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?”
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