And The Country Grew Rich

"You know that great prejudice exists against all successful business enterprise - the more successful, the greater the prejudice."

John D. Rockefeller (1839-1937)

As a young man, working as an office assistant for 50 cents a day, it is said that Rockefeller's great ambition was to have $100,000 and live to be 100.

He missed the first goal by a long shot, but nearly succeeded in the second!

Lining up third in the history of wealthy men (behind Andrew Carnegie and Sam Walton), John D. Rockefeller did it through business.  Adjusted for inflation some say he is the richest.

Although quite responsible for a lot of the economic development of the country during the Industrial Revolution, he was quite reviled in his time.

Living today, the word "revile" would not approach what the current gubment, and a lap-dog press, would do to him and his company.

According to my Oxford dictionary, "prejudice" is defined as a preconceived opinion that is not based on reason or experience.  It comes from the Latin word praejudicium, which means judgment in advance.

As regards successful business, Rockefeller says that there is "great prejudice."

That was in part fomented by the press in his era.  The New York World newspaper said, "Standard Oil is the most cruel, impudent, pitiless, and grasping monopoly that ever fastened upon a country."  Another muckraker, Ida Tarbell, wrote a book entitled The History of the Standard Oil Company.  Her book, in her words, "documented the company’s espionage, price wars, heavy-handed marketing tactics, and courtroom evasions."  Her father's oil company had been buried by Standard Oil and she was going to get it back!

But Rockefeller never said a word about her.  He did, in his own defense, say, "In a business so large as ours ... some things are likely to be done which we cannot approve. We correct them as soon as they come to our knowledge."

What did he do?  Organized horizontally and vertically, controlling about 80% of the country's oil at one point, his business developed drilling, refining, pipeline, transportation and distribution systems.  It is said he would arrive to the refinery at 6am to personally roll full barrels of oil into position for shipment.  Oil became cheap and affordable.  He developed over 300 oil-based products, including consumer items ranging from Vaseline to chewing gum.

His company was called a monopoly.  At its height Standard Oil employed over 100,000 people.

In 1911 Standard Oil was found in violation of the Sherman Anti-trust Act.  The "trust" controlled about 70% of the country's refined oil market, but only 14% of the U.S. crude oil supply at that time.  Standard Oil was broken up into 34 smaller companies.

What happened?  They all grew explosively (many still exist today - like ExxonMobil) and Rockefeller's personal fortune increased to over $900 billion.  Today's richest men are pikers compared to Rockefeller.

John D. lived in retirement for the last 40 years of his life.  However, he devoted his life to what he called "targeted philanthropy."  The extent of his philanthropy was huge, but not calculable.  He gave privately, and did not give for public notice.  And his whole life he tithed 10% of his pay check to his church.  His generosity is never touted.

So, was all this good or bad for the country?

His organization and business skills, and the practices he pioneered, helped feed the industrial revolution.  Immigration came from all over the world to find its fortune working for him, and the other "monopolies."

The business magnates of this era basically made the U.S., and made the west, RICH.  

They were heavy handed, to be sure.  They were ruthless, to be sure.  Would they get away with all that today?  Likely!

Some might call Standard Oil and the other business magnates of the Industrial Revolution monopolies.  But those magnates would call it free enterprise.

PROFIT IS MERELY THE MARKET RESPONDING TO WHAT A BUSINESS IS PROVIDING IT.  CONSUMERS, AND PERSONAL CONSUMPTION, RESPOND IN A BIG WAY TO A NEEDED AND WANTED PRODUCT. TODAY PERSONAL CONSUMPTION COMPRISES ABOUT 70% OF THE ECONOMY!  THOSE COMPANIES PROVIDING THE MOST-WANTED PRODUCTS ALL PROFIT! 

DID THESE MAGNATES, AND ROCKEFELLER IN PARTICULAR, LIFT OR SINK THE ECONOMY?  WERE THEY A RISING TIDE, RAISING ALL BOATS AS IT WERE, OR A FALLING ONE, BRINGING EVERYONE DOWN?   

