The American, the online magazine of the American Enterprise Institute, has published an essay of mine in which I argue that is wrong to lump criminals like Bernie Madoff in with creators like Steve Jobs. More broadly it examines the nature of the profit motive in contrast what motivates frauds and hucksters.
From the start, Madoff was treated not as a criminal who pretended to be a businessman but as the symbol of business greed. He was, in the words of Diana Henriques, author of The Wizard of Lies: Bernie Madoff and the Death of Trust, “a creature of the world he helped create, a world that was greedy for riskless gain . . . arrogantly certain of success, woefully deluded about what could go wrong, and selfishly indifferent to the damage done to others.”
The world around us has been shaped by a theory that says the Madoffs and Jobses of the world are brothers in spirit — or, rather, brothers in spiritual impoverishment.
But what if actual profit-seekers have nothing important in common with monsters such as Madoff? What if the profit motive is radically different from some unhinged “greed” capable of turning producers into predators? Then perhaps we owe businessmen an apology — and maybe, just maybe, a significant part of the justification for today’s regulatory state should be relegated to history’s ash heap.
Whole thing here.
If you would like to ask me a question, you can submit it here.
Cypress Semiconductor founder T. J. Rodgers had a well-crafted op-ed in the Wall Street Journal earlier this week, in which he shows that soaking the rich benefits no one.
A couple of years ago, I decided to invest in my hometown of Oshkosh, Wis., by building a $1.2 million lakefront restaurant. That restaurant now permanently employs 65 people at an investment of $18,000 per job, a figure consistent with U.S. small businesses. If progressive taxation in the name of “fairness” had taken my “extra” $1.2 million and spent it on a government stimulus program, would 65 jobs have been created.
According to recent Congressional Budget Office statistics on the Obama administration’s 2009 stimulus program, each job created has cost between $500,000 and $4 million. Thus, my $1.2 million, taxed and respent on a government project of uncertain duration, would have created about one job, possibly two, and not the 65 sustainable jobs that my private investment did. . . .
Every dollar that is taxed away from private investment and spent by government produces fewer jobs than the jobs destroyed by the loss of private investment.
But, Rodgers observes, there is a campaign to demonize any successful person who doesn’t declare that the government should seize more of his income.
Yet the politics of envy, promoted most notably by President Obama himself, continuously stokes the idea that the wealthy are not paying their “fair share.” This injured sense of unjust rewards was summed up on a radio show I heard the other day, when a caller said of the rich: “How much more do they need?
How much more do I need? How many more jobs do you want?
Compared to most businessmen, Rodgers is refreshingly unapologetic in opposing those who want to raid his fortune. The typical op-ed of this sort would contain at least one paragraph assuring us that the author is “compassionate” and supports the entitlement state.
But I wish Rodgers had been clearer about the fact that his wealth belongs to him because he earned it. As written, you could take him to be saying that he should be allowed to keep his fortune merely because it creates jobs for others. The point about jobs is relevant to showing that violating his right to his wealth would achieve nothing but destruction, but it should not stand as the justification for telling the government to keep its hands off his wealth.
The headline sums it up: “Judge scolds Apple for lack of remorse in e-book antitrust case.” The article quotes Judge Denise Cote’s statements to lawyers at a hearing last week. “None of the publishers nor Apple have expressed any remorse,” said Judge Cote, who recently found Apple liable for a Sherman Act violation. “They are, in a word, unrepentant.”
Apple intends to appeal, and so higher courts will decide the legal issue. But the moral issue is for each of us to decide. Regardless of what Judge Cote says, do you think Apple has behaved badly and should apologize? Here are some basic facts and legal considerations to help you decide.
Apple was found legally liable for having “restrained trade.” How? By offering five large publishers a great deal on e-book retailing, a deal so attractive that they all signed on, talked about it among themselves, and insisted that Amazon match it. In other words, the defendants’ illegal acts consisted of a series of entirely voluntary transactions in which each company set prices and terms for its own products and services only. There was no “restraint” that deprived any company or consumer of full control over their own property.
In short, there were no victims, and Apple did nothing wrong. But in the Kafkaesque world of antitrust law, business trading that violates no one’s rights can nevertheless be legally forbidden. In the e-book case, the defendants’ blameless conduct was transformed, by the linguistic alchemy of antitrust, into Apple being the “ringleader” of a “conspiracy” to “fix prices.” Under these circumstances, does Apple have a moral obligation to admit guilt and demonstrate repentance?
I say no. Whatever the company decides to do in the face of legal compulsion, the general public should not demand contrition from Apple. Quite the contrary—whether we use Apple products or not, we should voice admiration and appreciation for a company that is willing to succeed or fail in the marketplace solely on the value of its products and services, despite the omnipresent threat of punishment under this nation’s antitrust laws.