Steve Jobs will go down in history as one of America’s greatest entrepreneurs. It is not an exaggeration to compare him to a Thomas Alva Edison or a Henry Ford. All of these men changed the world forever. They were determined, creative, and unusually brilliant. In the case of Mr. Jobs there is probably not an American that has not in some way used Apple products, whether it be an I-Phone, a computer, or an I-Pod.
The commercial success and acceptance of their exceptional products made all three of the above-mentioned gentlemen very rich. Unfortunately, grand fortunes often attract envy and coercion. The common man on the street believes that the “rich” have too much. The baboonish politician is certain that the wealthy genius should be the victim of coercion in the form of mandatory taxation. In reality, the wealthy genius owes nothing to the common man; by using the products created by the genius, the average citizen has already received much more than he is due.
Let me use an example to illustrate my point. Somewhere in the early 1070’s brilliant scientists at Texas Instruments and other firms figured out how to manufacture a hand-held electronic calculator. While one person is not given total credit for this invention, we can be sure that there were some amazing minds at work. We can also assume that some of these incredibly talented entrepreneurs and engineers became wealthy as a result. For simplicity let’s assume that there was only one inventor of the hand-held calculator who was paid a “reward” of $ 10,000,000 for his/her inventive capability. Yet there was a lot of “effort” (a combination of intelligence, genius, and time) that had to exist to create this remarkable invention. Let’s say that the “effort” could be quantified as 1,000,000 “brilliance units.” As a result, the scientists’ “reward/effort ratio” was $10 million divided by 1 million brilliance units, or a ratio of 10/1 = 10.
Let’s compare the genius to a common worker who performs simple manual tasks that do not demand much skill or brilliance. Assume that the common worker expends just one “brilliance” unit in an entire career as a cleaner of restrooms at a railroad station. If the cleaner earns $10 per hour cleaning toilets, he can purchase an inexpensive hand-held calculator for just one hour of work. The worker’s “effort” to possess the calculator is a mere one hour of work, measured monetarily at $10. Yet, owning a calculator will release this worker from an entire lifetime of drudgery, sparing him from doing mathematical calculations by hand. For years, maybe decades, he will find it easier to balance his checkbook, reconcile hours worked on his time card, and make other calculations. The “reward” that the cleaner receives is tremendous, especially compared to the “effort” he spends cleaning toilets for one hour. Over several years the “reward” of owning a calculator has to be worth hundreds, if not thousands of dollars. Even if the total reward is only $1,000 the common man’s “reward/effort” ratio is $1000/$10 = 100/1. = 100. Ironically, the “reward/effort” ratio for the common man is ten-times the “reward/effort” ratio of the genius.
This happens all the time in capitalism. The genius must produce his product for a tiny fraction of its intrinsic value for the common man to afford it. While the genius is handsomely rewarded, the common man spends only a few minutes of his time to enjoy the wonders of the mind of the genius. I have no idea how my smart phone works; someone a lot smarter than I figured it out. The same is true for my computer, my microwave oven, the climate controlled heating and air-conditioning system in my automobile; I could go on and on. One thing is for sure; if you had put me all alone in a room in 1970 and told me you would not let me out until I had invented the electronic calculator, I would still be in there today.