Hey guys today, I want to talk about something a little different than I normally talk about. If you’re on this site, it’s likely because you have an SBA loan and you need help figuring out what to do with it if your business is closed.
But today’s blog posts is more of a general one. It’s more of an opinion piece. And it talks about something that I spent an awful lot of time thinking about. And that’s capitalism in general.
Now, as an entrepreneur, I love the idea that I’m competing with others and that the market determines whether I’m successful essentially by voting, but they don’t vote with arbitrary votes. They vote with their dollars. If my business is good, they will vote by giving me their dollars. If my business is bad, they will vote by giving someone else their dollars. And so in that aspect, it’s an interesting mule and carrot situation that entrepreneur has set up for themselves.
For me, working for an employer, getting a regular paycheck was kind of boring. I’m so much more motivated by the idea that I need to sing for my supper. I am that mule chasing that carrot. And if I don’t see that carrot dangled in front of me, I’m not motivated. I need to know that in order to get that money, I actually need to get something done.
Let’s talk about capitalism. I used to believe in pure capitalism, but now I’m not so sure.
When I was in college. I definitely believed that if you worked hard, then you would succeed. So successful people worked hard and unsuccessful people didn’t and it was just that simple. I worked hard to get into college. I worked hard while I was in college. So any success that I had after college was because of my hard work. Looking back, I realized how simplistic that type of thinking was.
I paid no attention to the fact that I had a fairly privileged upbringing. I didn’t come from a lot of money, but I came from a family of teachers. So in my household education was highly emphasized. It was never a question that I was going to college and getting good grades was expected. It wasn’t the sort of thing where I would be punished or had tons of pressure put on me. But the expectation was you do as you’re told in school. So I worked hard.
Now that I’m a little older, conversations about structural racism and even the residual effects of slavery really makes sense to me. These are not abstract concepts that happened at a moment in time. The effects are long lasting and severe.
I’ve had this discussion with my brother, lots of times, he has a friend who still believes to this day that if you work hard, then you’ll succeed. And the people who are at the lower end of the economic rung it’s because they chose not to work hard.
I’ve explained to my brother that given that we’re only a little over a hundred years removed from slavery, a practice in which human beings could own other human beings. It’s impossible to expect that those who are enslaved to be on equal footing with everyone else just because slavery was officially ended. Where you come from is a huge determining factor in where you’ll end up in life.
If you grew up in a household where your parents gave you nothing but sugar to eat, and told you vegetables were bad, what do you think you’d be like as a grownup? Do you think you would like to eat vegetables or do you think you’d basically eat nothing but sugar? My guess is nothing but sugar. Even if you learned later in life that sugar is really bad for you, some might be able to change the pattern, but I’ll bet you a dollar that most wouldn’t. That’s why we all like certain foods a certain way….you know, like mom used to make. That’s a simple example, but the idea is in today’s economy, you need to be educated to be successful.
If you come from a household that doesn’t value education or even worse, doesn’t have access to education, then you’re going to get left behind. And it’s not as simple as saying, well, if that student wanted to learn, they could have.
Everyone in life needs someone to push them. Someone to guide them. Someone’s to give them a kick in the butt when they’re being lazy, and to make sure that they stay on the right path. They say youth is wasted on the young. Kids don’t know what is good for them. I know I didn’t. That’s why they need good role models.
If you come from a household that has a single parent, that’s working two or three jobs at a fast food restaurant, it’s unlikely that you’re going to get the same attention or encouragement as somebody who grew up in my situation, where my mom was home to make sure I did my homework and studied for my tests.
My dad was a teacher. So he was home most of the time too. We had that family time, which was great. I had no other needs. All I needed to do is go to school. Money was not a concern. Food was not a concern.
