The Difference Between Winning a Lottery vs. Building a Successful Business

by | May 19, 2015 | Business

Obama’s stereotype of all rich people as being “born” into it (hence the lottery analogy) betrays not only willful ignorance, but an irrational hatred of production and success.

Target Businessman

Obama provided a “triple crown” of toxic ideas and attitudes over the last week, expressed via his tirades on the subject of poverty. Apparently, according to Obama himself, his policies of relentless taxation, expansive regulation of business, and executive orders in defiance of Congress and the courts, have not been enough to advance his cause of socialism and fascism. He wants more. And he wants it now.

First, there was his attack on Ayn Rand and others he labels “cold-hearted” advocates of private property and the right to keep what you earn. Next, he attacked Fox News for “making” people be against his policies, and hinted at government action to somehow curb or intimidate them And now the third jewel in the triple crown: Successful people are not responsible for their achievements, says Obama. They’re “lottery winners.”

“If we can’t ask from society’s lottery winners to just make that modest investment, then, really, this conversation is for show,” he said. As an editorial at Investor’s Business Daily (investors.com) reported on 5/13/15:

It’s disturbing enough that the nation’s president has such a disparaging view of the innovators and risk takers who [are] creating new products, better services, new jobs and more prosperity.

But Obama was just getting started. He complained that the rich aren’t just getting richer, they’re increasingly isolating themselves.

“(They) are withdrawing from sort of the commons — kids start going to private schools; kids start working out at private clubs instead of the public parks. An anti-government ideology then disinvests from those common goods and those things that draw us together.”

Draw us together — by force?

If we wanted to be “together” in the ways Obama envisions, then no force would be necessary. If public schools were any good, people would not flock to private education the minute they could afford it (and sometimes even when they can’t.) The same with other government-mandated activities or programs. People would voluntarily, en masse, “invest” and “come together” and do all the other things that Obama, and other progressive statists like him, believe we should do.

As for wealth: How on earth does becoming successful constitute being a “lottery” winner?

Let’s examine some facts. Buying a lottery ticket:

Involves little or no risk or cost;

Involves virtually no mental effort, beyond the purchase of the ticket;

Represents a payoff, if it occurs, based completely on random chance.

Contrast these with facts about accomplishing something big, something that makes you a ton of money:

Involves painstaking risks and huge potential loss;

Involves extraordinary levels of mental effort and/or long, long hours of work, and almost always both;

Represents a payoff, if it occurs, based on the direct result of those efforts, for which there never was a guarantee.

Winning the lottery and succeeding in business have nothing whatsoever to do with each other. They could not be more different. Only someone with no remote understanding of business would think such a thing.

Superficially, the only similarity between a lottery win and huge financial success in business is that neither is likely, and neither is guaranteed. But the similarity ends there. Financial, entrepreneurial or any other kind of achievement has everything to do with effort, risk and the ability to identify a vast market for a particular product or service at the right time.

By the way, the payoff to the beneficiaries of new technologies like electricity, computers, Internet technology, life-saving drugs, and the like, is so vast (and sometimes priceless) that even the millions or billions received by those who create these products pale in comparison to the life-changing value gained by others. However, that’s not the primary justification for leaving wealth in the hands of those who earned it; the fact that it’s their money (and it’s not the government’s money) is the justification.

Obama is guilty of the crudest and most ignorant form of prejudice in America — or elsewhere — today: prejudice against success in business.

Prejudice is generally characterized by irrational fear mingled with ignorance. Consider Jim Crow-era prejudice against blacks. Anti-black racists were usually ignorant and inexperienced with black people, considering them subhuman and also irrationally afraid of them. Ditto for anti-gay harassers and killers. Usually, such people know little or nothing about homosexuality, gay or lesbian individuals, and fear that they will molest children or spread diseases, even with insufficient or no evidence in support of such claims.

We’re right to reject prejudice against blacks, gays and others, and to call it what it is. Why not the same with rich people?

Obama wants us to think that most people who are rich are born that way, inherit it, or have it handed to them on a silver platter. That’s simply not true.

Statistics on what percentage of wealth is inherited vary somewhat, and interpretations of the statistics vary even more. However, all of the statistics I found indicated that the majority of wealth held by individuals in the United States is not inherited, and that inherited wealth has been steadily declining.

One of the most recent studies I found was reported at the washingtonpost.com on 11/4/11:

In 2007, the last year [researchers] Wolff and Gittleman look at, wealth transfers (mainly inheritances, but also including gifts) made up, on average, 14.7 percent of the total wealth of the 1 percent (more specifically, the top 1 percent in terms of wealth). Interestingly, inheritance’s share has declined over time. In 1992, 27 percent of the wealth of the top 1 percent came from wealth transfers.

The Wall Street Journal‘s online blog reported on 1/14/08:

According to a study of Federal Reserve data conducted by NYU professor Edward Wolff, for the nation’s richest 1%, inherited wealth accounted for only 9% of their net worth in 2001, down from 23% in 1989. (The 2001 number was the latest available.)

Wealth, to be accumulated, first has to be created (See “Francisco’s Money Speech” by Ayn Rand–ed.) Even if most of the wealthy people in America inherited it, that offers no legal or moral defense for wealth redistribution. Those who created the money are entitled to spend it on whatever or whomever they wish — and if that happens to be their children and their families, it’s their right. It’s not the government’s role to play “God” and decide that some have “too much” wealth while others have “too little.” Doing so, by definition, involves a violation of private property rights and individual rights more generally; once you concede this role of “God” to government, then government becomes a corrupt and manipulative force in the daily lives of all citizens, culminating — sooner or later — in an outright socialist or fascist state of some kind.

Obama’s stereotype of all rich people as being “born” into it (hence the lottery analogy) betrays not only willful ignorance, but an irrational hatred of production and success. We can only speculate on where that comes from. He has never produced anything of significance himself. His career has been almost exclusively tied to politics, i.e. government. There’s nothing wrong with a career in government when it’s dominated by a commitment to the defense and protection of individual rights, e.g., the right to life, liberty, property and the pursuit of happiness. But Obama’s type of politics has always and explicitly been connected to “spread the wealth.” It’s not about the creation, production or protection of anything.

It’s tempting to conclude that as Obama’s time in office nears its end, he’s starting to lose his mind. No, that’s not it. He’s merely dropping the pretense that he has any slight regard for private property, free enterprise, capitalism or private property rights at all. He’s going a step further, by attacking the virtue and nature of productivity itself. It’s irrational prejudice, no less than the anti-black prejudice whose defeat he was supposed to represent by becoming president. Those of us paying attention knew that this was what Obama thought and felt all along.

The United States would still be an impoverished wilderness were it not for the principles of private property and capitalism Obama now attacks on a daily basis. The United States’ unprecedented success in prosperity and invention was no lottery-like accident.

Dr. Michael Hurd is a psychotherapist, columnist and author of "Bad Therapy, Good Therapy (And How to Tell the Difference)" and "Grow Up America!" Visit his website at: www.DrHurd.com.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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