Is Profit A Bad Thing

Many people today view profit as a dirty word. With the rise of so-called Democratic-Socialism, and the move by Millennials to focusing on a non-profit model, the value of profit seems diminished. Today’s blog discusses just how important having something left over is. I’ll address the subject from two directions. The first direction involves the basic mechanics of capital accumulation. In other words, I will describe, with the help of Jeffry Sachs, the value associated with economic development. The second direction is from a stewardship perspective. If I start a business and try to use my resources to the best of my ability, then I would not only run my business well, but also have something left over to give raises, buy new equipment and support the community around me. This is what free market economics is all about. Creating enough profit that all people benefit.

To begin this discussion I’d like to explore Jeffry Sachs’ incredible book, The End of Poverty. In this book he describes how a basic economy works. On page 247 of his book Sachs has drawn four rectangles, two that are horizontal to each other, and two that are perpendicular. All four create a crossroads. The left rectangle is labeled Household Income. Then there is a line drawn from that rectangle to the one horizontally on the right side of the page. The line is labeled Household Savings. The line has an arrow head that points to the rectangle on the right which is labeled Capital Per Person. Obviously when capital per person is increasing, the economy can be assumed to be thriving. When the capital per person is low, the opposite is occurring.

Sachs has another line proceeding diagonally up to another rectangle. This one is labeled Economic Growth. This results from a thriving economy. As households save money, it goes in the bank, banks loan out the money, which businesses borrow to invest. Another line is drawn from the economic growth rectangle to the Household Income rectangle, which demonstrates how people get raises when the economy thrives. As growth occurs households have more money, and they then save more. This in turns creates a larger Capital per person, that creates a positive multiplier.

I have only described three of the rectangles. The last one is on the bottom of the graphic. It is labeled Public Budget. There is also an arrow connecting the Household Income rectangle with the Public Budget rectangle. The line is labeled tax payments. When households are doing well, they are paying taxes into the public coffers. The Public Budget is used for public investment. This public investment in roads, etc. then helps to create more Capital per person. This is a great description of how Capitalism works.

However, some nations, and communities in the United States, experience a Poverty Trap. This happens when Household Income is depressed leading to zero Household Savings. This also leads to zero tax payments. The lack of savings leads to a decline in Capital Per Person, and the zero tax payments lead to a zero Public Investment Budget. Both of these lead to Negative Economic Growth.

Jerry Sachs describes a solution to the poverty trap. Official Development Assistance (ODA) via either humanitarian relief or microfinance that helps with the deficiencies in Household Income and Public Budgets. I think he is on to something here. However, this implies that there is something left over someplace else to be able to apply that surplus value to ODA. You see, without profit, there is nothing left over to help those who need assistance.

A good example of what not to do is Venezuela. They are stuck in a Poverty Trap. There is nothing left over, so all they do is print more money. There is no wealth to redistribute creating the need to print. This creates hyperinflation that creates more impoverished households. If they only had surplus value that could be used to create ODA.

My second point is really looking at business as a provider to the community. George Gilder is huge proponent of the “morality and compassion of the free market.” His 1981 book, Wealth and Poverty, convinced Ronald Reagan to pursue his economic strategy, while arguing the “most important event in the recent history of ideas is the demise of the socialist dream.” Gilder likes to use a phrase “Google Marxism.” According to Gilder Marx believed that the Industrial Revolution solved all challenges associated with production. In other words, Capitalism erased the feudal system, therefore “human beings would focus on redistributing wealth among the classes rather than creating it.” Marx thought 19th century manufacturing was the final stage of social evolution, thus initiating a new Communist era. Obviously, that was an incorrect assumption.

In a side note, Google Marxism is used by Gilder to describe what he thinks Google’s beliefs are about the current economy. “Google believes capitalism is at an end. . . with the current group of capitalists being the end of an era. Google thinks that Information Technology will overtake human ingenuity, creating wealth, which all human beings need to do is collect their Universal Basic Income.

I have digressed a bit from my original point, but I will need to develop this concept a bit more. Getting back to my point, running a business and creating profit is a good thing for the community. That is if I look at it from the perspective of a steward. Wealth, excess value, is best used for the good of all. None of us want to be given something. We want to earn it. Therefore, as I run my business in a way that creates profit, I can replace equipment that is depreciating, I can give raises to my employees who earn it, I can hire more employees, and I can provide resources for the community my business is operating in. This is how is it is supposed to work.

