BUSINESS
THE FREE ENTERPRISE SYSTEM

This lack of results-based training in our schools has led to a lack of understanding of our free enterprise system. We live in the greatest country in the world, with the most freedom and the most opportunity due to our free enterprise system, yet we do not teach free enterprise in school. That is an almost unbelievable fact, yet sadly it is true.

In a free enterprise system, your customers score you everyday. An entrepreneur that does not satisfy the consumer will soon be out of money as the consumer will take his money elsewhere. Edmund Opitz in his great book, “Religion and Capitalism - Allies Not Enemies” said:

“All these good things are a result of the effort which began two centuries ago to put the system of liberty – equal rights before the law – into practice. But, of course, when men are free politically there will be, inevitably, economic inequalities. There will continue to be rich and poor, as there have been in every society since history began, but with this difference: the wealthy will be chosen by the daily balloting of their peers in the market place and the wealthy won’t necessarily be the powerful, nor will the poor necessarily be the weak.”

This means the individual that is consistently winning in a free enterprise economic sphere is satisfying the consumers best, no matter what their competitors or detractors say. Warren Brookes in his great book, “The Economy in Mind” said:

“Since economic thought first became formalized over two centuries ago, there have been essentially two different views about wealth. One view, first defined by Adam Smith and Jean Baptiste Say, is that wealth is primarily metaphysical, the result of ideas, imagination, innovation, and individual creativity, and is therefore, relatively speaking, unlimited, susceptible to great growth and development. The other, espoused by Thomas Malthus and Karl Marx, contends that wealth is essentially and primarily physical, and therefore ultimately finite. The modern presentation of this view argues that since usable energy is steadily diminishing into entropy, all wealth is really cost to be shared more equally.”

In a nutshell, Adam Smith believed in free enterprise and Karl Marx believed in communism/socialism. I am always surprised at how many Americans will argue for the worn out ideas of socialism and Karl Marx. According to the economist Irving Kristol:

“The most important political event of the twentieth century is not the crisis of capitalism but the death of socialism.”

Marxism says that as capitalist societies develop, most people are hounded into abject poverty while a tiny group of capitalist thrives. But in fact capitalism has always made societies richer, much richer. Capitalist get rich and workers become more prosperous than their grandparents could have ever imagined possible.

Roger Kimball in his article “The Death of Socialism” said:

“It is certainly significant that the Soviet Union imploded and that its last leader Mikhail Gorbachev recently acknowledged that Communist claims about economic progress had been ‘pure propaganda’………But I cannot help receiving the news of socialism’s death with a certain skepticism. For one thing, the fact that an idea has been thoroughly discredited does nothing to render it impotent. It is part of the perversity of human nature that discredited ideas are often the most successful ideas. Then too, I see little evidence that socialism’s fundamental tenet – namely, the ideal of equality – is on its way to the dustbin of history. The wheels of egalitarianism may grind away more slowly in liberal democratic countries than in Communist ones, but grind away they do…time and again history has taught us that the hunger for equality is among mankind’s most brutal passions. It is for this reason that I believe the philosopher David Stove was correct when he identified ‘bloodthirstiness’ as a central ingredient in the psychology of egalitarianism. Socialism will be conquered to the extent that egalitarianism is conquered. In the meanwhile, I fear that Stove is correct that ‘very far from communism being dead, as some foolish people at present believe, we can confidently look forward to bigger and better Marxes, Lenins, Stalins, Maos, etc…’”

It is not hard to find numerous examples of people arguing against free enterprise from a Marxist Socialist position - not everyone can make it as an entrepreneur, the critics yell. Why don’t you share all the wealth equally, regardless of performance, it’s the only fair thing to do, say others. Winston Churchill said, “Socialism is the equal sharing of misery.” The wealthiest countries are the freest every time, because they allow the entrepreneurs who have the best ideas and serve the consumers best if they wish to create real wealth.

As citizens of the wealthiest country it is imperative to understand just how that wealth was created. To criticize the entrepreneur who generates the ideas and risks his capital is like shooting the horse that pulls the wagon. Entrepreneurs who consistently satisfy the customer should be heroes. They must not be labeled as criminals as they were and are in today’s socialist countries. George Roche wrote:

“However absurd the Marxist theory, all its prejudicial conclusions were retained and are still widely expressed in hatred for, and attacks on, a free economic order. In another sense, Marxist theory did not and does not matter. Its real purpose was to turn envy into righteousness and to justify the immemorial resentments of weaklings and failures toward more successful men. In envy, Marx’s followers already clung to the ancient fallacy that ‘wealth’ was static, not constantly created. It follows from this blunder – exploded by Adam Smith a century earlier (1776) in “Wealth of Nations” - that to acquire wealth you had to steal it from somebody else. All they wanted was an excuse to unleash their envy and hatred with moral righteousness and Marx gave it to them: ‘capitalism is theft’…No demonstration in this century has been more overwhelming than the folly and brutality of this thinking, and the moral as well as economic superiority of free markets. Yet the anti-hero nurses his old fallacies and false righteousness to vent his anger against ‘the rich.’ Deep down he says, ‘It’s not my fault I am not more successful. It’s theirs, it’s the systems, and it’s the worlds.’ Deeming himself to be sensitive and superior, he reasons that if the world does not recognize it, the world is not good enough for him. He will punish it. If the system doesn’t put him at the top of the heap, nobody else can be, either. He will level it…from this cesspool of voodoo economics, whiny self-justifications, anti-heroic posturing and venomous envies springs the modern’s loathing for free markets in a free society. America, symbol of freedom and success, is for that very reason the quintessence of evil in the eyes of the anti-heroic intellectual – here as well as abroad. We do not understand anti-heroism adequately until we see its roots in envy and its motivation in revenge.”

