Conservative Colloquium

An Intellectual Forum for All Things Conservative

“Obscene” Profits and Salaries

Posted by Tony Listi on June 14, 2008

Well, well, looks like liberals actually do believe in the existence of something called obscenity. No, it’s not pornography. It’s not government financial support for disgusting and sacrilegious art. It’s not any of the vulgarities that characterize modern culture.

Profits and salaries are obscene! Of course! Money is obscene! How could we conservatives be so blind? Sure, one can know obscenity when one sees it.

The fact of the matter is that it is not any of government’s business how much profit any business makes, regardless of size and productive capacity. If workers at a certain company feel that they are not compensated enough or that their superiors are excessively compensated at their expense, then they are free to quit and seek another job where their talents are more justly compensated.

You see, the market works. It rewards companies that allocate their profits where such funds are most needed and deserved. A company headed by a CEO who takes a larger salary than is necessary or just is only hurting himself and his company. He is taking away funds that could be reinvested in the company to increase future earnings and maintain a competitive advantage over other firms. He is also driving good and talented people, human capital, away to other companies who will more justly compensate such people. Or at the very least (or worst?), the CEO is creating justified bitterness and complaining among employees who feel they are not receiving their fair share. This corporate cultural disruption can only hinder productivity and competitiveness.

The capitalist system works. We don’t need government stepping in and creating unintended problems.

But what unintended problems?  asks the naive liberal and statolatrist.

Glad you asked. Wealth creation (before it can even be distributed) is really a product of reinvestment of profits. The most successful and wealthy corporations reinvest their profits in human, technological, and various other kinds of capital. Thus the corporation uses its money to make even more money for all its stakeholders! Wealth grows at a rapid rate with such freedom to make wise investment choices.

Now what do you think happens when the government comes along and confiscates “obscene” or “windfall” profits from corporations? It stifles this wealth-creating reinvestment! It puts these corporations at a competitive disadvantage nationally and globally. Ultimately, it hurts the working man who depends upon the success of his employers and their ability to reinvest in him and his productivity.

What makes you think the government can more effectively reinvest the profits of companies within a particular industry or generally throughout the economy?!

You think that politician in D.C. knows anything about creating, marketing, and distributing a product or service? Hate to break it to you, but most of those politicians graduated from law school, not business school or the school of hard knocks. They are mostly lawyers who are talented in using the law to coerce others and steal the fruits of their labor. They are skilled in marketing of a certain kind (read: demagoguery), but they have no know-how in producing any great physical product. I’d like to see Barack Obama, Hillary Clinton, Harry Reid, Nancy Pelosi, John Kerry, and other liberals get oil out of the ground, refine it, and then distribute it worldwide! Last time I checked, they weren’t petrochemical engineers of the caliber that Texas A&M produces.

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