Prof. Phelps about Dynamic Capitalism
Nobel Prize winner Edmund S. Phelps wrote a very interesting article for the Wall Street Journal. In it he deals with the differences between the economical system in, for instance, the US on the one hand and the one in West Europe on the other. He explains:
There are two economic systems in the West. Several nations–including the U.S., Canada and the U.K.–have a private-ownership system marked by great openness to the implementation of new commercial ideas coming from entrepreneurs, and by a pluralism of views among the financiers who select the ideas to nurture by providing the capital and incentives necessary for their development. Although much innovation comes from established companies, as in pharmaceuticals, much comes from start-ups, particularly the most novel innovations. This is free enterprise, a k a capitalism.
The other system–in Western Continental Europe–though also based on private ownership, has been modified by the introduction of institutions aimed at protecting the interests of “stakeholders” and “social partners.” The system’s institutions include big employer confederations, big unions and monopolistic banks. Since World War II, a great deal of liberalization has taken place. But new corporatist institutions have sprung up: Co-determination (cogestion, or Mitbestimmung) has brought “worker councils” (Betriebsrat); and in Germany, a union representative sits on the investment committee of corporations. The system operates to discourage changes such as relocations and the entry of new firms, and its performance depends on established companies in cooperation with local and national banks. What it lacks in flexibility it tries to compensate for with technological sophistication. So different is this system that it has its own name: the “social market economy” in Germany, “social democracy” in France and “concertazione” in Italy.
The American and Continental systems are not operationally equivalent, contrary to some neoclassical views. Let me use the word “dynamism” to mean the fertility of the economy in coming up with innovative ideas believed to be technologically feasible and profitable–in short, the economy’s talent at commercially successful innovating. In this terminology, the free enterprise system is structured in such a way that it facilitates and stimulates dynamism while the Continental system impedes and discourages it.
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Friedrich Hayek, in the late 1930s and early ’40s, began the modern theory of how a capitalist system, if pure enough, would possess the greatest dynamism–not socialism and not corporatism. First, virtually everyone right down to the humblest employees has “know-how,” some of what Michael Polanyi called “personal knowledge” and some merely private knowledge, and out of that an idea may come that few others would have. In its openness to the ideas of all or most participants, the capitalist economy tends to generate a plethora of new ideas.Second, the pluralism of experience that the financiers bring to bear in their decisions gives a wide range of entrepreneurial ideas a chance of insightful evaluation. And, importantly, the financier and the entrepreneur do not need the approval of the state or of social partners. Nor are they accountable later on to such social bodies if the project goes badly, not even to the financier’s investors. So projects can be undertaken that would be too opaque and uncertain for the state or social partners to endorse. Lastly, the pluralism of knowledge and experience that managers and consumers bring to bear in deciding which innovations to try, and which to adopt, is crucial in giving a good chance to the most promising innovations launched. Where the Continental system convenes experts to set a product standard before any version is launched, capitalism gives market access to all versions.
It provides for a very interesting read, although I tend to agree with Dean Esmay when he points out that the American system is not a ‘genuine “free market”‘. It is close to it, there is not a single economy in the world which comes closer I believe, but it is not completely ‘free’.
Phelps goes on to explain that the economy of the US is, due to its system, responsible for much more innovations than European economies. In fact, Phelps explains, many European countries seem to be quite happy “to sail in the slipstream of a handful of economies that do the preponderance of the world’s innovating.”
Dynamism is one of the main strengths of the US economy. Although Phelps quotes one economist who states that we (Europeans) are ‘smart’ for sailing in the slipstream of economies like the US, I believe that this is a – potentially – grave mistake. Firstly it makes us dependent on, for instance, the US. Secondly, if Europe will focus more on dynamism and thus on innovation, we might come up with ideas / innovations, other non-European countries did not come up with. So, in a way, we might improve our own economies ánd other economies.
