The Real “Makers” and “Takers”

For those who haven’t had the great misfortune of reading Atlas Shrugged, the book is premised on the idea that if the world’s “creative leaders,” businessmen, innovators, artists (i.e., the “makers”) went on strike, our entire society would collapse. These strikers hide out in a utopian compound in the mountains of Colorado while the rest of us despondently wail and gnash our teeth and beg for them to once again bestow their creativity upon us.

The book mirrors in many ways the more lefty Elysium, where to escape the environmental degradation they have wrought, the wealthiest go off to form their own society in the sky. The rest of the human population remains mired in slum-like conditions, because the only thing standing between humanity and savagery is Bill Gates. But have no fear! Rather than collectively solving our problems, humanity needs a salvific “Jesus” in the form of (who else?) Matt Damon to make us citizens of Elysium and thereby save humanity. These two, very disparate tales of woe both have common elements (what I will call the “Randian vision”): society relies on the wealthy; collective action through government is either meaningless or detrimental; and a few individuals (“great men”) should be the center of social change and innovation. But all of these assumptions are false.

The appeal of the Randian vision to today’s wealthy is obvious: it puts them back at the center of economic life. They long ago realized that rather than being the beneficent “makers” they had always imagined themselves to be, they were the parasitical “takers” they so despised. Their wealth, which was once a symbol that God praised their work, became an instrument for social change (Carnegie, Rockefeller) and eventually good in itself (Gates, Jobs). Social Darwinism, the idea that the economy is a “survival of the fittest” competition where the superior end up on top, exults the businessman as superior and deserving. But as Henry George noted of Herbert Spencer (the founder of Social Darwinism): “Mr. Spencer is like one who might insist that each should swim for himself in crossing a river, ignoring the fact that some had been artificially provided with corks and other artificially loaded with lead.” F. Scott Fitzgerald and Thorstein Veblen ridiculed the idea that the wealthy were in any way superior. Social Darwinism has resurged in conservative thought, supplementing the Randian vision to fortify a social order in which a minuscule proportion of society reaps its rewards.

Because the wealthy are no longer willing to use their wealth for good, they have decided to glorify the wealth itself as good, thus, Harry Bingswanger writes in Forbes,

Imagine the effect on our culture, particularly on the young, if the kind of fame and adulation bathing Lady Gaga attached to the more notable achievements of say, Warren Buffett. Or if the moral praise showered on Mother Teresa went to someone like Lloyd Blankfein, who, in guiding Goldman Sachs toward billions in profits, has done infinitely more for mankind. (Since profit is the market value of the product minus the market value of factors used, profit represents the value created.)

Here we see the Randian vision in all its idiotic glory. If you could make a profit by pressing puppies into coffee, you deserve more moral praise than someone who dedicates their life to the poor. As E.F. Schumacher observed about capitalism, “Call a thing immoral or ugly, soul-destroying or a degradation to man, a peril to the peace of the world or to the well-being of future generations: as long as you have not shown it to be ‘uneconomic’ [unprofitable] you have not really questioned its right to exist, grow, and prosper.” To justify their wealth, the titans of industry must make themselves the center of economic progress and society, but the dirty little secret is that they aren’t; they’re just along for the ride. As Richard Hofstadter observed about American capitalism, “Once great men created fortunes; today a great system creates fortunate men.”

This observation fits with the facts: William Baumol found in the 1960s that 90 percent of the United States’ GDP today is due to innovations since 1870. Nobel Prize winner Herbert Simon estimates that a flat tax of 90% of income is justifiable because “social capital” accounts for 90% of income in developed countries. The Human Genome Project cost the government $3.8 billion but generated $796 billion in economic gains. The project is expected to bring about returns of 140 to 1 to the public. Research by Kenneth Flam finds that, “eighteen of the twenty five most important breakthroughs in computer technology between 1950 and 1962 were funded by the government, and in many cases the first buyer of the technology was also the government.” The Randian vision praises hedge fund managers, even though most hedge funds underperform the market. Social Darwinism praises the CEO even though the most highly-paid CEOs are often unsuccessful and many companies run fine without them. Society praises Zuckerberg, Brin and Dorsey, but it was DARPA that made their coding possible. Much of the research the government pursues isn’t profitable enough to merit the attention of private companies, or is simply too risky. Private space flight is only imaginable because the government went there first.

It seems almost axiomatic that no good person has ever done something great merely for a profit. They seek something more important than material possession. So why should we fear if the wealthiest left us? I would fear for the world if the empathetic, the intelligent, the compassionate, the fearless and the creative left us. We don’t celebrate these virtues unless they somehow lead to monetary gain, but often they don’t. Norman Borlaug, father of the “Green Revolution” that by some estimates saved 1 billion people from starvation and who was hailed as “… a towering scientist whose work rivals that of the 20th century’s other great scientific benefactors of humankind,” didn’t work for money; he worked to help people. A Dallas Observer story about him noted that he,  “rarely indulged in the comforts of the industrialized West for any extended period of time. His choice has been to immerse himself in locales where people stare death in the face every day.” When a reporter saw Mother Teresa helping a disfigured leper, he said to her, “I wouldn’t do that for a million dollars.” Mother Teresa said, “Neither would I.”

