Steer clear of extremes or everyone loses


Few things are more frustrating than being on the short end of an unfair situation. And since those claiming to be the "99 percent" are making a lot of noise about how unfair things are, let's examine what they're taking about.

By looking at the list of "demands" made by the Occupy movement one could say that their main gripe is about capitalism. That's how it's portrayed in the news, anyway. Unfortunately, that's an incorrect generalization, because much of what the Occupiers are really griping about is Crony Capitalism, and there's a big difference.

Capitalism in its natural, practical form is a free market in which people with moral purposes devise products and services that fill genuine needs. People take risks and negotiate contracts with others who agree to provide products or services for an agreed-upon price, and everyone makes some money (profit) along the way.

But Crony Capitalism is quite different. Crony Capitalism occurs when businesses and government officials get in bed with each other, and favoritism occurs in the form of special tax breaks, generous grants, overly generous contracts, and/or legislation that makes business too cumbersome for "the little guy."

Crony Capitalism looks like regular capitalism, but it's a corrupt version of it. Think of Crony Capitalism as the ultimate good-ol-boy network in which smaller players are shunned or legislated out of the picture. Think of nitpicky lawsuits pushing back challengers and back-room deals keeping newly branded products off retail shelves.

If this is what the "Occupy" movement is really against, then they've got a legitimate beef. Unfortunately, most of what I'm hearing is that they want equality of outcome – the same pay and rewards for doing unequal amounts of work. Only it goes beyond basic pay: They want a lot other things for free, too.

With regard to the workplace, civil rights legislation was passed to guarantee everyone a fair chance of achieving success. We should emphasize that the goal of that legislation was equal opportunity—not a guarantee of equal outcome.

How about we steer clear of the extreme perspectives for a moment and take a realistic look at what works, what doesn't work, and why.

What the Occupiers are failing to understand is that the freedom that accompanies a capitalistic society provides the optimal conditions in which people can pursue whatever endeavor or ideals they wish. In capitalism, people learn about their options and choose what course seems right to them. If their chosen course does not lead to prosperity, then they learn from their mistakes, make adjustments, and strive to improve.

But if we incorporate what the Occupy movement advocates, failures would result in other companies having to share their earnings with the companies that fail. When that happens, it doesn't take long for the achievers to slow down on their achievements.

Yes, I agree that the Crony Capitalists are giving capitalism a bad name, but a whole lot of the "99 percent" are hard-working individuals who want to operate within the bounds of true capitalism, so why punish those people in an effort to stick it to the Cronies?

Redistribution is not just a world-view argument, it's also a values argument, and not everybody holds that value. Furthermore, I have yet to meet anyone who enjoys having someone else's values shoved down their throat.

When redistribution is forced on the workplace, the entire society loses. The push for innovation is diminished and people don't care about learning from mistakes. As a result, excellence fades away as mediocrity becomes an accepted norm.

I strongly believe that Crony Capitalism is harmful to the business world, for in Cronyism we see companies trying to destroy other companies, or "take down the competition." The cutthroat leaders at the top of these organizations think they're acting in the best interest of their companies, but by removing competition they are actually hurting themselves in the long run.

For example, it's easy to see that Apple Computers learned a few things from Microsoft, and vice versa. If either company was "taken out" by the other, the company that remained would not be as good as it is now. Similarly, makers of the Droid and the iPhone have learned a lot from each other, and the competition has made each product better. I lost a lot respect for Steve Jobs when I read that he wanted to "destroy" the Droid, because I saw that mindset as short-sighted arrogance.

In real capitalism, companies are actively competing to fill niches. Markets grow, shrink, and shift, and companies adjust as necessary. If they fail to adjust properly, sometimes they even have to close their doors. That, my friends, is true fairness.

Therefore, I say steer clear of the extremes. Adopting a redistribution mindset weakens innovation and progress, and moving to Crony Capitalism does the same thing.

The best thing for everyone is to operate fairly and compensate reasonably. Move to either extreme and everyone loses.

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About The Author

Dan Bobinski
Dan Bobinski

Dan Bobinski is a training specialist, author, and an accomplished keynote speaker. He's been providing management and leadership training to Fortune 500 companies as well as smaller, regional concerns for more than 20 years.