By allowing ads to appear on this site, you support the local businesses who, in turn, support great local journalism.
Reviving free enterprise
Placeholder Image
Forsyth County News
Fear is a fearsome thing.

We think of our nation as the bastion of capitalism. Unlike other systems which attempt to control economic activity, we rely on private ownership and competition within a free market.

Although there are many exceptions where government regulates, subsidizes, taxes and even owns business entities, supply and demand play the major role in shaping our economy.

But clearly, as the current economic situation shows, wonderful ideals do not always create a wonderful reality. Let’s look at one of the reasons why, and what might be done to bring the ideal and reality into closer alignment.

Some time ago I proposed three principles which seem to apply to most situations. They are not startling, but it is amazing to me how often they are overlooked. Let’s apply them to the current situation.

When things happen, there is a reason. This statement seems so obvious as to be trivial. But frequently, we fail to address the reasons for the problems we face. This may be due to “political correctness,” habit, a desire for conformity or just the fact that cures often involve temporary unpleasantness.

Clearly, there are reasons why our economy is in trouble. I would propose that one of these is because many organizations have lost sight of critical connection between capitalism and morality.

Over time, nothing is enough. We keep striving to become bigger and better. That, in itself, is commendable. But when greed and unethical behavior become part of the equation, we undermine the very system we employ.

Instead of competition encouraging others to improve, therefore raising standards, cut-throat behavior urges others to adopt similar practices, creating downward spirals.

The search for “new and better” often results in leaping from one technology to another before anything is perfected. And service suffers as companies replace pride in workmanship with cost-cutting efforts.

Too much of anything is bad. As companies become bigger, they often force out competition. Monopoly, a logical result, undermines the system which gave rise to its development.

And bigness often brings arrogance and indifference, not only to customers, but also to employees, and this is the area I want to address. We forget that corporations are not impersonal financial entities. Corporations consist of people serving people.

Recently I was involved in a community function that contained a number of elements, one of which was a dinner.
The time frame was short. The local resort manager of a huge international chain reacted with: “submit a proposal in writing, our facilities committee will meet in about a week, and we’ll let you know.” In contrast, the owner of a local restaurant gave a positive decision before our telephone conversation ended.

Which of these best represents capitalism? I believe the image in most people’s mind would be the giant, worldwide corporation.

But contrast the two behaviors. In one, a salaried employee (perhaps also on a bonus) had a set of rules and procedures to follow. They governed his behavior and any deviation might have jeopardized his performance-rating. My needs were secondary.

In the other, the owner’s self-interest was directly tied to securing my business. Both are part of the same system; the results, totally different.

Think of the employee today in a large retail chain that is experiencing tough times. Every day, she comes to work wondering if it will be her last. Somewhere, in a remote corporate office, someone may make a decision that alters her life.

The ability to pay the rent or provide health care for a child rests in that individual’s hands. She feels helpless. No matter what she does, someone else will decide her immediate fate, probably based on a financial statement, perhaps devoid of human considerations. And if those human considerations are introduced, they will probably take the form of cutting off a portion of the enterprise so the rest might survive.

The behavior that results is predictable. The employee will cut back on spending, to try to minimize potential damage.
Second, she will probably start looking for other job possibilities. And fear becomes a significant part of her life.

The consequences? About 70 percent of U.S. gross domestic product is dependent on consumer spending. So as that employee cuts back, ripples go through the rest of the economy, putting her job in greater jeopardy. And as loyalty to the firm diminishes, so will service to the consumer, and the downward spiral accelerates.

Contrast this with a situation where the giant corporation reaches out to employees. “We are in trouble and we need your help.” It asks all to tighten their belts and work, creatively, store by store, to develop better ways to operate and to serve its clientele. Fear is replaced by energy, creativity and loyalty.

There is participation and some element of control over one’s fate. I can’t help but think that this, more human and humane approach, would resonate differently in today’s economy.

In his first inaugural address, FDR said “the only thing we have to fear is fear itself.” The challenge is how to break the cycle. Removing fear takes trust, and a trust bond, once broken, is enormously difficult to restore.

The greatest resource of any corporation is its people , and not just those in the CEO’s office. We seem to have forgotten this simple concept.

Companies that make efforts to harness the creativity and energy of their employees are likely to thrive, particularly firms that have found ways to allow their components to operate more closely to the simple entrepreneurial pattern of the “mom and pop” shop. That can only come with a strong moral approach to dealing with people and customers.  

Until we reintroduce the moral concept into the equation, we are likely to struggle from crisis to crisis, without confidence and trust, and trying to correct things via complex and unworkable laws and regulations. But all that is needed is for those in leadership positions to remember one of the oldest guiding principles of mankind: Do unto others as you would have others do unto you.

Dr. Melvyn Copen lives in both Georgia and Arizona. He is an educator and businessman who has worked and lived in many foreign countries and provides consulting services throughout the world. His column appears every other Wednesday. Please share your comments with him via e-mail at melcopen@hotmail.com.