What Does It Mean to Be a “Good” Businessman?

 

                       Steve McLean

When you watch the 6 o’clock news, you hear about the wars in Gaza and Ukraine and the latest political scandal. That’s about all, before they switch to the weather, which may turn out to be the worst crisis of all. If you want to be overwhelmed though, just Google “Crisis Watch.” It goes country by country, describing dozens of political and humanitarian crises all over the world. I’ve long tried to avoid thinking about the terrible things that go on in the world. It started when I was in Vietnam, when I started paying attention to world events. It was horrifying then, and it may be even worse now. I decided at the time that since I couldn’t do anything about world events, I’d be better off spending my time trying to become a better doctor. 

Now that I’m retired, I’m cursed with having more time on my hands, and since I’m also addicted to Google, I inadvertently read about current crises. Today I became aware of the Yazidis, whose homeland is in northern Iraq. The Yazidis aren’t Muslims. They still follow an ancient nature worship, which as a Native American, I respect and even admire. It seems better to me to think of oneself as one with the deer and the antelope, than to follow rules thought up by some charismatic madman who has convinced his followers that he has a direct line to god. St. Francis is my favorite Christian saint. He admired the birds.   

Anyway, back in 2014, when we were occupying Iraq during one of our crusades to remake the world in our image, ISIS, or ISIL if you prefer, became powerful and took over a large part of Iraq and Syria possibly in response to our intervention there. And they decided to convert the Yazidis to Islam, or else. As a result, thousands of Yazidi women were sold into slavery, thousands of civilians killed, and hundreds of thousands made refugees. 

Aiding in this outrage was the Lafarge cement company. Yes, a cement company. They just happened to have mining operations in the area controlled by ISIS. Naturally their main concern was profits, not the lives of thousands of Yazidis, so they made a deal with ISIS to share 10% of their profits, and to make it sweeter, to provide cement for tunnels to make the ISIS fighters more secure from American bombs. 

Miraculously, Nadia Murad, one of the Yazidi women, escaped after suffering brutal torture and abuse, and the murder of all her family members. Since then she has successfully sued Lafarge on behalf of herself and hundreds of American Yazidis, and has won the Nobel Peace Prize. 

As is so often the case, this story reminds me of another piece of wisdom I learned from my cousin Steve. 

Steve has long said that being a “good” businessman doesn’t mean that you are a good person. Now I don’t mean that all businessmen are bad, only that it’s difficult to succeed in business without being a little bit unethical, putting down your competition, and sometimes even sacrificing the good of society to make a profit. There are countless examples in the news almost daily of companies polluting the environment, and hiding evidence of unsafe practices and substandard products. You can find lots more if you Google ‘consumer protection.’ 

This is all because the goal in business is to make as much money as possible. In order to do this, the “good” businessman’s incentive is to make his product as cheaply as possible: to use the cheapest materials, to pay his employees as little as possible, and to avoid giving them benefits, like health insurance, and retirement savings. In advertising, he will exaggerate the advantages of using his product, and hide any harmful results. If a product wears out quickly, that’s just fine, because it means the customer will have to buy another. “Good” businessmen oppose unions because they raise costs by demanding higher salaries, and expensive benefits. 

These practices violate my cousin Steve’s principle of “earning your oxygen,” since they benefit no one and often cause harm. They also fail to value each person’s contribution since most of the profits go to the top executives and to the shareholders because they are the ones with the power. If an executive causes the company to fail, he has a “golden” parachute to console him. 

In order to continue this system, “good” businessmen lobby Congressmen to avoid regulations. 

The trouble is that the capitalist system incentivizes cutting corners in order to maximize profits. The government’s solution has been regulation, an elaborate system of monitoring quality, setting standards, and requiring companies to provide employee benefits, but there is always fierce opposition, and it often works because politicians are also incentivized by money, and companies spend enormous sums supporting the candidates that go along with them. 

Actually it’s possible to run a business successfully without following the usual business practices. Steve operated a business before he retired, selling a piece of oil field equipment called a plunger lift, and he followed his principles of earning oxygen, and valuing each person’s contribution in running his business. He became friends with his customers, keeping pictures of each of them on his computer so he would be able to call each by name. He shared tape books with them and although he didn’t care about sports, he followed their favorite teams so he could discuss the current standings with them. 

Steve’s plungers were more efficient and durable than his competitors’ products, even though that cost him more to produce them. And he provided unparalleled customer service. When he sold a plunger he maintained it himself for a full month, and if he couldn’t make the plunger work to the customer’s satisfaction, there was no charge. He also guaranteed his equipment, charged no restocking fee, and loaned out equipment for free.  

