” Eric Cantor the House Majority Leader, stirred up quite the controversy on Labor Day when hetweeted:
If you enjoy the content at iBankCoin, please follow us on Twitter“Today, we celebrate those who have taken a risk, worked hard, built a business and earned their own success.”
Of course, Labor Day
is a celebration of the worker class, not the capitalist class. But his comments sparked a debate in some circles that has long been raging – this so-called debate about the “job creators” and who really drives job creation in the economy. Unfortunately, the debate often falls on ideological lines as opposed to practical lines. But this is the world we live in. Everything is viewed in black and white when reality is usually somewhere in the middle. This case is no different. I’ll explain briefly.
Late last year I explained the role of the entrepreneur in the capitalist economy. In short, the entrepreneur seeks to provide superior goods and services that ultimately offer consumers a more efficient means of achieving some end. This creates efficiencies which result in greater future consumption, economic expansion and more jobs in the future. The example I’ve used in the past is Alexander Graham Bell, the inventor of the telephone. When Bell invented the phone he destroyed thousands of jobs. Messengers and telegram services were slowly defunct. But Bell created efficiencies through making communication more convenient. And in doing so he helped generate higher economic growth and ultimately more jobs in the future by streamlining what was once an arduous process – long distance communication. Bell created countless jobs by creating this efficiency. In this regard, capitalists, producers and innovators can be seen “job creators”.
