On this holiday weekend known here in the U.S. as Memorial Day, I would like to make a slight turn in the narrative that many give little to no attention too, yet, is one of the most important underlying principles or fundamentals which helped shape, lift, mold, sustain, and create one of the world’s greatest economic powerhouses bar none.
That “turn” is in remembering: The liberty to create, and own, one’s own business.
As true as holding the principles of liberty close to one’s heart is near-and-dear to every American. What gets forgotten all too easily is what enabled many of those immigrants that fled here during its rocky beginnings, and still continues today, to shape and mold a better life for themselves and their families. That other foundational principle is this:
The ability to create, and pursue, a business idea that could, or would, allow them to acquire economic liberty based on their own self-expression made manifest via perseverance, and sometimes a little luck. And with that – create a foundation which could either be passed on, or sold, by their heirs, giving them possibly one further step-up, or ahead, onto firmer ground to take another. And maybe another, and another, and so forth.
Only through the pursuit of business was the true circumvention of any stigmatized political or economic class, ethnicity, and more so truly held in one’s own hands. Self-actualization, the pursuit of economic riches, the ability to ingratiated oneself by their own means to not only claim to be part of the American experiment, but to actually be American regardless of where one began, either from abroad or born within – was not inconsequential.
Being an American businessman, regardless of ethnicity, political class, economic class, religious persuasion, gender, or anything else, in many ways was the embodiment for something to be cherished and honored by the owner.
Being the sole-owner of one’s own economic future was either unattainable, or unavailable anywhere else.
It embodied everything the American principle was created for and rose upon. Without it – we would have just been another ruled monarchy; socialist; communist; caste; (fill-in-the-blank) or combination of all system under a different name with better topography. It’s the only thing that separates the U.S. from all others that came before and since.
(Note: The gender neutral term “business-person” just doesn’t flow and only emboldens the gender-sensitivity-police and I’m personally sick-and-tired of them. Women with true business fortitude understand there’s no derogatory slight in the term “businessman.” Period. For those wanting more on my thoughts about women in business see my article “The Bull On Bossy” for more insight.)
The term, as well as structure, that has allowed the U.S. to grow as to become such an economic powerhouse is called: Free Market Capitalism (FMC.) And its foundational starting point is the sole-person who decides to either create their own product, or work with (and yes even for) others who are in need of their talent. Then, decide where, and on what agreed upon price commerce takes place. (Examples of such are Family Dr’s., accountants, bakers, tattoo artists, waiters, waitresses, plumbers, electricians, salespeople, and far too many more to list. And yes, even bankers.)
Again, at its foundational point is the solitary person who decides to take matters and consequences under their own purview and either rise, or fall, on their own business prowess upon the battlefield known as business or commerce.
What is taking shape today, and what’s worse – growing – is anything but.
What most have no understanding of, let alone idea, that’s taking place today is the circumvention of Free Market Capitalism, and in its place, the insertion of its hybrid, ever-morphing, evil twin. e.g, Cronyism, aka Crony Capitalism (CC.)
I could go on for days explaining why this insertion of CC into the FMC model is not only egregious, but dangerous. However, all one has to do is look at the current economic landscape with an eye for truth – and its perversions and consequences can be seen everywhere.
It’s like a visible, metastasized cancer encroaching upon economic liberty. i.e., Forget about the “golden egg” its wrapping its hands firmly around the goose’s neck in broad daylight. And never mind those not bothering to look. What’s worse – is those who can’t turn their eyes away seem to think there’s anything wrong with this picture! e.g., Ivory Towered academics, main stream business/financial outlets, et al.
A few years ago I penned the following article, “It’s The Entrepreneur That Saves An Economy – Not The Fed” and in it I made the following point. To wit:
“The problem that’s taking place right now within the economy is exactly what you get when you take a free market economy and try to impose a command and control blanket over it: you smother it.
The Ivory Tower academics have no real understanding of what “free” actually entails when it’s expressed through the economy as a whole. The ability to build a better mouse trap, or, solve a previously unsolvable riddle all while charging a price two parties can both bear, profit by, and have satisfaction in the transaction does not, nor ever will take place within a command and control base. Ever.
