The topic of economics has been an underlying theme during discussions with Orrin Woodward when conversing on business and politics. On more than one occasion we have discussed the disparity of results in a capitalistic society and the resulting outcome that it produces both economically and socially. Some with a socialist mindset see disparity within America and fail to see progress but rather social injustice.
I read an article this morning on ABCnews.com that had an alarmist ring as it stated that “The disparity between the rich and the poor is growing in America.” I realize that fear and sensationalistic journalism helps sell a news story, so I knew why they led with such a volatile opening line. This immediately enlightened me as to the direction the author was heading. If you want to have an honest discussion on this subject, you have to approach this topic from a different point of reference or as I highlight in my last post, with a different world view.
Is there growing disparity between the rich and the poor? This is not the important issue. We must ask an entirely different question. Where are the “poor” today in relation to where they were last year and twenty years before that? The fact of the matter is, with capitalism we have been raising the living standards in this great country generation after generation. The “poor” in America have cars, homes, televisions, and enjoy a level of subsistence that in most any other country around the world would be considered a lavish lifestyle well above the poverty line.
Actually, the current mandated poverty line established by our government dictates that anyone at that current mark, although considered poverty stricken by US standards, lives better than 80% of the rest of the world’s population! Now this is not to say that we do not have disadvantaged people who need help. I am merely arguing that when mainstream media focuses on the disparity gap between the rich and the poor, they are not talking about the man on skid row sleeping in a railway car or under a bridge, but rather a family of four that makes around $20,000. While poor compared to Bill Gates, they have won the lottery in life when compared to 80% of the world’s population.
A socialist might argue that the rich are getting richer. I’d argue that EVERYONE is getting richer and if the wealthy grow at a faster rate that is to everyone’s advantage! It is the wealthy who invest in new technology, start companies, open factories, create industry, and invest in housing and development. By doing so, they facilitate further economic growth, job creation, and more wealth that millions of Americans profit from. This is capitalism. Be wary of anyone who wants to level the playing field and make all outcomes equal. They advocate taking away the opportunity to get ahead and the ability to create personal wealth. That my friend is socialism and it has failed in Russia, Cuba, North Korea, and a host of other countries where there is a mass exodus as opposed to immigration.
President Ronald Reagan once used the analogy that the tide of economic prosperity from capitalism raises all the boats in the harbor. Whether rich or poor, the rising tide of capitalism affects everyone the same. Is there disparity in America? Absolutely! One of the principles on which our country was founded was so everyone would receive equal rights, NOT that we would all enjoy equal outcomes. Disparity and the ability to achieve disparity is a founding tenant of this great nation. Long gone are the days of the aristocracy and landed gentry where wealth and privilege were bequeathed on a few. Those who lost out on the lottery of birth never had the ability to ascend the social ladder to achieve a different place in society.
One only has to look at the wealth created by entrepreneurs and business people of our generation to see the greatness of this country. Michael Dell, Bill Gates, Sergey Brin, Oprah Winfrey, Orrin Woodward, and Chris Brady are just a few noteworthy examples of entrepreneurs who through hard work and determination rose from the masses to achieve the lofty heights of success. Once considered common Americans, they now sit at the pinnacle of their respective fields. Is there disparity between us in terms of wealth? Certainly! I take heart however that as an American I have equal rights and opportunities to allow me to achieve those heights if I work hard and strive to succeed. Should I feel upset and incensed with their success and wealth? Since I have common sense, I do not. I realize that they through their business endeavors have helped raise the economic tide of Americans all across this nation. The previously mentioned entrepreneurs have employed thousands and made life better for millions of Americans because of their hard work. As I write this, I am using a Dell computer, MS Word from Bill Gates, and search links on Google made possible by Sergey Brin and Larry Page, and I currently lead an international company started by Orrin Woodward and Chris Brady! By merit, they have achieved disparity with their former peers and in the process have made America and the world a better place. This is all possible through capitalism.
You do not see this type of economic achievement or development in Cuba, North Korea, or the former USSR. How many people in those countries have donated millions like Bill Gates to combat AIDS or bring health care to Africa? Ted Turner was a poor boy from the south that became wealthy enough to donate a billion dollars to the United Nations for humanitarian programs! Orrin Woodward and Chris Brady have built medical clinics and education facilities in India. How many stories like this can be told of business people who live in nations that practice socialism? Capitalism is the engine of economic prosperity that makes things like this possible.
One reason America is great is because under our economic system anyone regardless of race, creed, religion, or family background, has the same opportunity to achieve success. As the CEO of the Team, I am most proud of our profit-sharing program with our business owners because it is based on this very principle. The Team co-founders, Orrin Woodward and Chris Brady, are famous for saying, “As you perform, so shall you bonus!” Everyone enters the Team with equal rights and equal opportunities and will be rewarded based on their individual performance. This is a founding tenet of this great nation and Orrin Woodward and Chris Brady made sure this was how this Team would operate. Everyone starts equal but has the ability to prosper based on their hard work and determination and thus obtain disparity based on their merit.
Dinesh D'Souza really encapsulates this premise in his book, The Virtue of Prosperity, when he says, “The prime culprit in causing contemporary social inequality seems to be merit. Today it is the differences in skills, effort, and earning capacity, and not arbitrary factors such as inheritance or favoritism, that appear to be responsible for producing large differences in earnings and wealth. The guy who is worth little has probably produced little of value. By the same token, the guy who’s earning twice as much as you is likely – perish the thought- twice as good as you are.” America was founded on equal rights but never on equality of outcomes, thus arguing that there is disparity between the rich and the poor is pointless. In a merit-based society, people will work hard to obtain disparity. As Dinesh D’Souza states, “…government itself exists to guard citizen’s rights to accumulate unequal fortunes.” James Madison in The Federalist Papers spoke quite clearly that the founding fathers viewed, “The first object of government is the protection of different and unequal faculties of acquiring property.” People around the world come to America to have this opportunity.
A perfect example is of business man I know in California. I had the good fortune to spend some time at his picturesque mansion in the hills above Los Angeles one memorable night in 2004, we sat on his veranda above the pool watching the city of LA bask in the glow of capitalism. After an extravagant dinner with some friends, he recalled his personal story of fame and fortune. He came to America as an immigrant from India and started working as a dish washer at a Kentucky Fried Chicken restaurant. He and his wife saved enough to buy their first restaurant and over the years continued to expand making him one of the largest restaurant owners. He has developed a net worth in the hundreds of millions of dollars and his fortune now spans multiple industries with investments around the globe. Where else in the world could one have risen from a poor immigrant to one of the wealthiest men in the country? This is only possible in American! This opportunity does not present itself in the caste system of India, the socialistic system of Cuba, or the former Soviet bloc countries.
Disparity in America is not a problem, it is actually a benefit. Through the encouragement of people to go out and create disparity, men like Michael Dell, Orrin Woodward, and Chris Brady rise up and form companies and industries that employ thousands and aid in the continual rising tide of economic opportunity that all Americans benefit from!