Joshua, yesterday, my lawyer and I had a short debate about the purpose of business. He gave the pat answer, "Make money." I quoted Peter F. Drucker, "Create jobs." Profits exist as a measure of efficiency and as a surplus to reinvest in operations and training to keep the business competitive - not take the money to Swiss banks and gut the business.
Joseph F. Schumpeter, an economist at Harvard at the start of the 20th century made this argument. Profits exist to reinvest to create more jobs and profits. People needs jobs to live; society has the absolute right to devise any rules it wants to make sure its members live. Drucker recyles Schumpeter.
Germany today in fact follows Schumpeter, and it has the second highest export business in the world - after China. Moreover, its workers receive some of the highest pay and benefits in the world. It is because Germany reinvests the profits into improved operations(equipment, techniques, processes) and training of the workforce and management.
Germany is proof that we need not to be a Third World country to be competitive today and have jobs enough for our people. See the website of David McWilliams, an Irish busineess analyst, writer, for an excellent article on this by him.
Without a profit, you have nor surplus. Without a surplus, you cannot innovate to remain competitive. This writer is totally for profits if we reinvest those profits to stay in business and to create more business. Business is about jobs in the final analysis. The sooner American digest this the sooner we will know how to "set our house in order."
It is not take the money and run.l It is take the money and recycle it into competitive equipment and training.
Thus ends the sermon for today.
Amen.
Dr. Rux
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