Email L. Henry Platt, Jr.
Back when President Eisenhower was settling into his second term, and the economy and the stock market were beginning to blossom again, I had an opportunity to consider the intellectual consideration of the day: Communism vs. Capitalization. Each morning my part-time job preparing the courts for a local tennis club gave me ample opportunity to examine the question as I swept the courts. I stand by those conclusions which I present here and now. (Expanded and Supported with examples learned since.)
I had a job. I earned money. I could spend it as I saw fit, or I could give it away to friends or charities benefiting our community or peoples in need far, far away like Hungary. I provided a service nobody else was willing to do (I had asked some other friends to help without takers.) I had purchased ten shares of General Motors stock, and I felt that I was doing good things for myself and my community. I was a happy teen-ager. Other teens expressed unhappiness, but they had let opportunities pass to others.
This was the summary of the dynamism and success of private property and capitalism. There was a reward for those who contributed to their community. Communism didn't work that way. Under Communism everyone got his share whether he worked for it or not. It should be obvious to the reader that without a defined reward less will be accomplished.
Today (2011) many people both in Greece, Italy, and the United States complain that they are shortchanged. Many years ago I wrote a suggestion that still applies: "If you don't receive enough, try to give more." This piece of Quick Wisdom (qv) applies to all of life including marriage, employment, sports, education, home repair, religion, money, and general success. The wonderful secret of capitalism and private property is that if someone applies himself to a goal, his chances of success will improve.
At the turn of the twenty-first century a young man thoroughly dedicated himself to being the very best golf player in the world. He would play a course before the tournament even began - numerous times. He behaved as a gentleman, and was an inspiration to millions of people around the world that hard work, dedicated practice, and personal kindness could allow a young man of average means to rise to the very top.
Unfortunately, the man fell from grace and success as he became less of a gentleman and less dedicated to the sport he had loved. This, too is capitalism. When the product is no longer the very best, it can no longer command the highest rewards.
In 1907 the New York Central Railroad inaugurated one of the finest trains in American history: "The Twentieth Century Limited." This legend of a train departed from Grand Central Station in New York City in time for a fine dinner with all the finest food to be enjoyed before Albany. After Albany other boarding passengers may have dined and socialized before retiring to sumptuous sleeping cars for a peaceful trip through the night to awake for a full breakfast in plenty of time for a full business day in Chicago. The cost of this luxury guaranteed that only those of means rode first class.
Today there is still an afternoon train from New York to Chicago, but the opulence is gone, the food is mediocre, and there is more than an hour layover in Albany where more cars from Boston are added to the back of the train. This train arrives in Chicago later in the morning as well, and the breakfast is more Spartan. This too, is capitalism. Today's epitome of travel is a private jet with no stops and ample time for a good night's sleep on the ground in a fine hotel in Chicago.
A summary of this piece may be an anecdote my father might have told me: Hundreds of years ago, a king wanted to learn all about economics so he hired a well respected professor to write a book about economics. After some years the professor retuned with a thick book for the king to study. The king asked the professor to condense it. After many more years and condensations the professor finally came to the king lying on his death bed. The professor confessed that after distilling his works many times, his final paper had been reduced to just five words: "There is no free lunch."
In a few more words this might be explained as "Everything which is consumed must be produced." In ancient times much was produced by mother nature, the God Factor. In the autumn of each year the sky over New Haven, Connecticut used to be filled with geese migrating south. A single rifle shot into the air would bring down a bountiful dinner, but yesterday less than two dozen geese flew over my home as I worked in the yard. I haven't seen any wild turkeys this year either, and it's almost Thanksgiving.
Capitalism is also a system which provides concepts, laws, and procedures to allow groups of people to pool their resources and funds to build and create businesses to do what a singe individual cannot do. These groups are called Corporations, and they come in a multitude of forms including but not limited to: LLC (Limited Liability Corporation), Non-Profit Corporation, Sub-Chapter-S, and the most common: C-Corporaion.
In early times before the United States was created businessmen would gather beneath a large oak tree in the southern part of Manhattan Island. These men made business agreements and developed traditions which have become the codified laws which are today the New York Stock Exchange. As the exchange and New York City grew and tall buildings were constructed, the street where the exchange stood became known as Wall Street.
Today the term "Wall Street" has come to refer to the American Financial Sector. In other nations financial centers have other names, but in the twenty-first century a financial sector is a prerequisite. Going back in history my recollection is that finance and private property concepts began to coalesce in the new stone age.
"The God Factor" (qv) works well when the human population is much smaller than it is today. Whereas mother nature used to help us out much, much more, now we all need to work much harder.
WHAT CAN GOVERNMENTS DO?
In the United States we must continue the savings programs already on the books:
We must understand and support the group of men who met in Philadelphia during the summer of 1787. Now referred to as the Constitutional Convention, these men sought to create a framework of limited government to guarantee certain legal rights to every individual, and among these should be Life, Liberty, and Private Property. (The phrase "Private Property" was discussed as Property, and after much consideration that the word "property" might be misconstrued to require the Government to provide real-estate to everyone - not just to protect personal property such as foodstuffs, clothing, live stock, etc. from confiscation; it was agreed that the phrase "Pursuit of Happiness" would be used in its place.)
Unfortunately Ali Obama and his 47 thieves (or czars) have a different mindset than the men who met at Independence Hall during the summer of 1787. It seems to me that when Barack Obama swore to "preserve, protect, and defend the Constitution" on January 20, 2008, he and ultimate truth were not on the same page.
So - PAY ATTENTION - the Government of the United States of America should move cautiously and deliberately to return to the mandates and directives of the Constitution and to adjust tax rates to be be similar to the rest of the industrialized world. Much of what the Federal Government does can be done better at the individual state levels and at lower final cost to the tax payers.
Economics 101 should leave the reader, student with a reverence for freedom and its concomitant responsibility. Freedom without responsibility is anarchy. Responsibility without freedom is fascism.
© L. Henry Platt, Jr.