People Before Profits?

The Occupy Wall Street mob often chant…”People Before Profits”. Is that what most Americans want and believe.

What exactly is Profit for a company? Simply stated, it is what remains of income after paying expenses. Expenses are the cost of payments as a result of doing business such as rent, interest and wages.

If those payment (costs) are not met and paid, labor, land and capital will not be available and the company disappears. And, if Profit is not made, the entrepreneur won’t remain in a losing business.

To ensure a profit, business must satisfy a consumer. If one business is better at providing that satisfaction they will prosper over the business that is not as good at making the customer happy. We see this all the time in our local communities. We seldom hear of widespread complaints about our supermarkets, appliance stores, automobile dealers, hospitals, do-it-yourself stores and such.

This is usually the case because of the Profit motive. Entrepreneurs require profit and thus, must satisfy their customers. Is this the case with government provided services? I hear complaints about the Postal Service, Police and Fire Department, Schools, the local Social Security office, the motor vehicle office and more.

Why is that?

Could it be that the Profit Motive is missing in our government provided services?

How well would capitalism and free enterprise work if we followed the mantra of the Occupy Wall Street mob..."People Before Profits"?

I suggest the OWS folks haven't thought this through. Would they, would you, would I...risk our capital and invest our time in a business if we gave no consideration to profit, only people?

Well, some would say, we're talking about "obscene profits". Historically, corporate profits range between 5 and 8 cents of each dollar, and wages range between 50 and 60 cents of each dollar. Is that obscene? I wonder what percentage of profit is deemed by the OWS to be appropriate.

If we gave it just a little thought and asked what kind of organization throughout mankind's history has accounted for his greatest grief, the answer wouldn't be a free market, private, profit-making enterprise; it would be government, the largest nonprofit organization.

Posted by Royal Flush at October 26, 2011 7:57 PM
Comment #331084

www.the provides a website with info on customer satisfaction for a wide range of private and public organizations. It’s actually pretty interesting stuff. Satisfaction ranges among government agencies from exceptionally high (Social Security) to low (IRS). Private industries also show a wide variation. To make a long parragraph short, I don’t think a person can make judgments about profit v non-profit/gov effectiveness on the basis of customer satisfaction.

I don’t think OWS offers much insight either. Although I’m sympathetic with the general expression of dissatisfaction aimed at Wall Street, and the general lack of fairness in the overall system, the lack of specifics makes the OWS too… well… generalized to mean much of anything right now. In Portland, they made a huge mistake. They let the occupiers stay overnight. Now the encampment is becoming permanent. There are a lot of homeless people in Portland, and it looks like they will permanently occupy a public space because they are ‘protesting’ for their rights (and engaging in peaceable assembly). They should never, never have been allowed to stay overnight that first time. Anyway, it may turn into something more, a more focused and directed movement, but I don’t think any conclusions can be reached about the OWS attitude towards profit, since I don’t think they know themselves.

Posted by: phx8 at October 26, 2011 9:15 PM
Comment #331086

C&J, curious as to your thoughts on anti-trust.

As I see it the game today is to conglomerate, spread out more rather than project vertical growth with high visibility monopoly. I recall that TYCO Intl had 600 companies under its belt before coming unraveled.

If a company posted a year over year 2% profit and controlled a couple of thousand companies would you be ok with that?

Posted by: Roy Ellis at October 26, 2011 9:25 PM
Comment #331098

Modern business babble, uses the term stakeholder. To be successful one must satisfy the stakeholders. That would include customers, investors, and employees. Fail at one of these and the business will not grow, and ultimately may fail.

This theory can also be applied to government and politicians.

Posted by: Tom Jefferson at October 27, 2011 10:18 AM
Comment #331106


Why are you asking me?

But since you did, I think anti-trust is usually a waste of time. Monopoly only exists to the extent that it is protected by government action or law. We sued IBM just before its “monopoly” was destroyed by market forces. The same goes for Microsoft. Hard as it is to recall, people thought GM enjoyed “monopoly power” in the early 1970s. There is always a way around monopoly unless government (1) protects it or (2) colludes. Enforce ordinary laws against fraud and deception and don’t provide protection and monopoly will wither.