To close, I want to reiterate. Profit is a good thing, greed is not. Universal Basic Income is not a good thing, but a helping hand is. When we have something left over, profit, we can use it to benefit the community both economically and socially.

And that is my thought for the day!

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Capitalism And Adam Smith – Reprised

I had a wonderful time at a coffee meeting earlier this week. The person I was having coffee with asked me some questions about Capitalism. Since this discussion I have been thinking about it conceptually and practically. As someone who abhors economic Socialism, and is a proponent of a free market, I have decided to write about the subject again.

Initially, it seems that people equate Capitalism to the excesses of large corporations. I agree with the critiques in some cases, but I cannot support the current move to a proposed Socialism. I think people are forgetting the excesses of Socialism/Marxism/Communism as an over-reaction to current levels of inequality. People, in my opinion, are too willing to support an all-powerful centralized state in response to events that are controllable – at least according to Adam Smith the father of economics.

First, let’s answer the question – what is Capitalism? Capitalism is an economic system based upon the private ownership of property and the self-interests of both buyers and sellers. The way I describe it to my students is, people who have goods to sell meet those who want to buy those goods at the palm tree. This represents the marketplace where buyer and seller negotiate an agreed to price. The seller makes a profit and the seller gets what they want. Both parties leave the event better off. Both are operating from self-interest and both are better off as a result. This system is based on six pillars.

I have already mentioned one of those pillars, private property. This allows people to own the means of production. These include things like land, machinery, and houses. This is critical to our life in the United States. We do not have to live in government issued tenements but can own our own homes.

I have previously mentioned the second pillar, self-interest. This means we are all free to pursue our own good “without sociopolitical pressure.” If I want to be a business owner, and someone wants to buy what I am offering, then I am free to pursue this. If I want to buy a product or service I am free to choose what I want to buy. Because there are multiple offerings, I can choose which one that I want to purchase.

The above is the result of the next pillar, competition. Because the market system is free, people can enter or leave the market based upon demand. Because there are multiple people providing a particular product or service they have to work for my business. I can pay less, and have better quality, because of this thing we call competition.

The next pillar is the market mechanism. The key to this pillar is what we call the equilibrium price. The market operates collectively, and all the buyers and sellers, theoretically, set a price. If a seller tries to undersell the other market participants who are selling similar products or services, they need to give the buyers a reason. They also need to control their costs, which allows them to sell at a lower price. If a seller tries to sell at a higher price, they will fail.

A very important pillar involves the freedom to choose. All of us who participate in various markets can choose to engage the market where we want. There are different market needs that I as a business person can address, and there are different products and services I can buy based on my own need. It is our choice.

The last pillar involves the limited role of government. The government’s main role in the market system is to ensure a level playing field exists. This ensures the market behaves appropriately.

Obviously, this is a simplistic description of a very complicated process. There are many examples of how this works. China and its state-controlled Capitalism, the Oligarchic Capitalism that we see expressed in Russia, Nordic Capitalism with its strong social elements that we see in Sweden, and our more Big-firm Capitalism in the United States with its excesses. It appears that people who are troubled by Capitalism focus on the last. However, Adam Smith the father of economics and the concept of the invisible hand had a lot to say about this.
James Norman describes Adam Smith as someone who “is by general consent the most influential economist who ever lived.” Smith is “justly celebrated today for his insights into the nature of markets and for his famous analysis of how specialization creates economic value.”

Norman says the if we are to understand Smith’s concept of Economics we must combine his “Wealth of the Nations” with his other critical work “Theory of Moral Sentiments.” Norman states, “For Smith Markets exist not by divine right but because they have been shaped by human beings in ways that generate both private and public value.” This is accomplished via the pillars acting together to create positive competition, and people represented by their governments.

This market process is illustrated via the neoclassical economic model describing a circular flow. Firms supply finished products to the market. Households purchase finished goods. However, for households to have the money to purchase the finished goods they need to work for the firms. To do this they go to the factor market and are hired by the firms. The firms pay the households money, which in turn they use in the goods and services market to buy finished goods. The process works well until something goes asunder. This could be greed, market failure, or something else.

