If you’re a dyed-in-the-wool conservative businessmen and titles like this make your blood boil, read this article. There are some thoughts in it you might find enlightening.
Free-enterprise capitalism is the best economic arrangement that mankind has invented yet. There, do you feel happier? Like Winston Churchill said about democracy, it’s a mess, but it’s better than all the other ones we’ve tried. But capitalism’s greatest strength — its law-of-the-jungle, survival-of-the-fittest, adapt-or-die method of replicating itself — is constantly being short-circuited by the fact that there are people involved.
The Cycle of Life
I don’t suppose I’m the first person to observe that the life of a business mirrors the life of a human. The very fact that we use the term ‘life’ makes it clear.
- Youth
When we’re young we’re full of good ideas. Our body cells are still growing, and we heal easily. We take risks. Likewise, a new company with a new idea is full of idealism and is interested in expanding. Old ideas are tossed aside, new people brought in. This company needs a government that encourages and guides innovation and creates a happy, healthy and well-educated workforce. Concepts like health care, education, freedom of choice and secularism come to mind.
- Maturity
As we get good at what we do, we become settled. We polish the skills we have attained and we concentrate on our strengths. We are more careful of our bodies because they don’t replicate so well anymore. We’re starting to worry about the future, and looking behind us to see the new upstarts that threaten us. We start to think about our pensions and what we’ll have to leave to our offspring.
A mature business is the same. Profits are rolling in, but success is not assured. The jackals that follow the true hunters are gathering: copycats, polishers, patent infringers, the inept and the true criminals. Government has to react to the rule-breakers by increasing regulation. The most recent example: social media on the Internet is going through this stage. It’s time for a government that will rein in unfettered freedom, or the Wild West will be re-enacted online.
Slower expansion, tweaking of the old product line and complaints about red tape are warning signs of approaching senility. Owners start looking around for ways to keep things going as they are. Red tape is a problem, but government regulation is a possible protection, a hedge against change. So, instead of looking for new ideas, they start to look for a government that will help them along. They also have enough money and community clout to perhaps swing some government assistance. This is the danger point.
Where the Divide Begins
The difference between companies and people starts here. Humans have a definite lifespan. If not shortened by some catastrophic event, our life reaches its limit when our cells refuse to replicate anymore.
With a company, this is not necessarily true. New people and new ideas can be brought in. A company with the right attitude can be in a state of constant renewal. Apple, Inc. is a good example. So far. Watch what happens every time Apple brings out a new iPhone. The first comment is always, “There’s nothing really new.” Steve Jobs is no longer around to deal with that situation. We’ll have to wait and see.
The moment your company starts to worry about “protecting our market share” and “getting rid of all this red tape,” and, last and worst, “getting a government bail-out,” you’re over the hill. The old wolf has missed his kill, and it’s time for new leadership: in the company, in the marketplace, in the country.
Old Age
Once into our dotage, we no longer have the ability to adapt. Our world shrinks as we lose the ability to deal with large amounts of information at a rapid rate. We want security, which means a lack of change. We come to think we deserve our retirement.
Once a company reaches the end of its creative tether, one of two things happens. First, some kind of cancer or other problem, internal or external, wipes it out.
The other option is perhaps worse. If the company has made obscene amounts of money, the cancer turns outward, consuming other companies in the need for new growth. Take Nestlé, which has digested about a hundred well-known brands. At least it still produces only foods, for humans and pets; other multinationals are not so choosy. They are in business to do business, and it doesn’t matter what kind.
Now, like an old person completely concerned with his own health, the main responsibility of the company is to its shareholders; all efforts are aimed in that direction. And the first place they turn is to government. If they can get a business-friendly government to reduce restrictions on their ways of doing business, they can continue to make that kind of profit without changing their ways. Smaller companies, workers, and the public at large come far down the priority scale. Witness the spate of “business-friendly” legislation enacted by the recent Republican Congress in their two years of rape and pillage.
Business-Friendly Government
So it turns out that this term is a bit of a red herring. It doesn’t really mean ‘friendly to business.’ It means “friendly to old established companies who are trying to keep everything the same so they can keep making money using outdated methods.”
If the Quebec and Federal governments had taken the billions they have poured into Bombardier (whose last innovation was a new, improved snowmobile in 1960) and invested it in new companies who actually had new ideas, the face of that province’s industry would be much different now, and our government wouldn’t have a dying albatross hung around its neck.
Last year, when Bombardier got a government bailout, their top executives got a bonus, and the public was outraged. “What did they do to deserve that?” Andrew Coyne quietly pointed out that Bombardier was not a company that manufactured airplanes and needed government money to do so; it was a company that operated to get government money, and manufactured planes in order to achieve that goal. The executives had done their job, so they got a bonus.
The Bottom Line
So a conservative government, especially one that terms itself “business friendly,” is not of great use to the development of a progressive, active economy. It concentrates its efforts on the companies that are past their prime, on the downhill. New and small businesses whose point in life is defined by expansion and innovation would be much better off with a less conservative, rigid and change-averse philosophy in government.
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