Look ma, no rope!
Our family recently (last August when I wrote this) spent the day in Park City (site of the WCI Conference last month) at the Olympic Park. We had a ton of fun. For 1/3 the price of a Park City ski lift ticket, we got unlimited access to three rope courses, three ziplines, a drop tower, 3 extreme tubing hills, two ski lifts, a Ninja-warrior style challenge course, and the infamous Psicobloc climbing wall (positioned above a deep pool, enabling you to deep-water solo.)
The kids did great and we were all sad when our time ran out. As we left, they were setting up for the “Extreme Slip N Soar” event the next day, where people paid for the opportunity to zip down the ski aerialists training ramps and fly into the pool. If we had more time, we would have paid $25 more to ride the Olympic Bobsled course.
Business Made The Difference
What happened in Salt Lake? Well, two things. The first was Mitt Romney. He ensured that money was raised as a bit of an endowment to not just build the facilities, but also to maintain them. Whatever you think of his politics, having a successful businessman running the Olympics here worked out great for the facilities. The second thing is capitalism. And that was what we saw at work at the Olympic Park.
My daughter and I on the top (harder) level of the Olympic Park ropes course
We saw athletes practicing their snowboarding and aerialist jumps. They had ski jumpers practicing after we left. The bobsledders get to do their thing all year long. All for free. That wasn't tax dollars doing that. It was someone realizing that business can often accomplish things that other institutions cannot. The fees that people gladly pay to go do a ropes course or sled down a monstrous hill pay for that. And what user fees can't generate is paid for with generous grants from people who have been successful in business.
Business And The Professions
Too often in the professions like medicine, law, accounting, dentistry, teaching, and even police work, we denigrate those in business-“Awww, they're just in it for the money, not for a noble cause like us.” But when you look around at the standard of living you enjoy, far more of it came not from a professional, but from a businessperson, who was motivated not only by profit but also looking to make the world a better place. Internal combustion engines, electricity, trains, automobiles, airplanes, personal computers, the internet, air conditioners, and your iPhone all came from someone trying to make a buck. Business paid for The Birth of Plenty (great Bernstein book by the way if you like economic history) beginning in the 1820s. Business pays for a major chunk of your retirement, whether you invest in corporate bonds, stocks, or real estate.
While I didn't really start making any kind of real money with The White Coat Investor until about year four, that slowly increasing income it produced kept me interested and motivated to keep up my efforts and not quit. In exchange for that business focus, 10 times as many people have had a chance to hear The White Coat Investor message as would have if I had done it purely on a volunteer basis.
A mile-long zip line
So today, let's tip our hat to business. Thank you to those who work in it and those who understand human nature enough to know that we can do a heck of a lot of good while pursuing our own self-interest. Business and markets can't solve every problem, but they are the best solution out there to many of the issues we have. Let's get out of the way and let them solve the problems that they can solve. Learn its principles and apply them in your life.
What do you think? Do you think business is a noble pursuit? What are you grateful for that business has produced? In what ways have you used or seen used a profit motive to accomplish a lot of good? Comment below!
I think business (like doctors) get a bad wrap sometime from the public, because they see it (even if isn’t true) as the other person getting rich while nothing changes for them.
From your example in this post, that obviously isn’t true. Business accomplished a lot of good there, and continues to do good things. Obvious examples in my line of work in anesthesia involve technological advances from anesthesia gas machines and ventilators to the ultrasounds we use for peripheral nerve blocks. The technology today is ridiculous, and it comes from business trying to drive a profit. In turn, that profit allows them to make the next machine even better. Our newest ultrasound machine feels like we are looking at a flat screen OLED TV compared to the black and white static we used to have.
Business is a good driver of innovation that moves medicine and society forward.
Steve Jobs was on record plenty of times saying Apple was never about money for him.
Ha! What people say and what people do are not always the same thing. He may say that, but after reading books on his life, money was a very important thing to him. He wasn’t into charities and didn’t donate to them. He felt he could do more good focusing on his product than focusing on charities. I personally am glad he did, but that’s just because what he did advance helps me every day.
All that is fine, he can do what he wants, but to say Apple, one of the richest companies in the world, wasn’t/isn’t about the money is laughable.
Capitalism even in medicine is a good thing.
As Larry Kudlow says, “Free market capitalism is the best path to prosperity”.
Thank you for this. This progressive Democrat sometimes forgets when she views the perversions of capitalism claiming the name, or the unchecked excesses of it which result in abuses of rights and freedoms. I have long known I’m not a businesswoman ( never saw the angle that fit in with my interests and drive? ) and now that my interest is in politics I certainly don’t want to seek a way to profit from that since those doing so in a way I disapprove of are part of the reason I am in politics. However, it might make me more productive and a harder worker at my efforts.
