Anyone who has studied Austrian School economics–Böhm-Bawerk, Hayek, von Mises, etc.–will not be surprised by Andy Kessler’s comments on the source of real social progress: Virtually all of it comes from our entrepreneurs who invent and create the goods and services that improve our standard of living minute-by-minute. The main source of fuel for their creativity–but certainly not the only one–is the political and economic freedom that is necessary to become wealthy for one’s creations. These entrepreneurs surely put a lot at risk in the process–capital and reputation. So, it is disheartening to hear that many do not recognize the necessity of that freedom.
Read the whole thing in Friday’s Wall Street Journal: http://online.wsj.com/article/SB10001424052970204138204576600641068232846.html?KEYWORDS=kessler
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. President Obama suggested under a Cincinnati bridge this month that “if you’ve done well. . . then you should do a little something to give something back.”
Give something back? Greatbatch did well specifically because he provided something that society needed. His and Medtronic’s profits are what you and I are willing to pay above costs for these life-enhancing devices. This is true of Apple iPhones and Genentech Herceptin and Google Maps and Facebook Likes…
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…
The Bill and Melinda Gates Foundation is spending billions to eradicate malaria and other diseases in Third World countries. I admire their work and hope they succeed. But note that Bill Gates’s fortune came from Microsoft, whose software has done more to help bring Third World countries out of poverty than any charitable or government program.
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. Same for Jeff Bezos at Amazon and the founders of Facebook and Twitter and LinkedIn and the rest. Will we soon disparage these Robber Geeks?
It’s inevitable but wrong. Because they, like Wilson Greatbatch, have done their part to create wealth for society by inventing and being in business and investing their profits into even more productive products and services. That’s “giving back.” Taxes and charity are just gravy.
Mr. Kessler, a former hedge fund manager, is the author most recently of “Eat People And Other Unapologetic Rules for Game-Changing Entrepreneurs” (Portfolio, 2011).