Just some thoughts about his article. I found it to be a very interesting read and am wondering what you all think about it. For instance, what do you all think of his, perhaps romantic, view that the best way of achieving personal growth is by having a successful, innovative career? Or just about his, what some might consider, “idealized portrait of capitalism” in general?
35 Responses to “Prof. Phelps about Dynamic Capitalism”
interested and I had a long economic discussion in a random place, but this article ties in nicely to the idea I was argueing, which is that extremely wealthy individuals as well as large companies such as WalMart actually hurt the US economy. In Dr. Phelps words, it would prevent us from being as “dynamic” as possible. I think its summed up well in his last sentence.
Large companies like Walmart perform a similar function to the ‘social partners’ in Europe by settig product standards BEFORE they can be evaluated by the market. When the largest 10 companies in the US account for 15% of GDP, this effect could be quite significant.
GDP is a measure of the finite ammount of money flowing around in an economy whenever you put a large portion of that flow in the hands of a few people (be they extremely wealthy individuals or large corporations) the decisions they make will be less dynamic/eifficient than if we were to break that one stream up into many.
oh, and interested, I just read your question today but I’m not against performace based pay, just the huge accumulation of wealth, and I am talking people making over $5mil a year, or corporations with over $50 billions in sales., although I’m not an expert so I could be convinced to change those numbers.
You know the idea of the US economy being so open to new ideas is a great dream. Out of curiosity how large is the gap between the rich and the poor over in european “socialist market” nations? because over here its huge. And to bridge that gap comming from the poor is utterly useless. Innovation only flourishes in america if the companies already in power of that industry agree it will flourish. No matter how grand your idea may be, the top companies always have the capital to break you. This is what i see wrong with the US corporation.
Its funny because i was discussing economics with my co-worker and asked him why the wealthy lost any feeling of social obligation and he pointed to professional entertainment. He said when was lviing in the 70s CEO’s finally woke up and saw that entertainers were getting paid millions while they were getting paid hundreds of thousands. Its an interesting point that america’s addiction to entertainment has lead tot he gross income our CEO’s bring home every day while the people who make that happen barely survive off their product prices. Just an idea thats probably way out there but hey im open to practically anything.
But with this huge gap created between the burger flipper and McDonalds CEO, US economy will soon faulter again, and with it europes and japans. CAn the world really afford this?
thank you,
randal
Well I would disagree in one way, I believe in the Pharmaceutical Industry, as much as in the Automobile Industry there is a Big Problem with Innovation.
These are two Industries where I see the companies in America failing the consumer.
If you look at Big Pharma, they are more interested in TREATING over CURING, so that we have millions of treatments for many diseases, and yet few to no cures. Some would say, well a cure for disease is almost impossible, because of the way viruses and bacteria mutate, and the impossibility to cure a viral infection. And yet if you look at the amount of money the Pharma’s have spent towards treatment, I just don’t see how we couldn’t have a cure for things much sooner (although if we ever get around to stem cells we might have some breakthroughs).
I mean Salk spent a drop in the bucket and cured Polio saving millions of lives.
As for Big Auto, they can’t change fast enough, even with the way they are throwing Unions to the side, and I think they show the main problem with our Auto Industries. They live on the fad of the consumer, instead of the reality of the Earth and the environment of the Oil Industry. Not to sound like a hippy socialist, but if our auto industry wants to do something INNOVATIVE, plan the car now, for the world 50 years from now. Create a car that can go 100 miles on a gallon of gasoline. I mean I know that demand leads supply but still, the market is like a roulette table, sometimes the ball doesn’t drop your way. But its not like GM and Ford can just go about things the way they’ve always done it. Cutting workers and shipping work off to foriegn countries is not their problem, the problem is, their product is already considered inferior to most Asian brands. I mean, I think one people bought from them in the past was the Made in the USA tag on their cars, without that, what’s their brand worth?
As someone who has lived in both the US and Europe, I agree that certainly innovation is more valued in the US than here. I think that it isn’t just a part of our economies but of our national characters. Americans are more “yeah, that could work” and Europeans more “Oh don’t be silly”. Of course this is a gross generalization, there being many individuals that don’t follow this rule, but it IS ingrained in the culture.
