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Thursday, Oct. 23, 2014

Legitimate, productive businesses are America's golden goose

By Greg Bell, For the Deseret News

Published: Mon, Aug. 4 8:00 a.m. MDT

 The recent national dialogue about the 99 percent, income inequality, and a mandatory minimum wage shows that anti-business sentiment is growing. Just how did free enterprise get a bad name in America?

The recent national dialogue about the 99 percent, income inequality, and a mandatory minimum wage shows that anti-business sentiment is growing. Just how did free enterprise get a bad name in America?

(Shutterstock)

The recent national dialogue about the 99 percent, income inequality, and a mandatory minimum wage shows that anti-business sentiment is growing. Just how did free enterprise get a bad name in America — home to Henry Ford, Edison, Carnegie, Hewlett-Packard, and Apple?

Crony capitalism? Too big to fail? Wall Street bail-outs for big banks? Enron? Excessive CEO pay? Income inequality? The 1 percent? Corporate money in politics? All of these have certainly tarnished our perception of big business.

In fairness, these negatives don’t apply to small business. Moreover, small business is growing while big business is downsizing. Since 1990, big business has shed 4 million positions while small business created 8 million jobs. Small business now accounts for 55 percent of American jobs and 66 percent of net new jobs since the 1970s. According to the SBA, there are 23 million small businesses in the U.S. — equal to 10 percent of our adult population. Americans start 550,000 businesses each month. It’s an essential part of the American Dream.

Irrespective of size, business is an indispensable ingredient in our free society. Business pays the bills, directly or indirectly. Without business there would be no jobs, and therefore no taxes, no government, no charities, no arts funding. The USSR substituted government for free enterprise. It didn’t work then. It never will.

Next time you attend a symphony or play, notice who sponsors the performance. Who supports our charities? Most major donors are businesses or businesspeople. Business has made our lives safer, healthier, convenient and even fun. Wal-Mart, Costco and Amazon bring affordable products to us in such an array and at prices we could only dream about two or three decades ago.

It’s estimated that capitalism brought 300 million Chinese out of poverty over the last couple of decades. The same thing is occurring in India. What welfare or government program could approach that outcome?

Yet, somehow a deceptive error has crept into the current view of capitalism. It’s an easy trap to fall into: If someone makes money, then someone else has to lose money. Wrong. Suppose there are two fruit stands selling peaches and only 100 cars will drive by each day. A buyer who purchases peaches at stand A is a sale lost to stand B. A and B are in a win-lose game in this example. But that’s not how it really works. There are a lot more potential buyers. Satisfied customers will return and buy more. They’ll tell their friends, which will result in more business for both stands.

If Cuba were to throw off its backward and corrupt Communist regime, install the rule of law, and honor personal property rights, enterprising Cubans and foreigners would quickly begin to develop Cuba’s tremendous resources, restore its ports, create jobs, pay taxes and build infrastructure. Free and newly employed Cubans would become consumers. Cuba would begin to export and import billions of dollars of products as it used to do. On a net basis, Cuba’s economic success will increase the size of the world economy. The phenomenon of free enterprise — people following their best interests — will have created that many more Cuban buyers, producers and sellers.

Wealth is not finite. Wealth can grow without limit. This law of infinite growth still applies in America, and we can all prosper by it.

Napoleon famously dismissed England as a “nation of shopkeepers.” His quip acknowledged that England’s formidable geo-political power grew out of its potent commercial economy. Likewise, our unparalleled economic power enables America’s superpower status.

Granted, business excesses must be curbed by the market and by regulation. We also need to help more people participate in the American Dream through education and training. But don’t believe people who say we need more government and less business and that business is selfish and even evil. We need more, not less economic freedom, more entrepreneurs, and fewer tax and regulatory roadblocks. Let’s not kill our golden goose — legitimate and productive businesses.

Greg Bell is the former lieutenant governor of Utah and the current president and CEO of the Utah Hospital Association.

Recommended
1. Roland Kayser
Cottonwood Heights, UT,
Aug. 1, 2014

Yes, Capitalism has lifted hundreds of millions of people in China and India out of poverty. In doing so it has also destroyed the American working class and is now quickly eating away at the middle class.

It is instructive that all of our so called "free trade" treaties have abundant protections for capital and zero protections for labor. Capitalists get protection from capitalism while labor goes down the tubes. A capitalist system cannot survive if people who work can't make a decent living.

Adam Smith warned us about collusion between employers to suppress the wages of their workers, thereby enhancing their own profits. As in much else, Adam Smith was right.

2. liberal larry
salt lake City, utah,
Aug. 1, 2014

This editorial states:

"The recent national dialogue about the 99 percent, income inequality, and a mandatory minimum wage shows that anti-business sentiment is growing"

Unfortunately the rest of the editorial uses Cuba, one of the worlds most extreme communist countries, to illustrate that capitalism is good.

We need an editorial that seriously addresses the decline of middle class incomes, and the huge pooling if America's financial resources in the top 1%, not a discourse on the evils of Cuban communism!

3. Ultra Bob
Cottonwood Heights, UT,
Aug. 1, 2014

The real truth of why business has a bad name is simply that business cheats the people, denying the people their rightful service and performance that business is expected to give. All the smoke and mirrors like this article will not change that but it does seem to perpetuate the false notions of business.

The purpose of business is to provide the mechanism for the sharing of the talents and benefits of a civilized society. Unfortunately, the greed of men turned that around and propagated the notion that business was part of the right to happiness and had seniority over the rights of people in general. Throughout all of history, the goal of men of power has been to extend their control over others and their labors. Present company NOT excepted.

Small business is a political scam. While there are many small businesses with only 1 or 2 or a few employees, the small business that politicians are concerned with go all the way to more that 600 employees. Most of the small businesses portrayed in the propaganda come and go at a terrible failure rate.

4. Mountanman
Hayden, ID,
Aug. 1, 2014

And Obama and the Democrats are doing everything in their power to kill the golden goose! Get the government boot off the necks of businesses and you will see America prosper, again!

5. GaryO
Virginia Beach, VA,
Aug. 1, 2014

"The recent national dialogue about the 99 percent, income inequality, and a mandatory minimum wage shows that anti-business sentiment is growing."

Really?

How can anyone confuse the "recent national dialogue about the 99 percent, income inequality, and a mandatory minimum wage" with anti-business sentiment?

There is no relationship there.

That's an old "Conservative" tactic isn't it? . . . Setting up a straw man to knock down.

A recognition of a growing income disparity is NOT anti-business.

It's just an example of facing the facts.

Come on "Conservatives" . . . FACE THE FACTS . . . And quit making stuff up.