Profit Motive

                                             Profit Motive

Despite the fact that business ranks as one of the top ten college majors, it is true that many college graduates today would prefer to work for a non-profit organization than a profit making one.  There would appear to be a stigma attached to working for personal gain.  To many working for profit is ignoble, even crass. 

This attitude is not just found in the young but in all levels of our society.  It helps to explain the contempt we see directed today at words like Capitalism and Capitalist, both of which are terms of opprobrium in more than progressive circles. Indeed, popular fiction has for centuries ingrained in us a cardboard stereotype of the crass, boring, money-grubbing, overweight, usually lecherous business tycoon. 

Although the caricature of the avaricious old miser can be found in literature almost from the beginning, it took American cinema to place it into our minds like an implant. One just has to think of the elaborate musicals of the 1930s where poverty stricken artists and showmen had to persuade paunchy old businessmen to come up with the dough to finance their creative ventures. Inevitably, they had to be plied with lovely young chorus girls.

No one did more to popularize this image than Frank Capra, the great director who was himself the son of poor Italian immigrants. Everyone remembers Mr. Potter, “the richest man in town”, from It’s a Wonderful Life, but the classic bad guy was J.B. Norton in “Meet John Doe” played to perfection by Edward Arnold. He was rich, power-hungry, and a proto-Fascist to boot with his own private band of motorcycle riding storm troopers.

I must confess that I became a Capitalist many years ago when as a young college instructor, I signed up to participate in the school’s 401k type retirement plan. Without realizing it, my monthly contribution gave me a very small stake in the largest companies in the American economy. Though I contributed for only seven years, I still get a monthly check from that investment of long ago. Today, most of my retirement income comes from a portfolio of about a dozen American corporations.

Nevertheless, because of the bad connotation of the word Capitalist, I prefer to think of myself as an advocate of a free-market economy based on private property rights. By law and tradition in America, we all have the right to profit from our education, our knowledge, our experience, and our labor. It is the key to our success.

Countless examples could be provided to demonstrate the success of a free market economy versus a government controlled socialist model. Here is one example that shows that modern China’s economic success is due more to the profit motive than socialist ideology. 

Just recently I read an op-ed in the Wall Street journal by Michael Meyer in which he noted a real revolutionary development in a Chinese village 40 years ago.  After taking power in China in 1949 Chairman Mao and the Communist party had effectively abolished private land ownership. Villages were organized into communes “crippled by production quotas that seized most of what they grew for redistribution.” 

The result was a disaster just as it had been in Communist Russia decades earlier. Meyer tells the story of the village of Xiaogang where by 1978 the villagers could no longer meet their quota because they were starving. They were eating roots, leaves, and tree bark. Driven to desperation the farmers decided to defy the authorities.

They signed a pledge to divide the village land into family plots whose produce could be kept by each family once it had paid the required quota or tax. The results were revolutionary. Next year saw a record harvest that led the local political boss to complain that the farmers “had dug up the cornerstone of socialism.” 

Inevitably, the news and the practice spread until the popular land reform that defied communist orthodoxy became officially adopted after Mao’s death. Deng Xiaoping, his successor, urged the Chinese to ignore political dogma and instead “seek truth from facts.”

Interestingly, this same revolution had an antecedent in early American history. After two years of near starvation, the Pilgrim fathers at Plymouth colony abandoned their experiment with communal farming and divided the land into family plots worked by all members of the family. The colony never starved again. 

Why should it be so hard for people today to understand the value of the profit motive? Not only do the companies in my investment portfolio turn a decent profit, but also they provide invaluable goods and services for millions of people. Some light and heat our homes as well as enable us to communicate easily with one another.

The little revolution in Xiaogang not only fed the people of that village but it also has enabled China’s population to eat and prosper as never before. 

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Easter 2019

The headlines this morning about the bombing of churches packed on Easter morning in Sri Lanka seemed shockingly familiar this year. Only two years ago  Moslem fanatics in Egypt set off bombs in two crowded Coptic Christian churches on Palm Sunday. The explosions killed almost a hundred people and wounded many more. As of now the death toll in Sri Lanka is over 200.

During the past few years a friend of mine has worked to compile daily accounts of attacks on Christians all over the world. It is hard to read these accounts of varying brutality that occur practically every day. Most of the attacks are carried out by fanatical Moslems. Christians are beaten, raped, robbed, tortured, and murdered mainly because they are Christian. 