Steve hired an assistant who worked for him during the last few years he was in business. The man he hired was a Libertarian, who believed in maximizing profits and limiting regulations. He insisted on a detailed contract which guaranteed him reimbursement for all expenses, and first choice of buying the company when Steve retired. He disapproved of Steve’s liberal services and guarantees, but he followed Steve's policies, and they worked well together. 

When Steve retired, he sold the company to his assistant for the accounts receivable. He essentially gave him the company, and then he gave him all his equipment, and continued to supply him with plungers at a reduced rate. The assistant then sold the company, went to work for Steve’s biggest customer, and quit using Steve’s plungers, driving the man who bought the company out of business. 

This violated the strict contract that the assistant had insisted on, which specified that the assistant would continue to use Steve’s products after Steve retired. When confronted with that, assistant claimed the contract wasn’t a legal document. 

Steve tried to compensate the buyer by selling him plungers at half price and fittings at a quarter price, but it wasn’t enough. The buyer still went broke.   

Steve might have made more money if he’d been a “good” businessman, but he made a good living, and he enjoyed his work. Instead of profits, his priorities were the relationships he made with his customers, and the quality of his products and service. He told me, “I enjoy making things work.” 

I’ve been thinking about Steve’s ideas for a while, and I’ve heard some research that shows organizations are more productive if they are less competitive and more cooperative. Also the workers are happier and more satisfied if new ideas are encouraged. The trouble is, we live in a competitive society and people who don’t conform are often put down or disregarded. 

So far, we have tried to make society fairer by creating regulations to control bad behavior, resulting in a huge and growing bureaucracy and mountains of red tape, when the real problem is our competitive culture and our attitude of “winner takes all.” I don’t know the answer, but I think it would be a good start if every day we would ask ourselves the question: “Did I earn my oxygen today?”

 

Pollyanna

 

                                              

                         Pollyanna

 

I thought I’d share another bit of wisdom from my cousin Steve. See posts Ambivalence and Earning Your Oxygen. 

Steve’s favorite movie is Pollyanna – the 1960 version. Pollyanna was based on a book by Eleanor H. Porter, published in 1913. It features an 11- year- old orphan who comes to live with her spinster aunt, Polly Harrington, who agrees to take her in out of a sense of duty. Pollyanna is disarmingly cheerful and she proceeds to make friends with everyone she meets, even those with serious difficulties. Her secret, taught to her by her father, is the “glad game,” which is thinking of a way to be glad over any sort of misfortune. The impact of Pollyanna’s  philosophy becomes clear when Pollyanna herself is seriously injured and the whole community rallies to cheer her up, even her aunt Polly. 

The 1913 book and the 1960 movie were extremely popular. Haley Mills won an Oscar for her role as Pollyanna in the movie. But, over the years, Pollyanna has become a pejorative, symbolic of someone who is naively optimistic and unwilling to face reality. 

Steve watches Pollyanna over and over, reminding himself to be empathetic and to look for the good in others, something perhaps we all should do, in a time when so many people form arbitrary opinions and refuse to listen to others or try to understand their point of view. 

A few years ago, as I was writing Wenonah’s Story, about my mother’s childhood and young adulthood during the First World War and the Depression, I read several books written during the early 1900’s, to get a better understanding of the times, and also of my mother, who was an avid reader. 

One of the books she recommended to me was A Girl of the Limberlost, by Gene Stratton-Porter, published in 1909. It was about Elnora, a girl who lived with her widowed mother on the edge of a swamp. Although they were poor and her mother was cold towards her, Elnora loved nature and was kind to everyone she met, so she earned the love and respect of those around her and eventually her mother. My aunt used to call my grandmother “Girl of the Limberlost.” She was like Elnora in her love of nature, and her yard was overgrown much like Elnora’s swamp. 

It occurred to me when Steve told me of his admiration for Pollyanna, that the plots of both novels were strikingly similar. They tell of young girls, unloved and living in poverty, who are nevertheless kind and generous, and who have a positive influence on those around them. Both novels were popular, especially among young people. As I read other novels of the time – Heidi, Rebecca of Sunnybrook Farm, Little Lord Fauntleroy and others – I realized that they had a common theme. They featured characters who succeeded by being kind and generous.    

Then I thought about the novels that are popular with teenagers now. The heroes and heroines nowadays succeed by outsmarting evil villains, instead of showing kindness and generosity to the poor or misguided. Their virtues are strength and cunning. Pollyanna and Elnora wouldn’t be admired now. They’d be laughed at. 

I’m certainly not nostalgic about the early 20^th century. There was no welfare for the poor, no civil rights for people of color, no retirement benefits for the elderly. It was a time before child labor laws, women’s rights to vote, and laws protecting farm and factory workers. 

