Capitalizing On Christmas And Free Enterprise

"Our goal is to be a retailer with the ability to see opportunity on the horizon and have a clear path for capitalizing on it.  To do so, we are moving faster than ever before, employing more technology and concentrating our resources on those elements most important to our core customers."

Macy's Department Stores Mission Statement
Rowland Hussey Macy (1822-1877)

R.H. Macy accomplished a lot in a short 54 year life.  Leaving home at 15 to join a whaler company and sail the Atlantic Ocean, he worked there for four years.  During that time he acquired a large red star tattoo on his forearm.  That red star became the logo for his department store many years later.

Opening a "fancy dry goods" store in New York in 1858, his first-day sales totaled $11.08 (about $297 in today's dollars).  He plugged on however, with innovative policies like clearly marking prices (instead of haggling), and advertising those prices with lively and colorful newspaper ads.  His ads utilized set large-block letters, using marketing words and phrases over and over, and were instantly recognizable.  And he made history by hiring the first female executive for a major American retail store.

However, Macy had a lot to do with today's vibrant Christmas sales market.  He was the first to seize upon Santa as a way of selling goods, Christmas cards and wrapping paper.  He hit on this idea at the right time.  Nationally the Christmas tree was coming into vogue, as well as the recognition of Christmas as a religious and family holiday.

How did he capitalize on it?

• He was the first to employ an in-store Santa in 1862.  Children came from all over to tell Santa their secret desires and Christmas toy wishes.
• The country, and world, began to recognize Macy's as the instigator of the annual Christmas Parade.  This affair eventually morphed into the annual Thanksgiving Day Parade, which he used to kick off the Christmas buying season.  His parade was a marketing ploy for getting people to New York and to flock to his store at Christmas time.
• Customers loved crowding outside his store to peer into the large, decorated windows, which advertised the latest in fashion, kitchen wares and toys.  His friend P.T. Barnum suggested he make them more elaborate by using moving figures to tell various Christmas stories.  The windows became the hit of the season, and a practice picked up on by many other retailers around the nation at Christmas time.
• He began accepting mail order.

All in all, employing a capitalist spirit and shrewd business tactics (like mergers), the store eventually grew to be the largest department store in the world.  His short life left quite the legacy to the world of retailing success and free enterprise economics.

The Cancerous Disease Of Statism

"Statism is the disease that prescribes itself as the cure."

Barry Loberfeld

Pretty simply put!

What other thing is arrogant enough to wreck something and then claim to be the only entity that can fix it!  Our gubment does that all the time!

But, to understand the comment, STATISM must be defined.

Statism is essentially when the gubment becomes the most important thing in society - omniscient, omnipotent, and omnigood!

The philosopher Georg Hegel said that the state is "God walking on earth."  His thinking influenced the political thinking of another philosopher, one Karl Marx. 

While a Constitution places limits on gubment influence and activity, statism would do the opposite, removing such restrictions through lawmaking until the final stage of fascism or totalitarianism is reached.  THE GOAL OF STATISM IS 100% STATE!

It takes two forms, societal and economic.

Societal statism - there would be no "of, by and for the people" as sovereignty would rest in the state.  Individuals exist to contribute to the power and influence of the state.  "The people" would look to the state to provide what they typically and formerly would have provided for themselves.  Morality is found in service to the state.  This statist influence would extend into all aspects of the individual's life - education, health, finance, religion, housing, etc.  Statism, therefore, would refer to any state-sponsored political movement that advocates reliance upon the state to build the socialist society.

Economic statism - the state directs the economy, either through direct intervention with state-directed businesses (GM perhaps?), and state-sponsored organizations (Fannie Mae anyone?), or indirectly through economic planning (monetary and fiscal policy).  This intervention should be referred to as state socialism.  It only grows as the bureaucracy grows.  It's primary economic influence is THE BUREAUCRACY.  As it plans and implements its programs, even when the citizens resist (health "care"), at the same time it plans many new bureaucracies and hides many taxes that feed it.  Bureaucracy screws up and creates more bureaucracy to "fix" the screw ups!  The gubment spends to the point of extreme deficit and claims the necessity of additional "revenue enhancements" as the only cure, along with "cuts" in "future" rates of growth!  The vicious cycle only feeds the state. 

