The contentious presidential campaign and other events in 2020 have thrown us back to the drawing board, so to speak, by rekindling an ideological battle between different systems like capitalism and socialism. Even though some people (usually of the “very online” variety) are moved by political and ideological ideas, most people care more about the opportunity to flourish and achieve their potential. That’s what they want for their families, relatives, and close friends as well.
However, a big problem with much of the political discourse around these issues is that rather than celebrating achievement, we’re more focused in bringing down those who are successful and essentially frowning upon success. Some examples include Lululemon’s recent diatribe on the oppression of capitalism, the guillotine that was placed outside of Jeff Bezos’ apartment, or the fiasco of the Museum of African American History and the Whiteness chart — which framed hard work, achievement, and planning as exclusively white characteristics.
Perhaps the most glaring example from that list is Jeff Bezos and the guillotine. So-called “activists” are comparing late 18th century monarchs, whose wealth and status were entirely inherited, to Jeff Bezos — a self-made billionaire who worked out of a small office in 1994, whose company almost went bankrupt in the 2000’s, and who has dedicated his life to providing great customer services and helping many others create wealth and exchange goods and services. This is in no way a defense of Bezos’ virtue as a man, I don’t personally know him or necessarily agree with all of his points of view. But it is a defense of wealth creation, entrepreneurship, and a culture that values success, hard work, and perseverance — features that Bezos embodies and should be celebrated, or least don’t merit a beheading in the street.
The main problem is that we’re framing these issues in terms of the zero-sum narrative of income inequality rather than a more inclusive and positive-sum view of social mobility and achievement. A view in which people pursue meaning, fulfill their human potential, and enable others to do the same through cooperation.
The reality is that the best system we know of that fosters that kind of cooperation and achievement is capitalism, which allows for the subjective and inherently personal pursuit of human flourishing. Socialism, in its most common form, frowns upon that kind of personalized achievement. It should be noted that although some people mistakenly think of Scandinavian countries as democratic socialist systems, in actuality, they are very capitalist countries with a more expansive safety net. And even in these countries there are even fewer self-made high net worth individuals than in the US.
Capitalism is often only discussed in the context of the material results it produces, not in terms of the personal achievement and meaning that it enables people to cooperatively pursue. But capitalism only functions properly with other ingredients that make it more virtuous and moral, such as a culture of accepting individual initiative, valuing the virtues of commerce and voluntary exchange, and appreciating achievement and the pursuit of a maximum human potential. Other systems focused on equity do not allow for individuality that is freeing and creative, ultimately improving the lives of many people beyond those entrepreneurs and innovators who gain an immediate market reward. Moreover, research by nobel laureate William Nordhaus has shown that even when entrepreneurs and inventors reap great rewards the majority of the gains from their work goes to consumers.
However, when this success comes to be seen (to some) as excessive, we begin to say that billionaires or other high net worth individuals are a “policy failure”, frowning upon their success. We tend to just focus on the wealth people have once they reach the top and ignore the path that took them there. How we view their achievements at the beginning, if all their business dealings were honest, should not change if they reach millionaire and billionaire status. We support small businesses and entrepreneurs who stay small but if anything becomes “too successful” we start attacking it.
We should celebrate billionaires, millionaires, and everyone that has become successful through lawful means, because we’re celebrating an act of perseverance and hard work. Virtues such as prudence, honesty, and purposefulness (not just for the person that starts a venture or project but for everyone it affects) are worthy of public praise. Or is it that besides success itself we are starting to frown upon perseverance, hard work, and other virtues?
When we frown upon success we frown upon the stories and the paths, often full of sacrifice and hard work, that many of the most successful people in history have pursued. Why this happening is a big question that I’ll attempt to answer separately at some point. But for now, the main point is that it shouldn’t happen.
In his great book A Culture of Growth, Joel Mokyr notes that the success of the industrial revolution was not merely about the aptitudes people had to produce revolutionary technologies, engage in commerce, and invent new things, but it was also a broader cultural phenomenon of positive attitudes towards discovery, success, and hard work. The virtues that economist Deirdre McCloskey has described in her own writings, which are very complementary to Mokyr’s.
Why don’t we have a similar problem in praising success when it comes to sports, art, or culture? Athletes are also making millions, and in some cases billions, throughout their lives, but they’re not put under the same microscope. These various groups do add a lot value to society by providing entertainment to people and people enjoy that and get inspired by it.
But businesses and entrepreneurs outside of those fields are the same. First, they are creating different services and goods that are also amazing acts of success and achievement in their own right. The more divisive narrative is the assertion that big businesses or other entrepreneurs are just stealing money from their consumers and that they should have to give back in some way. But at the end of the day athletes, actors, and entertainers get their money the same way. We are paying for their services, for the consumer, it’s the same act as when we’re buying a product in a store or a service from another company. Why is the wealth less justified for people who give us goods and services for our house or daily life than it is for entertainers, athletes, and other public figures?
Maybe this denigration of business and entrepreneurial success will not become as common as I fear and we shouldn’t worry about something that’s not a pervasive mainstream attitude. Maybe the United States does value entrepreneurs and wealth creation more than it seems at this intensely polarized moment.
My main concern is that we are beginning to take entrepreneurs for granted and that the full dimensions of entrepreneurship are not appreciated. Have we lost the awe that entrepreneurship, hard work, and grit used to inspire? Things have not always been great, but the dynamic entrepreneurial culture that has always characterized the United States is built upon at least some reverence and recognition of those attitudes and virtues upon which it stands and that have continued to make it successful.
Gonzalo Schwarz is the Founder and CEO of the Archbridge Institute, a Washington, D.C. based public policy think tank focused on removing barriers to human flourishing.