The Market Economy

See on Scoop.itIt Comes Undone-Think About It

We are effectively governed by merchants and businesspeople.  Their interest is to maximize profit for themselves, not to generate value for the societies that they govern.

The trouble comes because these two interests are mutually excludable.  You can’t be for maximizing profit for yourself or your business and generate value for the rest of society at the same time.  If that could be the case, then we wouldn’t be having races to the bottom over things that are fundamental to a healthy economy and society, such as wages and compensation packages.  Wealth would be flowing out to the public from the sources of production, not into the hand of the elites.  It’s not a question of taxation or increased government interventions in the market.  It’s about making sure that you’re getting paid according to the value of the work that you’re producing.  There is no hierarchy in the job market other than what we make.  The burger flipper is just as important as the CEO for the health of the company and more valuable in the economy because there are so many more of them.  They’ll spend, save, consume and invest more together than any executive can spend in his/her lifetime.  And that’s the bottom line, as far as the ECONOMY is concerned, not as the businesses are individually concerned.

Adam Smith called the merchants’ interests as being diametrically opposed to the interests of a healthy society and a valuable economy.  The barriers to business entry need to be lowered, workers need to have a strong voice in determining their compensation packages, and the environment must be taken care of.  These run contrary to the merchants’ and investors’ interests of maximizing profit in the short term without consideration of how the economy works and how the environment effects us all (including them).  Merchants and businesspeople can either be merchants and businesspeople or they need to give up their logic of feeding only themselves and become statespeople instead, if they can.  There’s no two ways about it, for the long term health of the society that they’re trying to preserve and improve upon.

Think about it.

Eli Levine‘s insight:

That’s the skinny of what we’ve got, as far as I can tell.

Take from it what you will.

Think about it.

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