It slowly removes and incorporates more and more of the body that sustains it!

Support for the growth of the state, or statism, is more commonly found among liberals than among conservatives.  It was, after all, Ronald Reagan, who said the ten most frightening words in the English language are, "Hi, I'm from the gubment, and I'm here to help."

Surely unchecked growth is a cancerous disease that can only prescribe unchecked growth as the cure. Eventually all cancers reach the point of critical mass and the body can no longer survive its parasite.  And the body dies.  When in economic history has that not been the outcome?

It is impossible to cure any entrenched disease that is eating the body from the inside out.  Before it gets too large, or entrenched, the disease needs to be removed and the remaining cavity filled with newly-generated, healthy material.

THAT represents real change!

A Giant Immorality Portrayed As Truth

"We have enshrined a giant immorality as truth - that individual earnings belong to the collective rather than to those who produce them, and that we can in the name of the collective confiscate ever-larger portions of those earnings to advance our own individual lives and businesses in the form of pork, privileges, subsidies, loans, and entitlements."

Nelson Hultberg

Confiscate is a good word here.

But immorality?

Yes!  It is no less immoral to legislate thievery, in whatever form (taxes, surtaxes, fees, licensing, fines, you name it), than it is to put together a gang and rustle up some funds from people walking down the street!

Morality is defined by Oxford as

1.  concerned with the principles of right and wrong behavior and the goodness or badness of human character
2.  conforming to acceptable standards of behavior
3.  the extent to which an action is right or wrong

Morality comes from the Latin word "moralis," or 'custom.'  As a prefix "im" has variant spellings depending on the letter of the word it is modifying - it's other spellings are "in," "ir," and "il."  In any spelling variant the prefix means NOT, or THE OPPOSITE OF. 

IMmorality, therefore, means the opposite of morality.  And IMmoral means the opposite of moral.

Is it immoral or moral to pick a pocket?  Is it immoral or moral to rob a bank?  Is it immoral or moral to make anyone's successful financial outcome to a righteous risk or venture appear as shady and unfair?  Is it immoral or moral to legislate that more and more of someone's financial outcome to a righteous risk or venture be confiscated in the name of the rest of the group?

When did the rugged individualism that founded and grew this country and its principles into something exceptional get replaced by this idea that the "collective," to use Hultberg's word, and the collectives' wants, trumps the individual?  

And where has the country that extols collectivism developed into something exceptional and lead the world to new heights?

When did the expected entitlement supersede the right to the possession of one's private property?  And when did the right to the possession of one's private property become the expected entitlement of someone else?

Allocation Of Wealth

"In an unmolested market economy - where all dealings are consensual - the 'allocations' of wealth is the result of transactions."

Sheldon Richman

Shop owners are hoping for allocations of wealth.

Product manufacturers are hoping for allocations of wealth.

Entrepreneurs are hoping for allocations of wealth.

Any dealing in a free market economy happens when wealth is allocated!

How does wealth get allocated?  When people vote for our good or service.  They do so with normal transactions.

My Oxford dictionary defines "TRANSACTION" as this:

1.  an instance of buying or selling
2.  the action of conducting business
3.  an exchange or interaction between people

In a free-market economy, which Sheldon Richman calls "unmolested," trillions of transactions happen in the most efficient way possible - voluntarily!  They are each guided by an invisible hand, as it were, where each decision maker evaluates their individual transaction(s) and decides in a way that is most palatable and beneficial.

Most of the unmolested activity takes place between people who never meet however.

How can I say this?

If you are wearing a shirt with a button right now, how many people did it take to get that button onto your shirt before you made the final decision to transact business to acquire that shirt?

But, remember, you have to consider that button from start to finish.

THE ANSWER IS MILLIONS!  MILLIONS OF PEOPLE!  IT TOOK MILLIONS OF PEOPLE TO GET THAT BUTTON ONTO YOUR SHIRT!

And each individual in the inception, production and distribution of that button likely knew few others in the entire process.  But each was acting in his own best interest, allocating resources in the most efficient manner possible, engaging in transactions along the way, before the consumer finally voted for that shirt and make the ultimate transaction to purchase it.

THE CONSUMER MADE THE DECISION TO USE DISCRETIONARY MONIES AND VOTED TO ALLOCATE PERSONAL WEALTH.

