Saturday, April 29, 2006

"Heartless" Capitalism Is The Most Compassionate

Alice, my lovely wife of Great Expectations fame, is also a smart businesswoman who is the founder, majority shareholder, and Chief Executive Officer of a very successful baling wire manufacturing and distribution company, Vulcan Incorporated, Hayward, California. Her story is an “only in America” tale in more ways than one.

For starters, today we discussed world business environments over lunch, and agreed that she could not have had her successful business in a European country, like France for example, particularly in light of French labor laws. Presently the student rioters in France are making headlines because they want to maintain the very laws that are destroying France’s economic competitiveness.

Here is a simplified summary of the French labor law situation. In France, if a business hires an employee, they cannot fire them. Now think about the dynamics this creates in the minds of the business owners.

Owner: “If I hire good employees, after I train them and they become competent in my business, other businesses will want to hire them away from me, or they may go into business for themselves and compete against me. I hope I can keep them happy.’

‘But if I hire bad employees, no one will want to hire them away, they won’t want to leave me to start their own businesses, and I can’t fire them. Inevitably I will have one or two bad employees I can’t get rid of and my good employees will be disgusted working with them and leave. When I try to hire replacements, good workers won’t want to work with bad ones, so I will only be able to hire more losers. Soon all I will have is bad employees I can’t fire.’

‘Then my business will fail, and we’ll all be out of work.’

‘What if I hire a young Muslim? Their unemployment rate is 50 percent. But they are not well educated, they are not good workers, instead of assimilating they are actually trying to separate and segregate themselves from French culture and society. Who wants to hire an attitude problem that will just get worse that you can’t get rid of?”

Meantime, in the United States, Alice has been able to keep her good employees, fire the bad ones, and success has fed success. Every good employee contributes to and shares in her company’s increased profitability through bonuses on increased production, profit sharing, and a sweat equity program. That’s why they are happy to see poor employees go, and would resent laws that prevented their firing.

In the final analysis, which system is the most worker friendly? One that results in unproductive and failing businesses and high unemployment, or one that rewards both the good employees and the owners?

Capitalism isn’t killing socialism. Socialism is dying from self-inflicted wounds, and the sooner it dies, the better for all.

Below are links to other "Alice" posts:

Great Expectations - The tale of our whirlwind "story book" romance, featuring me picking Alice from a book.
The Dublin to Tralee Train, and how Alice stopped it!
Alice, the California Can Carrier - I think the Italian men liked the way she carried her can.
A Burning Desire - How lust landed me on the ski slopes
The Strong Woman Myth - In conclusion, a tribute to Alice and her daughters
Christmas Letter, 2005 - Alice had a busy year
A Fool Such As I - In a letter to the editor of our local paper, someone called me a fool. Alice didn't like that, and replied.

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