To each according to his ability

Posted on Dec 14 1998

Last September Worth magazine did a special feature story on Gillette’s new Mach3 razor — reportedly the best darn men’s shaver on the market today. Gillette reportedly spent $750 million on research and development, to develop the best razor in the world.

David Anderson, a Colorado resident who read that article, later wrote to Worth magazine expressing great indignation against Gillette. Said Mr. Anderson in Worth’s November letters section: “ . . . it should produce absolute outrage in most readers. At the very least, it should prompt a closer look at the values that lead to spending $1 billion on a new razor that may produce a more comfortable shave. How far would $1 billion go toward helping the thousands of families around the world who are hungry or who have been flooded out of their homes? Or the homeless and uneducated in Gillette’s hometown of Boston?”

Once again, it is people like Mr. Anderson who have got it all wrong. It is his type of thinking that represents true injustice, not spending $750 million to $1 billion to develop the world’s finest razor blade. Once again, we encounter the fallacy — the big lie — of the zero sum game in economics.

Wealth has to be created, not looted. Wealth is not a finite resource to be expropriated, but a process to be explored, an idea to be developed, a product to be created, a service to be performed.

Wealth creation can never be accomplished through wealth redistribution. Riches are not created by government force, coercion or decree, but instead through the free and open private marketplace filled with all the material incentives for innovation, productivity, efficiency and progress.

If the government looted Gillette’s $1 billion-plus research and development budget and redistributed it to the poor, the uneducated and the homeless, would more wealth be created for everyone? Would the poor be able to properly re-allocate those funds for even greater investment returns? Would they be able to create new products and services that would, in turn, create more jobs, increase tax revenues, explore new technological innovations, and improve man’s overall standard of living?

I recently purchased Gillette’s new Mach3 razor to replace my old Gillette Sensor Excel, which I promptly discarded. There is no question in my mind that this is the best razor ever made. I no longer cut myself shaving with the Mach3. It is truly a fantastic piece of shaving equipment. Go out and buy one at Town House now.

If you do, you’ll be contributing greatly to our economy. The retail store would profit. The wholesaler, Micronesian Brokers, would profit. The media advertisers, the newspapers and others, would profit. The government would profit through taxation. The employees of these involved entities would profit. Gillette’s earnings may well be improved, which would boost its stock price and benefit thousands of individual and institutional investors around the world. So many good transactions would result all throughout the multiplier effect.

But give a homeless person that Mach3 razor money and all you are ever likely to get is a cheap hangover and a waste of money. Loot $750 million in private funds and redistribute it to the less able and the results would be far more devastating. Remember: That’s precisely what destroyed Soviet Russia and ruined every socialist regime from Cuba to North Korea.

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