Although he made similar toys prior to 1993, in that year Warner named his small plastic, bean-stuffed toys Beanie Babies and the rest is history. In 1985, Warner risked everything by mortgaging his small house and, combined with his life savings, founded Ty Inc., a private toy company.
Who, besides Warner, benefits from his entrepreneurship? Millions of Beanie Babies have been sold. That means cloth, tag, plastic bean, packaging, and plastic eye and nose manufacturers, plus the assembly plants to put it all together, made a profit. New workers were hired and current employees retained.
Thus, Beanie Babies ensured the employment of hundreds (thousands?) of employees not directly employed by Warner. With Warner's orders also came a need for more accountants, managers, janitors, secretaries, supervisors, lawyers, etc. These companies prospered because of Warner's idea and because they all desired to make a profit.
Truck drivers and shipping companies certainly profited from transporting the materials and finished product. And don't overlook the gas stations and refineries that sold fuel to the transportation companies. Again, jobs were created or, at least, maintained due to the silly little toys.
How about Warner's employees? He began with two workers and now has approximately 300. How many of his employees have put their children through college due to Beanie Babies? Bought a new house?
Beanie Babies did not simply appear in stores. Marketing was needed. How many jobs were created and/or maintained advertising Beanie Babies?
Beanie Babies generated millions of dollars in sales tax, increased or maintained income taxes, corporate taxes, gasoline taxes (remember the transportation people), and others. Include tax preparers, bookkeepers, lawyers, and/or accountants. And government at all levels received increased tax revenue.
The simple fact that money circulated through the economic activity generated by the manufacture and selling of Beanie Babies helped the entire economy. The people who maintained their jobs, and new hires, spent money on food, housing, education, dentists, clothing, etc. again stimulating the economy. All this due to a stuffed toy.
I imagine even the most liberal/left partisan gets the point by now. And I undoubtedly overlooked some of the connections generated by the manufacture and marketing of Beanie Babies. Ty Warner and Beanie Babies increased the world's wealth in absolute terms wealth literally created out of nothing.
What motivates everyone involved in Beanie Baby economics? Altruism? No. The government told them to? No. Friendship? No. What motivated these thousands of people was self-interest. The individuals wanted a paycheck and the companies wanted a profit. Self-interest in a free market equals increased wealth for everyone. Amazing.
The Beanie Baby story is the quintessential free market story. Everyone gains through interlocking self-interest. Perhaps we should celebrate, not denigrate, the power of capitalism.
Thomas S. Garrison had a 15-year career as a radical democratic socialist, along with a full-time job editing a political science journal. Now he's a libertarian living in St. George.