The phrase, “Evil Capitalist,” has been used so often it has become a bromide. In a recent exchange on a blog the person I was discussing issues with stated that “Capitalism was a predator, going out and devouring others unless properly harnessed by regulations.” Indeed, when we think of a rich person many of us think of Scrooge McDuck, sitting in his vault on his piles of gold.
As stated previously in this blog, however, in actuality those who succeed in a Capitalist society are for the most part those who have helped a lot of people. More than just altruism, just by the nature of their work they have met the needs of many people.
A person who owns a gas station may become wealthy if the gas station is located in a location that is convenient to a lot of people. This means that he is meeting the needs of people who need to buy gas to conduct their daily business.
Moreover, if he charges an unfair amount for gas and other supplies, people would not frequent his station and he would eventually go out of business. Think about it, do you normally feel that the prices you are paying for things are unfair or unreasonable? Do you feel cheated typically when you buy something from the store or pay for a service?
This is true even with gasoline. Despite the fact that gas prices have risen a lot in the last few years, they were very low for a long time. They are also at least relatively reasonable still or people would be selling their cars and moving closer to work so that they could walk or bike a lot more than often than they have. Obviously prices aren’t so high that it is worth going without the gasoline.
A successful capitalist also usually provides jobs for a lot of people. She does not do this just out of a desire to provide jobs – she does it because she must do so to operate her business – but the net effect is that a lot of people who do not have the desire and personal strength to start their own businesses can still feed their families and keep their lights on. And while everyone would rather make more money, obviously the amount paid is reasonably fair or people would stop working and stay home.
Likewise, for workers, those who best meet the needs of the company’s customers and make a bigger profit for the company can earn more in salary and typically do. A salesman who sells a lot of products typically gets a bigger bonus than one who sells less. An employee at the cash register who makes sure the needs of the customers are met and they return again is typically selected for a management slot so that she can teach others in the company how to treat customers well.
By the nature of a business, employees must, on average, produce more than they cost in wages and benefits or the company cannot survive. Employees that produce less earn less, but even less productive employees can still earn a living. An employee who has no desire to move up can do the bare minimum and typically still hold onto the job.
So just by doing a good job or running a successful business, even if your motives are all about earning money for yourself and you never give a dime away, you are helping to meet the needs of others. So the next time someone starts talking about “Evil Capitalists,” perhaps ask them how effectively the average communist meets the needs of others.
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Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.