 

AND HOW COME BREAKING STANDARD OIL UP INTO 34 SMALLER ENTITIES DIDN'T STOP IT FROM DOING WHAT IT DID BEST - OIL PRODUCTION AND DISTRIBUTION, AND GROWTH?

Think carefully...

Let The Market Decide

自由企業

   "The Customer is God, and the market decides everything."
Ancient Chinese Saying

The symbols above mean "free enterprise" in traditional Chinese script.  Interestingly, the symbols also can say "economic risk."  Free enterprise is a system of economic risk!  From start to finish.

And that is well put.

There are no guarantees in a free enterprise system.  There are too many things that can and do interact to guarantee anything.  If, that is, the market is operating freely.  Billions of interactions happen to bring the simplest product to market.  They cannot be managed of course, except when the huge fabric of the market place brings all the stages of innovation, design, production, marketing and distribution together harmoniously.

The MARKET is the only way this can happen.  And this has been recognized for millenia. 

The MARKET decides everything.

But what's this that the customer is GOD?

The business should worship the customer?

Well, yes!  If I am a large or small business and I do not take care of my customer, somebody else will.

But I thought Adam Smith's saying that the butcher, the baker and the beer maker don't bring their products to the market for any other reason but self interest.

IT IS SELF INTEREST!  But that doesn't discount the importance of the customer!

The wise business presents its products in the most attractive way possible!

When a chef sells a recipe book, the photos are incredible!  It's all about presentation!  It's all about the customer!

What is the chef's objective in selling the book?  The chef's self interest!  The chef wants to become better known, establish a niche, gain market share, be different, show off specialties, become a household word, and attract future customers!

This is what Adam Smith's words about the butcher, baker and beer maker mean!  Businesses act out of self interest, and the bottom line is return.

The butcher winks at a patron and cuts the meat slightly thicker, knowing this makes the patron feel special.  The patron returns.  And tells others.

The baker might sell a vase of flour that has been pushed down and compacted, knowing that the patron feels there is extra for the money.   The patron returns.  And tells others.

And the beer maker might have larger mugs in his tavern or include free food in addition to the drink. The patron returns.  And tells others.

And it's all about the bottom line!  

AS WE SAY THE BOTTOM LINE IS RETURN, WE SHOULD SAY THE BOTTOM LINE IS PROFIT!  BECAUSE IT IS!

Self interest is not selfishness.  All businesses small and large want to survive.  And they want to get better in whatever ways it takes to survive. 

Competition DEMANDS that a business gets better.  And change.  And distinguish itself in terms of product (which microeconomics calls product differentiation) and public perception.  Free enterprise is the only system that encourages, yes encourages, competition.  It encourages that businesses stand out.  And the stand outs attract a market and survive.

It is survival of the fittest.

But, as this Invisible Hand of the marketplace directs that everything moves toward being more and more efficient, and stabilizes a system of risk and reward, it is not a pounding fist.

The Invisible Hand is present day and night, and is always a beacon, for those who have eyes to see and ears to hear.  Those who see and hear respond more quickly to market changes.  

The Invisible Hand is a protective hen brooding her flock, gathering into safety and allowing to grow. 

The Invisible Hand brings the customer out of the wood work and into the market place to see and enjoy and participate.

THE INVISIBLE HAND IS THE REASON THE MARKET DECIDES.

THE INVISIBLE HAND ESTABLISHES FREE ENTERPRISE.

Calm And Considerate Industry

"What most astonishes me in the United States, is not so much the marvelous grandeur of some undertakings, as the innumerable multitude of small ones."

Alexis de Tocqueville (1809-1859)

In 1831 de Tocqueville was commissioned by the French Parliament to come to America to examine the penitentiaries and penal system.  

He stayed two years.

He had an ulterior motive however.  He wished more than anything to examine what made America, and Americans, tick.

