In a recent campaign speech, Sen. Hillary Clinton said, “It is not rich people who made America great, it is hardworking Americans.” If you are rich, or know someone who is rich, this statement might strike you as extremely odd.
When used in the same sentence, the terms “rich” and “hardworking” make for redundant prose. The rich are frequently driven by a relentless work ethic that causes them to toil extremely long hours in their chosen professions. Successful entrepreneurs, in fact, are rarely successful retirees, given the certain high they get from working hard. And unless they’re among the small percentage of Americans who inherited their wealth, they have become successful — and rich — only because they have solved previously unmet market needs.
Indeed, contrary to the perception that the rich exploit their way to wealth, the surest path to riches involves fulfilling the desires of the vast majority of people who are not rich. For that alone, the rich are central to what has made America great. If you are in doubt about this fact, why not revisit a little business history.
That John D. Rockefeller, forever synonymous with the word “rich,” named his company Standard Oil was no accident. At the time, the kerosene that Americans used to light their homes claimed an average of 6,000 deaths per year. But his consolidation of the previously inefficient and unwieldy kerosene industry made for a commodity that was increasingly accessible and safe for all Americans to use. Safe and efficient became the new standard.
And while Thomas Edison did not invent the light bulb, he created the first commercially viable incandescent bulb for the masses. In founding Edison Electric, thanks to financing from the very rich J.P. Morgan and the affluent Vanderbilt family, he made plain that “We will make electricity so cheap that only the rich will burn candles.”
Edison’s electricity innovations of course threatened Standard Oil’s kerosene products with obsolescence, but with Henry Ford’s founding of his eponymous car company in 1903, there was soon an even greater need for oil byproducts. Ford, who died a very rich man, created the Model T in 1908 with the average American in mind. And sure enough, the $825 price tag in 1908 fell every year thereafter, thus enabling more and more Americans to experience the freedom that comes with motorized transportation.
See the progression? One entrepreneurs’ innovation leads to more innovation and more rich entrepreneurs. The story continues . . .
With Americans increasingly traveling by car, Howard Johnson created a roadside restaurant chain of the same name in 1925. By 1952 it was the largest restaurant chain in the world — one that included affordable lodging for an American population on the go. Recognizing that there was room for more entrants in this space, Ray Kroc bought the small McDonald’s chain of restaurants and arguably made it the best-known brand name in the world.
Then, as America’s middle class grew, consumer needs expanded, opening the door for Sam Walton who in 1962 founded the first Wal-Mart in Bentonville, Arkansas. While Walton’s creation made him America’s richest man, he enriched his customer base by offering previously inaccessible goods not only at low prices, but eventually the lowest prices possible. To this day, Wal-Mart shoppers get a “raise” every time they walk into one of these stores.
More modernly, we have our mega-moguls in the technology space. Bill Gates’s creation of Microsoft made computer-operating software available to the masses while enabling both individuals and businesses to become exponentially more efficient. And the fact that computers are increasingly the norm in businesses, classrooms, and homes is in no small part due to Michael Dell’s innovations with inventory management. Dell made hardware that was once unique, ubiquitous.
Notably, our rich entrepreneurs didn’t stop improving our lives with their commercial genius. From Rockefeller to Ford to Gates, they have established foundations that have and will continue to tackle the problems of education, poverty, and health that vex us to this day. And for tomorrow’s entrepreneurs, the wealth accumulated by our business forebears will serve as capital for new innovations that will continue to make our lives better and more fulfilling.
Hillary Clinton wants to distinguish between the rich and the hardworking. But the two are not mutually exclusive. And while the senator is correct in lauding the efforts of industrious Americans, she is unwise to demean the staggering efforts of the vital few rich who have done so much to make America great.