Therefore, in the middle of this, according to Adam Smith is the government, with whom I agree. Through all my research and experience, I see the need for government intervention to ensure the circular flow works correctly. I do think the Nordics do this well.

Anyway, my warning to those who are against Capitalism: be careful what you wish for. You may just get what you want, and then see just how good you had it under a Capitalist economic system.

And that is my thought for the day!

Seven Dangers to Human Virtue

With the initiation of my new endeavor, I am spending some time thinking about what constitutes stewardship. While I was researching the subject, I ran across Ghandi’s seven dangers to human virtue. As I pondered the list, I thought it might be worth sharing my thoughts.

These seven dangers have been called many things, but it seems evident that they are worth discussing. Ghandi published them in 1925 as a part of his newspaper, Young India. According to Ghandi, “the list represents seven ways of living that are bound to undermine your well-being and the well-being of those around you. This reminds me of Proverbs 11:10, “When it goes well with the righteous, the city rejoices.”

Amy Sherman in her book, Kingdom Calling: Vocational Stewardship for the Common Good, uses the term Tsaddiqim to illustrate what the righteous do. “The righteous act in concert with God’s will for the shalom of the community. The activity of the righteous shows they align themselves with God’s desire to create community well-being, and their activity is part of God’s creative, justice-establishing efforts.” The phrase used to describe this is social righteousness. I really like that phrase.

The first danger is wealth without work. Work is a critical part of our psyche. If we are given things, it leads to a sense of entitlement. And if we are trust-fund babies it is even worse. I am thinking about the young man who claimed that he did really horrible things because of affluenza. In other words, he was given everything and therefore knew no limits. A weak argument, but still if we have wealth without earning it, our humanity suffers.

The second danger is pleasure without conscience. When we start removing consequences to our actions there is a human cost. All around us we see people getting away with it. As Jeremiah 6:15 states, “Were they ashamed when they had committed abomination? No! They were not all ashamed; Nor did they know how to blush.”

The third danger involves knowledge without character. I have worked with some very smart people, but some of them were really horrible individuals. They lacked the character needed for people to listen to them. Knowledge without wisdom is a tragedy.

The fourth danger is commerce without morality. When it comes to stewardship all of the above is critical, but none more so than this. Profit without sharing, consumption without thought, and wealth without community leads to a loss of morality, a loss of humanity.

The fifth danger is science without humanity. I think the atom bomb is a great example of this. Another example is a medical doctor that may go into medicine to help people but loses the dream when they focus more on money then on care.

The sixth danger is worship without sacrifice. This seems particularly egregious. And if we add the words of Jesus in Matthew 9:13, “But go and learn what this means: I desire mercy, not sacrifice. For I have not come to call the righteous, but sinners,” we get the true sense of the issue.

The seventh and last, at least according to Ghandi, is politics without principle. I do think I could write a whole blog on this one principle alone. It appears that reason and compromise has been replaced with political maneuvering. Thus, nothing gets done.

These seven dangers illustrate both what could be and what shouldn’t be. There is a great scene during the new Jumanji movie where Spencer is questioning whether he could do what was needed. He states that he only has one life left. The Fridge tells him that all we ever have is one life. That was a very profound statement, even if it was made by Kevin Hart. It seems that Ghandi and Jesus are both telling us to make the most of our lives.

I end with a quote from Shakespeare’s Macbeth, Act 5 Scene 5, “This life, which had been the tomb of his virtue and of his honor, is but a walking shadow: a poor player, that struts and frets his hour upon the stage, and then is heard no more; it is the tale told by an idiot, full of sound and fury, signifying nothing.”

We can be an idiot, or we can be the righteous. We can choose to do good with our lives, or we can choose the other. What is your choice?

And that is my thought for the day!

Business Stewardship

I have just started a new business. The name and Logo is below:

Epitropos is the Greek word for stewardship. The foundational concept for my business originates in scripture:

“Moreover it is required in stewards that
one be found faithful” 1 Corinthians 4:2

I have just started a new business.The name of my business is Epitropos, which is the Greek word for stewardship. The foundational concept for my business originates in scripture:

“Moreover it is required in stewards that one be found faithful” 1 Corinthians 4:2

The Slogan: Building Sustainable Business with Heart, Trust, and Leadership

The question you might ask, how does stewardship play a role in the modern business world? I think the concept of stewardship is critical for a successful business. Often in this blog I have mentioned the fact that operational efficiency is critical for business success, this is what stewardship is all about. Let me explain.