"I have a passionate love for liberty, law and a respect for rights.  Liberty is my foremost passion," he wrote.  And he traveled where ever he could to examine that liberty in America.

His book outlining and analyzing his experience was finally published in 1835.  It was culled from handwritten notes he had made, even of conversations he had with citizens.

He was particularly taken with how freedom and liberty to express oneself was displayed in how Americans would set up a small shop, or business of any kind.  They expressed themselves "through industry."

Using words such as "marvelous grandeur" and "innumerable multitude" express how widespread this practice was in America, and certainly defines the boiled-down essence of free enterprise.

He witnessed America as a "whirling sphere of private entrepreneurship and civilian affairs regulated by civil code."  Americans would make laws to make sure free enterprise could thrive!  And de Tocqueville was astonished by how well oiled it worked.  He said, "Everyone is industrious."  And everywhere he traveled he saw it.

He was fascinated by what he called "American individualism."  For him individualism was a positive societal force, and his book changed its meaning as regards free market economics and free enterprise. 

Without using the words, he described free enterprise, which he described as the "American machine of industry," as "a calm and considered feeling which deposes each citizen to isolate himself from the mass of his fellows and to withdraw into the circle of family and friends ... with this little society formed to his taste, he gladly leaves the greater society to look for itself."

So how has he defined free enterprise?  As a pervasive system composed of rugged individualism, framed by the rule of laws.

That, brothers and sisters of the congregation, describes Adam Smith's Invisible Hand of free market economics!  Many millions are working individually, in concert with other millions who are unseen and unknown, to integrate a small portion of the greater whole into a supremely and finely woven fabric of production, distribution and growth.  And de Tocqueville describes that Invisible Hand as "calm and considered."  Each individual contributes his part.

THAT IS THE VERY SPIRIT OF AMERICA THAT ATTRACTED SO MANY PEOPLE, FROM SO MANY COUNTRIES, WITH SO MANY DIVERSE SKILLS AND BACKGROUNDS, FOR SO MANY DECADES, TO COME TO THIS COUNTRY TO AID IN ITS GROWTH AND TO GROW THEMSELVES.

This feeling, this SPIRIT, is why even today boatloads of people risk lives and fortunes to come here to America, and boatloads are not leaving to escape.

It was George Washington who appealed for "diversity" of immigration.  Not the meaningless diversity of heritage that confined and short-sighted people today think the word defines.  He was referring to diversity of skills and abilities to contribute to the building up of his great country and vision for the world.

It was George Washington who said we should have no "hyphenated Americans."  He was referring to heritage!  He said we should have no Irish Americans, Hungarian Americans, Chinese Americans, Latin Americans or African Americans.  Heritage was irrelevant to him.  AS IT SHOULD HAVE BEEN.  He wanted people to come here to BE Americans!  Just AMERICANS! 

GEORGE WASHINGTON WANTED PEOPLE OF DIVERSE INDUSTRY, GREAT ABILITY AND UPSTANDING CHARACTER TO COME TO THE UNITED STATES TO HELP FOUND IT AND BUILD IT UP.  AND HE WANTED THEM LEFT FREE TO DO SO.

AS PRESIDENT TODAY, GEORGE WASHINGTON WOULD WANT THE SAME THING ALEXIS DE TOCQUEVILLE DISCOVERED - CALM, CONSIDERATE, AND UNFETTERED INDUSTRY, CONTRIBUTING A "WHIRLING SPHERE OF PRIVATE ENTREPRENEURSHIP AND CIVILIAN AFFAIRS."

AS PRESIDENT TODAY, GEORGE WASHINGTON WOULD ENCOURAGE FREE ENTERPRISE.

Before It's Too Late

"The national budget must be balanced.  The public debt must be reduced:  the arrogance of the authorities must be moderated and controlled.  Payments to foreign governments must be reduced, if Rome doesn't want to become bankrupt.  People must again learn to work, instead of living on public assistance."

