Video: The morality of profit

posted at 2:16 pm on May 19, 2011 by Ed Morrissey

The Atlas Network has an interesting video this week insisting on the morality of profit, especially in contrast with taxpayer-financed subsidies. The difference lies in the voluntary nature of the exchange between consumers and producers in the former and the lack thereof in the latter. The video starts with Atlas VP Tom Palmer objecting to the common characterization of wealthy philanthropists as “giving back” their wealth to society. Palmer uses Microsoft founder Bill Gates to pose the question — did Gates “take” from society in the first place, or did he add more value than he received?

Anyone who has dealt with “blue screens of death” might object to this particular example, but Palmer is correct. Gates, along with Steve Jobs and Steve Wozniak at Apple and any number of entrepreneurs in the computer industry, added almost immeasurable value to society by personalizing the computer and democratizing its power.  Gates used a more open-source approach than Apple, which allowed for less central control of that expansion of power and value and allowed for more creativity.

Of course, Gates and Warren Buffet might feel rather fortunate to have lived in a free-market society where this kind of innovation and expertise gets rewarded, and the “giving back” aspect of their philanthropy can reasonably be taken as a more spiritual approach than one based out of guilt, as Palmer assumes in the video.  However, given the class warfare routinely targeting those who add value — and jobs — to our society, Palmer’s approach works in this video quite well.


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Gates used a more open-source platform approach than Apple, which allowed for less central control of that expansion of power and value and allowed for more creativity.

And it wasn’t really Microsoft that did that, it was the IBM PC architecture that encouraged clone makers to make alternative implementation of the hardware.

pedestrian on May 19, 2011 at 2:27 PM

Gates used a more open-source approach than Apple, which allowed for less central control of that expansion of power and value and allowed for more creativity.

Mac users would beg to differ.

somewhatconcerned on May 19, 2011 at 2:28 PM

Excellent points.

Another narrative due for destruction is that of the ‘selfless and ‘giving’ public servant’. Now that salaries, benefits and pension data shows that they are ahead of private business employees in all categories as well as job security, shouldn’t the public unionized employees be the ones disparaged as greedy and selfish?

slickwillie2001 on May 19, 2011 at 2:29 PM

Key questions to ask lib… er, “progressives”:

- Does the act of becoming wealthy make others poorer?
- How much of what we earn is ours?
- Does anyone have a “right” to take another person’s property?
- How much money is a person entitled to when they are born?

Ernesto? crr6? How about it?

Bat Chain Puller on May 19, 2011 at 2:31 PM

Mac users would beg to differ.

+1!

parteagirl on May 19, 2011 at 2:31 PM

Mac users would beg to differ.

somewhatconcerned on May 19, 2011 at 2:28 PM

Mac users are a fickle bunch. Microsoft is, and always has been, a software company. What Ed means is that Microsoft licenses out their software for use on system architecture that anyone can manufacture. Apple is, and always will be, a hardware company, which is why the first generation of Macs could not be opened up and expanded with additional hardware.

I don’t think one approach is necessarily morally superior to the other, but back in the late 1970′s, people thought that Bill Gates was nuts for trying to productize series of 1′s and 0′s that had no material representation. Now that Apple has reasserted its hardware dominance somewhat, history may turn out to prove those naysayers correct.

gryphon202 on May 19, 2011 at 2:34 PM

- How much money is a person entitled to when they are born?

Bat Chain Puller on May 19, 2011 at 2:31 PM

I want Obama to answer this one. He seems to know when enough is enough.

MeatHeadinCA on May 19, 2011 at 2:37 PM

Uh….anti trust suits Uh…. monopolies……I imagine this video with a school house rock jingle. Just who is the target audience Middle Schoolers? I’m sure that Microsoft doesn’t lobby our government\ (isn’t that how special interest work?)….what’s this guy in the video smoking?

Dr Evil on May 19, 2011 at 2:37 PM

Gates is a bad example. He has recently espoused socialist ideals with respect to taxation. Once someone gets that wealthy, they become, shall we say, philosophical. Witness almost all notable billionaires. They all have some kind of guilt complex.

keep the change on May 19, 2011 at 2:38 PM

It’s often a psychological truism that gestures towards children often have the opposite effect. For example, if you give a child everything he wants, he becomes spoiled, and then develops a chronic feeling of emptiness inside that no amount of material things can fill. If you school another child in morality and are always on him to do the right thing, then he may indeed become a model citizen who does what he’s supposed to, but doesn’t act from his heart, but rather out of a sense of obligation.

