Tuesday, January 27, 2015

People Partnered With Free Enterprise Make Things Happen

"Long John Silver unearthed a very competent man for a mate, a man named Arrow."

Robert Louis Stevenson (1850 - 1894)
from his novel Treasure Island

Not that the concept of this post is to extol pirates or piracy, because it is not.  Simply stated, the point of this post is the idea of partnership.

Who would Long John Silver want to accompany him on his journeys, no matter what the journey is about?  

He would want those who share is visions.
He would want those who he can work with.
He would want those who have what skills he doesn't.
He would want those who can bring symbiosis to the table, where one plus one is more than two.
He would want those who add their candle light to the other candles and make the fire brighter for all.

So, as to partnerships, this was suggested:  "To get along in business, the partners should have different skill sets that are complementary," said Issamar Ginzberg, a Brooklyn-based strategy adviser to entrepreneurs. "Two people who are good with numbers but bad at deadlines would be horrible. When they mismatch, they make a much better pair. … (As) in marriage, opposites attract."   

What are some famous free enterprise partnerships?  The ones where opposites attracted, or symbiosis brought more to the whole?
  • Ben Cohen and Jerry Greenfield - long-time friends who brought different angles to the same love for ice cream.  Almost everyone has taken a bite of their ideas.
  • Bill Hewlett and David Packard - electronics techs who combined curiosity and management, beginning in a garage.  Things added up very nicely.
  • Orville and Wilbur Wright - brothers whose mechanical abilities could be applied to another idea and industry.  We all know what happened then.  Even though death broke up the partnership, their business took off and continues today.
  • Warren Buffet and Charlie Munger - one, the value hunter, combined with the other, the inter-disciplinary thinker, learned to pay fair prices for good products.  The candle light from each has made the combined light much brighter.
  • Bill Gates and Paul Allen - combined computer genius aided by the negotiating genius of one with the innovation genius of the other.  Again, long-time friends.  Whose life haven't they influenced?
  • Steve Jobs and Steve Wozniak - two friends early in life bringing computer/electronic abilities together to take a bite from the same huge Apple.
  • Jerry Yang and David Filo - they found the internet rodeo could be corralled and organized and made keywords a part of the Yahoo of life.
  • Sergey Brin and Larry Page - two students who were Google eyed, joined for conversational clashes, which spurred a friendship, and then a partnership, with one having the ability to mine for data and the other the ability to place a value on how some things are perceived by many as important.
Long John Silver knew what he wanted, and where to go to get it.  He needed some help along the way.  And he brought together his crew.  So often the end is not seen in the beginning, but for him, at the end of the journey, X marked the spot.

Often one alone in a business endeavor is not enough to make it happen.  But in the right environment, a free-enterprise environment, one conducive to innovation and expansion, capitalism can make the combined effort more expansive and more influential than anyone had previously experienced.

And sometimes, just sometimes, we get to take a bite of a free sample - here I sampled the Triple Caramel Chunk.  Alas, there is no such thing as a free lunch, or even a free sample.  In this case the factory tour did have a fee attached!

People partnered with free enterprise make things happen.

Wednesday, January 21, 2015

Bureaucracy Is Almost Feudal, Where Free Enterprise Is Not.

"Washington has become this place that people don't leave. It has become this permanent feudal class."

Mark Leibovich
New York Times Magazine

The feudal economic system carried the load for much of the Middle Ages.  It was the ruling economic system on many continents.  It took hold, and spanned the 5th to 12th centuries, more or less!

What replaced it?  Free market economics - capitalism - free enterprise!

It is said that William the Conqueror (to whom I am said to be distantly related) brought feudalism to England to create loyalty.  Taking over as he did made him king over the land.  As the king, he was therefore responsible for his new subjects, those who lived in his new territory.  The system is such that as a king died, one of his sons or other relations would take over, and this kingship was passed along to subsequent generations.

William's territory would today be called Great Britain, but was then a disparate group of disparate areas and disparate people.  So, how does a king bring all that together?
He buys them off!  What does the new king William have to buy off loyalty?  Land.  So he appoints, or selects, barons to manage his business, awarding them land for such loyalty.  Barons were often selected from the family tree.

The barons, in turn, are responsible for that area so granted. Loyalty is created by them in much the same way, further down the line through the selection or appointment of knights.  The knights are the local managers, with the peasant rabble as their responsibility.  They are also the soldiers in the kingdom, even with power to recruit the army.  The knights were given land for their responsibility, with a small portion of it for personal use, and this entire grant would incorporate that local area of responsibility, along with the peasants that came with it.

The peasants were the local "blue collar" working class.  The peasantry had almost no ability to move up in the system.  They were without any rights, except what privileges that were allowed them by the local knight in charge.  Their work was forced.  They worked the land.  They worked for the king.  They had no ownership of anything. 

This began to change in 1215 when a group of nobles forced, that's forced, King John to sign the Magna Carta, or "Great Charter."  It began to change rights, incorporating new rights for the "citizenry," and even forced the king to obey some laws.  With time more and more ways were found to limit the powers of the king.  Councils developed, eventually into a representative Parliament, and the lawmaking began.  Kings had less and less ability to just do things - they needed Parliament's support.

This was not only a step toward democracy, but toward free market economics.  Individual rights were extended in private property rights.  And the free-enterprise games began.  

