My position on profit 1
My position on profit 1
The only way to take control of your life, raise your standard of living and move beyond merely surviving is to create your own unique product or service that you offer to increasing numbers of people in exchange for the things of value that you desire. This simple formula applies to countries as well as people. A self-sufficient economy has its own products or services of value to export to the world. Similarly, a self-sufficient individual has something of value to exchange in the global marketplace. That thing of value is based on your natural talent, skill, or interest—in other words, your passion!
So, here I am encouraging you to turn your passion into profit, while every now and then, if you read my column, you’ll hear my ethical opposition to capitalism and its effect on the world. Is there a contradiction here? Perhaps, but first some definitions are in order.
"Capitalism" is defined in the textbooks [and wikipedia] as: "an economic system in which the means of production are privately owned and operated for a private profit; decisions regarding supply, demand, price, distribution, and investments are made by private actors in the market rather than by central planning by the government; profit is distributed to owners who invest in businesses, and wages are paid to workers employed by businesses and companies."
The operative word in that definition is “profit.” In capitalism, the motive for producing goods and services is to sell them for a profit, not to satisfy people's needs. The capitalist’s prime directive could be stated as:
“We do WHAT we do, we do all that we CAN do, and we do what we MUST do, in order to earn a profit. Nothing else matters.”
This is a very important point to file away in your mind for future reference.
With that said, what we commonly experience as the effects of capitalism, and the profit motive behind it, is a bit less clinical, and has very noticeable and often severe consequences. Admittedly, people on various ends of the ideological spectrum will define capitalism and its effects quite differently. Here’s my take on some of the distinguishing features of capitalism as practiced in our society.
1. Exploitation/class distinction
The capitalist exploits the wage earner for her labor and pays her the lowest wage possible as a percentage of the value she creates for the private capitalist owners. In a capitalism-as-practiced system, you can never be paid the true value of your time and labor. That would negate the whole profit motive.
Similarly, the land and its natural resources are exploited by capitalists who take, deplete and destroy, but rarely replenish.
As a result of the exploitation of people and the planet, capitalism, as it is allowed to be practice, invariably creates a working class and a capitalist class—i.e. the “have nots,” and the “haves.”
2. No real value created
The most glaringly obvious fallacy of the whole system is that in the greater scheme of this concept we call life on the planet, there's no real value being created by capitalism-as-practiced. In other words, there’s activity, there’s distraction, there’s buying and selling, and what passes for economic growth, to be sure, but very little of real value is transferred from seller to buyer.
There’s no inherent value to a high-priced luxury car that costs $200,000, is there? Its value is a figment of one’s imagination. The seller has convinced you that you need such an extravagance. The buyer is convinced that he does.
Even among the basics of food, clothing and shelter, the value in most of the things we strive for are totally contrived! 99% of what exists to be sold in the average supermarket has no real value. The frozen dinners, the canned goods, the preserved, colored, flavored, pesticide sprayed food has limited nutritional value and is, in many cases, actually harmful to your health--it is destructive, and has negative value. However, these products were all created, harvested or using the time and labor of individuals who are paid a minimum wage, and the resources of the land which is exploited but not replenished. In other words, the things of real value that we have (our time, labor and the planet’s resources) are traded for, or converted into these things of contrived, imaginary value, and are then sold to us for more than the real value used to create them...for the ultimate benefit of the private capitalist owners.
Capitalism in a nutshell
So, essentially, you have an economic system and a way of life fueled by advertising which encourages consumerism, and that consumerism is based on the desire for non-essential goods of imaginary (and even negative) value, all built on the premise of exploitation.
Said another way: In order to survive, people are convinced to trade their most valuable asset of real value, --their time--for pieces of paper of fluctuating, and ever-decreasing value, so that they can purchase things of lower and negative value that they and others have created. To keep the whole system going, they are encouraged to buy things they do not need, to eat food that provides no health benefits, and to drive cars that pollute the air, and wear clothes that are all produced in ways that exploit those who do the work to create them, that deplete the earth's natural resources and ultimately lower the quality of life for the planet's inhabitants.
But it’s all prosperity, isn’t it?
At this moment, I'm looking out of my hotel room at a high rise building construction in a huge lot across the street. There’s the buzz of activity that says capitalism all over it.
Let's assume it's a hotel. Is this a sign of prosperity? Sure, everyone benefits in some way. Architects and engineers are rewarded for their design. Construction workers earn a salary. Suppliers sell their lumber and concrete. The owners of neighboring restaurants and shops benefit from the mealtime activity. Furthermore, when the hotel opens, even more workers are employed, and the city's leaders can boast that the economy is boosted based on the number of jobs created. Hotel profits increase, share owners reap dividends, and everybody’s happy! That’s prosperity, isn’t it? Perhaps. But, look, there’s a flaw in the foundation…..
The Foundational Flaws
There are a few beliefs and practices I’ve identified that point to flaws in the foundation of capitalist thinking
1. I’ve already alluded to one: the concept that no exchange of real value is required to be successful at capitalism. This violates a basic ethical principle of true prosperity which requires that equivalent value be exchanged such that both parties benefit.
2. Infinite growth. Economic growth in capitalism-as-practiced is based on the belief that every month and every quarter, the capitalist corporation can (and must) post higher and higher profits. This is flawed thinking. You cannot sustain infinite growth on a planet with finite resources. Something has to give.
So, how do we reconcile our wish to turn our passions into profit, without violating our ethics, and/or without falling into the trap of an essentially flawed business premise? Next week: The Passion Prosperity Reconcile.
Walt F.J. Goodridge is author of over two dozen books including Turn Your Passion Into Profit. Walt offers coaching and workshops to help people pursue and profit from their passions. Originally from the island of Jamaica, Walt has grown several businesses in the US, and now makes his home here on Saipan. To learn more about the Saipanpreneur Project and Walt’s philosophy and formula visit www.saipanpreneur.com and www.passionprofit.com)