Don’t the social engineers understand if you FORCE someone to do the “moral” thing, it breeds resentment, and extinguishes the feeling of joy people get inside when they freely help others out of a feeling of genuine compassion, and not out of fiat, law, or obligation?

Paul-Cincy on May 19, 2011 at 2:40 PM

Gates used a more open-source approach than Apple, which allowed for less central control of that expansion of power and value and allowed for more creativity.

Mac users would beg to differ.

somewhatconcerned on May 19, 2011 at 2:28 PM

Not necessarily. The open hardware platform that Windows was built upon was expandable and customizable at a time when Apple’s was not.

That said, now Apple’s approach of simplicity and minimization of customizability is in high demand, as computers have grown more complicated and fewer and fewer people want to build their own PCs. It’s the same principle in motion: by putting themselves in the user’s shoes, as Palmer illustrates, Apple is meeting a new demand for ease-of-use, and profiting by delivering it.

Everybody wins.

Caiwyn on May 19, 2011 at 2:42 PM

Apple is, and always will be, a hardware company, which is why the first generation of Macs could not be opened up and expanded with additional hardware…

gryphon202 on May 19, 2011 at 2:34 PM

Apple motivated a sea-change in video editing with Final Cut Pro, as well as personal music via iTunes, just to name two software apps.

But either way, “creative” is usually the last thing that comes to mind when I think of Microsoft.

somewhatconcerned on May 19, 2011 at 2:42 PM

Mac users would beg to differ.

somewhatconcerned on May 19, 2011 at 2:28 PM

The statement is true. Apple was selling their hardware fitted with their software only. No one else could sell software for the original Apple computers and Apple decided to charge an arm and a leg for every piece of software (even their fonts were very expensive!) As a computer buyer back in the early 80′s, that put a really bad taste in my (and others’) mouth, and as a result I haven’t bought anything Apple ever since. IBM/Microsoft, by contrast, had an open approach that spurred many software developers to produce products that competed and kept prices low and sped the development. Not to say that that has been flawless but accounts for the fact that Apple had a relatively low market share in the computer field for many years.

Christian Conservative on May 19, 2011 at 2:43 PM

But either way, “creative” is usually the last thing that comes to mind when I think of Microsoft.

somewhatconcerned on May 19, 2011 at 2:42 PM

Without MS, the personal computer would not exist as we know it.

lorien1973 on May 19, 2011 at 2:47 PM

Mac users would beg to differ.

somewhatconcerned on May 19, 2011 at 2:28 PM

Could it be because

http://www.digitaltrends.com/computing/apple-causes-religious-reaction-in-brains-of-fans-say-neuroscientists/

I don’t really follow what Bill Gates says, but I think the video misses the point of what people mean by giving back. Everyone benefits from the countless generations of parents providing for their children, and people paying taxes to build roads, etc that will yield benefits long after the bonds are paid off. Everyone, not just Bill Gates, benefits from all the work of other people previous generations, which in Gates case allowed him to create so much value. Without the contributions given by other people, it would have taken Bill much, much longer to develop his products.

pedestrian on May 19, 2011 at 2:47 PM

Mac users make their choices, Windows users make theirs. Which product is better or blue screens of death have no bearing on the point this guy is making. What Windows may lack in reliability (not really a major issue anymore) it makes up for in overall lower cost and the fact it will run 1000′s of programs the Mac won’t. Either way, irrelevant to the point.

echosyst on May 19, 2011 at 2:51 PM

Without MS, the personal computer would not exist as we know it.

lorien1973 on May 19, 2011 at 2:47 PM

There was a thriving industry based around CP/M and others when Microsoft came along. If IBM had chosen one of them, they would have copied Xerox instead of Microsoft.

pedestrian on May 19, 2011 at 2:52 PM

I like the GPA redistribution example. Money is no different than the grades you were “given” in college. Students who were asked to give some of their GPA to less fortunate students didn’t want to, because they had earned those grades.

Monetary profit is exactly the same.

hawksruleva on May 19, 2011 at 2:52 PM

Bat Chain Puller on May 19, 2011 at 2:31 PM

Great questions.

mikeyboss on May 19, 2011 at 2:53 PM

Till Bill Gates puts in his 2 coppers he can just shut up.