The Walton family heirs, whose fortune relies entirely on predation — of labor, of the environment, of government, of small business — controls more wealth than the poorest 40 million Americans. Imagine what we could do with that fortune if they left. For all the credit Bill Gates gets, it may be worth wondering, as Peter Singer did, if he has given enough:

Gates may have given away nearly $30 billion, but that still leaves him sitting at the top of the Forbes list of the richest Americans, with $53 billion. His 66,000-square-foot high-tech lakeside estate near Seattle is reportedly worth more than $100 million. Property taxes are about $1 million. Among his possessions is the Leicester Codex, the only handwritten book by Leonardo da Vinci still in private hands, for which he paid $30.8 million in 1994. Has Bill Gates done enough? More pointedly, you might ask: if he really believes that all lives have equal value, what is he doing living in such an expensive house and owning a Leonardo Codex? Are there no more lives that could be saved by living more modestly and adding the money thus saved to the amount he has already given?

If Gates donated all $53 billion to foreign humanitarian aid, it would be double what the U.S. government gives yearly ($23 billion in 2013). Imagine the good we could do with the fortunes of the rich, who have only amassed the wealth because of the infrastructure developed by society. Innovators regularly rely on government and academic funding for projects that corporations don’t think will be profitable (according to Singer, “less than 10 percent of the world’s health research budget is spent on combating conditions that account for 90 percent of the global burden of disease”). The arts are largely supported by public funding, not private donations. And many businesses are less self-sufficient than they imagine, requiring bailouts and competition between states to support them. Many corporations, like Walmart, dump poor employees on to government largess rather than pay them enough to feed themselves. And who builds the roads and takes out the garbage?

Were the richest .01% to venture out and form their own society, the rest of us would not devolve into violent conflict; rather, without the expensive burden of the wealthy tapeworms siphoning our common wealth, we could begin to solve our problems. So to the rich who threaten to leave New York, I say, “go.” If the rich somehow manage to form their own planet, we can start fixing the problems on ours. We are the makers, they are the takers.

9 thoughts on “The Real “Makers” and “Takers”

  1. Gary Leroy

    Sean – thanks. I often wondered why one of these gentlemen like a Bill Gates doesn’t attempt “bigger” things. With just a few of the billions he possesses, he could not only finance the entire City of Detroit’s 1.1B budget but wipe away its $380M deficit. After rescuing an entire city of 3/4 million people, Mr. Gates would still be be worth more than $50billion; no change in lifestyle, or ability to buy another Codex. It wouldn’t have to be Detroit, it could be Philadelphia or any other metropolis. Think what could happen in a city now freed from the burden of debt and the ability to invest in its infrastructure. And the brightest minds could probably be wooed to assist in governing such an American experiment. It could be a history making move; one that could alter the entire landscape of this country – after others saw what could be done. I will guarantee it would do more to preserve the legacies of these billionaires than any donation to a single university or museum endowment.

  2. paul isaac

    A 2012 graduate who seems to have undergone a “road to Damascus” conversion from the right to the left wants to be taken seriously in a sweeping condemnation of “the rich” , presumably in the service of some radical reduction to inequality. It was a nice polemic for HPost’s “Lumpen Occupy” readers; but it was, among many other things economically illiterate. And if The Strawberry Statement still holds true , you’ll do a lot better in Brooklyn in terms of getting laid.

    I have a lot else to do so this will be short; but there is a problem in allocation of inherently scarce resources among individuals with different moral claims to them based on existence, effort,disabilities, talent, citizenship, etc. , etc.

    Individual utilities are incomparable and there are a multitude of possible consumption choices . Price mechanisms allow a great deal of individual choice without the costs and frictions of political administration. Prices direct resources ;but do so through efforts to profit from them induced in factors of production. That inherently results in profits , inequalities , commoditzation of human experience and all the other attributes of modern society detested by every utopian from Rousseau onwards.

    Get over it. Some people have talent , e.g. athletic or the arts , work hard at it , get lucky and succeed, sometimes wildly. Some don’t, work hard at it and , like Lady Gaga, succeed wildly anyway. Same with business, and yes, elements of luck enter into it. But I would rather have those than the wildly oscillating enthusiasms of would-be philosopher-kings wearing guns ; both on a philosophical basis ,and given the historical track record , a practical one.

    As Marx’ mother supposedly said, “I wish Karl would accumulate some capital instead of writing about it.”

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