On another occasion during Easter season members of the Islamic State murdered four nuns of the Missionaries of Charity working in an elder care facility in Aden, Yemen. A few years ago, on the day after Easter, Taliban suicide bombers murdered over 65 Christian worshippers in Pakistan and wounded over 300. The only crime of those people, like so many thousands of others brutally persecuted in recent years, was that they were Christians. 

What is so bad about Christianity? Why do extremists, both secular and religious, hate it so much? Maybe I should ask, why do they fear it so much? 

Even after the Resurrection of Jesus on Easter Sunday, his subsequent Ascension forty days later, and the incredible events of Pentecost, St. Peter did not fully understand the implications of the Resurrection. Only after a personal vision convinced him that Jesus died and rose for all, did Peter see the light. He said,

“Now I really understand that God is not a respecter of persons, but in every nation he who fears him and does what is right is acceptable to him."

I have come to believe with Peter that God is not a respecter of persons, and that anyone who does right is acceptable to God. Still, I like being a Christian, especially a Catholic. I like the half hour of peace that attendance at daily Mass provides. I like the fact that I am not permitted or exhorted to kill innocent people, or even be angry at the guilty. But most of all, I like a religion that believes in and holds out hope for resurrection, for a life after death.

I like to think that the worshippers bombed in Sri Lanka or Egypt or the four nuns murdered in Yemen are living a new life, and that they are not just rotting bodies being picked apart by vultures. Some may think otherwise but what good  does that do them? It also strikes me that in reading accounts of the lives of the persecuted, they, like tens of thousands of other Christians who have also been brutally persecuted, had already given up their lives in the service of others. Like Jesus, they went about doing good and healing.

For Christians Easter, coming as it usually does at the outset of Spring, will always be a sign of new life.



The word "Easter" comes from a Germanic goddess of spring. Latin peoples used the word pasqua from the Jewish pasch or passover. When the Germanic peoples were converted, the Church wisely associated the word for Springtime with the feast of the Risen Lord. All around us new life is springing from the dead of winter. As the last traces of snow disappear, the flowers miraculously push their way up through their winter tomb.

Happy Easter!



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Basketball Inequality

      

Napheesa Collier and Katie Lou Samuelson

Last week Katie Lou Samuelson, and Napheesa Collier, two senior stars on the University of Connecticut women’s basketball team were picked #4 and #6 in the Women’s National Basketball Association’s (WNBA) 2019 draft. It is extraordinary to see two women from the same team go so high in the draft.

Although they lost in the semi-final of the NCAA tournament to Notre Dame, the two UCONN stars had stellar careers during their four years. In those years the UCONN women lost only five games, but unfortunately three came in NCAA tournaments. 

In 2019 they will probably earn the WNBA minimum rookie salary of about $52000. That figure is considerably less than the estimated $60000 to $70000 annual value of their athletic scholarship at UCONN, a benefit that is also tax free to athletes. It’s not as if there will be a pot of gold at the end of the WNBA rainbow. The top salary in the league is about $120000 and many of the leagues stars choose to profit from their ability by playing overseas during the off-season. Salaries for women players can be fifteen times higher in other countries.

Even if Samuelson and Collier go on like other UCONN women to have successful careers in the WNBA, they will never make in their entire career what an NBA player like LeBron James or Kevin Durant makes in a game or two. NBA stars make in excess of $30 Million per year. Even Duke freshman Zion Wilkinson, the likely #1 pick in this year’s NBA draft, will probably sign a pro contract that exceeds the entire WNBA payroll.

Equal pay advocates usually complain about the apparent income inequality between men and women. They argue that the average woman makes only 80% of what the average white male makes. They like to focus their attention on corporate America which they regard as the bastion of white male supremacy. However, they rarely complain about the enormous income gap in the worlds of entertainment and athletics. Do they overlook the huge contracts of black athletes because they do not fit the white male story? 

The disparities in income between professional male and female basketball players is certainly not caused by discrimination. The difference seems entirely market driven. Although the extraordinary success of the UCONN women’s basketball program under legendary coach Geno Auriemma has led to packed houses at their home games, the interest in women’s professional basketball in this country is minimal. 

As a result, the pro women play only a short 32 game schedule during what is usually the basketball off-season. As noted above, many of the WNBA stars go abroad to earn the big bucks. UCONN all-time great and WNBA MVP Brianna Stewart played this year for a Russian team.

