Recently by John Tamny: An Entirely Predictable EconomicDip
Though Rolling Stones’ guitarist Keith Richards’ autobiography is a great read on its own for the remarkable story it tells, there are economic lessons within that apply to all manner of concepts made frequently prosaic by books and newspaper articles. From the wealth gap, to what drives success, to taxation, Richards’ amazing story explains them all in exciting, uplifting fashion.
Considering the wealth gap, it’s often a confused concept. No doubt there are broad income differences throughout the world, but that’s frequently the case because the highest earners regularly reduce the lifestyle gap through innovations that make former luxuries quite commonplace. Richards revealed this numerous times in Life.
Indeed, while Richards’ mother worked as a Hotpoint washing-machine demonstrator, “it took her ages to get her own.” Maytag and Sears come to mind as successful businesses headed by highly paid executives who achieved their pay by virtue of making washing machines broadly accessible. Richards also notes that his family “didn’t have a record player for a long time”, but thanks to innovators who were doubtless well compensated for mass producing the once obscure disc player, someone of Richards’ humble beginnings was eventually able to buy and play music.
The above was particularly important when we consider Richards’ career path. As he put it, “I’ve learned everything I know off of records”, and “Being able to hear recorded music freed up loads of musicians that couldn’t necessarily afford to learn to read or write music, like me.” Economic commentators love to bash the rich as greedy, but the profit motive driving music industry executives provided Richards with a musical education on the relative cheap.
Commentators regularly bemoan inequality in terms of opportunity while seeking government fixes, but Richards’ inspiring story reminds us that starting at the bottom is often a blessing. His first guitar cost 10 British pounds, but since his mother couldn’t afford to pay for it, she got someone else to purchase it, and then that someone eventually defaulted. Notable here is that Richards “couldn’t afford an electric” guitar, but his family’s inability to pay for an electric was instrumental in his rise as a guitar player.
As he explained it, “I firmly believe if you want to be a guitar player, you better start on acoustic and then graduate to electric.” Rather than allow his reduced economic circumstances to act as a barrier to achievement, he accentuated the positive, that he had a guitar, and proceeded to “play every spare moment I got.” Clearly Richards started at the bottom, and had less financial resources to fund his development much as there’s inequality among children today, but this was no deterrent.
Richards’ view is that “if you want to get to the top, you’ve got to start at the bottom, same with anything.” Wise words from a wise man, and something politicians would do well remember as they seek to achieve equality through legislative fiat. Being at the bottom often drives creativity, as Richards’ story attests. Thank goodness British politicians weren’t giving out electric guitars back in the ‘50s.
Considering the Rolling Stones’ humble beginnings as a band, where they began and where they ended up exposes in living color the lie that says upward mobility is a myth. As Richards recounts about the Stones’ early days, “At the time poverty seemed constant, unmovable.” Living in a horrid Chelsea flat with Mick Jagger and Brian Jones, Richards tells the reader about live music venue Wetherby Arms, and how “Usually I’d go round the back and steal their empties and sell them back to them. You got a couple of pence on a beer bottle.”
Every little bit counted because while the Rolling Stones sell out stadiums today, in the early ‘60s they were lucky if they got paid at all for their concerts. Modern theorists would call this exploitation as they do any time individuals or groups are “underpaid” in their eyes, but for the band these allegedly stingy concert promoters provided them with invaluable experience that eventually put them in a position to charge quite a bit.
Still, at the time “hunger was the order of the day” given how bands almost by definition start at the bottom. Of course any profits they were able to cobble together went toward “guitar strings, mending amplifiers and valves. Just to keep what had going was an incredible expensive.” All of this can’t be stressed enough.
For one, the fact that limited profits were immediately reinvested in the business that was the Rolling Stones reminds us how crippling corporate taxes can be, particularly on businesses just getting started. When politicians seek high taxes on businesses they’re robbing them of their future. Second, in the early days they desperately wanted a drummer by the name of Charlie Watts, but they couldn’t initially afford him. Again, when profits are taxed, the ability of a company to grow is compromised.