Jim Huntzinger | On October 13, 2020

U.S. Constitution

In essence we are no longer operating under the Original Intent of the founding of this country. Since subtracting wealth from the top and adding it to a lower level is mathematically a zero net gain, the economy does not grow. However, in actual practice, this results in a net loss. Since part of the State, the bureaucracy, consumes a portion of the wealth when it is forcibly taken and then administratively redistributed, states end up with less capital than when they started. There is also further loss when wealth creators – particularly the higher level – lose significant incentive to create wealth or move their wealth into prospects which the statist cannot reach. Simply stated: American Exceptionalism is dis-incentivized and quite often smashed altogether. All levels of wealth lose and are diminished under these conditions.[1]

The lower level of wealth has a hard limit of zero. Meanwhile, the upper level of wealth is nearly unlimited. Therefore, unless people suffer from envy – one of the seven deadly sins and a violation of the 10^th Commandment – we should not be jealous of those who increase their economic worth when achieved under the law. When citizens of the United States increase in wealth, they do so by increasing the overall economy, not from taking the wealth of another. This increases the potential for more prosperity for all. In fact, since 1994 the Gini coefficient[2] has not changed. Though it varied slightly during this nearly 20 year period, the Gini coefficient for individuals increased from 0.510 in 2011 to 0.512 in 1994.[3]

The essence of this increase in wealth (capital) is productivity. The “lean [business model] creates the most wealthy strategy of anything I have ever seen.”[4] America has been the most productive civilization in the history of the world. From just 1947 to 2007, the percent of Americans employed in manufacturing has decreased from approximately 33 percent in 1947 down to approximately 10 percent in 2007 while manufacturing output has remained at around 14 to15 percent of the total GDP for the 60 year period.[5] This translates into a very significant productivity increase which directly creates wealth for all levels of wealth in America. “It is often said that the American manufacturing sector is in decline, but in fact manufacturing is declining in terms of employment, not in terms of output or its share of the economy.”[6]

Originally published on Townhall Finance.

Jim Huntzinger

Jim Huntzinger began his career as a manufacturing engineer with Aisin Seiki (a Toyota Group company and manufacturer of automotive components) when they transplanted to North America to support Toyota. Over his career he has also researched at length the evolution of manufacturing in the United States with an emphasis on lean’s influence and development. In addition to his research on TWI, he has extensively researched the history of Ford’s Highland Park plant and its direct tie to Toyota’s business model and methods of operation.

Huntzinger is the President and Founder of Lean Frontiers and a graduate from Purdue University with a B.S. in Mechanical Engineering Technology and received a M.S. in Engineering Management from the Milwaukee School of Engineering. He authored the book, Lean Cost Management: Accounting for Lean by Establishing Flow, was a contributing author to Lean Accounting: Best Practices for Sustainable Integration.