That said, what I’ve always wondered is why a system that encourages innovation and bussiness, like the US, must automatically abandon social protections, and vice-versa. Not one single Spaniard goes without health insurance, our universities are overwhelmingly public and virtually free, when you finish your time at a job you are entitled to a percentage of your salary for a time in order for you to have something to live on while you look for work. These are all, in my view, good and neccesary things. In order for our economies to become more dynamic do we have to give this up? Because that is the impression we are given here, which is why many people sharply resist the idea of becoming a US-like economy. Is there no way to combine social protections and a dynamic economy?
Lynx,
It’s funny that you bring that up from the European perspective, because I’d say that some conservatives here have the opposite concern: if the US were to move in the direction of nationalized healthcare, for example, we believe that would have a negative impact on our economy. I don’t know the answer to your question of whether it is possible to have a system that can deliver both the social protections and dynamic growth, but my impression is that one does have to give up somewhat of one in order to get the other.
C Stanley,
I’ve never understood that attitude on the part of conservatives when it comes to health care. I can readily see someone who might have been working for someone else and having health insurance who has a great idea for a new business. But he knows that financially it will mean waiting for the rewards. But he has a family and in today’s environment can’t risk his wife and children not being insured. Risk for him is one thing, risk for his family is another matter. Not depending on your employer for being able to afford health care could in fact lead to greater dynamism, more willingness for employees to go out on their own or even switch to a different employer who might better utilize their skills.
Folksm whydo so many focus on the dispoarity in incomes, HOW about teh disparity in PROduction?
A neighbor studied pyhsics at Harvard and uses his math ability to bring efficiencies to the MBS market.
he may save the world 4bp on 5billion in their mortgagesm HUGE contribution and maybe he makes 300k,
is that 2% of what he contributes?
someone else changes oil,, yes a needed vocation but it contrubutes perhaps 50k to teh economy.
well??????????
KevinH
Indeed – I completely enjoyed that debate.
This is one section that I think you were trying to say before that I missed this particular point – having gotten the other points about sheer size being able to maneuver market demand. Thinking about that statement – you are correct, Wal-Mart will do focus studies – just as Black &Decker will, etc. Makes sense, it’s cheaper for them to do a market study than bet on the product and end up a loss. However it will – like I believe you were saying – remove some dynamism out of the economy.
But that’s just one area, and I think perhaps maybe too narrow of one. Take Cisco for instance, (I’m really drawing off of memory) but they did acquisitions of about 25-30 companies in 2005. Many of these were small, highly innovative companies that brought something new, something fresh into the industry. Cisco bought, absorbed – or bought and discarded the products. End result though is those innovations still made it out into the marketplace, highly benefiting those that started up the companies – but still benefiting the world as a whole.
So yes – large business can and will take some dynamics out of the economy. However our system still allows for the guy who has an idea. When I had my business, my business partner and I had an idea – just a slightly different way to do business in a particular area – we tried. And well we got out of it 2 years later with no assets – but no debt either – but we still had the opportunity to start it up and run with it – just us two.
In our system, if someone takes the risks and it pays off – they’re typically greatly rewarded for it, for they were the ones that usually risked it all to start up. Small business is huge – it accounts for about 52% (and growing) of jobs in our economy. Our system even forgives those that try and fail (bankruptcies) – and even that is for a good reason.
Whereas the systems like Germany &France – well, they are obviously running into severe labor problems by allowing so much social protections. That works as long as the economy is doing well, but there is a limit. Our system is more volatile for employees for certain – but I think the volatism for our system is more short lived where the European system will be a large crash.
(Sorry to be brief and not fully thought out – not a whole lot of time on my hands today)
Jim S
In this – you and I agree. Much like 401′s I do think someone should be able to carry forward their insurance policies – no matter the pre-existing conditions along with them to another job. Course the only 2 ways to really do that is for 1) national healthcare and 2) have all insurance policies accept other insurance policy policyholders removing the pre-existing conditions. – Course then where say an employee pays 65 bucks a month for himself – once he goes on his own it’s upwards of 250-300 (if the employer kicked in) barring any pre-existing conditions.