You say it yourself, “I recall that TYCO Intl had 600 companies under its belt before coming unraveled.” BEFORE COMING UNRAVELED.

Posted by: C&J at October 27, 2011 5:00 PM
Comment #331109

A company should make it’s profit by human, moral, productive means. We create systems of profit hoping that system encourages good behavior. If the market does not encourage good behavior, we should not forgo it simply because the market doesn’t give us that blessing itself. We should not suffer, become impoverished, and see our nation’s interests diminished just so a few people who manage to go the furthest in cheating and violating norms of behavior can win.

People must come before profits, or the system that creates the profits becomes a tyrannical institution.

We should not have to suffer illness and death because pollution helps somebody make more money.

We should not have to become more dependent on debt, especially if the lenders have become especially unscrupulous, because somebody decided that their making money as a CEO is more important than their workers getting a fair share.

People should not become cowards about standing up for their interests, and the interests of this country just because some businessman says they might have to kill jobs if somebody regulates them or gainsays them.

Capitalism should be a system set with the goal of serving us all, as a nation, not with affording a few lucky, perhaps ruthless souls the privilege their inflated egos lead them to think they deserve as their right.

Let the businessman profit. But let our organizing principles as a society remain the basic morals that makes life tolerable and enjoyable between us. Let it not be simply the interests of a few hijacking the system to the ruin of most.

Posted by: Stephen Daugherty at October 27, 2011 6:06 PM
Comment #331110

As for calling them a mob? Hmm. Yeah, your people show up with guns and signs saying “tree of liberty”, “blood of tyrants” and whatnot, and you’re implying we’re the violent ones. Has it occured to you that the most significant violence yet has been mainly inflicted on the protestors?

There’s a Oakland Protestor, a Marine who served our country, right now in the hospital because somebody cracked his skull with a rubber bullet. I saw video of a policeman shooting a smoke grenade, which can be a lethal projectile if it hits somebody wrong, right into a group of people.

But we’re a mob, you say.

Meanwhile, we’re not overturning cars, we’re not throwing molotov cocktails, we’re not beating people up. For what you call a mob, we’re remarkably well behaved.

Your people are afraid. You pushed your own faux-populist movement in 2009-2010, and it’s long since peaked, especially after the cavalcade of idiocy, obfuscation and obstruction that your people have carried on. Nothing’s changed in the Republican Party, except the extremity to which your party seeks to force its agenda on the rest of the country.

Well, Americans have gotten sick of waiting for Washington in general to do its job, and they want to be heard, and for people like you, the most fearful thing is that the OWS protests are simply the most natural and unadulterated expression of people’s frustrations that we’ve seen. People weren’t scared into this by brazenly false accusations at public meetings, meant to get visibility for your movement quickly and sensationally. No, this movement grew organically, and gained its notoriety organically.

The Tea Party Wave is rolling back, and the rightful claimants to populist sentiments have come to take the public discourse back from them.

Posted by: Stephen Daugherty at October 27, 2011 6:26 PM
Comment #331111

It would appear that SD is part of what I choose to call a mob. A group of unruly people, occupying public spaces for demonstrations without permits or permission, causing unrest, unhealthy conditions and inconvenience to other citizens, clashing with legal authority, with no defined ideas or uniting philosophy is a MOB.

Then SD goes into his usual rant about “you people”. He doesn’t define who that would be, but rather, just a loose term applied to those who disagree with him I suppose.

He writes…”your people show up with guns and signs saying “tree of liberty”, “blood of tyrants” and whatnot, and you’re implying we’re the violent ones.”

YES, I am saying “YOU” are the violent ones being arrested. What you describe in your accusatory quote are all legal. Legal guns, legal signs, and legal demonstrations and rallies.

SD wrote; “People must come before profits, or the system that creates the profits becomes a tyrannical institution.”

Really, so you are calling millions of business owners tyrannical because they pursue profit? Is your car dealer, your grocer, your doctor, your dentist, your barber and more…all tyrants?

I wrote above that only those business that best serve their customers are the ones who usually prosper and survive competition. And, they all pursue profit. Not one person SD does business with, I will wager, is a philanthropist.