Free markets allow for competition to find equilibrium as to provide and deliver a service or good someone will pay a fair price for. And yes, even for such an item such as a stock price.
Command and control fosters either the “State” to be the only provider, or, a fostered crony capitalism styled arrangement which is nothing more than another iteration of some communist system in prettier buildings wearing better suits. Harsh? Yes. Off point? Hardly. And that’s the problem.
The great capital formation experiment and enterprise known as Wall Street and its Exchanges, once the envy of the world, has now been transformed into nothing more than a rigged casino where Fed fueled “hot money” front runs orders in ways so egregious to the principal of fair play; walking into “a den of thieves” would be considered a step up.”
Here’s a bit more from that article directed squarely at the Fed. (or central banks in general) and its interventionist policies. At the time my accusations were excoriated as derisive, uneducated, (fill-in-the-blank.) However, with that said I’ll let you be the judge as to just whom seems to be “uneducated” when it comes to economic theory and practices. Again, to wit:
“Business people know and understand this intuitively. Ivory Tower academics, intellectuals, and economists are not only clueless, it’s their wanton indignation of these facts that move their policies beyond destructive right into outright dangerous territory for any free market based economy.
The only one’s that can benefit from such a business environment are those that gorge and reward themselves via the availability current Fed. policy fosters. And the name for it is: crony capitalism.
Whether the Fed. wants to admit or not, that’s what their current policy and communication fosters and bolsters which is the antithesis of what the Fed. itself states as its primary objective; for there is no wage growth, no true job creation, no sustainable capital formations, and not stable markets.
The Fed. is killing the economy – not helping it. And as de facto proof I point to their own measurements of achievement. The markets, the labor participation rate, small business formation, wage growth, and on, and on. It’s all pathetic.
The Fed’s QE program has adulterated valuations so much it will be a wonder if we ever get back to a more normalized set of business values let alone their valuations and away from this calamity.
There are entrepreneurs along with CEO’s of companies who are quite literally chomping at the bit to try new or improved innovations – yet don’t dare for either their competitors are being kept alive via cheap money afforded them under current ZIRP policy, or worse, don’t dare hire or spend for who knows if the Fed. will raise out of the blue or announce some new program that runs anathema to basic sound monetary policies.
You don’t invest in cap-ex or hiring for the long-term if you don’t know what the rules might be tomorrow never-mind next year. Period.”
If you gauge the current economy via the abomination now known as “markets” (which the Fed. clearly does) this “success” is all but missing its own “Mission Accomplished” banner. However, if you measure the economy via its true measurements of health like jobs, small business creation, cap-ex, and more? You go from banner to tombstone. Yet – the epitaph reads the same as “banner.” It only depends on perspective as to what the words mean. Think about it.
To make my point even further on just how far economic “thinking” has gone off the rails. I was reminded of it by none other than Mark Zuckerberg of Facebook™ via his latest speech or commencement address.
Nowhere in my recent memory has the idea of small business, along with what it means for the economic health (e.g. Free market Capitalism) been so avoided, so adulterated, so perverted in its messaging and delivery than what I witnessed when viewing Mark Zuckerberg’s address to this year’s graduating class at Harvard University.
In my opinion: It was the epitome of everything going wrong in business today. I also viewed it as one of the most tone-deaf, quasi-political speeches ever given at a commencement speech via someone who should be the embodiment of this time in history’s most celebrated and espousing Free Market Capitalism entrepreneurs.
It was so dreadful, and full of what I view as socialistic laced mumbo-jumbo, I couldn’t listen to much more than a few minutes. Again, via my interpretations; it was agonizingly void of anything resembling free market business principles.
Only a speech delivered by Hilary Clinton compared for substance and delivery. And that’s being kind.
This so-called “address” was anything but “uplifting” for those who are supposedly about to enter the work force and help create the next wave of dynamism for economic growth for the U.S. and subsequently the global business environment.