One of the financial statements business leaders monitor is the Cash Flow statement. It has three sections: Operating Activities, Investing Activities, and Financing Activities. All three sections represent how the cash has evolved from the start of the year until the end of the year. Let me demonstrate.

Let’s say a company states that it had zero net cash for the year as a result of its operations. The company can improve its cash deficiency by selling assets. This would be reflected as a positive cash result in the Investing section of the statement. Therefore, even if operations had zero cash flow for the year, the company could show a positive cash flow simply by selling assets (Investing), or even by selling stock, which would be reflected in the financing section of the statement. Even though what the business did to make money didn’t make any it could show it had a positive cash flow by other activities.

This is not necessarily bad if it is one year, but if the management team does this year after year, then there is a problem. A management team needs to run the business well, which can only be done with a healthy operational strategy. This is where stewardship plays a role.

As a business leader your goal is to sustain the business over time. A healthy business is maintained through good practices. This is the same as living a healthy life style. It involves making positive life choices. Good stewards make positive business choices, thus keeping the business healthy.

What do I mean stewardship? I think if we explore the four pillars of stewardship, I think we will understand. The four pillars are:
1. A healthy perspective on ownership of the business
a. Good business owners/managers don’t see their business as just their own. Don’t get me wrong, I believe in private property, but ownership involves not what the business can do for me, but what can it do for everyone impacted by it? This is related to stakeholder theory.
2. Being responsible:
This means that, as a business owner/manager I will be faithful in practicing my craft. I will:
a. Pay my employees a fair wage and on time
b. Pay my bills promptly
c. Practice transparency in business
d. Practice a triple bottom-line: People, Planet, Profit
e. Provide a safe work environment
f. Provide appropriate work training
3. Holding yourself accountable
a. I will be a business owner of integrity and honest business praxis
4. Operate for a larger reward.
a. I see coins, profit, as having two sides. There is an economic side and a social impact side. I must create profit, but then I use that profit to promote good for myself and those around me.

I want to help business leaders learn how to practice stewardship. That will be my job for the next thirteen years.

And that is my thought for the day!

Pastors And Favorite Leadership Books

Last week I played golf with two Pastors and an elder from my church. It was a wonderful day of dagnabits, shoots, and darns. The Pastors and Elder, and me for that matter, did not use any swear words like many of my golf partners will do. For my now Pastor/Elder golf partners swearing is almost a part of their swing. However, one conversation of the day has stayed with me. Our lead Pastor mentioned taking ten leadership books and reading them over a period of time and then discussing them. This excited me, but it also got me to thinking, what leadership books do I have on my shelf, and which are my favorites. So here you go, my non-ranked list of top ten leadership books with a short description.

1. Authentic Leadership – Bill George
By far my favorite book on leadership. Bill George “makes the case that we need new leaders, not just new laws, to bring us out of the current corporate crisis. I think the lessons that George discusses in this book can apply to our current political situation.

2. The Heart Led Leader – Tommy Spaulding
Spaulding says this in his introduction, “The journey to heart-led leadership covers only 18 inches, but it lasts a lifetime. The author takes you on a journey to discover how to lead with your heart. Interesting read and fits my leadership philosophy well.

3. Lead Like Jesus – Ken Blanchard
Blanchard is one of my favorite writers. I have read several of his books. This one describes the difference between a self-serving leader and a servant leader. The book is well written and enjoyable to read.

4. Servant Leadership Across Cultures -Fons Trompenaars and Ed Voerman
The rest of the title of this book is “Harnessing the strength of the world’s most powerful leadership philosophy.” In this book I learned how to lead in cross-cultural settings using the powerful tool of service. “There is no us and them” when you are a servant leader; it is the development of shared goals.

5. Leaders on Leadership – George Barna
This particular book was written in 1982. It claims that is provides “wisdom, advice, and encouragement on the art of leading God’s people.” I was a pastor when I read this book, and I now think that it crosses over nicely for non-church organizations. Contributors include important church leaders of the day, Jack Hayford, Leighton Ford, and HB London.

