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The Creation of Wealth

The argument over extending unemployment benefits has been framed as a compassionate vs. uncompassionate issue. While that’s fine for the sake of striking a compromise between Democrats and Republicans over extending tax cuts and extending unemployment benefits, it really avoids the discussion of the truly uncompassionate path the U.S. Congress has taken in its entire agenda last year which sought in every way possible to stifle the small and midsize and large businesses that create all of our jobs and all of our wealth. The stifling of the companies is still in play, of course due to the uncertainty created by the creation of a huge new federal regulatory commission, the tardy addressing of the taxes, and last, but not least, the volumes of uncertainty created by the truly ominous new Health Care Law. All of this is evidence of a complete lack of understanding of what ‘Creation of Wealth’ is.
Clearly, the government does not create wealth. The Federal Government does not develop concepts, create products, offer them to the world at large to buy, offer stock to investors, and in doing so create jobs. Well, that’s with the exception of when the government commandeers an industry that’s poorly performing, dissolves the stock so all of the investors have nothing, and then re-offers the new and improved company to investors. That’s a special case that sadly, might become less and less special.
So what is the Creation of Wealth? The creation of wealth is not even really the selling of product to domestic consumers, the selling of product to foreign consumers, and then bringing that money back into domestic coffers. The creation of wealth is not the Initial Public Offering of stock for new companies that have new products. The creation of wealth is the fabricating of that coffee cup that’s in front of you, or at least the one in front of me. It is the creation of something that was not there before. It is the mining of gold that, though there, was not accessible before; it could not formerly be seen touched or manipulated into new products. The creation of wealth doesn’t occur until something is actually made. Anything else is the facilitation of the creation of wealth. That’s what service industries do. Industries that ship things, measure things, calculate dollars and cents earned. Companies that help provide for your staffing; presumably, even the government is in on this game of being ‘facilitator’ (Though this is generally not the case, and we have gone through two years now of seeing a government. which is a de-facilitator, a stumbling block to growth, and an entity which truly created much mayhem and the resultant uncertainty).
Creation of wealth is compassionate. It’s compassionate because it allows great ideas to come to use by people. It allows ideas that promote greater safety or better productivity, or a cleaner environment to become available. Creation of wealth is the creation of product. True enough, those products are sometimes Virtual in nature. They aren’t really tangible, but they must perform a tangible function. A piece of software that causes lights to go on, wheels to spin and gears to turn is a real product, and it is a part of the creation of wealth. It is real because it is no different in what it does than the object it replaces. If software does what a battery or a relay used to do, then it is a real product. It is part of the creation of wealth.
The creation of wealth is compassionate because it allows people to work to have dignity, top provide for their families, and to be a part of a team that brings new and great things to the use of humanity at large. Therefore, anything that stands in the way of the creation of wealth is truly uncompassionate, or is it? Well that’s where the role of governments comes in, and this is the problem. Companies cannot be allowed to create wealth if they are going to kill and injure people doing so. They cannot be allowed to create wealth, if that wealth creation will ultimately destroy the earth that we all share. Sadly, the governments that take upon themselves the job of regulating these companies are ill-equipped to do so. Do to lack of understanding of the product creation processes; governments tend to make laws that do more harm than good. There is not time here to list such laws. I think we all can think of examples of laws and initiatives that did the exact opposite of what they proposed to do. These certainly include laws that impact logging and oil drilling to laws that impact dog breeding. We have certainly reached a point in time where self-regulation by companies will be necessary if the dangerous heavy handedness of the Federal Government is going to be tied down and staked to the ground.

The recent examples of the need for self-regulation of activities amongst oil companies are evident, and in fact, several of the largest oil companies have entered into just such a venture. There is, an example that I find a little more interesting, however. It has something to do, in a very general sense, with our responsibility as United States entrepreneurs to our own hemisphere. On a governmental level this responsibility is generally expressed as a hands-off policy, by such doctrines as the Good-Neighbor Policy, and the Monroe Doctrine. The general spirit of the Monroe Doctrine and the Good Neighbor Policy was that our neighbors in this hemisphere who are sovereign have every right to expect that the United States will respect that sovereignty, and will insist that any nations in Europe and Asia also respect that sovereignty.
What we have failed to do is to help them create wealth, and in this we have failed not only to help our neighbors, but we have failed in helping our hemisphere, and we have failed in that those neighbors who are in situations of tottering stability are easy prey to foreign nations with unfriendly dispositions to the United States. If this partnership of Wealth Creation for the nations just south of the Rio Grande had been approached with the same vigor that corporations had addressed the New Markets of China, there would likely be more stability in the region, and less human trafficking across the border; this trafficking is, in the end both demeaning and inhuman. Governments can’t accomplish this beneficial change. They will be stepping on each others feet. Only corporations can make this happen.

Another example of a need for self regulation in industries is the need for a sense of responsibility that has almost completely vanished in the media industries. The recent parading of government activities and documents by the infamous Wiki-Leaks founder Julian Assange made clear the total ineptitude, and, inability of governments, particularly our government in the United States to address such situations which imperil people all over the globe. Individuals like Assange under the auspices of ‘transparency’ are able to turn into Lex Luther and hold the Governmental and Corporate World Hostage. Interestingly, while Assange was shouting ‘transparency’ and he was carelessly outing operatives all over the world, he himself was in hiding, to protect, of course, his mission, which is the same hiding governments do to protect their missions. Hypocrisies just seem to happen, despite the best intentions. While freedom of speech is marvelous, and this freedom should certainly be upheld, there were clear lines crossed here regarding the safety of individuals, and our government, in true Carter-ish wishy-washy fashion failed to indicate, as they should have, that a line had been crossed.
This goes back to the concept of self-regulation. There was a time period when the media had some self-regulation. Assange could probably have safely released some documents that would have shown the duplicity of governments without having complete disregard for the lives and safety of many people. Industries, in their creation and moving of Wealth, be it gold, or be it Information, have a responsibility to do so in a way that is more and more mutually conscious of the world we live in. They need to do so, because governments have failed to do so. They need to acknowledge more than just a responsibility to their stock-holders. They need to do so, because the creation of wealth, whether it is the distilling of whiskey, or the mining of aluminum, or the printing of books is ultimately about people working together, people being able to sit down at the table and eat. If they don’t see to this, then very misguided governments with large lumbering feet will try to do so, stomping the ground of productivity and always trying to plant the tares of (always forced) socialism amongst the wheat of a free market economy.

Copyright December 12, 2010 by John P. Schumake


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