No, instead, after listening about such themes as “guaranteed universal basic income”, “we are the world”, “save the planet”, and more; it would make perfect sense after receiving their diplomas they simply returned home to their parents basements and waited for the world to offer them a corner office, 7 figure starting salary, trophy-spouse, 2.2 children (gender to be determined) and world peace. Just make sure you’re logged into FB as you wait. Because that’s how Mark gets paid, even if you don’t.
It seemed when listening that in a Zuckerberg vision of the world: Don’t pull on your own bootstraps. Wait! Sooner or later they’ll be able to offer you Utopia. And you’ll thank him for it. Just remember to
vote “Like” to show your support behind him if, or when, he decides to run for office. Because for what that speech lacked in spoken words of business ideals, it was laced with more unspoken terms of the political which could not be ignored even when trying. i.e., I couldn’t help but think at any moment I would hear something to the effect of: “And be on the lookout for Zuckerberg for (fill in the blank) in 20??”
Compare Mark’s recent with the one delivered in 2005 by the late Steve Jobs at Stanford University. The two could not be more striking in both tone, as well as delivery. The difference is utterly remarkable and is clearly visible:
One is a businessman explaining via his own words and experiences how one may go about changing the world for the better via FMC principles and ideas eschewing anything to do with the political. The other? The antithesis of the former, delivering a speech more in-tune as if it were written by Mrs. Clinton’s former speech writers.
Don’t take my word for it, view both of them yourself and come to your own conclusions. The differences couldn’t be more striking.
The only way forward for this nation (e.g., U.S.) is for the rebirth of quest and zeal for small business America. It is what built this nation, continues to support it (although it is being waged war upon by crony capitalist benefactors and devotees daily) and is the only way to reassert and preserve the foundations of the Free Market Capital system.
What we are experiencing today is an adulterated, ever-growing, Frankenstein perversion of those once pristine principles that is growing ever-the-more unstable with each passing day and is showing signs that it’s about to break loose of its creators (The Federal Reserve) control at any time.
The current “market” is nothing more than a bull looking for a china shop. Ironically, it may be China that subsequently puts the “bull” into a place which no one “thinks”, let alone, believes.
For those of the newly minted “graduate class” let me offer you an example of just how cronyism works and is prevalent at the very core of what many of you use and treat almost as sacrosanct for entrepreneurialism in today’s business and “market” climate. e.g., Social media, and the companies that fuel it.
If you are one of the few that believed (or still does) Snapchat™ was possibly the next Facebook and invested in its stock, only to see your profits or initial investment go “poof” much like its core product? And yet – have watched simultaneously as FB shares rise and think there must be some “business” reason as to why this happens or “business acumen” you don’t fully yet comprehend? Hint: Welcome to central bank manipulation for picking winners and losers 101.
As I’ve stated too many times to count over the years: This is why having (or picking) a company with a stock price which has a central bankers “bullseye” on it is the only thing that matters. And guess what – Facebook does and Snapchat doesn’t. Want proof. Fair point. To wit:
The real issue here as I’ve reiterated time, and time again, is this:
When your investment loses value – you lose money and net worth. When a central banks “investment” loses value – they just print more, and buy more, allowing the pretense of “health” to perpetuate inducing even more to buy alongside them furthering the charade of a “market” based price or demand. Rinse, repeat.
Hint: Facebook is on that “Bullseye” list. Along with a few other notables. Snapchat? See latest stock price for clues. And that’s just the SNB. You still have the Fed’s proxies, ECB, BoJ, PBoC and their proxies buying who knows what else.
Is it any wonder why small businesses are having such a hard time competing with these new-found business behemoths of today? For others, its having to compete with companies which are clearly “over.” e.g., See Sears™ for clues and why it has been able to stay open via cheap capital facilitated via Fed. policies unavailable to small businesses.
So with that all said: Long live small business! It may be badly banged up, battered, and bruised. But it’s far from dead just yet. We only need to remember its importance too all of us. Our nations health, and very survival depends on it. It’s a too often overlooked part of our fundamental liberties. Brave men and women of all stripes have, do, and hopefully will, continue to fight for its preservation along with our other sacred liberties.
To all of them: past, present, and future – you have my sincere gratitude. Both military, as well as business people.