“Evil” Profit
Since I’m self-employed now, it astonishes me when liberals talk about the evils of the profit motive, and generally makes me believe that most people who talk about how evil profit is have never been able to earn one for themselves.
In the health care debate, some people say that a person’s health is too important to leave to profit-seeking businesses and should instead be left to the government. But in many areas of my life in which companies provide me with goods and services in the search for a profit, I am very satisfied with the results. Isn’t health care too important to not leave to the profit-seekers?
Well, liberals say, seeking profit motivates you cut costs and quality, jack up prices, and generally to rip people off. Evil insurance companies will deny coverage so that they can keep more of their money. But this argument is very symptomatic of never having been in work for yourself, where you realize that money isn’t the only thing that keeps your company running.
Any good businessman knows that you can’t cheat your customers unless you want to run out of customers in a hurry. The more people who perceive you as a ripoff, the less customers you’ll have, which can eventually drive you out of business. You see every day how much money companies are willing to spend on marketing – you don’t think they worry about word-of-mouth marketing and customer service?
In order to keep money flowing, businesses have to stay tight. They have to cut out what doesn’t work and expand what does work. They have to work quickly in order to cover payroll. Government operations have no accountability to customers and don’t have to keep their operations tight in order to continue operating – they just need a higher-up to approve their budget for the next year. By the way, in order to compete with other businesses for new customers, guess what? Companies have to keep their prices competitive in their market.
When I ride on an airplane, I trust the pilot to land the plane safely for a number of reasons, many of which depend on the pilot’s self-interest. I trust that he wants to earn money by having a reputation as a good pilot, which inspires quality work. On a more basic level, I trust that he wants to keep living just like I do, which motivates him to land the plane safely.
Similarly, everything I find in the free market seems to work out very well. If I place an order for a product, it is the company’s self-interest that makes the product high-quality, the delivery company’s self-interest that brings it to me quickly and the delivery man’s self-interest that delivers the package safe and sound. None of them are doing it because they like me or are particularly generous – they’re doing it because there’s a profit in it, and there’s less profit in ripping people off.
Check out services like Crowdspring.com, in which you can post up a graphic design project for people to complete. You get to see their samples, awarding the project to the one you think works the best. You find good work for cheap, while the potential profit of the project inspires better work in hope of earning your business. Yes, you have to spend your own money to make it happen, but it’s that business transaction that keeps everything efficient and high-quality. (By the way, if you post a project, Crowdspring.com says the average amount of samples you receive is over 85. Eighty-five!)
Do some companies cheat? Of course. But that’s what the government should be protecting us from, not from the competition of the free market. The great thing is, we already have anti-fraud laws in place. By the way, how has that whole “cheating” thing worked out for Enron?
When I pointed out how great of a company McDonald’s is, one of our BPN members pointed out that McDonald’s food is bad for you. Okay, so sometimes you can buy things that are bad for you. So what? American enterprise has wiped out hunger across the country so thoroughly that our main problem is that we’re fat. The free market has also produced Whole Foods, another profit-seeking company that is not in the business of ripping people off.
Many companies work with the government in order to exploit situations for profit, but that’s just another argument for limited government. Companies should have to compete with each other in the marketplace, not in Washington. And when you believe that government can do a better job of providing for us than the free market can, I ask you, what is the government’s incentive to do a good job? Not much, because they keep us as customers by force of law.
That’s wrong.
You’re right that I’ve never earned a profit for myself, so you’ll probably disregard this comment altogether. And although I’m not a member of a low-income house, I”m aware that there are people in this country (who might actually be hungry and not fat) who can’t afford the “luxuries” that are necessary to live in today’s day and age. This is when the conniving, swindling monsters of these companies emerge–when they can take advantage of some poor, unsuspecting fool who doesn’t know any better or can’t afford any better. I’m not going to claim that I’ve looked into the lives of either the super-poor or super-rich, but have you? Or are you just making commentary from a suburban, middle-class, everything-provided-for-me perspective?
In your plane scenario, I’d also like to add that the pilot would probably like to land the plane safely so he (and the people aboard the plane, too, I suppose) doesn’t perish in a fiery explosion. Or something similar.
Oh, and by the way, the more people who perceive you as a ripoff, the FEWER customers you’ll have, and Crowdspring.com says the average NUMBER of samples you receive is over 85. (I’m an English nerd–I correct grammar like it’s my job. I wish it was my job!)
“You’re right that I’ve never earned a profit for myself, so you’ll probably disregard this comment altogether. And although I’m not a member of a low-income house, I”m aware that there are people in this country (who might actually be hungry and not fat) who can’t afford the “luxuries” that are necessary to live in today’s day and age. This is when the conniving, swindling monsters of these companies emerge–when they can take advantage of some poor, unsuspecting fool who doesn’t know any better or can’t afford any better.”
The whole idea of competition is that the company that can provide the best value to the “poor, unsuspecting fool” is the one that would thrive and be profitable.
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