Undoubtedly spurred by Charles Murray’s recent (and reliably predictable) op-ed, Megan McArdle comments on Jim Manzi’s anti-elitism:
extremely well-educated people from a handful of metropolitan areas, few of whom have ever, say, been responsible for a profit and loss statement, or tried to bring a gas station into compliance with local and federal EPA regulations.
You don’t have to look far to find that 1. all three are fully-credentialed coastal elitists, and 2. none of the three has ever done anything like what McArdle describes. Update: I stand (abashedly) corrected. Jim Manzi is nice enough to comment and point out that he has done both, and that he is in agreement with much that’s stated here.
I have. (Not the gas station, but the P&Ls.) I’ve been a principal and/or equity partner in a whole string of startups, with ultimate values in the tens of millions. I’m doing another now.
I’m also decidedly coastal elite. Not Ivy, but NYU grad school, living on a houseboat in Seattle.
And I’m here to tell you that much of their book- (or blog-, or talk-radio-)learned supply-side thinking is hooey. Business people who spend their time thinking about where they’re going to get investment or credit are losers. Successful businesspeople think about sales and profits. Read: demand.
In all my businesses, I’ve spent less than 5% of my time thinking about government- and regulation-related issues, and even less thinking about funding sources (aside from sales revenues, which absorb say, 80% of my thinking.)
Smart businesspeople also don’t believe that their elitist cohort of credit- (and rent-)seeking capitalist confréres has some magical insight into where production resources should go. So they don’t believe that funneling more money to those elites results in superior allocation of resources. Quite the contrary. Lehman. Enron. Qwest. The list is endless.
Smart businesspeople want to see wealth and income widely distributed — for their own benefit so they can sell to all those people, but also so the wisdom of the crowds can work its magic.
Comments
3 responses to “Murray, Manzi, McCardle, and Coastal Elites: Who Knows What?”
Actually, I have been, and currently am, responsible for the P&L of the software company that I founded, and of which I ‘m chairman (as I have been for another company I previously founded).
I have also helped my dad run his gas station (though I was no way responsible for EPA compliance).
That said, I really do agree with the spirit of:
“Business people who spend their time thinking about where they’re going to get investment or credit are losers. Successful businesspeople think about sales and profits. Read: demand.”
I always said that the only financial metric I needed to focus on was free cash flow.
Also when you say that:
“Smart businesspeople also don’t believe that their elitist cohort of credit- (and rent-)seeking capitalist confréres has some magical insight into where production resources should go. So they don’t believe that funneling more money to those elites results in superior allocation of resources. Quite the contrary. Lehman. Enron. Qwest. The list is endless.”
I also agree with what I think is the spirit of this. I believe that the most of the best technical innovations that we have created have been driven by market interactions between us and our customers in collaboration.
Finally, when you say that:
“Smart businesspeople want to see wealth and income widely distributed — for their own benefit so they can sell to all those people, but also so the wisdom of the crowds can work its magic.”
You’re responding to somebody who wrote an article – for National Review, no less – called “A More Equal Capitalism.”
Best,
Jim Manzi
Heh, “no harm, no foul”. The dialogue helps us get to know each other better eh???
Although I must say frankly I have read enough of McArdle’s mistakes, utter screw-ups, and what appear to me to be purposeful misrepresentations, with either no retraction at all or some pathetic attempt at explaining why she is so dumb. I don’t need to hear bullshit in person. I have no time for adult brats born on third base who go through all their life thinking they hit a triple.
Two of McArdle’s more recent screw-ups in the following links. If I just catalogued her errors over the last year I’d still be typing in this thread in January 2011. Nevermind dating back to her Jane Galt days. If she had the capability to feel shame she would have kept the pseudonym. How does a girl like her keep in good graces with her magazine after multiple blunders I wonder????
http://www.angrybearblog.com/2010/07/megan-mcardle-disappoints-me.html#more
http://www.irvinehousingblog.com/blog/comments/another-ignorant-and-misguided-attack-on-the-30-year-fixed-rate-mortgage/