I don’t know about you though – but I’ve watched the Prime Minister’s Questions on CSPAN – it would greatly disturb me to see my government discussing hiring more surgeons – and trying to find more qualified surgeons. i.e. the ones they have are not necessarily qualified good enough.
If there wasn’t the person to change the mathematician’s oil (or the one to handle his garbage, or stock his food, or sweep the floor or…) then he would never have had the luxury of developing his theories because he’d be too busy working on menial tasks. Conservative economics just thinks that the “real” value should be market driven while liberal economics thinks that it is too hard to reflect the “real” value and so there should be help.
Anyway the important thing about keeping economies dynamic is productivity. The problem with Europe is they don’t encourage innovation and they are socialized, so they pour tons of money into people and not getting their return back. In the US on the other hand, we are in danger of getting the opposite problem where the upper classes is starting to hoard money (or spends it on extremely expensive items that don’t help many people) and this can decrease productivity as well. A touch of social safety could theoretically do wonders for productivity because people could take greater risks, but of course there is the problem that any government program tends to invariably grow out of control.
Interested said “Our system even forgives those that try and fail (bankruptcies) – and even that is for a good reason” which is extremely important. I remember hearing an NPR report on how in the European market you basically have one try and if you fail your credit is ruined forever. Well since it takes on average 2 or 3 tries to create a successful business over here, then our bankruptcy laws are very influential in letting small businesses flourish.
I consider myself liberal in my thinking of the economy, but at the same time i cant advocate a US social model based on european countries. The sheer size of the US in both populous and government makes it very difficult to institute anythin european countries charish today. In order to pass social programs such as healthcare you litterally have to get thousands of different minded people to jump on board, and to get that for a presidential election is hard enough.
Jim S Said ”
Not depending on your employer for being able to afford health care could in fact lead to greater dynamism, more willingness for employees to go out on their own or even switch to a different employer who might better utilize their skills.
Not depending on your employer means you will be dependent on someone else. You always ignore the issue of freedom in these matters. I am reminded of another thread in which you wanted guaranteed training for people who wanted to leave their jobs. But someone ends out paying. in effect, they are subsidizing the opportunities of others.
One of the incentives for people who start a business is the prospect of failure. Ask anyone who understands Venture Capital and they will tell you that it is important for a person to be strongly vested in the enterprise. When you take away a degree of the risk, you will see an increase in the failure rate
The incentive will increase for people to leave jobs to look for greener pastures. Most will fail. THAT IS FACT! Look up the numbers. Now consider the effects on those people who leave their jobs and lose their life savings. That job they left will most likely be filled by someone else. The employer loses productivity now that he has to train a new individual to do the job.
There are tremendous risks in starting your own business and it should be that way. The potential rewards are equally great and belong to those who have the motivation and acumen necessary to bring a concept to a successful conclusion.
interested said :
In this – you and I agree. Much like 401′s I do think someone should be able to carry forward their insurance policies – no matter the pre-existing conditions along with them to another job. Course the only 2 ways to really do that is for 1) national healthcare and 2) have all insurance policies accept other insurance policy policyholders removing the pre-existing conditions. – Course then where say an employee pays 65 bucks a month for himself – once he goes on his own it’s upwards of 250-300 (if the employer kicked in) barring any pre-existing conditions.
Do you really think it would be wise to operate a private insurance company that way?
No wonder your business failed. You should a glaring lack of understanding when it comes to running a business. If you were to start a company which insured drivers would you advocate taking any prospect regardless of his drivers record at the same premium? Think about it!