6. What Makes a Leader – Harvard Business Review
I have decided I like compilation books. This is one of those. This book includes various articles from the Harvard Business Review. The authors are Daniel Goleman, Michael Maccoby, Dan Ciampa. John Peterman, Robert Goffee and Gareth Jones. The article discussing Narcissistic Leaders is a classic. Might be worth a read given today’s political environment.

7. Leadership James MacGregor Burns
James MacGregor Burns wrote this classic in 1978. In this book he develops the concepts of transformational and transactional leadership. This book is recognized as being foundational to current leadership theory. When I did research for my doctoral dissertation I ran across this book. It can be boring, but it was pivotal for my understanding of leadership.

8. Leadership – Peter Northouse
One of my favorite books is “Leadership: Theory and Practice” by Peter Northouse. It is a book that provides just what its title states. It helps the reader reflect on theory, but also provides practical tools for doing leadership. It provides a classic definition of leadership, and then explores the theoretical development of the concept through history. It also provides questionnaires for the reader to understand their own leadership skills and how to apply them to organizational settings.

9. On Becoming a Leader- Warren Bennis
A few years ago, I did an internet search looking for the best leadership book. This book emerged as one of the top results. “On Becoming a Leader” was written in 1989, so it is dated. However, its concepts are timeless. Chapters deal with knowing yourself, knowing the world, moving through chaos, getting people on your side, and forging the future all set up the current/future leader for success. It really does help you understand the importance of authenticity in leadership.

10. Leader to Leader – The Drucker Foundation
According to the editors of this book, Francis Hesselbein and Paul cohen, this book will provide “enduring insights on leadership.” I read this several years ago, and I would agree with this claim. There are several chapters written by Peter Drucker, while other contributors include: Herb Kelleher, Max De Pree, James Kouzes, Peter Senge, John Kotter, Margaret Wheatly, Ann Winbald, Charlotte Beers, Warren Bennis, and many more. The book is organized into sections dealing with subjects such as, strategy, high performance, building great teams, and change management. It is comprehensive and informative.

As I look at these books today I think about how much I learned when I read them. Then I thought about what new lessons I will learn in the future, and what leadership books will I run across. Also, what will I do with this future knowledge? Also, most the books I have referenced in the above list are fairly static, and not a lot of diverse thinking. I need to look for other writers from different backgrounds and cultures to explore new ways of describing leadership. The organizations of today demand a diverse viewpoint.

And that is my thought for the day!

Boundaries Against Weapons Of Human Destruction

Yesterday was Father’s Day. It always elicits a plethora of feelings, some that are self-condemning, while others involve pride. Generically, Father’s Day has always been a little different than Mother’s Day. I think that Mother’s, generally speaking, deserve the adulation a bit more than Father’s. However, that may be just my experience. These ponderings has led to this posting.

I am a firm believer in the importance of humanity in business. I believe that business has the power to create positive social change, and the organization is the place where humanity can be expressed in meaningful ways. In other words, there are boundaries that control how we interact with each other. Social Media has no such boundaries, which leads to dysfunctional events. The reason I am thinking about this is threefold: the visit of Bishop Curry to Vancouver, WA, Jonathan Haidt’s organization Heterodox Academy, and the weaponization of children at the border. I know this is a bit removed from the purpose of this blog, but I think the discussion is important.

The Columbian, our local newspaper, reported that Bishop Curry, the person who presided over the wedding of Meghan Markle and Prince Harry, was in Vancouver preaching at St. Luke’s Episcopal Church. The heading of the article was “Bishop Curry: Love is the Cure.” A quote they attribute to Curry was, “If it’s not about love, it’s not about God. Period.” As I read that article I was troubled. The uneasiness I was feeling was also a result of a conversation I had yesterday about the children being removed from their parents at the border, which I think is completely wrong. What is it that troubles me about these events?

As I was reading my Bible this morning 2 Corinthians chapter 4 helped clarify why I was troubled. The last verse of chapter four states, “So we fix our eyes not on what is seen, but on what is unseen. For what is seen is temporary, but what is unseen is eternal.” The newspaper was not giving the whole story when it reported on Curry. I was not at the meeting, but having watched his sermon at the wedding, I can assume that he does not separate this love from the person of Jesus Christ. Love of neighbor is critical, but I am not loving just for love’s sake, I am loving because Christ’s love compels me to do this very thing. Sometimes I worry about the youth of the church because it seems like they are separating this love from Jesus and attaching it to a political movement. However, who am I to judge their motives?

