Jobs Require Capital

JANUARY 01, 1964 by W. M. CURTISS

A recent editorial in The New York Times commented on the fact that a taxi driver in New York City, who owns and operates his own cab, must have a medal­lion, now worth $26,500.

This medallion, a metal plate attached to the cab, is, in effect, a license to operate a cab on the city streets. The City fathers have seen fit to limit the number of cabs to a specified figure. As a result, the only way to become a cabbie is to acquire one of these medallions.

The market attaches a value to this privilege, so medallions are bought and sold or handed down from father to son or acquired by some other method. Once a medallion is obtained, then the owner can go about getting his auto and other tools of his trade.

The Times referred to the taxi driver as “The Capitalist Cabbie” and of course he is just that. It appears that it would require about $30,000 to set a man up in the business.

If this seems a rather big in­vestment in a job, think for a moment of the average factory worker over the country. Someone must have invested $18,000 to $20,000 to set up his job. In some industries it is much more and may run to nearly $100,000 for each employee. This investment provides the plant or place to work, tools to work with, and whatever else is necessary to make the best use of the worker’s time and effort.

A farmer may invest $50,000 to $100,000 in a farm to provide himself with a job. A physician may invest thousands of dollars in a specialized education and in the tools of his trade before he can hang out his shingle. You can think of many occupations which must be accompanied by a siz­able investment.

There is this difference: In the case of the factory worker or the farmer, the investment in the tools of his trade represents ac­tual, physical things. The cost of a taxi driver’s medallion, how­ever, represents only a legal priv­ilege—the cost of excluding others from the job by force.


January 1964

comments powered by Disqus


* indicates required
Sign me up for...


July/August 2014

The United States' corporate tax burden is the highest in the world, but innovators will always find a way to duck away from Uncle Sam's reach. Doug Bandow explains how those with the means are renouncing their citizenship in increasing numbers, while J. Dayne Girard describes the innovative use of freeports to shield wealth from the myriad taxes and duties imposed on it as it moves around the world. Of course the politicians brand all of these people unpatriotic, hoping you won't think too hard about the difference between the usual crony-capitalist suspects and the global creative elite that have done so much to improve our lives. In a special tech section, Joseph Diedrich, Thomas Bogle, and Matthew McCaffrey look at various ways these innovators add value to our lives--even in ways they probably never expected.
Download Free PDF