Still Pissed Off About the Hawley-Smoot Tariff

Thursday, October 23, 2008


A guy called a local talk radio show the other day to defend Obama's hostility to businessmen making profits, and he said something to the effect of "I believe in capitalism, but it's not unreasonable to limit the amount of profits someone can make." The radio host gave the example of a building contractor, and the caller said the contractor should split the profits with the workers.

I wonder how the caller would have answered if the host had asked, "should the workers all lose money if the project comes in over budget?" That is, is the entrepreneur the only one who should bear all of the risk, if he is compelled to share the rewards?

Or to put it another way. Suppose I need to hire two people. One will get a certain low, but guaranteed wage, and has the possibility of a substantial bonus if the project is successful. The other only makes money if the project is successful, and he doesn't get all of the profits if the project is successful, and if it takes a loss, he is the only one who loses money. Tell me, which position would you apply for?

In what sense could this guy possibly believe in capitalism?