As I said in the thread involving national health care, I don’t want to be in the same pool as the sedentary, alcoholic, smoker, who is 200 lb. overweight.
interested,
Who says you have to go that route? As I’ve said in other places, picture a not-for-profit organization (Remember when Blue Cross was not-for-profit? Almost all of them are for-profit groups now.) with the same relation to the government as the post office. They charge on a sliding scale and employers can cover the costs as a benefit just like they do now. Leaving one employer to go to another one is a non-issue. Leaving to start your own business if you can show what you’re doing could be encouraged, much like we have the SBA. Have enforcement of anti-fraud measures be up to a special FBI unit.
Given that private insurance paperwork is just as bad as any government red tape when it comes to increasing costs I’ve always been amazed at the whining when any system with government involvement is involved. The biggest talking point is loss of choice. You know, I don’t know anybody who has any real choice. That’s left to the employer who is only looking for what’s best for the bottom line most of the time (And that’s not meant in a disparaging way.) and the insurance companies who are looking at the bottom line and how far they can screw the doctors over without landing in jail (That was meant in a disparaging way.). If a business or you or I ever waited the months that insurance companies wait to pay doctors the insurance company would drop us like a hot potato and take us to court if they thought we owed them money. The conservatives who defend this way of doing business should really take a hard look at the reality of the current system and rethink things.
MichaelF
LMMFAO – that was – quaint. cute and quaint.
Jim S.
I read what you wrote – and am at a loss for what you were trying to say. I’m sorry but you’ve got a lot of words swirling around without a focus.
My main points were that there are other ways to approach changing the current system other than any given government system that currently exists in other countries and that the current insurance companies aren’t all that efficient or ethical.
interested:
I see you point and its quite a good one. Seems to me that the big benefit you get from Cisco is while it is growing. Now how do we get a system where you can grow as fast as you want but never get Big….
Do you want me to start a rant about what the Bush Administration did to the bankruptcy laws? Because I just might.
Cisco is big – Big isn’t something to shy away from, it can work in many cases.
Sure what’s your take on it.
Well, it won’t actually be much of a rant, and I had to look up some stuff to made sure I remember things correctly from when it happened, and ended up learning new stuff as well.
Seems like there are a couple of decent provisions, and a couple of bad ones. The new state exception rules would seem to help prevent opertunistic moving the day before you file for bankrupcey. The new penalties for lawyers if they present inacurate financial info seems quite sound, and the requirement of credit card counciling and money management classes are excellent. I guess the problem I have with the new rules is the same problem I have with high manditory minimum senentces. The judge is there for a reason, and I think it is silly to believe that they are continuously being dupped by kaniveing credit card frauders. The new laws take a considerably amount of the power away from the judges and seems very ‘undynamic’ to parrot our previous conversation. I don’t see any problem with judges making different rulings for individual cases. Was there a huge problem of shopping for a leinient judge?
In part of my looking around I tried to find out if the laws had any effect on Credit Card APRs. I couldn’t find any good historical data past 2001, but they were a bit higher in 99, which had a similar prime rate, than now. I’d want to look at some more recent data to be sold on anything here, but maybe the new laws helped make credit cheaper. But then again, cheap credit might not be a good thing in a country with a negative savings rate.
So in retrospect its more abivilance than a Bush Bashing-point. Well that was boring.
The problem with the counseling and money management class requirements is that neither of those services come free so people who are truly broke are more hurt than helped by the requirements.
Kevin,
I think the judges part was probably one of our cycles we do when we swing between extremes. In cases like this I prefer for a Judge to have a degree of leiniency.
Jim, yeah your probably right. If the judge had some say he/she could take that into account, but then we are back to square one.
Precisely, Kevin.
Kevin H said :
Do you want me to start a rant about what the Bush Administration did to the bankruptcy laws? Because I just might
I was salivating at the prospect of that topic . Most who do the complaining know very little about the subject .
Jim S said :
The problem with the counseling and money management class requirements is that neither of those services come free so people who are truly broke are more hurt than helped by the requirements.
Here we go again with another social program !