That is the guts of a free market economy.  It is the interwoven, connected and unconnected, steps of a long journey to convert natural resources into a consumer product.

A SINGLE BUTTON!

Wow, imagine how many people it required to produce that shirt!

That is a whole lot of allocation of resources engaged in trying to encourage the ultimate allocation of wealth in the pursuit of ... wait for it ... PROFIT.

Incentives To Production

"The way to maximize production is to maximize the incentives to production.*  And the way to do that, as the modern world has discovered, is through the system known as capitalism - the system of private property, free markets, and free enterprise."

Henry Hazlitt (1894 - 1993)

Why is this so hard to understand?

When people are free, and their abilities are left unfettered, each free person will find what they want to do the most, or can do the best, and seek that thing.

"What do you want to be when you grow up?"  That starts out as a dream, but as we get older and more focused it becomes, in most cases, a reality.

What happens when the ability to seek or begin one's most-desired occupation, or start one's business, is hampered or even squashed by a lack of employment opportunity, severe underemployment, and general economic stall?

According to a survey recently published by Forbes, nearly half are dissatisfied with what they do and 81% are unhappy overall.  That is not a new statistic, and not at all surprising.  I heard those exact statistics in surveys taken when I was in business graduate school in the late 70s.  There was a general lack of "incentives to production" then too.  I remember a certain talking head on the TV, wearing a cardigan, calling it a "malaise," and telling us it was OUR fault!

We Americans, indeed people the world over, free or not, desire occupational fulfillment and happiness.  Particularly those who have been in school or training for long periods of time, and have their career paths hopefully mapped out, and are eager to get started. 

Everyone thinks they can contribute, wants to contribute and desires to contribute.

But what if gubment control, increased taxation, regulation of industry or job entry, permits and licensing, redistribution of economic activity, and ever-growing bureaucratic control clobber those "incentives to production?"

Answer me - what would you prefer to do with your life - contribute WHAT YOU accomplish or redistribute WHAT YOU  accomplish?

That's an easy one.

Oh, redistribution is NOT contribution.  Taxes are not investments.  To have bread taken from you and your family is not patriotic.  None of that "spreads the wealth around."  And all of that squashes "incentives to [such] production." 

AND IT CAUSES MALAISE.

People who say such tripe (patriotic contributions and investments) are the equivalent of pigs walking on two legs trying to control a barnyard.

Period.

* The underlining is mine.

The Nature Of Private Property

"If man in the state of nature be so free, as has been said; if he be absolute lord of his own person and possessions, equal to the greatest, and subject to no body, why will he part with his freedom? Why will he give up this empire, and subject himself to the dominion and control of any other power? To which it is obvious to answer, that though in the state of nature he hath such a right, the enjoyment of the property he has in this state is very unsafe, very unsecure. This makes him willing to quit a condition, which, however free, is full of fears and continual dangers: and it is not without reason, that he seeks out, and is willing to join in society with others, who are already united, or have a mind to unite, for the mutual preservation of their lives, liberties and estates, which I call by the general name, property."

John Locke (1632 - 1704)

This is an individual who's thoughts and writings about freedom and natural law had a great influence on those who founded the United States, and on one Thomas Jefferson in particular who wrote the Declaration of Independence.

To wit - if an individual is, by a state of nature, master of property earned and owned, and finds the enjoyment of that property to be unsafe or insecure, that individual would reasonably seek out those of like mind and unite with them in the interest of preservation of that property.

So, then, what is property?

The word's origin is Latin, proprietas, from proprius, meaning 'one's own, special.'

From my Oxford dictionary, the definition of property, as it applies to the law, is "the right to possession, use or disposal of something; ownership."

Does it not follow, therefore, that the Founding Fathers, so influenced by such natural law as private property, would choose and develop an economic system that encourages capitalism, free enterprise and free markets?  If a legal framework that encourages moral and voluntary exchange is not integral to the system, the government they founded could not exist!

And if these masters of the ability to possess, use or dispose of their private property feel it unsafe or insecure, or are under the threat of having it more and more completely or forcefully removed, what does Locke suggest they would reasonably do?   

SEPARATE AND UNITE WITH THOSE OF LIKE MIND.

Interestingly, in my previous free enterprise quote, Ayn Rand suggests that the death knell of any nation would happen when one half of a population is expected to support the other half that feels entitled to that support.