As I read this, my thinking became so much clearer on why socialist countries hate America, and why socialists living in America hate America. There is living proof that their system doesn’t work.

In my opinion, no business in America today better exemplifies the free enterprise system than the Team, powered by Quixtar. When you hear people say negative things about our business, ask yourself why they are saying it. Many are just ignorant about our business and repeating rumor, hearsay or popular opinion, but some are professional anti-heroes that spend countless hours sharing and repeating negative lies and disinformation. The professional anti-heroes all argue from a socialist, anti-heroic, position. “It is wrong to make money in that “pyramid” they say. If someone is making money then someone is losing money.” These people have been well trained by Marx and Malthus.

Warren Brookes in his book “Economy in Mind” said:

“The primary and essential character of wealth is metaphysical, not physical, and is the direct result of the creativity of mind, not the availability of raw materials…Ultimately, a human being is wealthy not because of what he has but because of what he knows. What he has, he can lose through disaster, obsolescence, taxation, or theft. What he knows, he can never lose unless he loses life itself. Thus his real wealth is a characteristic of his thinking not a measured amount on a bank ledger. In fact, our accounting systems are notoriously and increasingly inadequate in their measurement of the real wealth (and potential) of our economy.”

This is a major reason why the Team places so much value on training and education. The real wealth in any business is the knowledge that exists in its people’s minds, not its products. The ability to adapt quickly to market conditions is what separates great companies from average companies. That requires knowledge. The amount of information going into the minds of the leaders is what is making the difference for our teams. When people criticize our training system, I know why. It is just another form of socialist anti-hero rhetoric.

The difference in thinking regarding these two concepts of wealth was never more dramatically revealed than by comparing President Jimmy Carter’s 1981 farewell address and President Ronald Reagan’s Inaugural address:

“The rapid depletion of irreplaceable minerals, the erosion of topsoil, the destruction of beauty, the blight of pollution, the demands of increasing billions of people all combine to create problems which are easy to predict and observe, but difficult to resolve.” Jimmy Carter, Farewell Address, 16 January 1981

“It is time for us to realize that we are too great a nation to limit ourselves to small dreams. We’re not as some would have us believe doomed to inevitable decline. We have every right to dream heroic dreams.” Ronald Reagan, Inaugural Address, 20 January 1981

Talk about the difference between anti-heroic and heroic! Only four days separated these two speeches but you would think that these gentlemen were talking about different countries. In fact, they were, because both were saying what they believed based on their outlook on life. Anti-heroes primarily see obstacles (and create obstacles) while heroes focus on opportunities (and make opportunities). Napoleon said, “Leaders are dealers in hope.” Ronald Reagan was a leader who gave hopes and dreams back to many Americans, not by promising handouts, but by providing opportunity.

It’s no different on the Team. There are obstacles and opportunities in our business as well. We choose to focus on opportunity. We’ll deal with the obstacles of course, but we believe, as Reagan did, that we have every right to dream heroic dreams! It takes heroes to build the business just as it takes heroes to build any long-term successful business in a free enterprise setting. Let’s hear what George Roche has to say about heroes:

“Heroes are a fading memory in our times, but we can still recall a little about them. We know, at least what sets the hero apart is some extraordinary achievement. Whatever this feat, it is such as to be recognized at once by everyone as a good thing; and somehow, the achieving of it seems larger than life. Even by this sparse definition, the hero’s deeds rebuke us. We have been struggling frantically merely to achieve the ordinary: that measure of happiness each of us is supposedly entitled to. The hero in contrast overcomes the ordinary and attains greatness, by serving some great good. His example tells us that we fail, not by aiming to high in life, but by aiming far too low. More it tells us we are mistaken in supposing that happiness is a right or an end in itself. The hero seeks not happiness but goodness, and his fulfillment lies in achieving it. His satisfaction such as it may be is thus a result: a reward if you please for doing well. This path to happiness is open to all, not just heroes, and until modern times nobody believed there was any other. To pursue happiness for its own sake it was believed was the surest way to lose it.”

The heroes in my life have always stretched me to do more by their example. I knew if they could do it, I could do it, even if I had to work three times harder. Do you believe that for yourself? Even if the other fellow is twice as smart, if you work hard enough, you can achieve success in our great country.