The counseling program is a smart idea. On another Blog I debated a moron who had filed for bankruptcy some years ago and was complaining about the new restrictions Yet he had just admitted that he purchased an automobile that he relay couldn’t afford. He was all set to blame the credit card companies and the car salesmen for his predicament again. He didn’t learn from his past mistakes and was making the same mistakes over again.
The new laws will not adversely effect the poor person with few assets. It is designed to prevent the fraud and the abuse which occurs far too often. I will give you an example of one very common abuse.
A person conducts business using his credit cards. He manages to hide cash and other assets while paying most of his bills. Just before he plans to go belly up he purchases large quantities never intending to pay for them. He can sell a product at a loss and hide the money. He stiffs his vendors. I knew a fellow who did this to the tune of over 300 k in Verizon yellow page ads and over double that in credit card bills. I have known others who play a similar game without file for bankruptcy. It’s easy to turn a profit if you manage to have no overhead or product costs .They make deals with the companies to pay off 25 percent or less to excuse the debt. If you have not been the victim of these scam artists you may not care. But many small to medium size business owners are the ones who pay dearly as a result of easy bankruptcy laws.
MichaelF said “I am reminded of another thread in which you wanted guaranteed training for people who wanted to leave their jobs.”.
Of course I said no such thing. I said that if someone loses their job and doesn’t have the resources to pay for training themselves then there should be a way to help them with it. It helps them and it helps the larger society and economy.
Most of the things I’d like to say about you would go over the line of the rules of conduct for this place so I’ll settle for just a couple of observations. You’ve drunk a lot of the libertarian-acid koolaid and worship the free market blindly. Secondly, your tirades on your perfection and how no one who disagrees with you can know anything about how to run a business have grown more than a bit tiresome as have your condemnations of those who aren’t successful on your terms as it being purely their fault. This part of your rants only proves that in fact you don’t know one of the most basic things about business, which is that it is a heirarchical system with more people on the bottom than the top and there is nothing that can change that in a capitalist system.
Typical of type to demonize those with whom you disagree. To clarify, I knowledge that the free market has many limitations. But the limitations are not ones that I consider the responsibility of the government to provide. That is best kept to the individual. You simply can’t accept that other people have a different view of freedom. Socialism is your religion and you are bound and determined to force everyone else to comply. In contrast, I find your foolish notions to be counterproductive to society and the individual. But I would not take away your right to enter into a communal arraignment with like minded people dispute the fact I think it will fail miserably. It’s a shame you don’t have the same respect and tolerance.
MichaelF says “Typical of type to demonize those with whom you disagree….Socialism is your religion and you are bound and determined to force everyone else to comply.”. Wow…talk about the pot calling the kettle black. You accuse me of demonizing those who disagree with me and then because I don’t buy into your beliefs about all individuals being able to overcome the built-in deficiencies in the system on their own you call me a socialist and say I treat it like a religion that I want to force onto everyone.
Let’s go into a basic civics lesson. You don’t agree with me, I don’t agree with you. If more people agree with me than you and vote accordingly things change. There’s not one thing I’m interested in seeing happen that would be ruled unconstitutional so it would stay that way unless and until the pendulum swings back. If you consider this forcing people into something they hate so very much that they just can’t live with it then I suggest they go found their own country where it works differently if they’re not willing to wait for that pendulum swing.
Secondly, your tirades on your perfection and how no one who disagrees with you can know anything about how to run a business have grown more than a bit tiresome as have your condemnations of those who aren’t successful on your terms as it being purely their fault.
Let’s parse what you just said. Of course people who disagree with me can know something about running a business. I never said anything to the contrary. As for the second part of the statement, you obviously don’t read posts very closely. My definition of a successful business is that it provides me a sufficient return on my investment. Two people can share that same definition but having varying ideas as to what constitutes a sufficient return. I lease to people who are happy with what I call purchasing a job. They might run a convenience store and work 7 days a week and earn 150 thousand per year. Another might make half that working less hours while pursuing a passion they enjoy. One of the happiest people I have ever met was a woman who ran a yoga studio out of one of my properties. To me, she was a success. In contrast, I became involved in several high tech start up ventures during the late 80′s either through financing or as a partner. Everyone involved made enormous amounts of money. The return on investment for me was fantastic. But that did not prove to be the case for some others. Divorces, heart attacks, burnout, a stroke, and general dissatisfaction effected several of those with whom I was involved. For them the return just wasn’t enough for what they gave up.