As a new business owner, I appreciate the sentiments. I will say, as an employee for 18-years and now an owner the mind-shift comes fast and hits a bit hard, but enjoying it so far. Four families are depending on me to keep the lights on. And I, in return, hope to do a bit better by them and my family. I’ve made a sizeable investment of capital, I don’t think it is wrong to want a decent rate of return on the investment.
I don’t even necessarily think it is wrong if the Gov’t helps give a push start as long as those funds are returned as profits are made. Squaw Valley is another example of an Olympic Venue that is profitable to this day.
Most people’s retirements are depending on businesses doing well for them. Hug a business owner today. :O)
I consider myself a libertarian, and I advocate a free market capitalist economy, but we must be very careful to remember that we have currently is not a free market economy but a mixed market economy based on corporatism. Lobbyists, regulations and the personhood of corporations is what distorts business and the economic balance. When Shkreli, Valeant, Myriad and others price gouge, that is not beneficial to anyone, as we all pay increased insurance rates through private insurance, those paying OOP and through taxes for Medicare/Medicaid when they drive up the price of healthcare unnecessarily and unethically. We all shake our heads, but nothing changes.
The fee-for-service healthcare model in the US does not incentivize well-care unless there are tests and imaging that can be done to boost collections/RVU, so practitioners must fight between their moral calling to help patients, the desire to keep M&M rates low and achieve good outcomes, but also make a profit. There is also no incentive for patients to make lifestyle changes or to be healthier. If people don’t have to pay for it directly, they don’t take care of it. I hope that HDHP’s will change that model.
Like everything in life, moderation is key. Zero regulations, specifically for consumer safety and ethical business models and complete unchecked capitalism is not beneficial, socialism breeds complacency and abuse of systems as well. Overregulation kills businesses and leads to monopolization. There needs to be incentives and “skin in the game”, and innovation and industry disrupters, but without the power of large organizations and corporations that rig the system to benefit those who don’t want change.
There are far too many people and parties making so much money off of the system as it runs currently that I can’t see any beneficial changes actually happening anytime soon. We would need a complete overhaul of the healthcare system and the entire economy and political system. Apathy will be our downfall.
I agree, moderation in all things.
Capitalism and free markets have been a boon to society since the beginning of time. The motivation provided by the potential to profit spurs creativity and innovation which often changes the world for the better.
I feel the profit motive is neither inherently good nor bad. When directed appropriately, aligning selfish interest with public benefit, it produces incredible gains for the society.
Unfortunately, the profit motive is not necessarily aligned for public benefit. And it is these instances that have created the bad rap that unconstrained free market capitalism gets: rent-seeking behavior (eg increasing rent on apt without improvement or increasing prices of very-old-drugs just because you can), exploitation of workers (eg child laborers or indentured servitude/company towns, etc etc), and tragedy of the commons (dumping industrial waste into the creek, polluting the air).
For this reason, I feel that those who overemphasize and only see the good of capitalism (eg “Greed is good” or “Free market capitalism is best path to prosperity”) are either overly idealistic, intentionally deluding themselves by ignoring the ills and pitfalls that rampant free market might bring, or completely ignoring the fact that “Free market capitalism” is a theoretical construct that has as much validity in reality as “pure communism”. Just as “From each according to his ability, to each according to his needs” will never occur as long as one or more person feels entitled to more than one needs, true “free market” can’t exist with the reality of information asymmetry, unequal market power, barriers to entry (artificial or inherent), and unequal bargaining power.
Still, it is easy to inappropriately vilify and oversimplify, so having a good story to balance out the bad stories one hears oh so often is refreshing.
As far as businesses go, I am grateful for all the great small food establishments that add such variety and spice to the world. If you like travel and food, check out “Somebody Feed Phil” on Netflix (oh and I’m grateful for Netflix and the people take risks to produce good content). It’s a funny guy meeting people and experiencing local cuisine. It makes we want to go to each place he visits.
I think people have a sense for businesses that are in it for profit ONLY or keep profit first, help later mentality. There are plenty like that. I DO NOT tip my hat to them. And yes, being a doctor IS noble. Sorry if you don’t feel that way. When I go practice, I keep practice of medicine and helping patient first. And please don’t call patient a customer; standard and things on the line are different.
Do you really think that the practice of medicine (providing health; saving lives) is more noble than capitalism (providing jobs; changing the world)? I’m not so sure. I’ve met my share of docs who do not put patients first. Rather, I both have the inherent potential for nobility which, sadly, is not always realized.
Every field has bad apples.
Doctors also are known to go on medical missions and provide free care. While businesses can do philanthropy, doctors provide services few can and for free in this situations; money can’t buy that. Also throwing money doesn’t solve issues, people do.