The second part of my ruminations this morning was a result of learning about the Heterodox Academy. In the article “A Movement Rises to Take Back Higher Education,” Emily Esfahani Smith describes how Jonathan Haidt, who wrote “The Righteous Mind, Why Good People Are Divided By Politics and Religion,” feels that “current collegians are more apt to be threatened by words and ideas. . . These students, many of whose parents protected them from the ordinary adversities of daily life, [are] psychologically fragile and unprepared for the challenges of a college education.” This has led to “trigger warnings,” “safe spaces,” and “speech codes” on campuses around the United States. Smith describes this using a Crimson poll which stated, “The censorious climate of higher education has predictably created a culture of self-censorship. Two-thirds of this year’s graduating seniors at Harvard said, ‘they had at some point chosen not to express an opinion in an academic setting during their time at Harvard out of fear that it would offend others.”

As a result of this unhealthy environment, the Heterodox Academy was created. It is “an organization founded in 2015 to promote viewpoint diversity on campus.” Its members include 2,000 professors and graduate students in the United States and around the world. They are in favor of free speech and inquiry. They believe “that the purpose of a university is to teach students how to think, which entails disturbing their psychological equilibrium from time to time by exposing them to ideas that contradict their current beliefs.”

I think this is why I am concerned for our country right now. There is a move to demonize the other. If you don’t agree with the current understanding of reality and culture, then you are a hater, homophobic, or some other horrendous thing. In this type of environment an “exchange of ideas” becomes impossible. This is my concern for our country.

This leads me to my last point, the weaponization of various events in our society, specifically the children at the border. Laura Bush wrote about this today. She stated, “I live in a border state. I appreciate the need to enforce and protect our international boundaries, but this zero-tolerance policy is cruel. It is immoral. And it breaks my heart.” There is no doubt that our immigration system is broken. It is time to fix it. She argued, “I moved away from Washington almost a decade ago, but I know there are good people at all levels of government who can do better to fix this.” I agree!

I will not argue for American exceptionalism, and I will not argue that America is a God chosen country, and I will not argue that we have always chosen the higher path. But I agree with Bush when she states, “Americans pride themselves on being a moral nation, on being the nation that sends humanitarian relief to places devastated by natural disasters or famine or war. We pride ourselves on believing that people should be seen for the content of their character, not the color of their skin.”

I do think that part of the problem is identity politics, “the tendency for people of a particular religion, race, social background, etc. to form exclusive political alliances, moving away from traditional broad-based party politics.” If we don’t change our mentality we will continue to hate the other. As Ms. Smith ably ends her article with, “there’s a more fundamental shift that needs to take place – a rethinking of identity politics. ‘Rather than promoting a common-enemy identity politics that admonishes white people and others with privilege,’ Mr Haidt said Friday, ‘professors and administrators should embrace a common humanity identity politics.”

I think this “common-enemy identity politics” is what occurs in the workspace. All of us have boundaries that keep us from hating out loud. It is my opinion that Bishop Curry was trying to take us back to the social boundaries once created by our Judeo-Christian moral foundations, not its imperfections, but its boundaries. Although organizations wouldn’t describe their boundaries in this way, it is similar. There needs to be external rules for us to operate well, it is time to reclaim them.

What are weapons of human destruction? They are those elements of our interaction used to demonize the other, while looking past them. It is time to see one another, listen, and thrive. Can we do it? That is a subject for another posting.

And that is my thought for the day!

Business A Power For Good

If you have spent any time reading my blog, you know that I love to read. Earlier this week I wrote about Ronald Reagan, as a result of reading a book about Reagan. Somebody asked me yesterday if I liked Reagan? It was a political question, one that I answered thoughtfully. When I was younger, and Reagan was Governor of California, I did not care for him. In fact, I chose not to pay my state income taxes to resist. Later, I paid those taxes and the subsequent penalties, declaring “boy I showed him.” Today I reflect back on just how naïve I was.
I told the person, asking me the question about Reagan, that I did not like his closure of mental hospitals because it put many people on the streets that really needed help, but I also said I appreciated his leadership in a time when our country needed leadership. He was able to get two sides to work together for the good of the people. Something that our current President is struggling with, and the previous one was not able to do.

