The influential economist Joseph Schumpter (1883-1950) studied and wrote about the role of entrepreneurs. Entrepreneurs are the outstanding elite achievers, innovators – the engines of our economy – guys like Steve Jobs, Bill Gates, Henry Ford. They have an extremely narrow, intense focus – an unnatural obsession with whatever it is they’re doing. Entrepreneurs acquire so much knowledge of their business that they become a world expert on a very narrow topic. Others may see the issue as small but the entrepreneur views it as an empire. They create a private kingdom and then seek to become the master overlord of that kingdom. They push through all barriers and fight well passed the diminishing returns curve. Successful entrepreneurs are the elite individuals that single handedly change the world and drive the economy and society forward.
On the other hand are politicians, academics and journalists that resent those who are financially successful. These guys are economic novices and yet the loudest critics of capitalism. They preach resentment and envy against the wealthy. They are second guessers, naysayers and whiners who complain that our capitalist system is unfair and rigged, while entrepreneurs continue creating historically phenomenal levels of wealth. Leftist economists and politicians want to divvy up wealth like it’s a pie for everyone to share. It’s not. Economist write about “income distribution” like money is something to be distributed among the population according to some central planner’s idea of what’s “correct”.
It’s a dangerous threat to your interests for government policy makers, who see themselves as economic “Chess Masters”, to tinker with the global economy. It’s a losing game because the elite wealthy have all the power and control. They will deflect the burden of any wealth-redistribution efforts down onto you, my Mass Affluent clients. The politics of envy is misguided and insidious.
As Thomas Sowell recently wrote:
….. government giveaways polarize society into segments, each trying to get what it wants at somebody else’s expense, creating mutual bitterness that can tear a society apart. Some seem to blithely assume that “the rich” can be taxed to pay for what they want — as if “the rich” don’t see what is coming and take their wealth elsewhere.
The U.S. Tax Code is already more progressive than any other wealthy country. Here’s a short video that illustrates the point.
As the political and economic battles rage on – be thankful for entrepreneurs, your wealth, health, awareness of the war and your Estate Planning War Chest.