\n<p>Second, just why does the record need straightening out?\u00a0 Well there are two reasons.\u00a0 On one hand, there is simply a lot of misinformation that clutters up the idea landscape.\u00a0 This economic noise distracts and deceives people from understanding and appreciating what economic freedom means; from appreciating that they control much of what happens in their lives.\u00a0 This ignorance not only spawns poor decision making it also contributes to the overall unhappiness of any afflicted by it.\u00a0 On the other hand, there is a certain class of people unwilling to trust that their fellow citizens can manage their own affairs.\u00a0 This professional busybody class is always poking its collective nose into everybody else\u2019s affairs seeking to dictate and control things that aren\u2019t any of their business.\u00a0 Ironically, but not unexpectedly, these type of people never subject themselves to the autocratic rule they wish to subject others under.<\/p>\n<p>The story of the first Thanksgiving (nicely summarize <a href=\"https:\/\/commoncents.blogwyrm.com\/?p=45\">here<\/a>) centers around the Pilgrims realizing that private property and economic freedom matter (see also <a href=\"https:\/\/www.hoover.org\/research\/how-private-property-saved-pilgrims\">How Private Property Saved the Pilgrims<\/a>).\u00a0 Sadly, this fundamental message is warped and twisted \u2013 sometimes innocently, sometimes maliciously \u2013 with off-the-mark commentary and argumentation that simply \u2018doesn\u2019t follow the science\u2019 (the dismal science of economics that is).\u00a0 A <a href=\"https:\/\/commoncents.blogwyrm.com\/?p=727\">previous post<\/a> dealt with some of the most distressing criticisms of the holiday and tried to set some small corner of the record straight but there is always a need for more.<\/p>\n<p>This is where Dinesh D\u2019Souza comes in.\u00a0 I recently came across a lecture he made in which he presented ideas that solidly support just why the real story of Thanksgiving is worth remembering.\u00a0 He didn\u2019t tie these ideas directly to the pilgrims so that will be the contribution I provide here.<\/p>\n<p>The tale that Dinesh tells involves a valet car attendant who parks cars at a luxurious resort.\u00a0 On average the attendant works 10 hours in a day for which he makes $150 ($15\/hour).\u00a0 Over the course of that day he parks 100 cars (10\/hour) at the price of $30\/car.\u00a0 The total revenue the resort earns $3000.<\/p>\n<p><center><iframe loading=\"lazy\" width=\"560\" height=\"315\" src=\"https:\/\/www.youtube.com\/embed\/mYbambvmWMs\" title=\"YouTube video player\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/center><\/p>\n<p>D\u2019Souza then discusses how the Marxist looks at what he perceives as an inequity:\u00a0 the valet, as the main agent, is the one providing the service with his labor but he is only getting a small fraction (5%, in fact) of the revenue.\u00a0 D\u2019Souza goes on to say (although some inference is needed as there is a cut in the edit) that once the operating costs are subtracted there is still a substantial profit that flows to the owners (the capitalists) which bypasses the valet entirely.\u00a0 He summarizes Marx\u2019s objection as centering on the fact that the capitalist (precise definition to follow) has already had his recompense through the interest and that the profit should go to the laborer as he is the only one actually producing a \u2018good\u2019 in this scenario.<\/p>\n<p>D'Souza then goes on to point out the obvious flaw in this argument.\u00a0 In Marx\u2019s point-of-view, the capitalist\u2019s only function is to provide the financial power to start the business.\u00a0 D\u2019Souza correctly points out that the owner (or what he calls capitalist with a more widely expanded definition) does far more than supply working money.\u00a0 The owner provided three essential ingredients that make his portion of the profit much higher than that of the valet\u2019s:<\/p>\n<ul>\n<li>Conception \u2013 the owner conceived of the idea of the resort with the necessary appeal to attract people willing to pay $30\/day to have their car parked<\/li>\n<li>Realization \u2013 the owner turned the conception into reality by organizing the countless details, large and small, that make an idea a reality<\/li>\n<li>Protection \u2013 the owner gets paid last and provides a bulwark against the ebbs and flows of the business cycle to labor thereby giving labor the security of steady wages at the expense of lower profit.<\/li>\n<\/ul>\n<p>So, how does this narrative tie back into Thanksgiving?\u00a0 Well, the same passions and resentments that showed up in the valet\u2019s Marxist criticism of the resort\u2019s profit were on display in Plymouth all those years ago.\u00a0 However, Marx\u2019s facile explanation in terms of the friction between labor and capital doesn\u2019t work so well for the case of the Pilgrims.\u00a0 The capital for the founding the Plymouth Plantation came from the Company of Merchant Adventurers of London, who remained behind in the old world and, thus, were as far away as conceivably possible at that time (separated by the Atlantic in the early 1600s).\u00a0 If Marx\u2019s view were correct, why didn\u2019t this laborer\u2019s paradise work from the first go?<\/p>\n<p>William Bradford, who chronicled the events in the fledgling colony, identified how working in common was \u2018found to breed much confusion and discontent\u2019.\u00a0 That the most able bodied complained that they had to \u2018spend their time and strength to work for other men\u2019s wives and children without any recompense\u2019.\u00a0 Where is the worker\u2019s utopia that Marx promised once the worker was freed of the shackles of capital.<\/p>\n<p>In 1623, Bradford took the bold step of abolishing communal labor in favor of private ownership and responsibility.\u00a0 He turned each family into owners of their own land and a bounty ensued.\u00a0 In other words private not communal ownership corrected the problem.<\/p>\n<p>To be fair, some of Marx\u2019s observations about the exploitation of the some for the enrichment of others are valid.\u00a0 Adam Smith also raised concerns about these situations and, as a moral and just society, we should look for mechanisms to address these things.\u00a0 But the answer, contrary to Marx, isn\u2019t ridding ourselves of private ownership.\u00a0 Rather, we should be expanding opportunities for more people to own some part of the economic means of production. \u00a0As a society, we should offer opportunities for the valet (assuming he is resentful of the role he plays at the resort) to open his own business.\u00a0 In short, we should reject Marx and embrace Bradford.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>It is a yearly tradition in this blog to simultaneously discuss 1) what makes Thanksgiving worth celebrating and 2) to set the record straight by articulating the first point clearly... <a class=\"read-more-button\" href=\"https:\/\/commoncents.blogwyrm.com\/?p=916\">Read more 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