And yes, I do consider the success or failure of a business entirely the fault of the people involved. If you partner with someone who doesn’t have the proper work ethic or knowledge, or financial backing that is your mistake. If you incorrectly predict the size of a market you didn’t do your homework.
It’s always easier to blame someone else Jim. But that kind of thinking will just lead to more failure.
Jim Said:
Michael says “Typical of type to demonize those with whom you disagree
…Socialism is your religion and you are bound and determined to force everyone else to comply.”. Wow…talk about the pot calling the kettle black.
No, Jim. I didn’t use the word as a pejorative nor do you seem to consider it as such. I do see your brand of ideology as similar to a religion. The parallel is clear. My politics allow you to form your economic partnerships with LIKE MINDED PEOPLE. You need to force others to make your system work.
You know that old saying , ” Anytime you rob Peter to pay Paul, Paul won’t complain. Well, there are some patriots named Paul who would disagree with that notion .
I agree with that entirely. If people’s business fail it is… let me think… yes, their fault. If you work hard, if you do the necessary research before you get started, if you surround yourself with the right people, etc. your business will not fail. It is that simple. If it fails, you did something wrong. Very simple but o so true.
Sigh. Who’s talking about people who start their own businesses? MichaelF is, not me. I’m talking about the employees who pay for those errors, not the ones who make them. MvdG is free to agree with him but it has nothing to do with my point. While it is quite true that there are the lazy bums and the bad employees it is equally true that there are huge numbers of Americans who have paid the price for the errors of management and ownership. I have no doubt that the response of MichaelF will be that they should have gone out and gotten a different job if that was a possibility. Anyone else care to take on the task of pointing out the clash of this belief with the real world? I already know that it will be completely impossible to point it out to MichaelF.
Jim S (mail):
Sigh. Who’s talking about people who start their own businesses? MichaelF is, not me. I’m talking about the employees who pay for those errors, not the ones who make them
. Wrong as always Jim S. Those employees make an informed decision when they choose to work for an employer. You just own that victim mentality. Just as you research a new business so should you research a prospective job offer. Some might prefer to take a lesser paying job offer with a company which boasts great job security. Others might prefer the prospect of gambling with a young and adventurous start up. It worked pretty well for Ray Kroc’s secretary. Several years ago I was invited to spend the day on a yacht owned by one of the senior employees at Microsoft. The affair was wonderfully catered and was attended by several well known celebrities. On that vessel I met many empties who began with the company at it’s inception. They were all quite rich despite having very basic jobs. I will never forget the view from the living room during the late night party. the wall of glass went almost ten feet high. Now that was a guy who chose wisely.
Jim S said :
I have no doubt that the response of MichaelF will be that they should have gone out and gotten a different job if that was a possibility. Anyone else care to take on the task of pointing out the clash of this belief with the real world? I already know that it will be completely impossible to point it out to MichaelF.
Jim, I told you in a prior thread that several of my nephews have recently entered the job market. One of them just accepted his first real job out of college. He will be starting at just over 90 grand. That’s not bad for a young kid. Within a few years he will be well on his way to being a high earner. Good paying jobs are out there if you have the skills people need. But if you make poor life choices and the skills you posses are not marketable things will be difficult. That’s life. But don’t expect those who sacrificed and made good choices to pay for your retraining.
Suck it up and get a second job. My wife is currently going to night school despite having a very good career. She manages to do it all while helping me raise two children. Next month we will be bringing a third child into our home via our second adoption. As if that were not enough we just got the stunning news that my wife is now pregnant ! ( long story) I assure you that she will finish up her last year and get her law degree even with all these minor distractions. So don’t tell me about the real world Jim. I live in it just as you do. Motivated people can overcome just about any situation. But you can’t even get out of bed when you have your attitude.