And spare me capitalism as solution to everything. It works, but come on comparing that to what doctor does isn’t apples to apples (did I mention apples one too many times already? hey as they say an apple a day…). People didn’t invent KPI metric but when they were busy putting food on the table, covering their nethers with leaves, and stone for a roof there was a doctor trying to treat (there was also a prostitute but yea).
Larry,
Consider this interesting thought experiment I came across somewhere: Who do you believe has improved the world more . . . Bill Gates (both through creation of Microsoft AND his philanthropy) or Mother Theresa?
Sort of gets to the nut of your question.
Did you digitally erase the rope in the wall photo?
Rope? Do you see a harness?
I think business principles should be learned by physicians. We have acquiesced control over our hospitals to administrative people with business training, but who lack an understanding of how medicine works. And by not applying efficiencies in our practices, we’ve provided an opportunity for the bean-counters to make cuts that are not in the best interest of patients. More physician MBAs running healthcare facilities should be encouraged.
I’ll toast to that! It’s Saturday night so a beer is forthcoming.
I enjoyed this quote:
“But when you look around at the standard of living you enjoy, far more of it came not from a professional, but from a businessperson, who was motivated not only by profit but also looking to make the world a better place.”
Agree. I’ve re-read Ayn Rand’s Altas Shrugged (and reread Fountainhead) twice since finishing training. It motivates me to keep struggling for what I want despite paying disproportionately high taxes and sometimes dealing with an entitlement culture.
Although I’m not an atheist like Rand, she took a world in which the creators (ie business people and also a doctor) removed themselves from society and let the rest of the world see what would happened. Spoiler alert – it ain’t good! Interestingly the symbol of the new society they founded was the dollar sign.
Just did first zip line in Kauai, tons o fun.
You might be surprised to find out the amount of hatred people of a certain political persuasion feel for Ayn Rand and those who like her books.
Like anything, people should take what’s useful and leave the rest.
Oh Jim, I wouldn’t be surprised cause I already know ; )
I’ve never read Rand’s books, but that creator removal scenario sounds like an interesting one.
How would it work? How would one decide who were “creators” to be removed? Once they were, what if some previous not-creators stepped up to the plate and became creators (eg maybe those who lacked the motivation or were discouraged before from being overshadowed)? Would they then be removed? Would this removal keep going on until all the “creators” were removed? Is being a “creator” inherent and genetic or a product of environmental factors? Are there actually people who are fundamentally “non-creators” such that society would actually suffer if the “creators” were all removed or would creators always emerge from after each of these selection process? How likely is Rand’s postulated aftermath of “creator-removal”?
In the classic Atlas Shrugged, the creators/entrepreneurs/workers/makers removed themselves by heading off to Galt’s Gulch (Who is John Galt?) where they could keep the fruits of their labors instead of having them taken by the takers/redistributors.
I don’t know the answer to your other questions.
Like WCI says, they removed themselves. It was voluntary. Whomever didn’t leave was free to try and salvage the society. Sounds like you should pick up a copy : )
JasonH,
You ask, “How would one decide who were “creators” to be removed?” Here’s the answer: as you personally went through life, if YOU were always the person on academic ‘group projects’ that did most of the work, organized the group to get the work done, and then cleaned up the work at the end because other people did mediocre work and you could make it better, then YOU are a ‘creator.’ Probably everyone on this site can relate to this – as we all go through life, there are people who can be counted on to get stuff done and have the grit/intelligence/perseverance/talent to accomplish things, and then there is everyone else. Now assume all of human society is the equivalent of one giant ‘academic group project,’ and you get the point.
I’m no Randian scholar, but I’ve read the books. I believe Rand would simply say that those who are ‘creators’ or ‘producers’ or ‘makers’ in society have no moral obligation to share the benefits of their gifts with anyone else. It is not that a ‘creator’ is prohibited from sharing the benefits of their work with society if they choose, but just that a ‘creator’ has no moral obligation to everyone else who is not a “creator.” And to the extant that they create value in society or ‘create,’ then they have a moral right to compensation based on the value of the ‘creation’ on the market, not a value dictated by some societal authority.
Rand’s position is that it is a moral act of creative and productive people to withdraw themselves from productive work that supports an immoral regime . . . and a regime controlled by ‘takers’ is immoral. This is very similar to our discussions of “early retirement.” Rand would say that it is a positive and good moral act when a doctor in the prime of her life at age 44 (just an example) chooses to cease working because she is tired of the BS and authoritarian garbage from the government and medical Boards. The howl and cry and clutching of pearls that results from “society” when a productive doc follows FIRE is the same as that when a ‘creator’ retreating to Galt’s Gulch. Rand would have a big moral problem with docs being subject to ‘take it or leave it’ crappy government payer’s mandates, and especially ABMS/medical specialty Boards MOC and recertification requirements.
