Politics aside, political conventions can be rather amusing. People have the capacity to say some pretty outrageous things, and conventions seem to function as a breeding ground for bizarre comments. The Democratic National Convention, which took place at the beginning of the month, was no exception. The main function of the convention was to officially nominate incumbent president Barack Obama as the Democratic Party’s nominee for president.
Posing as an anti-business zealot, radio host Peter Schiff interviewed a number of delegates at the convention about corporate profits. In a video posted on YouTube, Schiff speaks with seven delegates who call for an outright ban on corporate profitability. Six more express support for a federal cap on how much money corporations can earn. Bear in mind these are not “Occupy” protesters, but leaders of the Democratic Party.
Despite the enthusiasm of these delegates in favor of corporate poverty, there is no economy without profit. For whatever reason, it has become popular to despise the wealthy and successful. There seems to be a false assumption that the economy is a zero-sum game, or that the rich are only rich because the poor are poor.
Basically, there are two ways a company can use profit. First, it could use the money to expand, which provides goods or services to more people, causes the company to spend more in other areas in the economy, and allows the company to hire more staff and create new jobs.
Second, if the company chooses to save the money, that money is made available to other businesses in the form of loans or investments, allowing them to expand their operations or develop new products.
One way or another, that profit is not only good for the individual company, but for the economy overall.
If the company isn’t turning a profit, how can it afford to hire new employees and create new jobs? Without profit, the company can’t afford the investment necessary to design that new phone, that new car or that new anything.
The very potential to make money is what drives people to work hard. It is certainly easy to criticize supposed greed in people wealthier than ourselves. But let’s face it: no one would go to work if there wasn’t a paycheck involved, and if the company isn’t making any money, neither are you. Without profit, there is no motivation for innovation or hard work, and economic growth collapses.
Of course, if the government is taking corporate profits and giving them to us, that’s a pretty sweet deal, right? Don’t we deserve it? Absolutely not. Companies make money because they sell things that people want. They have earned the right to their profits because consumers benefit from their products or services and voluntarily choose to spend money on them.
Advocates of forcibly taking earned profit from companies or individuals and giving it away to those who have not earned it need to examine themselves before saying anything about greed.
Greed aside, it is simply immoral for the government to determine how much success is allowed. People may like government intervention when it benefits us (think the minimum wage), but how would you like it if the government set a limit on how much you could earn?
With the economy already in shambles, banning profit is the last thing we need. The fact that Democratic convention-goers thought this was a good idea is almost comical, if it weren’t so serious.
Nelsen is a senior majoring in political science. Comments can be sent to email@example.com.