Yesterday's yard sale produced three notable conversations, every one instructive and thought-provoiking in its own respect.
The first exchange was with a man I'd guess to be in his mid thirties. He was wearing a golf shirt with the logo of a servicing/maintenance company I recognized. This company does a lot of work for the local large corporation as well as smaller-sized clients. When I asked him about his company, he immediately gazed past me in a reflectively somber way.
He has been with the company many years and is ready for a career change. He said the company is no longer what it used to be. I asked in what manner had it changed.
"It used to be a company. Now it is just concerned with making money."
My mental knee-jerk reaction was to think, "Of course it is concerned with making money. How else could it operate and hire employees? Any company that is not first concerned with creating a margin--profit, that is--will not be able to employ people."
He left out the details of his disaffection, paid for his item, and went on his way. Consequently, he gave me lots of room for conjecture. And, after speaking with my thoughtful and judicious wife with business experience galore, here's the lesson I learned:
Yes, companies by their very nature have to be concerned with making profits. They make profits primarily by providing the needs and wants of the great majority of everyday people, consumers that is. As Walter E. Williams poignantly points out: Who made more money, Henry Ford or the founder of Rolls Royce? In the process of pursuing margins (profits) companies of necessity have to utilize all possible capital, the productive capabilities of people (labor) being one. Enter employment.
Put in cold, calculating, capitalist terms, companies require humans to make profits.
Before anyone gets emotionally wrapped around the axle here, give it a minute. There is a very good, humane upshot to such cold calculation on the part of companies. Simply, if companies make their employees unhappy, then said companies are ill-affecting the productive capabilities of their capital. When productive capabilities are not maximized, let alone lessened, margins shrink and profits are lost.
It is just bad business to not provide an environment in which employees are happy and wish to stay on. (Hiring and training new employees is a costly capital investment). Further, the right environment will attract talented and motivated employees from other employers, creating a competitive labor environment in which other companies will feel compelled to provide attractive employment lest they lose their best employees.
Long sentence to wrap up the lesson learned: In a free and competitive market without government regulations and bailouts that unfavorably and artificially give advantage to some companies over others, and without excessive union contracts that give immunity to the lazy and incompetent and artificially drive wages above their market value, companies have to treat their employees right out of their cold, calculating, pursuit of profit. Rational obsession with profits, in a free market, makes for favorable working conditions. Funny, that.
It's just bad business to do otherwise. If my yard sale customer's company is engaged in such bad business practices, it needs to be driven under by a superior competitor or so threatened. This fellow's talents and time would be better utilized and he would be better compensated, by said competitor or his current employer. Free people voluntarily and respectively cooperating to pursue their self interests in a free and competitive market works. He's interested in gainful and rewarding employment, companies in profits.
Cold, calculating capitalism works, so much so it makes me feel all warm and fuzzy inside.
