I received several great comments as a result of my blog yesterday. And yes, I am arguing for moderation. Big government, as well as unrestrained greed, will lead to the oppression of people. Therefore, in my opinion any meritocratic economic system must be guided by compassion and ontology. If there is no cognizant oversight, the worst will happen. “The money will go into channels which will carry it, not to the most productive, but to the most corrupt.” Who is John Galt?
Yesterday Tiger Woods came in third place. However, his earnings took him over $100 million. This is just the amount he has earned by winning tournaments, not from endorsements. The closest golfer to Woods is about 33% behind. Therefore, the world of golf has a superstar, which has affected the earning capabilities of all golfers. PGA purses have grown exponentially since the advent of Woods. Right, wrong, or indifferent, that is a fact.
In this example we can see the effects of a superstar, or high performer, on the overall system. The need to perform is higher, but so is the reward. This generates a system of winners and losers, but increases incentives. However, the cost necessary for this reward becomes higher too. An example of this is the climbing cost of education.
Parents recognize that in a superstar economy they need to invest in the education of their child. This investment helps the child prepare for the requirements and rewards. This works if you have the resources available, but to those who don’t, it creates human despair. In fact, “between 1973, and 2010, the male labor-force-participation rate went from 79 percent to 70 percent, largely because the number of less-educated men grew.” Many of these men are from working class backgrounds, but the according to Zingales, this could spread to the middle class as education costs rise.
The superstar economy is a win-lose event. However, it is not imperative that it stay this way. Business As Mission, can be expressed in two different manners. First, as we see in the life of Paul the Apostle, Business As Mission, was career endeavors (tentmaking) used to further the Kingdom of God. The purpose then of business is to create an organization for the purpose of demonstrating God’s love through economic pursuit. The second expression, is the pursuit of economic gain for a purely social reason. Obviously, business must be effective and efficient, we can interpret that as profitable, and it must be environmentally friendly, but the ontology is focused on social justice. The drive is to create profit for the social order.
The superstars create value, raise the stakes, which in turn encourages others to do the same. Interesting! Milton Friedman believed that the only socially responsible thing a company needs to do is to create profit within the boundaries of the law. Today, all companies are doing more than that. Corporate Social Responsibility (CSR) is being expressed in manners that go far beyonds the legal confines. As Richard Branson has stated, anyone doing business today needs to be socially responsible. Thus, the superstars can change the way we do business to one of compassionate competition for the good of all.
And that is my thought for the day!