Just what People, who should be placed above Profit, is SD talking about? Are they consumers, employees, welfare recipients, unemployed…just who are the People you are referring to?

Posted by: Royal Flush at October 27, 2011 7:03 PM
Comment #331156

Royal Flush-
I haven’t had the privilege of protesting alongside them, actually, but I support them. They are not dirty, not violent, not really all that radical. The radical thing they’re doing is voicing views that are actually not that controversial outside of the hothouse flower environment of movement conservative culture.

I’ve seen violent protests, the kind that seemed to follow people in the G8 and WTO around in the 90’s. These protests? Nothing like that. The most visible violence has been by the police brought in to handle the protestors, and I’m afraid there’s more video of police brutality than there is of OWS member running riot.

As for the rest? Your comedic attempts at twisting my words aside, I think I made myself quite clear. The tyranny comes when the system becomes inhumane, extraordinarily unfair, when it serves just a few and makes the rest of us suffer decline and humiliation.

You claim that business naturally do good with the market and the market alone takes its hand in things. This is naive to the extreme. People cheat to gain rewards all the time. The “corrections” to this that you claim would save us are rarely immediate, especially with Wall Street so deregulated, and often take the shape of incredible disasters that leave the economy flat on its back, the results harming more than just the folks who did wrong.

I’ve lived the refutation of your political dogma. Things have not unfolded like your theory would have it unfold, so why should we share your expectations of what further deregulation would do?

We need an economy that is manageable by human beings, and not hostile to the interests of most Americans. It’s really that simple. There’s no point in most American giving up their needs and comforts so a few folks who already enjoy the best luxuries can gain more wealth.

It’s economic elitism wrapped in populist language. More to the point, it defies common sense. Why should we sacrifice without return for the rich and powerful, in the expectation of such altruism in return from those who have never demonstrated it?

No more naivete here. People should stand up for themselves, not sit back and take it in vain hopes that the jobs will come back when those who already have much in the bank as it get more. They’ll come back when the people to their left and their right have the money to pay for goods and services.

I don’t expect people to be philantropists. I don’t expect corporations to bring back and create businesses and jobs without the consumers necessary to allow them to turn a profit. You, unfortunately, must expect them to spontaneously create jobs and contribute cashflow to the economy just because we’ve been so generous to them. Years of layoffs, downsizing, cheap bastardry, shipping jobs overseas, giving themselves bonuses and golden parachutes and various other things have convinced everybody else that this won’t make new jobs and better wages forthcoming.

People are going to have to learn to act in their own interests, not wait for the rich and powerful to help them of their own accord.

Posted by: Stephen Daugherty at October 28, 2011 8:41 PM
Comment #331157

Also, let me speak to something here. You say that Government lacks a profit motive. Good. That’s called corruption in most civilized countries.

Our government ought to operate on a different motive. Instead of operating on the expectation that good service will gain them revenue, the government should work on the principle that governing well is the key to gaining and maintaining political power, and people should discourage those who try to game that system, if they know what’s best for them.

There’s a point to having a government, to having a coordinating force in our society whose mandate is drawn equally from every voting citizen, not simply concentrated in the hands of a few, rare, extraordinarily sucessful people.

Posted by: Stephen Daugherty at October 28, 2011 8:54 PM
Comment #331193

C&J, slip of the fingers/mind as to why I directed the query about Corporate Personhood to you.

I pluged in ‘Tyco International and anti-trust suits’ to google and noted that the first six pages dealt with Tyco in the anti-trust courts.

Before Corporate Personhood law corporations were allowed to be established to serve a public good and could be terminated when that condition was violated or no longer existed. IMO, the gov’t waited far to long before coming down on TYCO Intl but the public good was better served by busting up TYCO.

Posted by: Roy Ellis at October 29, 2011 2:50 PM
Comment #331225

peter schiff shows just how clueless the OWS crowd really is. lots of catchy slogans, but no real substance.

it’s clear that dear leader ALWAYS put people before profits. right?

Posted by: dbs at October 30, 2011 9:58 AM
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