Tommy_G on May 19, 2011 at 2:55 PM

Mac users would beg to differ.

iPod, iPad, and iPhone users would beg to differ, and there are a lot more of them than Mac users.

Bob's Kid on May 19, 2011 at 3:06 PM

Mac users would beg to differ.

somewhatconcerned on May 19, 2011 at 2:28 PM

You have to be pretty creative to screw up BSD.

Without MS, the personal computer would not exist as we know it.

lorien1973 on May 19, 2011 at 2:47 PM

In spite of ms the personal computer exists.

jdkchem on May 19, 2011 at 3:15 PM

This isn’t a Mac vs PC thread, however as a Mac user, there are …no, ain’t going there.

pedestrian on May 19, 2011 at 2:47 PM

I think you miss the point. One can parse something to smithereens… well, you just did.

Uh….anti trust suits Uh…. monopolies……I imagine this video with a school house rock jingle. Just who is the target audience Middle Schoolers? I’m sure that Microsoft doesn’t lobby our government\ (isn’t that how special interest work?)….what’s this guy in the video smoking?

Dr Evil on May 19, 2011 at 2:37 PM

When the idiotic anti-trust suit against Microsoft went down, Microsoft had no lobbyists and made no political contributions. That suit should serve as an example why a major company has to hire lobbyists for survival. Corruption is caused by the enormous power the government wields.

cartooner on May 19, 2011 at 3:21 PM

Without MS, the personal computer would not exist as we know it.

lorien1973 on May 19, 2011 at 2:47 PM

If Gary Kildall hadn’t been out flying his plane on the day IBM called, the PC would have launched with CP/M and Microsoft would have merely provided Basic, C, and Pascal. The PC would have existed without Microsoft, at least until it was replaced by a browser and the cloud. Beyond some good “back office” products it’s not clear where Microsoft will play a role in the world of computer applications. Gates was an astute businessman–at least until he handed the company over to Steve Balmer.

dedalus on May 19, 2011 at 3:32 PM

In spite of ms the personal computer exists.

jdkchem on May 19, 2011 at 3:15 PM

this

John the Libertarian on May 19, 2011 at 3:34 PM

The moral question never ever lies in the “thing.” The moral questions always lies in the person.

Profit is not good or bad. People are good or bad.

j_galt on May 19, 2011 at 3:39 PM

Uh….anti trust suits Uh…. monopolies……I imagine this video with a school house rock jingle. Just who is the target audience Middle Schoolers? I’m sure that Microsoft doesn’t lobby our government\ (isn’t that how special interest work?)….what’s this guy in the video smoking?

Dr Evil on May 19, 2011 at 2:37 PM

Monopolies, for all that they are not optimal for maximizing overall production, are still moral when they involve voluntary transactions. The customer is still getting more worth than money he pays — just not as much more than if there was market competition.
Still, it is good to have some mechanism to beat down monopolistic tendencies.

Count to 10 on May 19, 2011 at 3:46 PM

Oh for crying out loud, this was not an argument about the morality of Mac vs MS.

It is an argument about the morality of voluntary vs involuntary exchanges, and that profit is an realization of the extra value created after costs, thus increasing overall wealth.

Wake up and smell the starbucks.

Saltysam on May 19, 2011 at 3:46 PM

I’m surprised this is all so focused on gates’ “contribution” through Windows. To me, its the Gates Foundation which is his true lasting legacy.

KMC1 on May 19, 2011 at 3:55 PM

I’m surprised this is all so focused on gates’ “contribution” through Windows. To me, its the Gates Foundation which is his true lasting legacy.

KMC1 on May 19, 2011 at 3:55 PM

Then you aren’t getting it. The amount of wealth he produced not only far outstrips the charity that he is giving away, it is the reason he was compensated with his share in the first place.

Count to 10 on May 19, 2011 at 4:01 PM

Gates was a bad example. Was it moral to use IBM DOS to build MS-DOS?

gbear on May 19, 2011 at 4:06 PM

Count to 10 on May 19, 2011 at 4:01 PM

It is amazing to me how the most basic of concepts baffles so many.

Saltysam on May 19, 2011 at 4:07 PM

For those who think todays PC are harder to assemble never configured an AT to use multiple serial printers and a modem using DIP switches to set IRQ’s.

gbear on May 19, 2011 at 4:10 PM

It’s the same principle in motion: by putting themselves in the user’s shoes, as Palmer illustrates, Apple is meeting a new demand for ease-of-use, and profiting by delivering it.

