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Thursday, June 15, 2006

Idealism and the Freedom Movement

Berend de Boer has emailed me an excellent speech by US Organic Food entrepreneur, John Mackey.

At the time I started my business, the Left had taught me that business and capitalism were based on exploitation: exploitation of consumers, workers, society, and the environment. I believed that "profit" was a necessary evil at best, and certainly not a desirable goal for society as a whole. However, becoming an entrepreneur completely changed my life. Everything I believed about business was proven to be wrong.

The most important thing I learned about business in my first year was that business wasn't based on exploitation or coercion at all. Instead I realized that business is based on voluntary cooperation. No one is forced to trade with a business; customers have competitive alternatives in the market place; employees have competitive alternatives for their labor; investors have different alternatives and places to invest their capital. Investors, labor, management, suppliers, they all need to cooperate to create value for their customers. If they do, then any realized profit can be divided amongst the creators of the value through competitive market dynamics.

In other words, business is not a zero-sum game with a winner and loser. It is a win, win, win, win game 'and I really like that'.


Read the full speech here.

This speech articulates far more eloquently than I could, a better way forward for the freedom movement.

The left has the idealism to attract youth, but has few real practical solutions. The freedom movement has heaps of solutions, but we often under values the idealistic potential of our ideas and allow ourselves to be painted as motivated only by personal material success.

I am going to be answering some pretty tough questions in the next few days. I took on the challenge because I am idealistic about freedom and wanted to show that freedom is not only immensely practical, but also incredibly inspiring.

I urge all my readers, left, right and centre, to read the above article because it effectively demonstrates a better way to advance the cause of human liberty.

8 Comments:

Anonymous Anonymous said...

"At the time I started my business, the Left had taught me that business and capitalism were based on exploitation: exploitation of consumers, workers, society, and the environment. "

I don't know many people on the left who think that. They may think that pure capitalism opens the opportunity for exploitation by those with the productive assets but I doubt that many think that the basis of capitalism is exploitation.


"Instead I realized that business is based on voluntary cooperation. No one is forced to trade with a business;"

... assuming all needs are satisfied.


"customers have competitive alternatives in the market place;"

... with the exception of monopolies.


"employees have competitive alternatives for their labor;"

... assuming there is a large enough and flexible demand for labour, workers have the right to form unions, the country hasn't been screwed by IMF structural adjustments and the country hasn't been caught up in the 'race to the bottom' caused by pseudo-free trade agreements.

If you look at the sweat shops in Jakarta, people can either not work and starve or work and be malnourished. Many of them work 16 hour shifts for only $2 a day. The employers can afford to pay them a living wage but don't.


"investors have different alternatives and places to invest their capital."

... but not everyone can afford to invest; and those who do have the incentive to invest in the place with the cheapest costs of production. In the case of low to medium tech manufacturing the capital goes towards the countries with the lowest wages and poorest conditions for workers.


"Investors, labor, management, suppliers, they all need to cooperate to create value for their customers. If they do, then any realized profit can be divided amongst the creators of the value through competitive market dynamics."

... but sometimes the powerful would rather coerce than cooperate. If Nike profits go up, the sweat shop workers would still be paid the same. Profit sharing rarely happens for low level workers despite those workers being vital for wealth creation.

9:00 PM  
Anonymous Anonymous said...

If people are desperate enough, they become vulnerable to exploitation. As long as the state is correcting market failure and providing an adequate safety net, most of the statements quoted from that speech would hold true.

9:05 PM  
Anonymous James said...

" As long as the state is correcting market failure and providing an adequate safety net"

Please provide one example of "Market failure".There is no such thing.Its like claiming nature fails when a tree withers and dies or a beaver dam breaks causing flooding...these are examples of nature working as it does...so too does the market operate according to supply and demand and the incentives and disincentives people in it friend themselves offered.

There is no "FREE market" operating anywhere yet...the Government has a hand in everthing that go's so to blame 'the market" when its the hidden dirty hands of Government to blame is very rich....but so typical.

11:00 PM  
Anonymous James said...

Whoops! ...this line..

"and disincentives people in it friend themselves offered."

should read...

..."find themselves offered"

11:02 PM  
Blogger Berend de Boer said...

Mr Anonymous, just listen once to parliament when it is in session will you? The late Hon. Rod Donald pronounced entrepreneur as criminal. He uses these two terms interchangeably.

10:12 AM  
Anonymous Anonymous said...

"Please provide one example of "Market failure".There is no such thing."


Market failure and government failure are terms used in economics. They are defined in most introductory macroeconomics texts.

From wikipedia:
"It should be noted that the word "failure" here is not intended to mean an economic collapse, or a breakdown in market relations. Market failure is a claim that the market is failing to create maximum efficiency. It doesn't mean that the market has broken down or ceased to exist."

Some wikipedia entries:
Market_Failure

Government_Failure

2:55 PM  
Anonymous Anonymous said...

"The late Hon. Rod Donald pronounced entrepreneur as criminal. He uses these two terms interchangeably."

I never heard him say that.

The following is from one of his speeches:

"I would like to make clear at the outset that the Green Party recognises successful businesses are crucial to a thriving economy."

"Our attitude to the business community shouldn't come as a surprise. After all, many of our MPs were in business before coming to parliament."

"My first business venture, Piko Wholefoods Co-operative, is still going strong 25 years on, as is Trade Aid Importers, the fair trading organisation I managed for six years before coming to parliament.
"



Greens mean business

3:13 PM  
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