MichaelF says “Wrong as always Jim S. Those employees make an informed decision when they choose to work for an employer.”. Thank you for being so predictable. That’s exactly what I expected you to say. It undoubtedly qualifies as one of the absolute wrong-headed comments made in weeks on this blog.
Meanwhile back in the real world it’s just so obvious that everyone knew what Ken Lay and company were up to when they hired on to Enron and knew how the books were being cooked. Same for every other case that’s been in the news recently like Enron and Worldcom. People who go to work for a company when one set of management is in place and then see a new set of managers screw it up sure fit that description. The people who are unemployed because their employer didn’t foresee changing market conditions certainly should have known it was going to happen when they started to work. No matter how little you may think of the desire, most people want to find a good job and stay there so it’s easy to get caught up in unforeseen changes. The plain truth is that no, most people won’t have the kind of information available to know these kinds of things when they take a job. There are more circumstances out there for the good and the bad than you know from you and your nieces and nephews, MichaelF.
The rest of your most recent post just continues to show that you are amazingly ignorant and obnoxious. What you know is yourself and your life. Everyone else is obviously inferior and deserving of comments like these: “But if you make poor life choices and the skills you posses are not marketable things will be difficult…Suck it up and get a second job….But you can’t even get out of bed when you have your attitude.”. Guess what, all knowing one? I’ll be getting out of bed and going to work tomorrow morning just like this morning. You know nothing about me and obviously about hardly anyone who isn’t just like yourself. Hmmmmm….what do they call someone who thinks of large numbers of people based on either anecdotal evidence or preconceived notions? I’ll think of it eventually….
No , people do make informed decisions . Just as some people makem a political decision when they decied not to vote , so too do employees make a decion when they limit thier investigation into a propspective employee . They may not care to take the time of not know how to go about it .
You point out the fact that management changes over time . But employees are not or should not be ignorant to this fact . When I sell a bussiness it has an effect on the employees . But they are not my children and as such I have no fiduciary responsibility to these people beyond that which I am contractually bound .
Jim said :
The people who are unemployed because their employer didn’t foresee changing market conditions certainly should have known it was going to happen when they started to work. No matter how little you may think of the desire, most people want to find a good job and stay there so it’s easy to get caught up in unforeseen changes.
Some may want 30 years and a gold watch when they look for that job but others are out for that paycheck. As an employee you know you are depending on the company heads to make smart decisions. Hence the reason I caution to choose wisely. If you don’t want to have your future in the hands of others, start your own business. By accepting a job you give up the ability to call your own shots. But many people prefer to do their 40-50 hours and go home. They don’t want the added pressure involved with making the critical decisions which can make or break a company.
The issue of criminal behavior by senior staff within a company is a separate issue beside the point. We have courts to adjudicate criminal or civil matters. Remember, it works both ways. Employees steal from their employers as well. But that doesn’t mean the system is at fault.
Jim said :
The rest of your most recent post just continues to show that you are amazingly ignorant and obnoxious. What you know is yourself and your life. Everyone else is obviously inferior and deserving of comments like these: “But if you make poor life choices and the skills you posses are not marketable things will be difficult…Suck it up and get a second job….But you can’t even get out of bed when you have your attitude.”.
Yes, Jim. I promote personal responsibility and achievement in all aspects of life. My children are tough the importance of education and fitness as well. take care of your mind and body and you will be a success. I believe in actuary tables Jim. I believe in science. The advice I give actually works. The opposite values FAIL! are there exceptions? Of course.
If we were to take your beliefs to their logical conclusions we would all wear bumper suits
to eliminate the risks involved with walking. Life has risks Jim. Some people will simply fail. In rare occasions is the result of bad luck but in most instances it is the result of poor choices. But regardless of how you place the blame, freedom necessitate personal
responsibility. you might be a very decent guy and I may be an insufferable jerk. But that still doesn’t mean I should be forced to help you navigate your life .