On Saturday night I took my eldest out to see “Capitalism” the latest film by Michael Moore. Now Moore has his detractors and I am not going to go into their complaints here about demagogy and the use of images that don’t correspond to the reality being presented, but one thing he does rather well is illustrates the excesses that have brought the American Dream to a crashing fall for many people in the States and all around the World.
The film brought home one thing especially for me, the need to stay ethical when working as an entrepreneur. There was one business based in California that demonstrated the usefulness of the cooperative model in a capitalist economy and one quote from a worker there worked really well. I am paraphrasing here but it was along the lines of “If I build the company up and give myself a huge rise while leaving everybody else behind I am just greedy and couldn’t face my co-workers” The emphasis was that by holding a stake in the company all workers do their best for the company and they all benefit from the company prospering.
At one stage in my real estate company I was earning a lot less than those who worked for me on each and every sale because of the way the money was split. (I had also made a mistake on calculating the amounts thanks to my useless ex accountant) There was even a case where if we sold a particular house in a certain way I actually lost money! Great organisation eh? That particular gravy train was cut off as soon as my new accountant realised this. However the point was I was being much more than fair, I wanted the best for everyone even if it meant that the company didn’t make the money it could have done. My mistake I know.
Now the other issue of course is profiteering. If the base cost of an item is 10 let’s say and after all costs you could sell it for 15 and still make a nice profit, is it OK to charge 20, 30 or even 40 or more just because you can. Obviously you don’t want to compete in a race to the bottom price wise because then nobody wins but how much is that product worth? I have my own theories on this which will be in my next entry.
So how much is it OK to earn without being viewed as greedy? How much can you take out of a company every year and how much do you need of course? There is a limit to the number of cars that can fit in the driveway or garage isn’t there?
What do you think the aim should be for a start-up company every year and where do you draw the line? Is it possible to have an ethical business model?