Thursday, January 24, 2013

An alternative to Atlas Shrugged; Atlas Spent?

In Ayn Rand's novel Atlas Shrugged, our capitalist heroes ultimately defeat the collectivist power grab by going on strike. They drop out of society, taking their ingenuity, productivity and imaginations with them. Society soon crumbles and the bureaucrats beg for their return.

In real life, there are problems with this approach. Not the least of which is the nature of the capitalist. When a capitalist sees a problem, he or she sees opportunity. They want to fix it. They want to fix it profitably, but they want to fix it. When they see an insurmountable problem (or so perceived by general consensus) they see an opportunity for an enormous return. The other problem is that, unlike in the book, societies don't generally blow up quickly. They die a slow and agonizing death. Rome didn't fall in a day. It took centuries. Personally, I don't want to wait that long.

If you believe in capitalism, you believe it works because it takes advantage of human nature rather than fighting against it. There has been much made of the fact that nearly half the people who file taxes in the U.S. pay no income taxes. Thus, they have little concern about rising taxes and increased regulation. But what if they did pay taxes? What if they had a taste of capitalist success? What if they saw things from the same perspective you do? It is not human nature to do yourself harm.

So how do you create more tax paying capitalists? Invest in your business, locally. Look for small businesses at the local level that can provide things for your business. It may cost you more, but there is value to be had in this approach. For one thing if you're paying 50+% in taxes on your income anyway, why not get the most luxurious office equipment and furniture available (in town)? Make your workplace comfortable, cozy, attractive. This will bring down your bottom line some, but after taxes, it's not that big a difference, and as a bonus, you create tremendous goodwill at the local level. Look for local service providers and suppliers as well.

When you place a $3000 order with a multi-billion dollar company half way across the country, do you think they're bubbling over with gratitude. Now spend that $3,000 or $4,000 at a local shop that averages $2,500 in revenue a week and see if it doesn't get their attention. You can still shop quality and price, at the local small business level. It's going to be more costly than using a super-efficient giant producer, but even if you just spend a portion of your operating capital locally, the return in goodwill can be well worth it. Also, rather than letting the government pick winners and losers with your money, wouldn't it be smarter to eliminate the middle man and pick some winners yourself? Who do you think is a better judge of the worthiness of an up and coming entrepreneur? You, or a panel of bureaucrats at the Department of Commerce?

Further, if this were a trend that caught on, successful small business people would become much more aware of the burdens, speed bumps, roadblocks and useless paperwork, regulation and make-work that government imposes on the business community. They would have to hire help, who, now having jobs, wouldn't have the time or inclination to "Occupy Main Street" or worry about where their next condom is coming from.

In short, if you want to keep the country from going down the drain, don't look to the global financial markets. Look to the local market and see who you can lift up. Create allies and compadres at the grass roots level. Someone who is defending an income of $50,000 a year and rising is likely to be much more passionate in that defense than someone who's already sitting on $250 million hedge fund account. They may not have the same resources, but they have the same number of votes come election day, and if you want to see change in government across the board, you need representation at the City Council in places like Falcon, Colorado and Springfield, Missouri, not just in New York and Los Angeles.

Waiting for society to collapse and come to its senses is a long wait for a train that aint coming (to steal a line from Firefly). Investing in a new generation of capitalists seems much more win/win and intuitively more capitalist to me than hoping the populace will eventually become miserable enough to see things your way. It's also faster, more likely to succeed and more gratifying.

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