“The Redemption of Chris Hughes” is how the New York Times characterizes his book released this week titled Fair Shot: Rethinking Inequality and How We Earn.
Hughes book reads like an Obama speech. In fact, the words, “Fair Shot” came from Obama as his way of justifying high taxes, a way to give other people a “fair shot” at…I don’t know, money, success, or something. Problem is, the best way for the government to give people a fair shot is to leave them alone as much as possible.
I can hear Chris Hughes’ response: “That’s just wrong!”
I guess the New York Times editors believe Chris Hughes needs redemption because as a co-founder of Facebook he’s a billionaire. I wonder if they think George Soros or Tom Steyer need redemption. Nah, I doubt it.
As far as we know Chris Hughes broke no laws in getting his wealth. We don’t know whether George Soros violated currency laws to gain his wealth. Some say he was a Nazi sympathizer. I don’t know about Tom Steyer but we know his politics, as with Soros, are of the manic-hysterical type that allows people to think the ends always justify the means.
Facebook’s success, according to Chris Hughes, are due exclusively to technological advancements, globalization and the rise of private equity firms. These phenomena, according to Hughes, have created a “winner takes all” economy in which only a small group of people succeed.
I smell the stench of socialism in Hughes’ words. Why is it that when capitalism allows some but not all people to get rich they immediately want to change the system. Is that a “pulling up the ladder” mentality? Sort of, “I’ve got mine so let’s destroy this system before others have a “fair shot” of their own.
Is it a fair shot to charge capitalism for not making everyone rich. Is it not better that some get rich than none get rich?
Hughes wants to benefit others, I get that. But it sounds like he wants to do it by abolishing capitalism, the very system that enabled him to become a billionaire. [He’ll deny that, but his proposal will destroy capitalist individual incentives] When capitalism is extinguished or just neutered and restricted it is invariably replaced by some form of socialism. Every country on earth today that is under the rule of socialism is a dystopia ruled by a criminal gang. Only members of the gang enjoy the riches produced. The rest are left to suffer under the only kind of equality possible under socialism. Everyone is equal all right, equally miserable.
Hughes believes the creation of new wealth under capitalism is a “winner take all” proposition.
Jean-Baptiste Say (1767-1832), disagrees. He was the French economist credited for Say’s Law of Markets. The law of markets, in its most simplified form, simply says that supply creates it own demand.
When people increase their savings by placing some of their earnings in a bank or invest some of their earnings in the stock market, say through a 401K plan, the money in their bank account or 401K plan doesn’t just sit idle. The money we save becomes available for other people to get bank loans or for the administrators of 401K plans to invest in business expansion or the creation of new businesses.
Chris Hughes’s “winner takes all” comment in not accurate. Not by a long shot. Technological developments, globalization and the rise of private equity firms create new wealth. Hughes and Zuckerberg got a huge chunk of the new wealth created by Facebook. But they didn’t get all of the new wealth so created. They may not even have got the lion’s share of it.
Say’s law of markets shows that new business formation creates economic activity beyond that which directly benefits the founders. The new wealth they create for them selves creates new wealth for others who get jobs not only in the new enterprise but also in the many ancillary new or previously existing enterprises that are stimulated by all the new demand that is created. New and existing firms took advantage of social media through Facebook to market their products and services. This is not to mention all the money Facebook spends directly on it corporate headquarters, supplies for it’s business, salaries for its employees, etc.
All of this activity increases supply and that new supply creates new demand, both consumer and commercial. The new jobs created that provide salaries for people enable them to purchased goods and services in the economy. This is quite simply Say’s Law in action, supply creating it’s own demand.
It’s also a rebuke of Keynesian economics which largely benefits politicians. Keynes doctrine enables them to claim they are doing something “for the people” or “for the children” when what they are really doing is padding their own political pockets. What they are really doing is fleecing the people with high taxes and promising them personal prosperity from the social programs they establish, which always turn out to be little more than costly vacuous bromides that benefit no one except politicians seeking votes.
Poverty programs never alleviate poverty. They more likely drive people deeper into it.
Lyndon Johnson’s “War on Poverty” from the 1960’s was a total failure. It maintained poverty and even increased it by destroying individual incentive. It destroyed the black family by substituting government largess for breadwinner fathers. It increased crime first by creating a class of men who lived off several women at a time by tapping into the Welfare and Aid to Dependent Children benefits they received. It increased also crime by creating a hoard of fatherless boys with no male models to steer them onto a better path. Today, at least 40 years later, the poverty level in America remains little changed.
Now Chris Hughes is at a cross road. He can grow up and stop feeling guilty about his wealth. I mean, we don’t have any reason to believe he broke any laws getting it, do we? He can do good things with his wealth, or he can use it assuage his guilt for having it by using it to implement a guaranteed income for everybody. That might make him feel better for awhile, but it won’t do much for the prosperity and happiness of all the new victims he will be creating.
I hear you, reader. You are saying, ”What the hell, TeeJaw?” He wants to give money to people. What’s this about “victims?”
Yes, victims. You see, it’s not only Say’s Law at play here. It’s also Maslow’s theory of the hierarchy of innate human needs. It’s the psychology of human flourishing. It the common sense of how people may exercise their unalienable natural right to the pursuit of happiness. Under those laws, under that psychology, and that common sense, we learn what lifts people up and what pushes them down. We come to see how and from whence we despair. We learn where we must look to find our bliss.
Maslow said we need more than shelter and security. On top of those we need stimulation and identity. After those innate needs are satisfied we have the opportunity for bliss, which he calls self-actualization. It’s an obscure phrase. Think of it as self respect. We benefit the most from the prosperity we earn by our own talents and our own work. We gain self respect, we reach a state of self actualization by the knowledge that we can make happen what we want to happen in our lives.
Unearned money is always welcome, but it can be our downfall. That’s why so many lottery winners who were previously poor end up finding little happiness from their newfound wealth. Many waste the money they won or have it fleeced from them by bunko artists. Money doesn’t buy happiness unless you earn it for yourself.
Giving people a guaranteed income is a destructive way for a billionaire to use his fortune. It will encourage many people to become lazy and unproductive. So many people already don’t need further encouragement in that direction. Government will quickly step in and take it over. Politicians will not long allow themselves to be upstaged by a wealthy billionaire. If Hughes wants to stay in with the in crowd in Washington D.C. he will need to give them his money, not poor people. Who does he think he is? That will be the thoughts racing through the minds of the D.C. establishment. Along with, How can we get in on this?
You had to be pretty smart to create facebook, Mr. Hughes. There is no shortage of worthwhile charitable causes you can support. It will take the brain power you have already demonstrated to find them. Don’t allow yourself to do something stupid like push for a guaranteed income for everyone. You may make yourself feel good but you won’t be doing favors for your victims. Yes, victims albeit they are of willful kind.
Chris Hughes should try to re-think not how we earn (whatever he means by that). He should re-think what it really means to be rich, as in well off. The most well off among us are those who faced obstacles and overcame them by their own initiative.