Capitalism and the Winners’ Society

Jeopardyhost Ken Jennings

I just did something I used to do frequently, but haven’t done for years: I watched a full episode of Jeopardy. Television has lost its allure in recent years, and Jeopardy’s appeal to shallow knowledge of inconsistent topics has become an emblem of modern society. Too many people know surface-level flotsam about nearly everything, giving us all a false sense of expertise on topics where we’re profoundly ignorant.

One player, working with speed and confidence, managed to rack up the largest cash haul on the stage, then he hit a Daily Double. He decided to risk it all on a question about corporate ad slogans. Yes, he risked it all--and lost it all. He went from being in the lead, to having nothing.

American capitalism loves winners. I’ve witnessed journalists, economists, and social media stans tripping over their own packers to lavish praise on billionaire CEOs. It’s often unintentionally hilarious to watch White boys without two dimes to rub together, invent phony narratives to explain why Elon Musk, Jeff Bezos, and Mark Zuckerberg are epoch-making geniuses, not just winners of America’s greenback lottery.

Business writers I've reviewed on this blog have lavished praise on society's winners. They will perform seriocomic contortions to justify why, say, Jack Welch or Sam Walton are intrepid adventurers and the epitome of moneyed masculinity. To critics like me, these paragons of capitalism are highway robbers and guttersnipes who hoard the wealth created by others. But their fluttering groupies insist their favorite CEOs generated their wealth by rubbing two sticks together in the woods.

Elon Musk

Among these praises, one seems pointedly recurrent: billionaires deserve their riches because they risked their own seed capital. Risk looms large in billionaire mythology. Michael J. Sandel quotes philosopher Robert Nozick as saying that all wealth is the product of bold risk-taking and unique innovation, the outcome of intrepid individuals who somehow exist in an economic vacuum.

However, even if we accept the risk mythology, it fumbles on one level: we evaluate risks by their success. It's easy to praise Bill Gates or Steve Jobs for their success, when we don't simultaneously evaluate why the founders of Sun Microsystems and Commodore International flopped so ignominiously. When we only look at those who risked and won, it's easy to think risk leads to reward.

But for every world-renowned success, there are uncountable failures. Eighty percent of American companies fail within five years. A handful of actors become million-dollar stars, but most limp along on day jobs before leaving the industry altogether. For every Facebook, there's a bloodbath of MySpaces, Geocities, and Friendsters. Failure, not success, is the usual outcome for risky courage.

Watching Jeopardy, that one player who lost everything didn't give up. He slowly won back the money he lost, then in Final Jeopardy, gambled everything again. He turned out to be the only player to recognize a question about Dashiell Hammett, and finished the game with almost four times as much as the second-place finisher. In under thirty TV minutes, he went from wearing egg on his face, to becoming the reigning champion.

Bill Gates

But that outcome wasn't inevitable. He won, not only because of his own wide-ranging knowledge, but because the rules called a halt to the game before he had a chance to lose everything again. He benefited from writers who corresponded with his backlog of trivia knowledge. And he handled the buzzer effectively--something many past players have said isn't easy.

When Elon Musk and his giddy evangelists call him a self-made billionaire, they overlook the environment that created his wealth. As Giblin and Doctorow write, the monopsony economy that makes Musk's companies possible results from public policy and social order. Regulations written to prevent past economic abuses, become barriers to entry for small start-up entrepreneurs. Inequality festers unchecked.

This doesn't mean risk-takers don't deserve reward. Musk, Bezos, Gates, and others did indeed risk their, or their investors’, seed capital, and could've eaten dust. But that doesn't mean they work alone. They used others’ skills, labor, and time. They benefited from technicians trained in state schools. Many, like Musk, received direct government subsidies to offset the costs which their risks carried.

American rhetoric in support of capitalism emphasizes the goodness of taking a risk. But in practice, our economy doesn't reward those who take a risk, but those who win. And victory is always socially conditioned. Success means what customers pay for, not what billionaires prefer. There's literally no difference between Microsoft and Sun Microsystems, except that one guessed right.