By Sam Waltz
“Don’t eat your seed corn” was an expression oft heard around our Illinois sharecropper’s family farm when I grew up in the 1950s and 1960s. It was an everyday expression in East Central Illinois farm country and most likely, farm country anywhere.
Non-farm business managers and owners may not know that expression, but they know its sentiment.
If it is to be in business tomorrow, a business needs to conserve its working capital today for investment, for liquidity, for job creation, to fund its ability to meet customer needs.
That’s a thought that comes to mind frequently in my work and life, but even acutely so, as we celebrated America’s Fourth of July birthday this past weekend.
As a democratic republic, our great country was founded to, among other things, maximize personal liberty. It’s the theme that cuts through our founding documents, the Declaration of Independence, the Constitution and, most notably, the Bill of Rights, the first 10 amendments to the Constitution.
Our rule of law – more sacrosanct than about anywhere else, except perhaps totalitarian societies where its dramatic enforcement is punitive, is based on the 800-year heritage, also celebrated in June 2015, of the Magna Carta.
Although his position required some royal deference, some of Thomas Hobbes 17th-Century thinking amplified some concepts of liberty from the Magna Carta, and those as well as others inspired the next generation, the American colonies’ own Thomas Paine and Thomas Jefferson as well as later John Stuart Mill, even Alexis de Tocqueville, who astutely noted what seemed in the early 1800s, to be America’s incredible potential.
Hobbes “social compact” inculcated a public morality around obligation, particularly from the “haves” to the “have nots,” but the founding of America assumed that much of that would be voluntary, by local communities, by charitable and fraternal and faith-based support of neighbors.
It seems never to have anticipated in America the social democracy that arose in various forms in Europe, much less the even greater state socialism that provided the springboard for totalitarian communism that lasted much of the 20th Century in Asia and Eastern Europe.
That brings us back to “seed corn” and the July recess of legislatures across America.
The decay and the disappearance of the “citizen legislator” gave way to permanent political elites who find themselves in the necessary position of greater deference to populism. At its heart, populism is about numbers, that is, votes and voters.
Few are those of us who create jobs. Greater are those who are hired to do the jobs, employees. And even greatest are those who are dependent on society, and the confiscation, transfer and redistribution from the productive sectors to the non-productive sectors. Some of the latter is obligatory under “social compact” theory, people taking care of people who can’t take care of themselves.
Beyond that though, business, and business owners who have labored far beyond the norm and put at risk their own lives and savings and a secure future for their families, are seen as “fair game” because they have fewer votes and lesser influence on the process.
America’s new aristocracy is the public-sector employees, those who go to work every day (most days) for us, and who live better than most of the people they serve, earning pensions, for example, that have ceased to exist in the private sector. And benefits that populist legislators in both parties seem too timid to touch.
And in cultivating the loyalty of those people, America’s political leaders are kowtowing to social movements that accelerate the cannibalization of working capital, the “seed corn” of business, and hollow out business.
If you want me to agree that every American should be able to earn $15 per-hour wage, I would heartily agree. Heck, I’d love to see everyone earn $25 per hour. But, if you want me to agree that government should require it as part of its social leveling, and its transfer of income and wealth, I’d say “absolutely not.” It should be set by the market.
Similarly, as he prepares to exit stage left, President Obama in June unilaterally decided – without referring it to Congress even for a vote – that overtime should be available to professionals earning as much as $50,000, even more.
And, in municipalities around the country, government is involving itself in business, mandating sick days and vacation, all issues once handle as part of an employment agreement.
Mine is not an appeal for non-regulation or deregulation of business. No. Business needs regulation, perhaps now more than ever, and, if ever we’re inclined to forget that, the big events of the banking scandals and the smaller events every month somewhere remind us of that.
But, in America’s creep from social democracy to state socialism, the cost is in American liberty, and, ultimately, it’s in the ability of individuals to start and grow businesses, via government’s confiscation of the “seed corn” necessary to fund the transfers and redistribution, the social leveling.