Marcus Tullius Cicero (106BC - 45BC)

Cicero was a well-known lawyer and orator, but he himself considered his most important achievements to have come in politics.  He thought of himself as a "Constitutionalist," and we might refer to him today as a "strict constructionist." 

The last half of the first century in Rome was disfavored with various wars and suffered under the dictatorship of Julius Ceasar.  Cicero fought against that politically with philosophy, education and advocated the participation of the people in the gubment process. 

CICERO FAVORED REPUBLICAN GUBMENT! 

His letters were found by Plutarch, who preserved them, and in the 14th century, because of these letters, Cicero's influence is said to have spurred the Renaissance.  His popularity peaked during the 18th century period of Enlightenment, and he had great influence on such political thinkers as John Locke, David Hume and Montesquieu.

Therefore, by transference, Cicero's philosophies had great influence on our Founding Fathers, and, in particular, one Thomas Jefferson.  The well-read Mr. Jefferson was very familiar with one Marcus Tullius Cicero.

Cicero warned often of the fall of the Roman Empire, unable to sustain itself as it got increasingly pre-occupied with the growth of gubment and its bureaucracy.  He saw that growth in gubment as, his word, "unsustainable."  Does this sound familiar?

Cicero warned often against budget deficits, advocating a balanced budget, by law if necessary.  He saw such deficits as, his word, "unsustainable."  Does this sound familiar?

Cicero warned often against gubment spending, which he called "arrogance," and a gubment which would eventually become financially, and morally, bankrupt.  He saw such spending as "unsustainable."  Does this sound familiar?

Cicero warned against the "entitlement" society of his era, and coddling those who would receive public assistance instead of working.  He saw the increasing growth of this segment of society as "unsustainable."  Does this sound familiar?

Cicero warned against piling up a debt that would get foisted upon the next and then following generations!  He saw this at a time when the Roman population growth was diminishing.  Fewer citizens would be required to "support" more and more debt and those from previous generations receiving gubment assistance.  He saw this eventuality as "unsustainable."  Does this sound familiar?

Cicero warned against not protecting Rome's borders and against a citizen population becoming more interested in entertainment and less interested in education and economics.  He saw that these empty interests would create the unraveling of a culture and the collapse of the society he knew.  He saw the preservation of Roman society up until his time as "unsustainable."  Does this sound familiar?

And our "leaders" seem uncaring and unfamiliar with this, learning nothing from history, and still stained and filled with the same arrogance as has brought down societies before.  They please themselves by growing the size and power of gubment and its bureaucracies, and spend money as if it is there, knowing that a future generation or generations will be responsible.  But like so many societies that have gone down before, this pattern will also fail.  And these policies will be unsustainable, and fail. 

And like the frog in a pan of slowly heating water, that does not know to jump out, the society will end up cooked.

What would Cicero be doing today?  He would be a firebrand, and a warning voice in the wilderness.  He would be trying to get others to understand what the future of today's political and economic arrogance holds and take back the society with the same teachings that buoyed up and stimulated the Founding Fathers.

CICERO WOULD SUGGEST THAT WE TAKE OUR COUNTRY BACK ... BEFORE IT'S TOO LATE.  

CICERO WAS RIGHT THEN, AND HE WOULD BE RIGHT NOW.

Does One Size Fit All?

"The whole gospel of Karl Marx can be summed up in a single sentence:  Hate the man who is better off than you are.  Never under any circumstances admit that his success may be due to his own efforts, to the productive contribution he has made to the whole community.  Always attribute his success to the exploitation, and cheating, the more or less open robbery of others.  Never under any circumstances admit that your own failure may be owing to your own weakness, or that the failure of anyone else may be due to his own defects - his laziness, incompetence, improvidence, or stupidity."

Henry Hazlitt (1894-1993)

The word "gospel" means "good news!"

When has the word Marxism conveyed good news?  Good feelings?  Good thoughts?  Good economic growth and the betterment of the societies who had it shoved down their throats?

