As often as we hear words like corporation, entrepreneur and unemployed, it is easy to lose perspective of what these words actually mean.
Take a moment to think about the word corporation. It might call to mind imagery of big buildings, helicopters and over-paid executives, which is understandable considering the way corporation is used as nearly a pejorative term by politicians and media pundits.
But consider this: if a corporation has to pay a tax bill of $10 million, who pays it? Can we tax the floor of an office building? No. Corporations are comprised of people — executives, employees, stockholders and even customers — and the costs of taxes on a corporation are dispersed among these people. Ultimately, people — human beings — pay all taxes.
The point here is not to argue about corporate taxes, but to illustrate that everything boils down to people.
In 1923, a Brooklyn taxidermist named Clarence Birdseye started a company with an electric fan, buckets of brine and cakes of ice. His company went bankrupt in 1924 due to lack of interest from consumers. But Birdseye did not give up. He thought his idea was worth something, and he decided to continue to pursuing it.
Five years later, in 1929, the Goldman-Sachs Trading Corporation and the Postum Company purchased Birdseye’s trademarks and patents for $22 million, or over $290 million in today’s currency. What was this brilliant idea? Frozen peas.
Birdseye invented, and perfected, the quick-freezing of frozen meat and vegetables, and today the Birdseye brand remains one of the leading names in frozen food.
To quote the inventor himself, “Only through curiosity can we discover opportunities, and only by gambling can we take advantage of them.”
This man was an entrepreneur, turned unemployed, turned corporate giant. The risks he took made him wealthy, but the wealth he created for the average person far outweighs his personal take. The average person can now afford to have fresh vegetables and meat without having to grow or hunt it. That is only the case because Clarence Birdseye took risks, failed and persisted despite his failure.
Henry Ford did not revolutionize the automobile industry to comply with a government mandate. Thomas Edison did not gain a single of his 1,000-plus patents because of an economic stimulus package. Birdseye did not use a single tax dollar in the invention of a system that would enable the poor to afford fresh food.
Governmental institutions cannot create anything. They can redistribute, but that is wholly unproductive. Unleashing the government cuts the pie into smaller pieces. To unleash entrepreneurs makes the pie bigger. They take risks, they create wealth and everyone is better off.
If we want further prosperity and wealth for all people, government should set free the economic potential of the individual risk taker and get out of the way.
Consider the risks imposed by government on small business. The government allows entrepreneurs to keep 50 percent of their profits (due to taxes), but 100 percent of their losses. Minimizing risks for entrepreneurs not by individual subsidies but by less restrictive and extractive forces of government functions as boon for all Americans.
Frozen peas, like all of the great achievements of civilization, came not from government or business, but from people. People who were curious enough to discover opportunities and brave enough to take advantage of them. The question now is who’s next?
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Can frozen peas solve our economic problems?
JoJo Dodd
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November 19, 2013
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