Wednesday, September 04, 2013

"Giving back"

Last week I bumped into an old friend who was working on some improvements to the bike trails near Harry Myer’s Park. It had been a couple of months since I had seen him, so I stopped to talk. We each talked about our kids, and then discussed his very successful business based here in Rockwall. Finally I asked him about the work he was doing on the trail. With a rather pained expression, he told me that he had volunteered for this project because he wanted to “give back to the community.”

As we talked, I continued to process that statement. If he needs to “give back to the community,” that presumes that his success was taken from the community. For every dollar he has earned, the rest of the community must be one dollar poorer. I needed some clarification, so I asked him why he felt the need to give back to the community. “Well,” he told me, “My business is for profit. I’m doing this for free.”

“Why does starting a profitable business mean that you are taking from the community?” The question took him aback, so I pressed on. “How many people do you employ?” He told me that he currently has fifteen full-time employees and a few students and interns part-time.

I picked up a shovel and started helping him load rocks into a wheelbarrow. “How much did your company pay in taxes last year?” He listed off the amounts they paid in sales tax, property tax, corporate income tax, and payroll tax, each one well into five-digit figures. All told, it was well over a hundred thousand dollars, and that didn’t count his own income taxes, property taxes, and the income taxes paid by all of his employees.

“How many customers patronized your business last year?” He pondered that for a moment, then responded, “Thousands. But I made a profit on them.” Finally we had gotten to the crux of the matter. Clearly he had fallen for the myth that profit is greed and altruism is the only pure motivation. “Which do you believe that your customers value more: your product or the money they paid for your product?” He looked puzzled. “I hadn’t thought of it in those terms before. I suppose they value the product more. Otherwise, they wouldn’t bother to buy it.” I agreed. The fact that people freely decided to trade indicates that both parties are benefiting from the exchange. “The goods you produce enrich the lives of the people who buy them. You pay more than your share of the tax burden. And you created more than a dozen jobs which would not exist without you. So why do you feel guilty for making a profit”

“I guess I feel like I’m supposed to feel guilty. Are you saying I shouldn’t work on this bike trail?”

“Not at all,” I answered. “Building this trail is magnificent. I’m saying that running a successful, profitable business is noble and does not put you in debt to society. There are people who owe a debt to society, and ought to feel the need to give back to society. The most obvious are criminals. We say that they go to prison to ‘pay their debt to society.’ In fact, society doesn’t benefit much from their time in prison, apart from being protected from their criminal behavior. Our taxes pay for their free room and board, cable television, weight-lifting room, and law degrees preparing them to beat the system next time, but they spend years producing nothing in return for our resources they consume. A second category are government dependents who take from society in the form of welfare checks, food stamps, unpaid mortgages and student loans, and a host of other means of accessing the public trough. They receive something for nothing, which means that somewhere, someone is producing something only to have it confiscated without remuneration. Sometimes the first two categories even overlap, as seen in the vast array of fraud perpetrated in the welfare, Medicare, Social Security, and unemployment systems. Next comes the vast army of 4.1 million government bureaucrats who endlessly write regulations and produce nothing but draw a taxpayer-funded paycheck for meddling in other people’s business, suppressing productivity, destroying wealth, and hindering commerce. The final category is those who profit from cronyism, seeking special favors from government officials in exchange for campaign contributions or political pull. These looters are hard to distinguish from real producers, because they have all of the trappings of success, but careful examination will show that their profit does not come from voluntary free-market transactions. They are being carried just as much as the welfare recipient. All of these people benefit by taking from society and therefore ought to feel compelled to give back, but rarely do.”

“But doesn’t it show that I’m a good person if I want to give back?”

“No!” I told him emphatically. “It means that you are agreeing to their misplaced guilt, accepting their accusation that earning profit is an evil which must be atoned for. There is no virtue in saying that good is actually evil. All of these people who you are carrying want you to feel that way so that you won’t object when they demand more from you. More taxes, more freedom, more of your life.”

“Then why should I work on this bike trail?”

“Because it is consistent with who you are every day,” I told him. “You are a creative force, a producer, an innovator who brings life to this community. The purpose of your generosity is not to make up for your success. It is an extension of your success.”

No comments: