©2015 By Bob Litton. All Rights Reserved.
NOTE TO READERS: I am continuing my meandering journey through accumulated thoughts on business owners and their employees.
Before I go any further, I want to apologize for the “political incorrectness” scattered throughout these writings; I refer particularly to the use of masculine pronouns to represent any person of either gender. I do not intend to slight or annoy feminine readers; it is just that the “he/she” routine is awfully cumbersome and seems wasteful time-wise. I have lived most of my life during a period when the use of the masculine pronoun was acceptable as representing anyone, male or female.
Also, I have yet more to say on the general topic of economics; but I think that, after this installment, it will be good to take a break by writing about something more fun…or funny.
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The Entrepreneurs and the Investors…
My first inclination was to use “The Capitalists” for the subhead above, but that term is too exclusive while at the same time too smeared with political connotation; it has acquired an aura of bloated grandiosity. The truth is that our inherited economic system does not consist entirely of plutocrats; there are many more small-time players in the game, from the mom-and-pop grocery (which actually is pretty rare these days) to the owner of a small factory that employs, say, fifteen people. Each of them has invested significantly in their relatively minor enterprises with money from their earnings in a previous job, their savings, or with money borrowed from friends or some seed-money organization.
For years now, I have heard and read that any individual beginning a new business should have an initial financial surplus above their estimated operating expenses for two years: that surplus is what they are to live on during the start-up period. I sadly noticed that many new business people do not adopt that “rule-of-thumb” and they fail.
Another mistake many small business aspirers make—which I observe rather than read about—is that they, naturally enough, start a business related to their personal hobbies, abilities or interests, without checking around to see how many such places already exist in their area. Frequent choices of the sort are a boutique store, a flower shop, or an ethnic restaurant. A bizarre example of this mind-set is the bar-fly with a comfortable bank account who suddenly decides that, since he enjoys the company of his fellow bar-flies so much and he is tired of paying someone else to supply his beer habit for a couple of hours every day, he should open his own bar; he does this without thinking he is going to have to spend most of every day and night, seven days a week, tending to the place. Those people have done little to nothing in marketing research or deep personal evaluation before risking perhaps their life savings in a launch toward the American free enterprise dream. But I admire them for trying.
I have written before about how one of my brothers teamed up with a carpet-layer in opening their own carpet store, specializing in dropped patterns, slightly irregulars, and used carpet. The two men made up a good combination in some ways: my brother had had several years’ experience in selling used cars and possessed a knack for getting along with people and haggling, while his partner was the son of a carpet dealer/installer and was himself possibly the fastest carpet-layer in the city. They were successful for nearly twenty years, increasing their stores to three before my brother’s partner sold his half to my brother and moved to Montana.
But another reason I mention the carpet store here is to introduce what I call the “copy-cat” aspect of business: if you have a good thing going, someone will quickly imitate your process or product. During the first years, a man opened a furniture store right next door to my brother’s store. Not many months later, he, too, started selling carpet, although on a much smaller scale. One day he used red paint to draw out on the sidewalk some hooked arrows, pointing toward his door, and the words “Carpet in here”. He was capitalizing on a premium ad placement my brother and his partner had in the weekly TV guides published by the two daily newspapers.
The same game is perceivable in the larger spheres of business. I noticed long ago how some soda pop brands, new to the market, copied the colors and even to a slight degree the labeling design of an established brand. And some lawyers make a pretty good living contesting copyright and trademark infringements, in the courts.
Despite the risks, drawbacks and villainies described above, I much respect the folks who venture their all to start up a small business. Such people — the smart, successful ones, at any rate, — are the economic backbone of our nation, of any nation. Reportedly, in spite of their small size, combined, they employ more people than any other entities in the country. The politicians claim to highly regard them, too; although, when I hear a politician call up the image of “small business” to buttress his assertions about whatever, I become annoyed by what I perceive to be the lowest kind of platitude.
At least one thing the small-business employer has in common with the industrialist: He or his managers have to deal with government record-keeping. The amount of such paperwork has purportedly increased incrementally since the early days of unionism, or rather successful unionism in my country. The business owner with employees has been appointed tax collector, safety inspector, and health insurance provider for those people working for him. Even though, being all my life a member of the proletariat, I am sympathetic to the working class (as it is so condescendingly described), I believe that perhaps too much such responsibility has been placed on the employer’s shoulders. On the other hand, a large part of the employee’s life-span as well as his individual skills are being expended on behalf of the employer’s business; his labor is his capital. The first contribution obviously is being consumed irretrievably, and the latter is vulnerable to injury and obsolescence; while the employer’s business will hopefully grow, and his investment in buildings and equipment can be depreciated on his tax return.
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…and now the Employees
This is going to get awfully personal, but there is no help for it. For, you see, I have never owned a business in my life, unless you insist on considering that year or so in my youth when I had a paper route or the decade I reported on a contract basis for our local radio station as self-employment or “businesses”. No, I have always seen myself as a member of the “working class”. And during my lifetime of working, I have always compared myself —my speed, productivity, effectiveness and collegiality—to my fellow workers. Such observing and measuring has naturally informed my view of the workers in general.
I discovered in my teens that I was slower, physically, than most people; it was a handicap that I never overcame, although I could to a small degree compensate for it by being diligent and detail-conscious. On a few occasions in various work places, the individual who was showing me how to do a task has been surprised, when I noticed a fault in something like a file or when a shipment had been overlooked, and said, “I didn’t notice that!” On some other jobs, such as being news editor at a country weekly, speed was not usually a priority, as long as I filled the news hole each week. But I was let go from several other jobs, such as house-painting, because of my turtle’s pace.
Sometimes, though, when I noticed some co-worker’s slap-dash efforts that often resulted in slight damage to a product or an ill-lined stroke of paint, I thought to myself, What is the point of rushing through some task if you’re probably going to have to do it all over again or it is going to look crappy to the customer?
Some of the people I have worked with, however, have been graceful and dedicated workers. But the best comment on such talent cannot come from me: it came rather from a carpet installer/salesman who described another installer as “an artist…his every move seems to flow so naturally that the carpet seems to lay itself.”
That brings up another aspect of my immature attitude toward compensated work: I thought the job was there primarily for my benefit. My satisfaction and comfortableness with it were my main concern. Only well into adulthood did it dawn on me that my job was to help my employer be successful, to make money for him. I remember my first job beyond the paper route , when I was fifteen. I worked for a few weeks for an air-conditioning contractor, my brother’s father-in-law. He paid for my lunch the first day, and I deduced from that, that employers ordinarily bought their employees’ lunch. I know, that sounds crazy, but you have to realize that I had had no prior training from my parents in work ethic or etiquette. I guess they thought that just came naturally.
Still, the benefits for workers have in fact multiplied since the unions began to win their extended battles in the 1930s. Paid holidays and health coverage eventually became virtually universal in the major industries and some smaller ones. Now the fight is on for paid maternity leave, even paternity leave. How different is that from my supposing that employers conventionally buy their workers’ lunch? Of course, mossbacks like Margaret Thatcher and Ronald Reagan dealt some heavy blows to the union movements as such; but those blows seem to have merely fractured the union organizations, the forces of labor now apparently have moved into the populace as a whole. I cannot say this with authority, but I believe that the current forces for change are the result of the rapidity of modern mass communication; it is like an ocean tidal wave awakened by a crack in the Earth’s crust. Not just the workers are joining in the push, but some of the billionaires themselves, like Warren Buffett. They recognize the force of change cannot be stopped, that they have more money than they can spend, that the needs of the workers must be recognized and tended to.
But there are other, contrary attitudes in play, too: the reactionaries.
Soon, I believe, the era of the worker will conclude. The inventors are designing robots and other types of mechanization for virtually every occupation from store greeters to accountants…even journalists now. The Associated Press is already mechanizing its facts-gathering and article-composing processes. Boy, am I glad I’m not going to be around much longer! Not many decades hence, the plutocratic industrialists will no longer see any use for other humans except as consumers; but how will people be able to consume if they have no jobs to pay for the things they consume. It will be a world of loafers and artists living on garbage out of dumpsters.
Or everything will be free, but, in such a world, there will be no joy in ownership, for such joy derives mostly from having worked to make the money to pay for something much desired. If there is no work other than punching a few keys or turning a couple of dials, then where will the sense of pride in one’s efforts reside?