The short of it:
- The government does not in fact have the power to control the economy of the nation. Hundreds of years of failed policies have proven this. The market will do what the market will do. What the government CAN do however is protect its citizens from the harshness of the economy’s dips and the fraud and abuse of those that would take advantage of the citizenry. Also, all public companies, companies which take money from the public at large for funding, owe a debt to that same public to operate morally, ethically, in good taste, and most of all: in the public’s interest. Therefore,
- All public companies that do any business or make any sales of goods and services beyond a single state shall be regulated via the Commerce Clause to set the prices of their goods and services to a certain percentage above the cost of production.
- No employee of a public company (including the CEO or any other executive) will be allowed to have a salary and benefits package exceeding ten times that of its lowest paid employee. Which includes any contractors whom you may hire on a short term basis. That means that if your janitor made $20,000 last year, your company president can only make $200,000 the next year, including the value of benefits and bonuses added.
- All public companies will be audited on an annual basis by the FTC’s Bureau of Consumer Protection.
- It should be noted that private businesses will be untouched by these proposals.
One of the cancers at the source of the failures in modern American society is the separation between freedom, power, and responsibility. This can be seen best in the machinations and workings of America’s biggest corporations. I don’t begrudge anyone to going into business for the sake of going into business. Self-empowerment and self-actualization are two of the hallmarks of the American spirit. However, the entrepreneurial spirit that helped build America has been replaced for the most part by nameless, faceless, interchangeable brand names.
Where there was once a Sam Walton who built up an empire from a $20,000 personal loan from his father in law, now exists a machine who’s CEO you most likely can’t even name (without resorting to Google). In America, there was once a dreamer who imagined up an entire fantasy-land of wonder for children of all ages, there now exists a conglomerate of hucksters who try to drain every last drop of money they can get out of the legacy of a man, and commercialize the dreams he created into thousands of merchandizing opportunities.
Where there were once men and women working to do what they love in the industry that they love, there are now thousands upon thousands of interchangeable people that are educated to learn how to run all industries in exactly the same manner.
Where am I going with all this? My main point is that the business world which was originally run by people that had a passion for what they were doing, that loved the industry that they were working in, has now been changed into a series of identical enterprises devoid of passion, and interested in only the almighty dollar. Where businesses used to be guided by men and women of character, who cared about what they were doing, the products and services that they sold, instead they are now run by executives that couldn’t care less about the specifics of what their business is doing, and are only concerned with making sure that profits continue to grow exponentially, by any means possible. Executives who, by the way, don’t have a direct liability in the decisions that they make.
Ayn Rand was not wrong, not totally. There is something powerful and majestic about the “Men of the Mind” doing what they do best in the field that they love. But where Rand’s philosophy failed is that her heroes didn’t end up shrugging the world off of their shoulders – they sold it off to the Mouches of the world. And those Mouches seek one thing, and one thing only – not just profit, but perpetually growing profit.
The Fallacy of Perpetual Growth
This is the cause of many of the failings of the modern world. It is a function of greed. It is the concept that has been pushed out by MBAs (Masters of Business Administration) and slowly infected into every publicly owned business like a disease. It’s the fallacy of perpetual growth.
If you have ever worked for ANY public company in any kind of position higher than entry level, you’ve seen this in one form or another. Metrics, bean counters, that all say “THIS quarter must have better numbers than LAST quarter!” and “THIS quarter must have better numbers than the same quarter last year!”.
That is the fallacy of perpetual growth. You also see this in the government. In fact, social security is BASED on the concept that there will always be a larger and larger working class to pay for the ever growing retired class.
But it is indeed a fallacy, IT’S NOT THE WAY REALITY WORKS. Things ebb and flow, the economy ebbs and flows, business success and consumer purchasing ebbs and flows. Business should fluctuate WITH it.
This is why the most stable companies that exist today are sole-proprietor companies or family owned businesses. Oh sure, most of them are not huge and most of them are not global. Hell, very few are even national. But they are ALWAYS THERE.
Why? Because when one person or a small group has a personal stake in the company, they don’t have to be beholden to stockholders and the fallacy of constant growth. If my company profited 100K net last year, and this year is a “tough” year, I don’t HAVE to drive for 125K or 150K or even 100K… I can be happy with LESS. I can be happy making a MEASLY profit as long as we stay stable and stay in business and don’t lose money. I can take the LONG view.
If I don’t have the money to increase my business, I can WAIT and SAVE the money and buy expansions outright in my own time. The growth of my business can be related to the success of my business. If I’m doing poorly and have a small franchise, I can cut one or two stores out and sell them off and keep the rest operating the same way. I don’t have to cut corners everywhere and stress every one of my employees out. I don’t HAVE to make them “do more with less”.
Public companies can’t do that. They are pushed on all sides for ever increasing profits and ever expanding GROWTH of the company.
And do you know what I see happening? In every business that I’ve ever worked with? The company is becoming a behemoth monster, constantly growing in size, while at the same time eating itself from the inside out, until all that’s left is a gigantic skeleton with no meat left… just scrawny bones that can collapse or any moment.
Or better yet, a better example is Jenga. Yes, Jenga.
THAT is the end result of the fallacy of perpetual growth. You pull from the bottom to feed the top and guess what’s going to happen? Eventually, it’s all going to tumble down. Unless we stop it, dead in its tracks. The only way to save the free market and capitalism in America – is to put it on a diet, a profit diet. Because for the last few decades, it has been gorging itself, become opulent, while in the meantime the citizenry has suffered.
So what is the solution to these issues? It is quite simply this – set the maximum profit that a public company is allowed to make on each individual good or service, and you will, directly, stop the drive to perpetually increase profits.