So all this is to say that where you grow up and how you grow up is a huge determining factor in who you are as an adult. It’s not as easy as saying work hard and you’ll be successful because people’s internal drives are impacted by tons of factors. And I truly believe that where you end up can be very frequently connected to how you grow up, can easily be connected with how you turn out as an adult. S
So here’s my problem with capitalism. As I see it today, the amount that people get paid are frequently grossly disproportionate to the value that they add to society. Easy examples of that are professional athletes. If you can hit a ball, run fast, throw a ball, shoot a ball. You could make 20 40, or 100 million dollars. Do you think a professional athlete works a thousand times harder than anybody else? I doubt it.
Now you might say that professional athletes are an anomaly. But let me give you a different example. I come from a family of teachers. My younger brother’s a teacher, my sister’s a teacher, my wife and my older brother work in finance. Do you think that my wife and my brother work 10 times harder than my brother and sister? Because I’ll tell you what they literally make at least 10 times more than they do as teachers. Now, yes, those jobs can be more stressful and require some more hours than teachers, but 10 times, 20 times, 50 times more compensation than people who are educating children seems grossly unfair to me.
And again, people will argue, well, anyone has the choice to do those jobs, which to some extent is true, but there’s some people who come from some backgrounds who will never have an opportunity to work at JP Morgan.
If you’re bar born in a poor black neighborhood where no one gets out of the 10th grade, what are the chances that you’re going to get good enough grades to go to a top notch college that mostly consists of white kids from wealthy families? And what are the chances if you graduate from that college, that your grades will be good enough to be recruited by a major financial firm or mostly run by old white men?
This is one of the major problems I have with capitalism. The jobs that are important, nurses, teachers, basically any workers everybody’s working hard. My landscaper works hard. They break their backs. Sure, it’s a skill that maybe isn’t as hard to come by. But here’s my question about that. Do I really think it’s fair that someone has to work at McDonald’s and then leave and go to another job at burger King working 40, 60, 80 hours a week and making $2000 to $3,000? Meanwhile, someone else is making a $100,000 per month and someone else is making $3,000 per month. It just doesn’t seem right to me.
The problem with these economic disadvantages is that it’s going to continue for generations. People who grew up wealthy have every advantage. They get tutors, they have the best schools. They go to the best colleges. They have the right connections. If you’re not part of that club, if you’re not born into that club, very unlikely that you’ll ever get in. And it’s a problem.
The word socialism gets thrown around by people. And I don’t think most of us really have a good understanding of exactly what that means. What I think people are interpreting as socialism is bad because communism was bad. And when you think of communism, you think of Russia, Rocky 4, cold weather and drinking vodka – but that’s not what socialism is.
Socialism is the idea that we should all be sharing things. Small segments of the population shouldn’t be hogging all the resources. And there’s plenty of examples that exists in America today that are examples of socialism that are great. Social security. That’s a form of socialism. We’re taking care of our elderly. There’s also Medicaid and Medicare, right? We’re giving healthcare to people who need it. And so when they talk about giving universal healthcare to all or requiring a living wage, these are not necessarily bad concepts.
All proponents of these ideas are trying to say is that human beings deserve basic rights. And if we’re going to prosper that it’s only fair that my wife who makes 50 times the average salary, fine, maybe she only makes 40 times the average salary so that the guy at burger King can make $30 an hour. I understand that a lot of people feel like burger King is a job that a teenager should be doing, and maybe it’s not a career, but the truth is at some point, the imbalance will become so great. And so many people will be so unhappy.
Now, I don’t want to get into politics, but I will say there is a growing swath of the country that is very dissatisfied with the direction of the United States economy, because capitalism tends to be a “winners” and “losers” type of game. The winners are becoming more and more consolidated so that the wealth of the nation is accumulated only among a handful. That’s where they come up with the phrase “the 1%”. It’s becoming too concentrated.
And as a result, other people who used to have jobs in factories with union benefits are going away while it might make more money for the company in the long run. My big question is, is it good for people in the long run? The way I see it, I think we reached a tipping point where we need to take a look at the highest earning professions and question whether or not it’s appropriate for them to be earning that astronomical sums of cash while people like teachers or nurses or fireman, will never have the opportunities to make those types of financial windfalls because they’ve chosen a profession that is publicly funded.