Shoots from the Grassroot Institute of Hawaii – Feb. 10, 2004-The Bloodsucking Businessman Myth

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“StuartHayashi Image”

One reason why businessmen are unjustly maligned is that people in
general aren’t clear on what they do.


After being bombarded by anti-capitalist propaganda from their
social-science professors, the school newspaper, and the corporate media
itself, students at the University of Hawaii and plenty of mainland colleges
ask, “Don’t ‘captains of industry’ really do nothing but sit on their butts
all day and fire people?”

Many people unknowingly buy into Karl Marx’s “exploitation” theory.
Marx observed that money from a corporation’s accumulated revenue first goes
to pay off its expenses — including employee compensation — and that what
the company has left over afterward is the profit that the entrepreneur
keeps and spends on himself (perhaps re-investing it back into business).

Marx declared that laborers did all the real work while entrepreneurs
contributed nothing. The money the entrepreneur pocketed ”’after”’ paying his
employees rightfully belonged to ”’them”’ ”’not”’ him. The businessperson
should’ve distributed all the profit among the laborers and taken zippo for
himself, since he’s moronic deadweight.

Marxians speak as if factories magically sprout from the ground like
weeds and workers could spontaneously convene to work on manufacturing goods
without any centralized leadership. (And if a rank-and-file worker arose to
lead the others, he’d assume the businessman role.)

But it’s easy to see why educated people misunderstand corporate
executives’ importance when their teachers have long stated that the main
factors of production are only land, capital, and labor. Those three factors
”’combined”’ are meaningless without entrepreneurship.

“Land” — meaning natural resources — has no intrinsic worth; it’s
only valuable inasmuch as it benefits humans. Petroleum was once regarded
as a nuisance when it seeped onto farms and destroyed crops. Everyone hated
it in the 1600s; it enriched nobody.

Petroleum only became valuable when “Industrial Revolutionary”
scientists like Abraham Gesner discovered it was a cheaper, more-efficient
fuel source than the then-conventional alternative (whale oil).

Scientists help the economy because they decipher the principles of
nature, which inventors and engineers learn about and then use to design
fantastic products (e.g., transforming sand into microchips and
electricity-carrying cables).

But to convert natural resources (land) into goods, you need special
machinery or tools, such as those in factories (capital), and humans who’ll
operate those tools so that everything runs smoothly (labor).

What do you have when you’ve got labor, capital, and “land,” but no
manager? A directionless gang of ”’laborers”’ who don’t know what they’re
supposed to do or why. Since they don’t know what to do, the machinery
won’t be operated correctly, so ”’capital”’ is wasted. Thus, the natural
resources won’t be made into anything; the “LAND” is useless.

The businessperson’s profit is the ”’consumers’ payment to him”’ for the
”’service”’ of cohesively managing the other three factors of production —
labor, capital, and “land” — so that they actually produce useful goods.

Scientists, inventors, engineers, and laborers cannot perform the
same vital function unless they become business managers too.

History has seen some scientist-inventors who were also wealthy
magnates: Thomas Edison (he earned $12 million), George Westinghouse
(invented the airbrake), Howard Hughes (retractable landing gear on
airplanes), Edwin Land (instantly-developing film), and Herb Boyer
(genetically-engineered organisms).

But when tycoons get richer off an invention than the inventor did,
it’s often called exploitation. Oh, really?

One example is of Stephen Wozniak and Steve Jobs, who co-founded Apple
Wozniak assembled the first desktop computer with a monitor and keyboard.
Jobs never invented ”’anything”’ in his life, and he doesn’t even understand
digital technology. So people say Jobs parasitically profited off Wozniak’s

But it didn’t initially dawn on Wozniak that normal people would want
their own home computers; it was Jobs who saw their potential and explained
it to Wozniak and everyone else.

If Wozniak were left on his own, Jobs-free, we might not have had a
world where middle-class people owned Macs or PCs; we should thank Jobs for
his initiative. And it wasn’t as if Jobs slacked off in his role; he
attracted venture capital and enlightened people of the computer’s
importance (so they’d purchase it).

It may seem unfair that non-inventing mogul Jobs is a billionaire
while inventor Wozniak made “only” $80 million. But if it weren’t for
Jobs’s business acumen, Wozniak wouldn’t have made a nickel from his

Inasmuch as he helped transport the personal computer from Wozniak’s
private garage to everyone’s homes, Jobs was just as creative as any
inventor or artist.

Far from parasitically feeding off employees, businesspeople attain
success in mostly-free markets because their activities fundamentally
enhance life.

”’Stuart K. Hayashi is a research intern at the Grassroot Institute of Hawaii. Hayashi is the founder of a news Web log, “The Fiftieth Star,” at:”’ ”’to be unofficially centered around activities at the University of Hawaii at Manoa. His older editorials can be seen at:”’ ”’and he can be reached at:”’

Related articles by Stuart K. Hayashi

“What Capitalism Is and Is Not”

“The Economy of Life”

“Big Business Is a Persecuted Minority”

“‘Playing God’ — A Moral Necessity”

“Appreciate Industrialism on Earth Day”

“Industrial Capitalism Liberates Working Mothers”

“A Credit to the Corporate Raider”

“Ralph Nader’s Ideal Economy”

”Recommended links:”

“The Moral Basis of Capitalism” by Robert W. Tracinski

“The Moral and the Practical” by Robert W Tracinski

“The Industrial Revolution’s Indispensable Entrepreneur” by Roger Donway

“The Benefits of Industry — We’re Living Longer!” by Jim Peron

“Rewarding the MVPs of the Business World” by Elan Journo

“Forgotten Heroes of 9/11” by Onkar Ghate, Ph.D.

“Where Is the Future?” by Robert W. Tracinski

“The Meaning of Jack Welch’s Cave-In” by Edwin A. Locke, Ph.D.>

“Hatred of the Good” by Edwin A. Locke, Ph.D.

“A Robber Baron Saved the Whales” by Walter E. Williams, Ph.D.

”’This editorial is intended to provoke thought, discussion and an examination of issues. It does not reflect official policy of the Grassroot Institute of Hawaii. See the GRIH Web site at:”’

”’ reports the real news, and prints all editorials submitted, even if they do not represent the viewpoint of the editors, as long as they are written clearly. Send editorials to”’