STEVE JOBS
Apple is the biggest company in history. I don't know if it will remain that way, and I would bet that it would not. That is not the important question. The fundamental question is this. How did Apple go from being on the brink of bankruptcy to being the most successful company in US history? And the bigger mystery remains. How did they do it without also becoming the most hated like Microsoft and Walmart? And why are those companies hated so much? I will answer those questions and others as well.
I am a free market person. I have always been for free markets. This is because I came of age during the Reagan era, and I remember the Soviet Union. I know that communism does not work. Capitalism works even if its fruits are unequal. I would rather live in unequal prosperity than equal misery. I have never wavered on this outlook, and I never will. Capitalism works.
The problem these days is that capitalism has gotten for itself a profoundly bad name. We have auto companies getting government bailouts. We have big box stores securing government favors denied to small business owners. We have companies that pay parasitic layers of managers to fellate one another all day while squeezing the last bit from their workforce that actually makes the goods and services that the company sells. Then, there are the banks. The banks are the black hole of evil in this economy. How did things get this way?
The belief is that if communism is inherently evil then capitalism must be inherently good. This simply isn't the case. Communism is inherently evil because it denies to people a basic human right. This is the right to own property. Under communism, your property belongs to the collective. Your right to that property is relative to your need. Under capitalism, you own your property. You get to exchange that property for something of greater value to you. Where capitalism fails is when you exchange something of greater value for lesser value. This is usually the result of fraud, extortion, and theft. As such, there are two types of capitalism--moral and immoral.
Immoral capitalism is all about making a buck. Moral capitalism is about creating value. There is a fine distinction here but an important one. It is relatively easy to make a buck. You buy low and sell high. Just go out and make a profit and quote some Ayn Rand to make it seem moral. It is quite hard to create value. Creating value is difficult. But it is worth it. This distinction is what makes the difference between being an Apple or a Goldman Sachs.
It is my belief that most people prefer stealing to trading. To get money without earning it is the dream of many. This is why a company like Enron ends up like it did. This is why people want a welfare check, a government subsidy. or a bailout. It is also why companies want to to stick it to their workers while the workers want to stick it to their companies. The free market merely restrains this vice as theft is not a long term winning strategy in a truly free market. Even the mafia will provide a valuable product to consumers because drugs and prostitution are more lucrative than theft and extortion. But the mafia still keeps stealing and extorting.
Government interference is what allows immoral capitalism to flourish. My libertarian friends will argue that this isn't true capitalism, and I agree. Where we will disagree is the belief that immoral capitalism disappears when you get government out of the way. It doesn't. If you have ever done business with a shyster car salesman, you realize that his sliminess is not the result of government favoritism. People really do try and con you and get over on you in a free market. It is stupid to do this, but this is simply the story of the frog and the scorpion. It is in the nature of the scorpion to work against his own best interest. Likewise, many capitalists often undo themselves because they would rather con and steal than make a fair exchange.
The genius of Apple was the genius of Steve Jobs. Steve Jobs wasn't out to steal. He simply wanted to make great products. The making of money was secondary to making awesome stuff people would want to buy. Steve Jobs practiced moral capitalism. He wasn't out to sucker his customers into buying some overpriced crap. Instead, he pushed his company to make the best devices that it possibly could. Apple did not always succeed in this endeavor as they will be the first to admit. But they did capitalism in the right way. If you create value, you are literally making money in the original sense of making money. Ayn Rand would be proud. This is how Apple became so successful. Wealth is about value.
A bank like Goldman Sachs is not about value. This doesn't mean that all banks and financial firms are inherently evil. BB&T refused to engage in subprime lending during the housing bubble because it was bad business because it hurt customers. BB&T wasn't out to merely make money but to make prudent decisions with the capital deposited in their bank. This is the creation of value. You don't have to make an iPhone to create value.
Creating value is a simple proposition. Make the goods and provide the services that you would want to buy at the best possible price. This is moral capitalism. When moral capitalism is done right, both parties in the exchange feel that they got the better part of the deal. In immoral capitalism, one party exults in the suckerdom of the other party.
The fundamental pathology of immoral capitalism is the same one with communism. It is the zero sum game. In order for me to win, someone else must lose. Immoral capitalists believe that profits are the result of conning people out of their hard earned cash. If you doubt this, read some of the emails from Goldman Sachs where they discuss "shitty deals" and sticking it to people. You won't see emails like this at Apple. Instead, you get Steve Jobs blowing a gasket and delaying the shipment of products because they do not meet his exacting requirements for quality.
The world would be a better place if people practiced moral capitalism on a universal scale. Workers would give honest labor, and companies would be loved by families instead of hated. Customers would display fanatical loyalty to quality goods and services, and the best advertising would be word of mouth. Commercials would list the virtues of a product instead of showing scantily clad bimbos or eye candy in some sort of psychological trick. This is the way advertising used to be. Customers were rational consumers not Pavlovian animals responding to a dinner bell.
The irony of our times is that the best capitalists are the ones who distrust capitalism the most. Steve Jobs was a pot smoking hippie who despised IBM. Left wing types make the best entrepreneurs whether it is Ben and Jerry's or the Grateful Dead. The reason for this is simple. Despite being Marxist in their leanings, they believe in creating value, and the market rewards this with lots of money. Ayn Rand would not be proud of this, but there it is. Hippies are moral capitalists. This ethic of value creation is all you need to be a successful entrepreneur.
How do we restrain immoral capitalism while letting moral capitalism flourish? This is very difficult to determine, but I think it would help a lot if the government stop bailing out the immoral capitalists like Goldman Sachs. Prosecuting fraud and theft would also help. Instead, the government directly helps these shysters while indirectly hurting the good guys in its efforts to make things better. The reality is that if companies are corruptible then government is even more corruptible. So, I don't believe government is the answer.
The real answer is you. You can champion moral capitalism by being a moral capitalist yourself. This means giving honest work at your job. That is a small start, but you have to remember that Apple started in a garage. Don't worry about making money. Just focus on creating value. If your company is too stupid to see this value, shop your services to other companies. Don't lie on your resume. Just tell your next employer about the value that you can create for him or her. Focus on the value not the money. The money will take care of itself. If a company can't appreciate the value you create, they are the fools and not you. When companies are this foolish, you can start your own company and hire people just like you that care about creating value. This is what Steve Jobs did. He created value, and the world opened its wallet.
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