The "technical" definition of free enterprise is where goods and services are priced in an economy based on the laws of supply and demand (yes, LAWS), and the market-perceived benefits or quality of those goods and services.  Prices eventually reach a maximum point of equilibrium and are sustained by competitive market forces.  Competition can lower prices by making goods and services more prevalent and therefore less expensive.  Free enterprise demands competition and private ownership of one's idea, good or service.

Feudalism has not died, however.  It is alive and well in the gubment bureaucracy!  People come to Washington, set up their territories based on political "grants," and go about protecting it.  They want to live on in perpetuity!   And Washington becomes a career.  And the bureaucrats become permanent fixtures.  The Ben Franklin statement that visitors and fish begin to stink after three days could not be more applicable!


Tuesday, January 13, 2015

Free Enterprise Allows Go-Getter People To Happen To Things

“It had long since come to my attention that people of accomplishment rarely sat back and let things happen to them. They went out and happened to things.”

Leonardo da Vinci (1452 - 1519)

Happening to things.  That is very much a part of the philosophy of the free enterprise thinker.

And a free-market environment which allows the free enterprise thinker to think and become is essential to the process!  And the advancement of product development, and innovation, and production, and marketing, and - well, you name it.  Think about all of the "ands"  that follow.

One big  "and"  is the risk involved in all of that.  Risk may be the biggest reason that people of accomplishment, those free enterprise entrepreneurs of accomplishment, do not sit back and let things happen to them.  If an entrepreneur wants his product/idea to come to the market there must be a lot of making things happen! 

Look around!  This only happens in free enterprise spheres.  Where is the new thinking, new science, new tools, new ideas, new music, new art, new CONTRIBUTION, the new whatever (!), that advances everyone, that lifts everyone, that improves the lives of everyone, coming from?  All of the controlled people?  The people under the "gentle care" of dictators?  The economies where the wondrously-smart bureaucrats make all the decisions for the rest of their societies? 

Where do so many in the world go to get educated?  Go for training in things like medicine, aerospace, global business, technology, or you name it?  Where do people go to advance themselves as individuals, as world participants who make a difference, as members of a worldwide, corporate team?

They go to environments that are conducive to all that happening.

According to Leonardo da Vinci, they would want to go to where they can make things happen for them.

Free enterprise allows go-getter people 
to happen to things.

Wednesday, January 7, 2015

Free Enterprise Does Great Good To The People

"There have been abuses connected with the accumulation of wealth; yet it remains true that a fortune accumulated in legitimate business can be accumulated by the person specially benefited only on condition of conferring immense incidental benefits upon others. Successful enterprise, of the type which benefits all mankind, can only exist if the conditions are such as to offer great prizes as the rewards of success.

The captains of industry who have driven the railway systems across this continent, who have built up our commerce, who have developed our manufactures, have on the whole done great good to our people. Without them the material development of which we are so justly proud could never have taken place."

Theodore Roosevelt (1858 - 1919)

The term "Robber Baron" is an interesting one.  Of course it's a term intended as a slant, intended as a swipe at reality, and intended as a means to sway readers of history away from capitalism as a viable form of economic development.

But how did the west, how did the United States, grow so rich, and so fast?

Because monopolistic capitalists preyed on the poor and built huge business entities by suppressing all advantages to the ignorant and the slow?

No, not really.  Were there abuses, a word used above by Mr. Roosevelt?  Certainly.  There always are.  And the gubment provided a backlash toward what they perceived as monopolistic growth by trying to crush it with antitrust legislation.  What that succeeded in doing was breaking up a whole into smaller parts which each grew larger than the previous whole.  But that is another story.

The brilliant organizers of the American industrial revolution did so because they took advantage of new business organization techniques, and took huge risks.  They developed technologies and utilized natural resources to such an extent that out of nothing that previously was they created a vibrant something!  Not only did their businesses (and industries) grow, but all of the ancillary businesses (and industries) grew as well.   Think, for example, of all the towns, and businesses in those towns, that sprung up because of thousands of miles of railroad tracks that connected left to right, and up to down?  Goods and services could move from place to place, and thrive.

These Business Barons took advantage of free-market economics, which they called "enterprise," and combined it with the politics of freedom and rugged individualism, attracted a work force made up of natural-born citizens and immigrants who came to share in this growth, and utilized the diversity of skills (not heritage) and knowledge and energy of this work force, so well that these Fortresses of Free Enterprise made lives better for everybody.  They were EXCEPTIONAL at it.

If these immigrants were so badly mistreated why did so many keep coming for decades to take advantage here of what they could not take advantage of from where they came?  These immigrants kept coming because the word got out!  It was better here!  Was the work hard?  Yes.  Did they deal with personal and religious prejudices?  Yes.  Was there severe mistreatment at times?  Yes.  Was the life easy?  No.  But opportunity was in abundance, and futures were staked.

No group of men, these Business Barons, put a bigger stamp on the cultural and charitable and educational institutions in our society.  They established museums, art galleries, cultural halls, theaters, schools and universities, libraries, church buildings, orchestras, and other social and educational entities in virtually every city in which they prospered.  Indeed, no group of men in history has contributed more to these kinds of social things, and in particular to charities, than this group of men.

These so-called "Captains of Industry" created extraordinary economic privilege for all.  And how?  By employing an uncommonly forceful defense of laissez faire gubment policies and the protection of private property rights to form these new economic systems.  The means of finding, developing, producing, combining, transforming, manufacturing, transporting, communicating and financing a nation's natural resources came to be.  This is what T.R. meant by "material development" in the quote above, about which "we are so justly proud."

And the west, and the country, and the people, grew rich.  Let's keep it that way.

Free enterprise does great good to the people.