The NBA and WNBA are two distinct business models. The packed houses and TV ratings for the men’s game have allowed the best players to command huge contracts and move freely from one team to another. On the other hand, the WNBA, despite the quality of play and the ability of its athletes, must struggle for revenue. To keep the WNBA viable the teams must use a pay scale where there is little difference between the salaries of the best players and the benchwarmers. Otherwise, the league would have folded years ago and there would be no option for players like Katie Lou Samuelson and Napheesa Collier to continue to play the game they love at home. 

In that case, they would be no different than the thousands of athletes who play in American colleges and universities today for love of the sport. My granddaughter rows crew at UCONN. She had no scholarship but just tried out and made the cut. She loves it, is in the best shape of her life, and has bonded with her crew mates. At the same time, she has kept up her grades and became a scholar-athlete award winner this year. Congratulations N.B.

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Gender Pay Gap 2019

Equal Pay Day arrived for women on April 2 this year. According to gender rights advocates, the average woman must add to her 2018 income three months of work in 2018 to make as much as the average white man made in 2018. In other words, a woman in Connecticut only makes 83% of what a man makes in income. Black and Latina women are even more disadvantaged compared to white men. Oddly, the wages of black and Hispanic men seem to be excluded from the calculations for black and Hispanic women. 

Gender gap ratios do not actually compare salaries of full time employees working the same job. Such reports just use averages based on the salaries of men and women across companies, industries, and job titles. How this information is gathered is a mystery to me? I suspect Census data or IRS compilations are used but these figures often show great variation. 

Interestingly, it is difficult for those calling for new laws to deal with wage discrimination to find instances of wage discrimination. After all, both Federal and Connecticut law forbids wage discrimination. A few years ago a spokesperson for the Connecticut Commission on Human Rights and Opportunities reported, “the number of women who complain about not getting as much as their male counterparts is small.” 

All government employees, for example, work on gender-neutral pay scales. Teachers, police officers, firefighters, mail carriers, all get the same pay for the same work. Even high income occupations are no longer the exclusive male bastions of the past. The medical and financial professions have become increasingly open to women and will become more so since the majority of college graduates today are women. No modern corporation would dare to have differing wage scales for men and women. Nevertheless, most engineering students are still men and over 90% of art history students are women, a factor that obviously contributes to disparity in income.

I would venture to guess that the disparity in gender income is largely based on decisions that people choose to make. A few years ago a statistical survey came to the comical conclusion that it was better for a woman to live in Bridgeport, CT where the gender gap was narrow, than in Darien or New Canaan where it was the widest despite the fact that the average income of women in those towns is twice the income of women living in Bridgeport.

 Obviously, talented well-educated women choose to live in towns like New Canaan and Darien because of the beautiful homes, excellent school systems, and crime free streets. 

One of the statistics noted that in both New Canaan and Darien the number of married women in the work force is only about 40% compared to a national average of about 60%. While one of the “experts” quoted in the article referred to the “nostalgic idea of what the family is supposed to look like,” and called it a “romantic notion,” it still seems to be working very well in New Canaan and Darien. Compare that romantic notion with the one espoused years ago by Murphy Brown and see the devastation that single motherhood has brought to the lives of so many single mothers and their children in cities like Bridgeport.

It is a sad fact that the low income of single, unwed mothers does statistically drag down average median income for women. Poverty is practically an inevitable result when women have children before they have jobs or marry. The obvious success of Asian immigrants in this country is basically due to what one researcher called a traditional “success sequence” of education, work, marriage, and children in that order. In China, where she grew up, illegitimacy was unthinkable. Even in modern China, the out of wedlock birth rate is only 4%. 

The same figures used by gender rights advocates show that women of Asian descent make substantially more that black or Hispanic women. Politicians in New York City are trying to change the admission standards for the City’s elite public high schools. Candidates for admission must take a competitive entrance exam to get into one of these schools. Currently, students of Asian immigrants gain 50% of the places even though Asian-Americans make up only 16% of the city’s population. I suspect that Asian women do as well if not better than white men on these tests.

Politicians and commentators who think that legal measures like minimum wage laws and paid family leave will close the gender gap are sadly mistaken. Using their own figures, it appears as if the gender-equity gap has disappeared in cities like Bridgeport. What has been the result? Has Bridgeport become utopia? It used to be said that if you were not part of the solution, you were part of the problem. But if you don’t understand the problem, you can’t be part of the solution. It would be appropriate next year if Equal Pay Day were to fall on April 1.

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