You can always tell a Marxist - they are all consumed with class!  And they want class envy!

They desperately want class envy, for without such they (the Marxists) have no box to stand on to deliver their spiels.  One must be turned against another, for without such strife they (the Marxists) have no following.

And how can one get turned against another?  By pointing out how much better off one is as compared to another!  Never mind how the one was bettered - studying in school, focusing on a career path, employing personal motivation and desire, striving, working, or whatever!

The Marxists want us to think that the one was bettered by stomping on and taking from another!  By exploiting another's circumstance and cheating him out of his opportunity!  By robbery!  All this is suggested by Dr. Hazlitt, and we hear it all around us.

The modern Marxist wants us to think that the reason any productivity has happened whatever is because of the wondrous efforts of those in the controlling ruling authority - whatever that is!  The national gubment.  The state gubment.  The local gubment.  The gubment agency that "made it happen!"

We hear it all around us with code words - infrastructure, education, job creation, housing, equal opportunity, "green" whatever, debt relief, etc.  The most infamous line of recent times is - "you didn't build that!"  All of that is made to look different than it is.  All of that is made to look more important than it is.  All of that is made to seem like it cannot happen because of hard-working people, but because of forward gubment thinking.  And the politics of the moment rulz!  Things can change on a dime! 

Notice the lack of individual effort, personal development and leadership, competent accomplishment, common sense thinking, and the like in any of those "forward-thinking concepts!"

Every industry, every field, every job, every effort has its stand outs.  There are always those who lead the field.  There are those who, for whatever positive reasons, get ahead because of effort, work, personal application and productivity.  People don't get ahead because they "fit into the mold," "blend well with the group," "don't make waves," or add your own favorite cliche.

Leaders in their fields happen because, almost always because, they made things happen for themselves.  We are not paid well in life because of how we fit in with the other kids.

THOSE WHO ARE PAID WELL IN LIFE, THOSE WHO RECEIVE THE REAL REWARDS IN LIFE, WHETHER FINANCIAL OR PSYCHIC, ARE SO PAID BECAUSE OF HOW HARD IT IS FOR THEM TO BE REPLACED.

Let me say that again:  THE HIGHEST PAID IN ANY ENDEAVOR ARE THOSE WHO ARE THE HARDEST TO BE REPLACED.

Think about it.  Why is the guy in the park picking up trash with a long stick with a nail on the end not paid as much as a brain surgeon?  Literally because the trash picker-upper can be replaced by a fourth grader!  Brain surgery requires decades of personal effort.  Few have such personal ability or are willing to put in such effort, and as such, brain surgeons are very hard to be replaced.

Which athlete on any team is the highest paid?
Which executive in any corporation the highest paid?
Which leader in any field is the highest paid?

One of my friends growing up lived in a big house and we all knew he was "rich."  When I found out his father was a plumber I asked my mother how in the world a plumber got to be so rich.  She said, and I will never forget this, "Plumbers can be rich."

That's a pretty simple answer.  And, when thought about, pretty true!  This "plumber" had the largest plumbing supply house in town, trained his own employees, had the most trucks in town, had garnered the best reputation in town (through no small effort), and was the go-to guy if you had a plumbing problem!  Hence he was rich!

Mr. Lincoln had it right when he said that you cannot build up one person by giving him the property of another.  Tearing down doesn't build up.  And the one who can build himself up often lifts others!

FREE ENTERPRISE AFFORDS ALL THE EQUAL OPPORTUNITY TO BUILD THEMSELVES UP BECAUSE OF ALL THE REASONS DR. HAZLITT SAID - ONE'S OWN EFFORTS AND PRODUCTIVE CONTRIBUTION.  FREE ENTERPRISE NEVER FOISTS A ONE-SIZE-FITS-ALL PROGRAM ONTO EVERYONE, BECAUSE THAT NEVER WORKS. 

WE THE PEOPLE ARE NOT ONE SIZE FITS ALL.