Money-Chasers vs. Money-Makers

The following is a letter published in the New Jersey Star-Ledger on March 12, 2009, followed by my posted comments. My comments were inspired by Ayn Rand's essay "The Money-Making Personality", originally published in the April, 1963 issue of Cosmopolitan magazine. In her essay, Ms. Rand drew a sharp distinction between what she referred to as the Money-Makers and the Money-Appropriators. The difference between the two is dramatized in her novel, Atlas Shrugged. The essay is reprinted in The Objectivist Forum

Producers Fell Short

I'm confused by your reader who's concerned that President Obama wants to replace the high standard of living through capitalism with socialism by punishing the producers and rewarding the slackers ("Obama policies destructive," March 7). Who are these producers? Perhaps he is referring to the Ponzi scheme specialists Bernie Madoff and R. Allen Stanford.

I also have in mind notable producers from 2008, before Obama was elected. Richard Fuld earned $70 million as CEO in the year that Lehman Brothers collapsed. Let's not forget some of the best producers of our lifetime: AIG, Washington Mutual, Merrill Lynch, Wachovia, Bear Stearns and Countrywide.

A famous comedian had a skit in which he handed out business cards announcing he was a producer. What did he produce? Business cards. Our producers created derivatives and other indefinable investment vehicles, raking billions of dollars off the top, leaving no value for the original investor.

I'm a capitalist like the reader. But my form of capitalism yearns for morality, integrity, clarity, and yes, regulation to assure that destructive greed can be minimized.

-- Richard Kochman, West Caldwell

My Commentary:

Posted by Zemack on 03/14/09 at 9:54PM
Richard Kochman's confusion stems from his equating of money-chasing at any cost with money-making. Money-makers are the producers who give value to money. It's true that the ranks of the money-chasers are growing...and the money-makers shrinking...in our politically corrupted economy. But, think of all of the goods and services available to you which you do not yourself produce, and you'll have proof of the existence of the actual producers. A producer is anyone who puts in an honest day's work producing something of value for others willing to purchase that value through voluntary, uncoerced trade to mutual advantage. Highly productive people are those who produce vast amounts of wealth for trade, thus enriching the lives of thousands and millions. The highest in this regard are the creators and inventors who turn innovative ideas and theoretical science into commercially valuable wealth. The fortunes they earn pale in comparison to the benefits they bring to their fellow man. The jobs we fill, the skills we learn, the tools we work with, and the array of products and services we purchase with our earnings...values we do not and could not ourselves provide...come courtesy of the most productive and creative few. In all cases, production can be traced back to the minds of individuals.

Mr. Kochman is right to tie capitalism to morality. Capitalism is the moral social system which rewards integrity and honesty (clarity) because it is based upon the recognition of individual rights, and a government charged with the task of protecting those rights from foreign enemies and domestic criminals...both violent and non-violent (ex. fraud). So long as an individual (or his business) does not violate the rights of others, he is free, under capitalism, to act on his own judgement and in his own self-interest. Madoff is a criminal money chaser, not a producer. His prosecution is government's proper function. It is grossly unjust to equate him with producers on any level of competence.

But government regulation is destructive of capitalism and free markets. The mostly capitalistic system established at our Founding has been replaced over the past century or so with a special-interest-driven mixed economy drifting steadily toward total government control. Regulations that replace the private judgements of individuals regarding their own affairs with those imposed by government bureaucrats are a violation of an individual's rights to life, liberty, and property and are thus immoral...i.e., anti-capitalist.

The current financial crisis is proof of the failure of government regulation and market interference. The shenanigans of some of the bankers and financiers as well as many home-buying borrowers, while representing the face of this crisis, occurred within the context of a heavily regulated banking system under the control of a coercive government central bank money monopoly. On top of that is a whole network of market distorting government housing policies accumulated over a period of decades spawned by the intention to "encourage" homeownership. We are witnessing the climax of the failure of those policies and regulations today.

We should turn away from the destructive and immoral policies of targeting the productive and rewarding government with more power, and instead discover and turn toward capitalism.