But, as Steve says, the more you know, the less critical you can be. The popularity of these themes, this literature, reveals that people of the time valued kindness and generosity, not just wealth and power. Maybe it was because material gratification was harder to come by back then. I don’t know, but as Steve would say, ‘the more you look, the more good you will see in people.’ 

We can all learn from Pollyanna. She definitely earned her oxygen.

 

PInk Panther

Killing One Person is a Tragedy, Killing a Million is a Statistic

 

                             Henry Kissinger

I know I’m breaking my cousin Steve’s rule that you should learn more about an issue before making a judgement, but with the war in Gaza killing tens of thousands, and the death of Henry Kissinger, who may have been responsible for hundreds of thousands of deaths, in the news, I just have to make a comment. 

The title of this post, “Killing  One Person is a Tragedy, Killing a Million is a Statistic” has been attributed to Joseph Stalin, of all people. He should know, being responsible for 43 million deaths, according to columnist Ron Bailey, in his article in the magazine, Reason.  Stalin probably said this to justify killing millions, so it’s ironic that his words are now used to condemn his unthinkable crime.

I just watched Fareed Zakaria’s program on CNN. He interviewed Henry Kissinger’s biographer, Niall Ferguson. When asked for his response to criticisms of Kissinger’s policies, his response was “disgusting.” I’m sure he knows a lot more about Kissinger than I do, but to me his response is just another example of the idea that ideology is more important than human life, and its corollary, that American lives are worth more than those in other countries. Kissinger supported our secret bombing of Cambodia near the end of the Vietnam war, starting an eight year genocide by the Khmer Rouge, hoping it would put us into a better negotiating position with North Vietnam. He backed West Pakistan in their war to put down East Pakistan, now Bangladesh, in their fight for independence, because he thought it would weaken India and the Soviet Union in our cold war struggle against communism. That war cost the lives of as many as 500,000 people. Kissinger also supported Indonesia in putting down a rebellion in East Timor, as well as insurrections in Chile and Argentina, in hopes of getting governments more friendly to the U.S.. Kissinger got the Nobel Peace Prize, in spite of his responsibility for the lives lost. How absurd is this?   

Kissinger’s legacy brings to mind Israel’s killing of 15,000 Gazans, so far, mostly civilians, in response to the terrorist attacks by Hamas, which killed 1500 Israelis. That’s ten to one, so far. Israel’s actions are based on ideology, that Hamas must be destroyed as a political movement, that they have no choice, since Hamas is imbedded among the civilian population, and that Palestinian lives are not worth as much as Israelis. That’s not to mention the desire for revenge. 

Our response, that we support Israel, no matter their actions, likewise ignores the issue of lives lost. Israel and Gaza are not ethnic monoliths. They are diverse groups of individuals, each with his or her own beliefs, hopes, and talents; each with his own family and friends; each of whom is important in his own way. 

I support Israel’s right to exist, and also her right to defend herself, but why can’t the cost in human life be factored into decisions. Palestinian lives are worth as much as Israeli lives, as are Ukrainian, Russian, and American lives. We’re all humans. I suppose there are reasons to go to war, given the need to defend ourselves against those who would abuse or kill us, but loss of life needs to be considered. It’s the most important thing, to my mind. 

How differently would the Israeli government act if they weren’t dead set on revenge. I’m no expert on either diplomacy or war, but even I can think of some alternatives to destroying Gaza and everyone in it. Israel is one of the richest, most technologically sophisticated countries in the world. Why don’t they concentrate their bombing on the sites where Hamas is launching the bombs, or better, extend the cease fire? Why don’t they identify and indict those responsible for the attacks? Why don’t they agree to negotiate with Hamas to end the fighting? Why don’t they consider a plan which would give Palestinians independence? Why don’t they consider giving aid to the Gazans to rebuild their country, and help raise them out of poverty? Why don’t they stop building settlements on Palestinian land?   

Human life is precious. Why can’t we get that through our thick skulls?

 

The French Leave Vietnam, We Step In

    

               Dwight D Eisenhower and John F Kennedy

In January of 1953 Dwight Eisenhower became president. We had already been supporting the French in their effort to regain control of Vietnam for eight years, with money, advisors, and military equipment. With the Korean conflict ending, the Pentagon was concerned that the Chinese would be freed up to enter Vietnam in support of the Viet Minh, and we would be forced to enter the war ourselves. But they advised Eisenhower to avoid direct involvement at all costs. Winning would require a full commitment, which would be expensive and would put our international prestige on the line. 

The Korean war ended with an armistice in July of 1953, and the involved powers met the next April in Geneva to negotiate terms of the armistice. The Viet Minh had just defeated French forces at Dien Bien Phu, so Vietnam was included in the negotiations. According to the accords, Vietnam was divided into northern and southern sections, the north to be led by the communists under Ho Chi Minh, and the south by the Christian nationalist, Ngo Dinh Diem, appointed Premier by the French puppet, Bao Dai. Vietnam was to be united under leadership to be determined by elections held in 1956. 

