“When Edsel Ford died and Henry Ford had to reorganize his company board of directors there was a good deal of discussion of changes in “the Ford Empire.” Metaphors comparing a businessman with a monarch have become common. But the business man is not sovereign. On the market sovereignty rests finally with the consumer…Whether a businessman has got his wealth through inheritance, or through his own activities, he or his agents must ultimately obey the orders of the buying public.”
Unsigned editorial, N.Y. Times, June 18, 1943
(December 2013) Business owners–from the anonymous innkeeper whose generosity provided shelter to Joseph and Mary1 to the high-tech geniuses behind Space Age technological wonders–exist to serve the public, i.e., consumers. This insight is lost when civil discourse descends to class warfare instead of examining the factors behind a market-based order, which leads to the production of consumer goods and economic prosperity.
The Source of Production
One immigrant who fled Hitler’s Gestapo to emigrate to America in 19402 explained the onset of this complex economic process as follows:
“At the outset of every step forward on the road to a more plentiful existence is saving–the provisionment of products that makes it possible to prolong the average period of time elapsing between the beginning of the production process and its turning out of a product ready for use and consumption.”3
Savings and capital goods are the source of “every attempt to improve the material condition of man; they are the foundation of human civilization.”4 This insight applies to the lemonade stand and the industrial conglomerate.
The Consumer as Sovereign
Entrepreneurs control market-based production. But they are not in control:
“(Entrepreneurs) are at the helm and steer the ship. A superficial observer would believe that they are supreme. But they are not. They are bound to obey unconditionally the captain’s orders. The captain is the consumer.”
“(Consumer) buying and their abstention from buying decides who should own and run the plants and the farms. They make poor people rich and rich people poor. They determine precisely what should be produced, in what quality, and in what quantities.”5
Business owners, whether rich, middle-class or poor6 increase wealth through savings and capital investment, and by serving consumers in an efficient manner. The exception is the monopolist, the beneficiary of an exclusive government privilege obtained through the political process.
More Public Servants Than You Can Imagine
The popular press usually associates the term ‘public service’ with elective office. But more public servants emerge if one understands ownership’s broad distribution. Business owners aren’t limited to large enterprises such as those operated by successive generations of the Ford family. Most are small enterprises never cited in the paper of record. This universe of commerce expands further if one includes indirect owners, i.e., shareholders in mutual funds and various retirement programs. More public servants than you can imagine emerge once you comprehend the following:
Savings and capital lead to goods and services produced for consumers by business owners, the most numerous public servants in a market order.
–Greg Kaza
1 Luke 2:7 (KJV): “And she brought forth her firstborn son, and wrapped him in swaddling clothes, and laid him in a manger; because there was no room for them in the inn.”
2 Ludwig von Mises (1881-1973), an economist , later worked with the Office of Strategic Services against the Axis powers. He authored nine unsigned editorials for The N.Y. Times during WWII.
3 Ludwig von Mises. Human Action (New Haven) Yale University Press, 1949, 1966, p. 260
4 Ibid.
5 Ibid, pp. 269-70
6 The poor are oftentimes prohibited from earning an honest living. One example are licensing requirements that target hair braiders.
