IT'S ALL ABOUT THE $$$: D'Souza proves Marx was wrong about capitalists — Transcript

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1. 0:00D'Souza: Here in Palo Alto, there's a Ritz-Carlton.
2. 0:03Imagine a guy, who is a valet parking cars, at the Ritz-Carlton here in Palo Alto.
3. 0:09This guy is paid, let's say, 15 dollars an hour. Let's say that he works
4. 0:1510 hours a day, so he makes 150 bucks. And this guy is now thinking to himself,
5. 0:21"In those 10 hours, how many cars did I park? I parked 100 cars.
6. 0:29And how much does the Ritz-Carlton charge for someone to park their car?
7. 0:3430 dollars. So how much did the Ritz-Carlton make as a result of
8. 0:39me parking those 100 cars? 3,000 dollars. How much was I paid out of that
9. 0:463,000 dollars? 150 dollars. 3,000 minus 150 gives 2,850 dollars. Who gets that?"
10. 1:00From the valet's point of view, this is a very unjust system because, "I'm doing
11. 1:04the work, and some other guy is taking the cash." This argument about the
12. 1:11injustice of captialism is actually anchored in, I think, a rather
13. 1:16interesting argument that was made by Marx himself.
14. 1:19There's a big difference between the revenue generated
15. 1:24by the sales and the cost. That difference Marx calls "surplus value."
16. 1:31We call it "profit." Marx's question, and quite a profound question, is
17. 1:37"Who gets that?" Marx's assumption is that that belongs 100 percent to labor.
18. 1:45Why? Because labor made the goods. The capitalist supplied nothing more
19. 1:51than the money, which has already been recompensed through interest.
20. 1:56My view is that this description, convincing as it is at first glance,
21. 2:03is a completely false representation of how businesses actually run.
22. 2:08Consider, for a moment, the captialist. In America today, the vast majority of
23. 2:13capitalists supply a lot of things, but the one thing that they do not supply
24. 2:18is capital. Did Steve Jobs actually put up all the capital for Apple? No,
25. 2:24he went to a bank. The bank supplied the capital.
26. 2:29This is true of Gates and everyone down the list. The bottom line of it is
27. 2:33the captialist supplies three things that Marx completely ignores that are
28. 2:37actually of far greater value than capital and actually entitle the capitalist to
29. 2:42a share of the profit. Marx, in a sense, submerges these three factors
30. 2:47completely. First, the capitalist has the idea for the business.
31. 2:52Without the idea, there's no business. Labor doesn't think of the idea,
32. 2:56the capitalist does. It's his or her idea. They do it. Second, the capitalist
33. 3:02organizes the business. Here, you have this valet, and he goes, "I park the cars.
34. 3:06I need all the money." The truth of it is the reason you're getting 30 dollars
35. 3:11to park a car is you're at the Ritz-Carlton. Somebody built the Ritz-Carlton.
36. 3:14Somebody thought of it. Somebody paid all the capital costs. Sombody took out
37. 3:18the insurance. You didn't think of that. If you come to my house and want to
38. 3:22park my car, I'll pay you 50 cents. [Audience laughter]
39. 3:25D'Souza: The reason that you're getting 30 dollars is not because of you.
40. 3:29It's not your labor that's worth 30 dollars. It's the resort that's worth 30 dollars,
41. 3:34and you didn't create that. The capitalist has the idea for it,
42. 3:38he organizes it, and, third, he takes all the risk,
43. 3:42a very important factor. The capitalist gets paid at the end. If the business has
44. 3:46a bad quarter, Tim Cook can't go to Apple and say, "Sorry guys, I'm not
45. 3:54going to pay you for six months. It's looking bad for us this half of the year."
46. 3:58No, he has to pay them anyway. Labor is trading a fixed wage for security,
47. 4:03but the entrepreneur is taking the risk that he might get nothing out it,
48. 4:07and he could even lose money. The truth of the matter is that in fairly assessing
49. 4:12the just rewards of capitalism, you have to match what the entrepreneur actually
50. 4:18contributes. To say, "it's just capital," it seems to me, is a gross
51. 4:22misunderstanding of how business is actually conducted in the United States
52. 4:26and all around the world.