As one of those “people of a certain political persuasion” who retired at 48, let me distance myself from any credit for that to Rand. (And point out to any of her admirers who might be ignorant that she was very happy to take social security, and so a taker as well as a creator, and thus ironically not a solid Randian.) I do believe in capitalism and that we are all best motivated by self interest. So I have often refused to work for a wage lower than I felt fair or desired, preferring that those hungrier than me get the work instead rather than driving down the price. Sadly in the US retiring from medicine means my gap has been filled with midlevels and as this is the national trend we all watch it with dismay. Of course as a Progressive I don’t want only those with enough gold to get good medical care, but am too self interested (and realistic that one volunteer doesn’t a national gap fill) to work for free full time to give decent care to a few people.
Jenn,
Rand, like Lenin/Marx and other political philosophers, seems to offer structures for life that look great on paper but fall rapidly apart and require significant dilution once they come in contact with actual human beings. I think what so many find Rand refreshing on first reading is that most highly successful people are fed a constant diet of “to whom much is given, much is required” or some other guilt trip about not “getting above yourself” or being told “all men are equal, you’re not better than anyone else.” There aren’t a lot of societal voices telling people that some people are not equal, that in fact some people are exceptional, even when it is obvious. People conflate the language of human rights imprecisely with that of talent, ability, and effort. Some people are smarter than others. Some throw a discus farther than others. Some people tell stories better, and some people are better singers and songwriters. So for every person who’s lived experience is that they are constantly being told that they in some way don’t deserve their talents, along comes Rand and tells exceptional people not to let others devalue their exceptionality. Your exceptionality, your creativity, your productivity, is in fact your own. So own it.
My opinion only, but that is why I have always felt Rand tends to explode in peoples minds on first reading. But like the Marxian ethic of “from each according to his ability, to each according to his needs,” it doesn’t hold up long in the real world. Still, an interesting intellectual wall to bounce ideas off. But again, I could be totally wrong . . . I’m a doc, not a political theorist.
I think it’s a good idea for someone to read both Rand and Marx. I’ve found useful stuff written by both.
100% agree. Both Randian and Marxist analysis of physician employment by a hospital lays bare the exploitation of the worker/physician that results when the doc gets a fraction of the billings the hospital collects on the docs labor. The Gastroenterologist, or whoever, gets her procedures billed under hospital “facility fee” structure which may be 30% higher (or whatever) than if there was no facility fee. But the gastroenterologist isn’t going to see that, and the hospital isn’t going to reveal those inflated billing numbers to the doc. Instead, the doc will be provided wRVU data about her productivity, which really is a smokescreen and not a proxy for billing results under the hospital. Marxists would have a field day with that. I suppose a Randian analysis would speak to how the hospital is using the docs productivity to prop up the low productivity outpatient primary care clinics, and suggest that the the GE doc negotiate harder to keep the fruit of her labor, threaten to leave (withdraw her labor from the immoral system of payment she is in), or perhaps go independent, or even concierge.
Useful financial illumination can come from many sources; you know, Marx, Rand, WCI, et!. Ignorance of economic principles, on the other hand, is the physician’s universal enemy.
Reontgen,
I like how you tied it into modern medicine. I feel the same way. However, I’m not going John Galt anytime soon becuase the balance of my work is positive and I’m still feelin’ the good vibes (although recently recovered covered from burnout)
In the theme of this post, I need to find a way to scratch the business “creation” itch either as a Physician or with a side hustle. My blog is monetized so that doesn’t count, it’s just a creative outlet for now.
Dr Dahle is an excellent example of a creator. He accomplishes his WCI education fair shake mission, makes tons of money and we all benefit. If he were to be regulated in such a way that this work wasn’t allowed to align with his goals, he may quit and we would be the worse for it. Imagine a world where docs recklessly spend money without thinking of retirement savings and are forced to work until 65 years old just to keep up an overinflated lifestyle…
Rand’s other books explore the Objectivism philosophy she created. They can be a little heavy for me. The Virtue of Selfishness is short and sweet.
As an engineer who’s been reading you from early on, I can certainly relate to this one!
I’ve always said my job is to create a $5 solution to a $10 problem.
And if we can sell that for $7.50, everybody wins!
Great Article! One truly under-appreciates business (as being run by high school dropouts or rubes) until one realizes that it these people that have given us a lot of the luxuries that we enjoy. 3 Cheers for Capitalism… it is time that the younger generations are taught that value and enterprise of capitalists!
As Nicholas Taleb says – we need to set aside a day to honor those business men and women who take risks to build and grow our societies.
Thanks Jim for this timely article.