Here was an excellent opportunity for the US to correct its mistake and get out of Vietnam. The French had been defeated and Vietnam was again under the control of the Vietnamese, Ho Chi Minh in the north and Ngo Dinh Diem in the south, and there was an international agreement in place to reunite the country under one government. Why didn’t we just abide by the agreement and get out of Vietnam, preserving what little respect we had left in SE Asia? 

As the French gradually phased out their control of the South Vietnamese government and military, Eisenhower put off the decision on whether to withdraw our support or transfer it to the new Diem government. He ordered a study by the Joint Chiefs of Staff, which concluded that no amount of training would enable the South Vietnamese military to be successful against the communists without the backing of a strong effective leader, and they saw no evidence of that in Diem. 

Eisenhower sent a letter to Diem saying that US aid would depend on him establishing a government that would meet our standards of performance, and he sent a trusted colleague from WWII, General J Lawton Collins, to Vietnam to evaluate the situation. Collins’ report was also negative. He found no popular support for Diem, and he recommended withdrawing support if Diem failed to make progress.  As for sending in US troops, General Matthew Ridgeway, Army chief of staff, reported that Vietnam did not have the infrastructure to support a modern army, and entering the war would require the huge expense of building infrastructure and at least ten divisions of troops. He advised against it. 

In spite of all these recommendations, Eisenhower decided to continue sending financial aid to Diem, and he started making plans to train the South Vietnamese army. 

Why? 

According to Barbara Tuchman, “Once a (government) policy has been adopted and implemented, all subsequent activity becomes an effort to justify it.” Support of the South Vietnamese government had become established government policy.  

After the Geneva agreements, evidence continued to build that our support of Diem was a mistake. The South Vietnamese government was corrupt and ineffective, and not supported by the people. Diem filled government positions with family members and Catholics in a country that was mostly Buddhist, and dealt with political opponents by jailing or executing them. He was turning into a dictator.  His army was weakened by desertions, and he could only count on a small part of it to be loyal to him. In 1955 he was almost overthrown by a coup. Even the French had given up on Diem’s government. They sent a diplomatic mission to Hanoi to try and make a deal with Ho Chi Minh to maintain economic ties after Diem fell. 

After the coup, there was another opportunity to withdraw our support for Diem. He hadn’t satisfied Eisenhower’s criteria for support. None of our allies supported him, not even France. But in spite of all the evidence to the contrary, even with his prestige as a WWII hero, Eisenhower continued to support Diem. Russian military forces had taken over Hungary, and communists under Fidel Castro had taken over Cuba while we did nothing. Why was Vietnam considered a greater threat? Because it had become established government policy. Eisenhower justified his decision with his “falling dominoes” theory, that if Vietnam fell to communism, then the other countries in Southeast Asia would also fall. 

Communism was the biggest issue during the Eisenhower administration. The USSR had exploded their own atom bomb, so the US was forced into an arms race as well as the “Cold War.” The communists were in power in most of eastern Europe, as well as in North Korea and China, and there were strong communist parties in several countries in western Europe, including France. Back home Joe McCarthy was heading up a Senate committee investigating communists in the US government, creating pressure on government officials to prove their anticommunist sentiments. 

Between 1955 and 1960 Diem made no attempt at democratic reforms. It was against his interest, which was in maintaining power. By giving others a say in decision making, and making the country more democratic, he would risk losing control. So as we bolstered his government by providing 60 to 75% of its funding, he used strong arm tactics rewarding people who informed on “traitors,” whom he jailed or put in re-education camps. His land reform program favored the landlords over the peasants and was riddled by corruption. When ten of his cabinet members quit and signed a manifesto demanding his resignation along with government reform, he had them thrown in jail. In 1960 he barely survived another coup. That same year the NLF, or National Liberation Front, was formed. They demanded reforms, and the overthrow of Diem and the American “imperialists.” They started building a network of insurgents in the South, which became known as Viet Cong, ready to take over when the Diem government fell.  

Meanwhile in North Vietnam, Ho Chi Minh was busy. Cut off from the rice fields of the South, his people suffered from hunger as he executed landlords and confiscated their farms. Opposition to his government was ruthlessly put down, as he consolidated power and built up his military, stockpiling weapons and recruiting troops, preparing for an invasion of the South. Refugees from South Vietnam were trained in guerilla tactics and sent back to join the Viet Cong. They infiltrated communities and used terror tactics to intimidate the population. According to the Saigon government the Viet Cong had assassinated 1400 local officials by 1960. In 1961, when John F Kennedy became president, Ho was ready to invade South Vietnam.