That is the very premise of her book Atlas Shrugged.  In that book those with ownership of tangible, financial or intellectual property do separate and unite.

In order for this condition to be reached, property owners have to be identified by how much they possess. 

If income level so determines their identity, or income earned from PREVIOUSLY-ACQUIRED possession, any level is baseless.  No matter one's income, someone else will consider that "rich" by comparison!  And when an overlord determines the level of income that must be treated differently, no matter the level, it can only be ARBITRARY. 

Why?  For certainly, CERTAINLY, that level will encompass a great number of people whose income is LESS than than is earned by the overlords, and the overlords will justify ways, and find ways, and install ways around its application to them!  Whatever the overlords can and will do to benefit themselves will be "legal."  They will protect their property with the law!  And if those same things were to be done by the rest, well, that would be considered "illegal."  They, a separate class, would be punished by the law!

The phrase "four legs good, two legs bad" applies well!

Eventually that pinpointed income level will not provide enough for redistribution to the "entitled" or "dependent" class and redistribution will have to increase as the arbitrary, taxable, income level is lowered, and lowered, and then lowered again.

So, when do those whose earned property is so threatened that they do in fact seek to associate with others of like mind?

THAT, BROTHERS AND SISTERS OF THE CONGREGATION, IS YET, AND PERHAPS SOON, TO BE SEEN ... STAY TUNED.

Have We Reached The Tipping Point?

"When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that, my dear friends, is about the end of any nation."

Ayn Rand (1905 - 1982)

This scenario has been on the minds of many people in the past few days.

Is it possible that the United States has reached this tipping point?  If not, how close are we?

We certainly know that there is a percentage of any vote that looks for gimmes.  We could accurately call it The Gimme Vote.

If there is The Gimme Vote, what is its percentage of the total vote?  30%?  40%?  What is motivation for The Gimme Vote to vote differently?

We know that one of the larger two parties has a reputation for gimmes, as perceived to be provided by a larger and larger gubment.  And the other larger party, well, is said to hate, and take away, and prevent gimmes, wanting instead a smaller gubment.

So gee, where would the percentage of the populace that wants the gimmes go to vote?

Here are the two positions as envisioned by Ayn Rand's quote:

Party One - vote for us because we will tax the bad people and spend the money on you.
Party Two - you won't need the "help" of gubment because we will help create the economic growth that will ensure you a good job and you will be able to take care of yourself.

Party One surely cannot exist without a dependent class.  Are they going about trying to make that class bigger?

And Party Two surely cannot exist if there is a large, and getting larger, dependent class.  If it continues to exist, it can and will only do so as a minority party.  And, as things continue, as a minority it will get smaller and smaller.

So, my question remains - is it possible that the United States has reached the tipping point?

And if so, what does that mean?  It is said that there are 10,000 Baby Boomers retiring every day, who will no longer be paying the taxes they did while working.  At the same time, gubment is getting larger and larger and filling its old and new bureaucratic nooks and crannies with more people who are paid by taxes.  As these two things happen, the POOL of taxpayers will NECESSARILY shrink.

Each of those taxpayers, NECESSARILY, will have to shoulder a larger and larger burden.

NECESSARILY!

Notice that the POOL is not getting any larger.  Gubment does not create economic growth.  In fact, it can squash it, and does so with laws, licensing restrictions, regulations, taxes and fees, and forcing its people into more and more "programs."

But isn't gubment taking water out of one end of the POOL, say the deeper (richer) end, and pouring that same water into the other side of the POOL, say the shallower (poorer) end?  Is the dimension of the POOL getting bigger?  But the number of people wanting to swim in that POOL is increasing every day!  Will there not one day be a water overflow, no matter how much is poured from one side into the other?

I know the popular term now is "fiscal cliff."  In this metaphor, it might more appropriately be called a "fiscal overflow."

At what point, if it has not happened already, at what point does this naturally retiring 10,000 not get supplemented by more people, every day, who simply say they aren't participating in this gimme thing anymore?

Atlas is shouldering the world.  The load is getting heavier and heavier.  When I hold a weight I know that it seems to get heavier with time.  The load surely is getting heavier and heavier for Atlas with time.  Is Atlas shrugging? 

And how many John Galts would that create?