David Frum

09.29.12

Who Are the Real Job Creators?

Video screenshot

Nick Hanauer demolishes the silliest idea of this election cycle: that of the Randian-inspired, intrepid "job creator" feeling oppressed by the government.

Capitalists are idea creators, not job creators.

Every business, from the mundane ("How do you make the chip taste more like BBQ?") to the arcane ("How do we turn photons into electrons?"), is based on an idea about how to solve a problem. The process of converting great ideas into products that effectively solve fast-changing human needs is what creates a business. The essence of every business is both an idea for a product that meets an important human need and the ability to make that product efficiently in order to create profit. ...

If capitalists create ideas that produce social and economic value, then it is obvious why it makes so little sense to pour more money into the already wealthy and successful. Even the best of us have only a few ideas. Steve Jobs, arguably the greatest entrepreneur of our generation, had only a handful of truly brilliant ideas. Most billionaires, it could be argued, have only one. It would be far better for our country to enable every citizen to participate in our capitalist economy by ensuring that they have the requisite education and access to capital and training to convert those ideas into products that solve the world's problems.

Of course, the kind of problems we choose to solve is important. Finding clever ways of securitizing imaginary assets may not create a lot of social utility. Finding cheap ways of converting the sun's rays into electricity unquestionably does.

Great success should be celebrated, but not institutionalized. When we tax working Americans at a higher rate than billionaires, it is bad for business. When we tax the small business more than our largest corporations, it is similarly bad for business. When we give tax breaks to the wealthiest while excluding those in the middle and the bottom, we slow down our economy by slowing down the rate of idea creation, because so many are excluded from the process of solving our nation's problems.

Thanks to commenter "dc9man" for pointing out the excellent video I've now added to the top of this post.