Enough of Reagan, today I’d like to write about the power of business. On May 14th Seattle levied a tax against businesses, with $20 million or more in annual revenue, of $275 per employee to help deal with the city’s homeless problem. According to the WSJ, “It was projected to raise about $47 million a year, to be spent on affordable housing and homeless services.” Originally the tax was going to be $500 per employee, but Starbucks and Amazon pushed back, resulting in the $275 compromise. Yesterday, the city council in Seattle voted to repeal the tax. This demonstrated how business can be a force to change things.

I know the homeless situation is dire, but I have talked to people who are working with homeless people, and they often tell me the state, in this case a city council, does not want to do the right thing. The state usually wants to take money and throw it at the problem and not look at the systemic elements of the problem. The state typically looks at short term wins for political gains.

The young in Seattle, and in Portland for that matter, think business is an enemy. Often business leaders see Millennials as the problem. Ken Langone, founder of Home Depot, once said, “In 2016 I saw Bernie Sanders and the kids around him. I thought: This is the antichrist.” I think that both sides should take an enlightened look at just what business can do.

In the editorial where I read that quote, Peggy Noonan stated, “An occasional preoccupation in this space is that young people have no particular affection for capitalism, the economic system that made America a great thing in history and a magnet for the world.” She then went on to describe two reasons for this lack of fondness, the 2008 crash of the market and the levels of inequality in our country, and they’ve never heard capitalism defended. The reason for this is the educational system in our country leans left even more than the leaning tower of Pisa.

I have taught in the academic environment, and I saw young people who wanted to do good things, rightfully so, but they wanted to start non-profit organizations or do social work. Don’t get me wrong those things are good, but how do you pay for them? There has to be surplus value, profit, left over. It is when the economy is healthy that people are able to provide the resources needed to help others. The combination between wealth generation and a right-sized tax system would provide strong social systems to help people who are hurt by the evolving economic system.

Many of the young today look to socialism as the answer. Even some of my colleagues think socialism is the answer. However, as Paul Kengor stated in his May 4th editorial, “May 5th marks the bicentennial of Karl Marx, who set the stage with his philosophy for the greatest ideological massacres in history.” His ideas have, and continue, to kill millions of people throughout the world. The foundation of his ideology is the elimination of private property. The freedom of owning your own private property is the foundation of capitalism. Kengor states, “In the Communist Manifesto, he and Fredrich Engels were quite clear that the theory of Communists may be summed up in the single sentence: abolition of private property.”

Young people today may not understand the implication of this and its impact on freedom. If that is not enough to convince you of the issues with socialism/communism, then how about Marx’ s ten-point program: 1) abolition of private property, 2) a heavy progressive income tax, 3) abolition of the right of inheritance, 4) confiscation of all property of all emigrants and rebels, 5) centralization of credit in the hands of the state, 6) centralization of the means of communication in the hands of the state, 7) all production of goods will be a part of a common plan, 8) Equal liability of label and creation of agricultural armies, 9) gradual abolition of all the distinction between town and country by a more equitable distribution of the population over the country, 10) Free education for all children in public schools. Everything is controlled by the state with a complete elimination of individual freedom. And for those who say, we are not talking about communism but socialism, remember Marx always argued that socialism was part one and full-blown communism the ultimate goal.

I am not a proponent of McCarthyism, looking for communists under every rock, but I do think that we need to pay attention. Especially those who have more resources than others. The non-idiot billionaire, Ken Langone, “worries about the future of economic freedom and sees the selfishness of some of the successful as an impediment.” He argued there are some who are greedy and evil, and he rightfully argued don’t throw the baby out with the bathwater.

So, what is the point with all of this? I think that Democracy and economic freedom work well together. However, our economic system works best when those who have resources share with those who don’t. What I mean is, instead of relying on government to help people develop the work skills needed to provide for their families in an evolving world, wealthy people should create systems to help people develop needed work skills and the opportunities to exercise those skills. Like Langone states, “Home Depot has changed lives. We have 400,000 people who work there, and we’ve never once paid anyone minimum wage.”

I know it is not business’s core mission to create social change, but it does have the power to do that very thing. We have seen this power throughout the world. Through globalization a billion people have been lifted out of extreme poverty. This could be the start. But it will take forward thinking business people like Ken Langone to accomplish this.

And that is my thought for the day!