On wealth creation

At the AFL-CIO’s labor union website (www.workingfamilies.com), visitors can play a game called “Smash Corporate Greed.”

The fact that such sentiments still exist in a flourishing America is truly astonishing. After all, this is the year 2000. Compared to the rest of the world, Americans are quite rich.

We are all perfectly aware of the major economic indicators. Unemployment is at a 30-year low. Inflation remains restrained. The American economic growth rate, as measured by the Gross Domestic Product, is robust. And the stock market is still strong.

Contrary to the credit claimed by the Clinton administration, most Americans are better off today–most Americans are rich–precisely because of corporate greed.

Bill Clinton did not make America rich. Bill Clinton did not create America’s great prosperity. He does not know how to create wealth. Clinton redistributes wealth through taxation and government spending. He does not create wealth. Only entrepreneurs and corporations create wealth.

Labor unions do not create wealth. If labor unions create wealth, the AFL-CIO should attempt to unionize Bangladesh and see just how fast they will create wealth there through collective bargaining. Extortion never creates wealth. Extortion only destroys wealth. Unions have institutionalized coercion and extortion.

Note that American labor union membership in the private sector is practically at an all-time low. Unions are particularly absent in the hottest, fastest growing sector of the American economy: in the high technology industry. Most high-tech workers don’t organize. Most high-tech workers are extremely well paid–without union membership.

Wealth is created when merit is rewarded.
Wealth is created when people are free to achieve their full potential–that is, when they are free to reap the full benefits of their creative and productive efforts. Wealth is created when people are allowed to be greedy.

Corporations, in particular, create wealth by pursuing greed. By slashing costs and improving efficiency, by constantly innovating, by being highly competitive, by offering products and services that people want and need, by being highly profit-oriented–great wealth is created.

When politicians and labor unions obstruct profit-seeking, when they try to smash greed, people are harmed, as productive incentives are lost. Ultimately, what needs to be smashed is not corporate greed but labor union and tax-hiking politician greed.

When labor unions clamor for the smashing of corporate greed, they are not calling for the destruction of greedy “fat cats”; they are calling for the destruction of the hopes and dreams of millions of ordinary Americans–of the 50 percent of the population who own stocks, directly or indirectly, in America’s best corporations.

Smash the obsolete labor unions. Long live corporate greed!