Jim Gammon at American Thinker asks the question, “Is Capitalism Evil?” Gammon comments on the common mischaracterizations of capitalism by the Left, and how bad management techniques do not signify an inherent flaw in the capitalist system.
In conversations with supposedly educated people who lean to the left, the concept is an accepted axiom, that maximizing profits – at the expense of everything good in the world – is the one and only purpose of business. It is the socialist rallying cry these days.
This really frosts me. I have been in business for 35 years, and there are many shades of business management styles, and only one puts “maximizing profits” first. In my opinion, “maximizing profits” as a management goal is the most ill-conceived and destructive business management style. It causes loss, not gain.
Survival is the first objective of any business. Profit is not the goal of running a business, it is the result of running a business well. Through the business cycles, profits are never a constant, you make hay while the sun shines and hunker down during the winter. Real profit comes in two forms, increase in total value and cash in the bank.
Look at General Motors. This is a classic example of a company run into the ground by bad management. This is not the fault of the evils of capitalism, it is the fault of the evils of bad management. Communism is the ultimate form of bad management, not a solution to capitalism’s ills.
If you think capitalism is at fault for bad management, you know nothing of human nature. To paraphrase Steve Forbes – If government run business was better than privately run business, then Communist Russia would have won the Cold War.
This is a popular trope for leftists to argue. “Company X employed bad management and failed. That proves capitalism doesn’t work.” No, it proves bad management doesn’t work. Company X failed. Companies Y and Z, which provide the same services but without bad management, succeeded, and got Company X’s clients. It was the free market system that caused Company X to fail.
Socialism doesn’t allow for the failure of bad management structures. It simply forces people to suffer under them.