Philosophy Without Sweat
Dylan Ratigan caught my attention twice within the past week. The first, during his self-admitted televised rant and the second, his follow-up article where he, after gathering his thoughts, put together a more detailed explanation of his opinions (review for yourself here). Reading this explanation three times myself, I found the undertones to be quite virtuous (“We need to fight against the great ideological machine that lacks purpose, lacks integrity, and lacks aligned interests.”) and was left contemplating what he was actually proposing.
Reflecting on commerce in the early 1960’s, consider his assertion regarding the Kennedy Administration: “They believed in prosperity as a goal, and they had a shared set of problem solving values to get there. They believed in education, in health and welfare, in mutual security, in dignified work and in Americans making things.” I agree, but would suggest that the concept of “shared” in this context really meant that Americans, whether they realized it not, are/were stitched together by the goal of seeking profit!
A few years ago a close friend invested over $1 million (his entire life savings) to bring a new restaurant concept to Michigan. In addition to wanting to “open the market up” he wanted to provide his employees with health insurance, 401k plan’s, etc. But, he was, by his own admission, not seeking to maximize profits. He told me exactly that when he invited me to personally invest (which I did not for obvious reasons). The business failed, he is now bankrupt, his employees are benefit-less and unemployed and his creditors are left holding the bag. One of his lending institutions (CIT Financial) was nearly bankrupted in 2008. So, that is reality.
Successful organizations understand that in order to achieve their corporate objectives, they need an educated and continuously trained workforce and will seek this out and pay for it. In order to keep these people, they will provide the benefits their workers find valuable – healthcare, 401k, vacation, etc. All of these things cost money and their only guarantee rests on the prospective of profit.
Ratigan also submits “With the markets in turmoil and the global financial architecture groaning under the weight of fraud and corruption…” . But, he fails to note that a material source of this fraud and corruption had its roots in the US Government (see previous blog on Gretchen Morgenson’s book Reckless Endangerment). Hence, our own government was a material contributor to the problem.
Until one has run a business and dealt with the challenges, or been elected to public office and discharged his/her responsibilities with demonstrated competence, their pontifications ring hollow. It is merely philosophy without sweat.
Your comments are welcome.
Robert M. Bilkie Jr., CFA