D'Souza: Here in Palo Alto, there's a Ritz-Carlton.
Imagine a guy, who is a valet parking cars, at the Ritz-Carlton here in Palo Alto.
This guy is paid, let's say, 15 dollars an hour. Let's say that he works
10 hours a day, so he makes 150 bucks. And this guy is now thinking to himself,
"In those 10 hours, how many cars did I park? I parked 100 cars.
And how much does the Ritz-Carlton charge for someone to park their car?
30 dollars. How much did the Ritz-Carlton make as a result of
me parking those 100 cars? 3,000 dollars. How much was I paid out of that
3,000 dollars? 150 dollars. 3,000 minus 150 gives 2,850 dollars. Who gets that?"
From the valet's point of view, this is a very unjust system because, "I'm doing
the work, and some other guy is taking the cash." This argument about the
injustice of captialism is actually anchored in, I think, a rather
interesting argument that was made by Marx himself.
There's a big difference between the revenue generated
by the sales and the cost. That difference Marx calls "surplus value."
We call it "profit." Marx's question, and quite a profound question, is,
"Who gets that?" Marx's assumption is that that belongs 100 percent to labor.
Why? Because labor made the goods. The capitalist supplied nothing more
than the money, which has already been recompensed through interest.
My view is that this description, convincing as it is at first glance,
is a completely false representation of how businesses actually run.
Consider, for a moment, the capitalist. In America today, the vast majority of
capitalists supply a lot of things, but the one thing that they do not supply
is capital. Did Steve Jobs actually put up all the capital for Apple? No,
he went to a bank. The bank supplied the capital.
This is true of Gates and everyone down the list. The bottom line of it is
the captialist supplies three things that Marx completely ignores that are
actually of far greater value than capital and actually entitle the capitalist to
a share of the profit. Marx, in a sense, submerges these three factors
completely. First, the capitalist has the idea for the business.
Without the idea, there's no business. Labor doesn't think of the idea,
the capitalist does. It's his or her idea. They do it. Second, the capitalist
organizes the business. Here, you have this valet, and he says, "I park the cars.
I need all the money." The truth of it is the reason you're getting 30 dollars
to park a car is you're at the Ritz-Carlton. Somebody built the Ritz-Carlton.
Somebody thought of it. Somebody paid all the capital costs. Sombody took out
the insurance. You didn't think of that. If you come to my house and want to
park my car, I'll pay you 50 cents. [Audience laughter]
D'Souza: The reason that you're getting 30 dollars is not because of you.
It's not your labor that's worth 30 dollars. It's the resort that's worth 30 dollars,
and you didn't create that. The capitalist has the idea for it,
he organizes it, and, third, he takes all the risk,
a very important factor. The capitalist gets paid at the end. If the business has
a bad quarter, Tim Cook can't go to Apple and say, "Sorry guys, I'm not
going to pay you for six months. It's looking bad for us this half of the year."
No, he has to pay them anyway. Labor is trading a fixed wage for security,
but the entrepreneur is taking the risk that he might get nothing out it,
and he could even lose money. The truth of the matter is that in fairly assessing
the just rewards of capitalism, you have to match what the entrepreneur actually
contributes. To say, "It's just capital," it seems to me, is a gross
misunderstanding of how business is actually conducted in the United States
and all around the world.