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Pride vs Profit

The entrepreneurial spirit can push many to start a small business so the person can make a product or sell a service that the person is confident can be done right and so the person can be rewarded for those efforts. If the product or service is needed or desired by the local community the person can take pride in both the accomplishment and the recognition of that contribution to the community's economic health. This endeavor could be a farm, a small store or merchant business (such as selling one's crafts or one's service like a beauty salon or auto service shop), or even a church, restaurant or tavern.

For those not having that independent spirit but still the ambition to make a contribution, the person could learn a skill that is needed. These people could become teachers, doctors, nurses, or perhaps professionals like engineers or geologists. In this case, people having different skills can work in cooperation with others to provide a more efficient service (like a school needing different courses to be taught, or a hospital needing different maladies to be addressed). While not individually responsible for the economic success, each person can take pride in their accomplishments and can receive the recognition of that contribution.

The critical component of this economic model is each person has some control over their profession. A slave forced to dig a trench is far less likely to take any pride or satisfaction in a job well done than a person who provides a drainage system that includes a trench.

In a small community, a banker could provide money to a farmer in need of a necessary improvement and the farmer would repay the loan with interest. In this transaction, the farmer maintains control over his operation without interference by the bank which just provides the financial resources. In this case, the banker is part of community and the process of collecting and disbursing financial resources serves a critical function for the economic health, since any family and any business just like the weather can have its ups and down (perhaps a new car is needed or a new baby is expected).

The inherent diversity of the human race (different backgrounds offering different perspectives contributing different alternatives) and the specialization of labor within society contribute to the vitality and integrity of humanity.

With the industrial revolution and the rise of the financial class, those having more money than the rest could just delegate work or just purchase services without having to actually provide a service to the community, other than perhaps coordinating others that provide those services. A new class of business and financial managers is not based in the small businesses themselves but rather they sought to manage the businesses themselves or their funds. These managers are not motivated by the labor of making something or providing a service. Their motivation is to manage others to maximize their own accumulation of wealth; in other words, they seek to maximize profit and the motivation is greed. One example is the recent development of new financial derivatives, where money could be made simply by packaging other assets and taking fees and interests off that sale. Another example is the sale of subprime loans, knowing those who were sold the commitment would eventually default but the seller was able to realize fees and income from the transaction, with no concern of the eventual outcome. Another example is naked short selling where a company sells shares that cannot or will not be delivered.

When two businesses merge, with one taking over the other (two coming together as a partnership will generally be possible only with very small businesses though the same behaviors might occur), a manager can deal with the situation as combining just financial assets (not dealing with the impacts on employees). Duplication can result in simple termination; units not turning enough profit can be liquidated (closed or sold off). A merger is rarely good for any of the employees doing the work (at the bottom of the hierarchy) since they either lose their jobs or are told to do their job differently (including new responsibilities, often without accompanying compensation) or perhaps even transferred to a new job (which could actually be beneficial to some, who are able to diversify their skills and experience, but this would not be part of the decision). A merger is rarely good for the marketplace since competition can entice innovation and improvement; by removing competition, a company is able to continue making profit on what was made or done before, perhaps even more profit without that competition so the urge to innovate is reduced.

Business managers of large companies are able to market their subsidiaries among different communities in an attempt to find one willing to offer lower paid employees, perhaps tax breaks to the company, or changes to local zoning rules to accommodate the new facility. This act of putting workers in one community in competition with those in another community is an act of extortion, forcing those to either accept a lower standard of living or lose their job. With multinational companies, this marketing offers even more inhumane tactics, where the search is for a country willing to offer its low paid citizens working in harsh conditions and willing to accept environmental damage (when the original host country had established pollution controls to protect the local community).

These behaviors indicate those making such decisions have apparently lost any empathy for those human beings involved. The decisions are made with only economic justification. There have been notable cases where such inhumane actions have been recognized and/or studied. The Nuremberg Trials after World War 2, where many in the German government and its armed forces were charged with various crimes against humanity. Many of those not at the top of the hierarchy used as their defense a claim they were just following 'superior orders' but this was considered not valid for escaping punishment though it might lessen its degree.

The social psychology experiment performed by Stanley Milgram at Yale in the early 1960s tested obedience to authority figures in an attempt to measure the willingness of participants to obey and perform acts in conflict with their conscience. In the original study, some 65% of the participants administered the highest voltage shock. One of the interesting observations in these studies is the closer the participant was to the subject getting the shock, the likelihood the participant would refuse to obey the instructions increased. Conversely, this suggests that the increased separation from the victim could mollify their feelings of empathy conflicting with their obedience.

As the world's economic system has become dominated by multinational companies (both manufacturers and financial institutions), the leaders of those entities apparently lose their empathy for those affected by their business decisions. If it is not possible to restrict the size of these institutions to maintain some level of human contact from those at the top to those at the bottom (employees or those in the local community) then there must be some check to influence those bad behaviors. With the various means of economic extortion available, and when the local or national government leaders have condoned those behaviors the local armed forces also become available to suppress the local opposition, apparently only public demonstrations and protests offer a possible constraint. Unfortunately, since those in charge have also shown their willingness to infiltrate opposing groups and these infiltrators cause violence to damage the reputation of the protests and to lead to a violent response to the protests, the non-violent demonstrations to oppose these inhumane actions confront misery and even death during the course of events.

With the recent Occupy Wall Street movement, a number of political analysts have remarked how the current economic conditions, with the international companies and banks having such power, is significantly different than any previous generation.

Bill Moyers recently gave a speech about this new development.

There is the concept of odious debt.

The world appears headed either for economic collapse (as the Ponzi scheme initially orchestrated by the large  American financial institutions eventually brings down the entire system (the EU is already on the brink) as unable to pay its obligations) or an authoritarian world government marked by austerity measures applied to all but those in the elite privileged class.

created - November 2011
last change - 11/06/2011
broken links 12/14/2018
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