Articles are available for reprint as long as the author is acknowledged: Domenick J. Maglio Ph.D.

Friday, July 20, 2012

President Obama: Capitalism is About Personal Initiative


By Domenick J. Maglio PhD. Traditional Realist

“If you got a business, you didn’t build that. Someone else made it happen.” President Obama.

President Obama, please listen to the actual stories of millions of small business owners and their families who will tell you about the hard work they had to do to get their businesses off the ground. They would convince you that your statement above is ludicrous.

If the president of the United States still believes what he said, then capitalism 101 is in order.  Any person can start a business in a free capitalist society. The U.S. from its inception has been a beacon for Adam Smith’s, Wealth of Nations capitalist principles in action producing the greatest economy in the world.

In capitalism an individual, a partner or a group of people can freely decide to begin an enterprise. It is only through a person’s initiative that the business moves from a vision to a reality. The sacrifice made to get the idea off the ground is solely made by the people who have chosen to participate in the venture not by anyone in government.

There is no fairness in the process of a start-up business. All the legwork of finding a location, renovating the building, buying the necessary equipment, advertising, utilities, communication and the money necessary to pay for these service has to be provided by the entrepreneur and often his family. Working 60 to 90 hours per week and often on the weekend is not unusual. No government official is assigned to help the business with these issues but their hand will be held out for fees, permits and penalties if you do not comply with the bureaucratic red tape and roadblocks.

Usually after earning little or no income, often for several years, does the time, labor and financial investment start to pay some dividends. As earnings accumulate the owner has to decide how much to reinvest or to extract from the business. The more put back into the venture, the greater the potential for growth.

The proprietor’s major objective in business is to earn a profit.  When the owner is able to start to hire employees, he should hire the best person for a position at the most economical cost. If he can hire a person with the same skill set and people-skill at a lower salary than another candidate he would be crazy to do otherwise. He is not a social welfare worker but an employer although the entrepreneur should be as accommodating, pleasant and reasonable as possible to create a pleasant working environment for retention.

In capitalism there is no such thing as equality because in the real world everyone is unique. Each person has a unique character and talent that can be utilized to create a quality service or product. Successful employees are not equal although they share certain traits. They are dedicated, hard working achievers with a strong commitment toward enhancing the business.

All businesses are risky. They fail more often than they succeed. There is no guarantee of success.  Capitalist businesses do not have a government bureaucrat assigned to insure the success of the business. President Obama, the Solindra type crony arrangement with the federal government is not capitalism.

Many socialistic leaning people believe fairness is getting something for nothing. This idea is rejected by an overwhelming number of Americans as it would defy every natural law of reality. Getting something for nothing is utopian, wishful thinking that can only seem feasible under heavy hallucinogenic drugs, intellectual corruption or psychosis.

There is no free lunch. Just look at the European Union nations finally realizing the bill has arrived for their ridiculous entitlements. If you want a more potent taste of “something for nothing,” look at the full-blown communist countries and examine the disastrous impact on their citizens.

Capitalism is not a pipe dream. It is born out of personal initiative and freedom.  A person who is able to work and saves can accumulate capital. This capital can be used to make more money through investing in someone else’s business or reinvesting in his own to make more profit. The greater the profit, the wealthier the individual becomes.

All the wealth originates with a free person willing to use his energies and brainpower to do something for which others would be willing to pay. As long as the business is able to pay its bills and continues to make a profit, it can remain viable in the marketplace. Once it is unable to provide a noteworthy service or product, it fails.  There are no bailouts for small businesses.

President Obama, this is capitalism 101. Just because you are playing around with federal money to pick winners and losers, it does not in any way define capitalism. The crony corruption is the antithesis of capitalism. It is nothing more than a central government’s attempt to control the economy. Historically it has been called crony government corporate corruption or fascism.

President Obama, please cancel your golf weekends and devote your time to shadowing an entrepreneur. After this experience look directly into the camera and attempt to tell Americans that government, not business people, make their dreams become a reality. Stop stigmatizing and demeaning hard work, achievement and success as these standards are the cornerstones of our greatness.


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