Everybody wins.

Caiwyn on May 19, 2011 at 2:42 PM

Especially simple people. You don’t even have to be fully literate.

Squiggy on May 19, 2011 at 4:18 PM

When the idiotic anti-trust suit against Microsoft went down, Microsoft had no lobbyists and made no political contributions. That suit should serve as an example why a major company has to hire lobbyists for survival. Corruption is caused by the enormous power the government wields.

cartooner on May 19, 2011 at 3:21 PM

Excellent.

This used to be the instinctive radar built into the American DNA. Many have had this axiomatic knowledge bred out of them, and are now the brainless automatons of the State that we find ourselves up against in the electoral process.

Saltysam on May 19, 2011 at 4:34 PM

Mac users would beg to differ.

somewhatconcerned on May 19, 2011 at 2:28 PM

Douglas Engelbart would beg to disagree with Gates, too.

profitsbeard on May 19, 2011 at 4:43 PM

Uh….anti trust suits Uh…. monopolies……I imagine this video with a school house rock jingle. Just who is the target audience Middle Schoolers? I’m sure that Microsoft doesn’t lobby our government\ (isn’t that how special interest work?)….what’s this guy in the video smoking?

Dr Evil on May 19, 2011 at 2:37 PM

Antitrust is bullshit. Only a government can create a [coersive] monopoly.

The Antitrust laws—an unenforceable, uncompliable, unjudicable mess of contradictions—have for decades kept American businessmen under a silent, growing reign of terror. Yet these laws were created and, to this day, are upheld by the “conservatives,” as a grim monument to their lack of political philosophy, of economic knowledge and of any concern with principles. Under the Antitrust laws, a man becomes a criminal from the moment he goes into business, no matter what he does. For instance, if he charges prices which some bureaucrats judge as too high, he can be prosecuted for monopoly or for a successful “intent to monopolize”; if he charges prices lower than those of his competitors, he can be prosecuted for “unfair competition” or “restraint of trade”; and if he charges the same prices as his competitors, he can be prosecuted for “collusion” or “conspiracy.” There is only one difference in the legal treatment accorded to a criminal or to a businessman: the criminal’s rights are protected much more securely and objectively than the businessman’s.
“Choose Your Issues,” The Objectivist Newsletter, Jan. 1962, 1.

ebrawer on May 19, 2011 at 4:55 PM

I have seen Buffet and Gates on some videos talking about how lucky they were to grow up at a certain time, and then tell the kids in the audience maybe they can be lucky too.

How condescending! Luck just can’t be replicated. No matter how hard anyone tries, how could you work at being lucky?

On the other hand if they were honest they would say they worked very very hard at what they do. Gates might have been lucky living across from a computer terminal that he had access to, but who else would have spent 10 hours a day everyday for 5 or 6 years programming? Bill Gates in fact did have over 10,000 hours of programming before he turned 18. By 18 he was one of the most experienced programmers in the world.

Now that can be duplicated, that anyone can do. But you could put 10,000 kids in front of a computer terminal in the 70s and how many would still be trying to program a month later? 6 months later? 6 years later?

Only Bill Gates. He earned his money the old fashion way by earning it. Why is he ashamed of that?

And truth is that’s why Buffet has so much money, he put in ungodly hours to learn something and became very very good at what he does. And that is the lesson for all of us, that is the free enterprise system, if you want to make a ton of money, work crazy hours at something you love and get really really good at it. Make a better mouse trap!

odannyboy on May 19, 2011 at 5:11 PM

ebrawer on May 19, 2011 at 4:55 PM

Rightt…. Bill Gates played fair and didn’t rig the playing field in his favor, Sure I believe that. NOT!

Dr Evil on May 19, 2011 at 5:58 PM

The video starts with Atlas VP Tom Palmer objecting to the common characterization of wealthy philanthropists as “giving back” their wealth to society. Palmer uses Microsoft founder Bill Gates to pose the question — did Gates “take” from society in the first place, or did he add more value than he received?

-
I reject the premise… Bill did not take… he was given. Palmer mistakenly states that you can only “give back” if you have first taken. You can just as easily give back that which was first given to you.
-
Nit picky on my part… yup.
-

RalphyBoy on May 19, 2011 at 8:26 PM