The main premise of “The Returns of Giving” is the concept of entrepreneurship adapting towards ‘giving’ instead of the typical stereotype of ‘greed’ and ‘taking.’ George Gilder opens chapter 3 with a firm stance towards the benefits of capitalism. He claims that the capitalist’s essence is conducive to the betterment of society. Entrepreneurs immediately take on enormous amounts of risk when they begin an enterprise. Since the US is not in a socialist environment, future profits are not predetermined or guaranteed. This means, the entrepreneur is taking a substantial bet that their idea will generate profit at a future point in time. Again, since there is no guarantee of future profit, the entrepreneur risks their time, capital, and safety all because of their ‘faith’ in the idea and it's possible future implications. Not only this, the entrepreneur takes on all of these known and possibly unknown risks just to give to society. All of their work towards mastering a certain craft or completing a revolutionary product has the end goal of providing value to the marketplace, hence benefitting the consumer. An example that comes to mind is when Steve Jobs and Steve Wozniak lived in their garage for years while they attempted to create the iPhone. There was no guarantee that they would be able to complete their idea, and even if they did, there was no guarantee the market would find value in it. They both took a bet on the future consumer valuing something that had never existed in all of humanity and it worked beautifully in their favor. But, again, based on probability, there was no guarantee that both of them would be successful in the end, yet they continued to build and troubleshoot in the garage for years.
Gilder also adds to his initial claims by providing context to primitive forms of humanity. He explains that even before money, early men would build in hopes of providing for their family and tribe. The admiration of the tribe and benefits of their labor was enough to push them to achieve new feats and move along society. It is remarkable that even before a currency was established, humans were motivated to invent and innovate. This point further demonstrates the validity of Gilder’s argument, as entrepreneurship has always been about ‘giving,’ even from its early days. This is a good reminder of the basic concept of a market to begin with. Even though there was no money long ago, humans found other forms of value to exchange with one another to further build up society. Basic supply and demand is the basis of society as a whole through history. As Gilder (2015, pg 32) says,
“The circle of giving (the profits of economy) will grow as long as the gifts are consistently valued more by the receivers than by the givers.”
This is a wonderful representation of the basic premise of supply and demand and a useful reminder that value is based on an individual's perception. If the receiver values a good, service, etc… more than the going rate it is being sold for, then both sides of the deal benefit and society pushes forward. Speaking of supply and demand, George Gilder also references Say’s Law in Chapter 3 of “The Returns of Giving.” Say’s Law is a concept that supply creates its own demand. Although refuted, the principle remains, as capitalism’s goal is to provide up-front then receive later on. This again supports Gilder’s initial argument towards the premise of ‘giving,’ similarly to Gilder (2015, pg 35) when he said,
“Giving is the vital impulse and moral center of capitalism.”
In order for a capitalist society to function, entrepreneurs must provide something of value to those around them. Without the exchange of values, a capitalist society is unable to function. Exchange, an important concept referenced through this class, is essential to the very fabric of society. Without it, not only do individuals not benefit by acquiring substances of perceived value, they cease to gain crucial information to further the pursuit of truth and knowledge – another form of value, whether it be conscious or not. In Chapter 3, (Gilder, 2015, pg. 47) explains that socialism assumes that society knows everything it needs to function. However, capitalism understands the never-ending complexity of the world and provides a solution of acquiring knowledge to constantly improve society. Only a fool assumes they know everything that is necessary to thrive. The world is a constantly evolving machine that changes with time. Time, in itself, may even be a basis of perceived change. If nothing were to change around us, would the concept of time cease to exist? Nevertheless, it is important to adhere to the reality of the world and humble ourselves to the necessity of consistent knowledge acquisition to further progress humanity.
Lastly, Gilder makes remarks with respect to the welfare system. He claims that by providing too much security to society, it in turn weakens the very essence of the characteristics required for growth. He even goes as far as saying excessive welfare can become an “addictive dependency.” I agree with this, although we must be conscientious of those that are truly unable to provide benefit to the system. Some people are unfortunately born without the abilities required to provide value to society and therefore should not be punished outright. Nevertheless, this is a small proportion of the population compared to the amount of laziness that plagues western society. Throughout most of history, the attitude of the majority of modern individuals would leave them dead from starvation or ignorance in various other forms. You only deserve what you earn in this world and are entitled to nothing. As Adam Smith says, ‘the invisible hand’ will reward and punish everyone regardless of their place in the world.
Sources:
Image: Investopedia. (n.d.). Invisible hand. Updated March 21, 2023, from https://www.investopedia.com/terms/i/invisiblehand.asp
Gilder, G. F. (2012). Chapter Three: The Returns of Giving. In Wealth and poverty (pp. 27–49). essay, Regnery Publishing, Inc.
This is a very well written essay, I do recommend using headers to allow the reader to have a better understanding of what the essay is about at first glance and what each paragraph will be covering. I like how you highlighted the risk that comes with being an entrepreneur and how you used Steve Jobs and Apple to show you believing in yourself and ideas can allow you to succeed in the future. You mention how it not only affects the future, but also was a key factor of the past. Using examples from primitive times showing that entrepreneurship and giving have both been key factors in the foundation and building of society. You did a great job incorporating supply and demand into how giving into a society and market has many different effects on businesses. I used the second quote that you used in my essay as well. I think it is a good representation of the human nature and morals that entrepreneurs possess.
I like how you highlight the importance of value and how trading it helps grow the economy. Value is the very thing that entrepreneurs seek to make so that they can give it to society which will help benefit and grow the market and also will allow them to benefit from their hard work and ideas. This is why I believe that giving is the very foundation to capitalism.
I agree with your statement about how capitalism understands the complexity of society and market places and knows that there are always needs that need to be met. This is why innovation is so important in entrepreneurship because people do not know what the solution is until it is created. That always reminds me of the Henry Ford quote about how if he asked the public what they wanted, they would have said "a faster horse" but Ford knew there was a better way to help benefit society and grow the economy.
Overall this was an excellent essay that captured the meaning of Gilder's writings about capitalism and the importance of giving. This was very well formatted with quotes, the only thing I would consider adding are the headers to help guide the reader throughout the essay.
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