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  • Bob Burg

“Business volume to our new targeted market increased by 300% in just 3 MONTHS! ”

~ Dave Brandt, Divisional Vice President, GE Financial Advisors, Genworth

Archive for the ‘Politics’ Category

Question Regarding Capitalism vs Cronyism

Sunday, September 28th, 2014

Question Regarding Capitalism vs Cronyism - Bob BurgIn a Facebook group run by my friend, Dov Baron, he posed the following question:

Capitalism…Do you see a difference between Capitalism and Corporate Capitalism? Should we keep either, both, and if so how do you see us repairing the system?

Many responded. One I found to be particularly interesting was from someone we’ll call Steve who replied:

“The ‘elephant in the room’ difference is that Capitalism can use guns to enforce their will.”

Since that, by definition, is actually the very opposite of Capitalism, and I feel that understanding this concept is so vital to our future as a country, I responded to Dov’s question and “Steve’s” comment with the following:

“Corporate Capitalism” (a/k/a “Corporatism” or “Crony Capitalism”) is a misnomer and is actually not Capitalism at all. As I often say, “Crony Capitalism is to Capitalism what Chinese Checkers is to Checkers…nothing!”

That’s why I don’t even use that term “Crony Capitalism” and simply call it “Cronyism.”

The entire premise of Capitalism — aside from private ownership — is that it is the exchange of products/services between two or more willing parties with both sides coming away from the exchange better off than they were before the exchange. Otherwise, neither party would willingly participate.

Cronyism, on the other hand, is where corporations or other special interests purchase special favors, rules and regulations from politicians (usually via lobbyists and through campaign contributions and other goodies) in order to provide themselves with an unfair advantage over the competition.

This ultimately hurts the consumer in many ways as well as the country as a whole.

Freedom vs. Force

Responding to Steve, I must respectfully disagree and say that the difference is not that Capitalists can use guns to enforce their will; it’s Cronyism that employs “the guns of government” through the buying of politic favors from politicians.

Key Point: With true Capitalism, companies can only get people to buy from them by providing value in such a way that a consumer chooses to do so. In a truly free-market environment the consumer is the ultimate boss and votes with their dollars.

In other words, Capitalism is based on freedom of choice. Cronyism is based on manipulation, politics, and ultimately, force.

Capitalism — while not utopian or perfect — has been the driving force in an increase in the standard of living for everyone living under that system. The more economically free a country is, the higher standard of living for the masses (including the poor). The less free, the lower the standard of living.

In answer to Dov’s question about how to repair this situation, the citizenry must insist its elected representatives do not participate in Cronyism or they will be voted out of office.

Of course, for this to happen, the citizenry must first understand the difference between Cronyism and Capitalism. I’m afraid that at this point most people think they are the same. And, that is a huge problem.

We cannot repair what we don’t understand.

Want to weigh in? Feel…free! :-)

Don’t Let Yourself Be “Chris Matthews-ed”

Friday, July 25th, 2014

Chris MatthewsA large part of influence is believability. Believability inspires trust. If you are believable once, you’ll get a shot at being believable again. If you are not believable just once, however (especially if it’s someone’s first exposure to you), the chances are excellent that you will not be considered such from that point on.

I recently witnessed a person make a somewhat dogmatic statement during a discussion. When asked to cite his source he began to hem and haw. When further pressed he grumbled something or other and got mad at the person who questioned him. Whether his statement was right or wrong, his lack of even basic source knowledge made him…unbelievable. In this case, “UN-believable” was not a good thing. :-)

The incident immediately brought to mind an interview conducted in May, 2008 by MSNBC TV Hardball host, Chris Matthews. In this segment, one of his guests was Los Angeles-based Radio Talk Show Host, Kevin James. As James began to bring up British Prime Minister, Neville Chamberlain’s well-known appeasement of Hitler during the lead-up to World War II, Matthews asked him to explain what he meant. In other words, how exactly did Chamberlain appease Hitler?

Beginning at 4:10 of the video and all the way through the 7:05 mark, James danced around the issue. Matthews, of course, refused to let him off the hook. Finally, it was determined that James wasn’t able to cite anything specific, most notably the infamous Munich Agreement.

Now, does that mean that Mr. James was wrong? Not at all. Chamberlain certainly did appease Hitler. And, if you listen to that part of the interview, James wasn’t incorrect in anything he said.

However, the fact that he couldn’t cite an example of this appeasement — one of the most famous in history — simply took away any type of credibility he might have had with Mr. Matthews’ audience.

Personally, being a Libertarian and believing in both free minds and free markets, I certainly don’t agree with most of the political ideas Mr. Matthews advocates. Nor do I enjoy his communication style. He’s an interrupter who at times can even be insulting.  But, you know what else Mr. Matthews is? He’s very intelligent; he’s very sharp. And, he’s not about to let someone get away with “not backing up their statements.”

I learned a hugely important lesson from that interview: to never place myself in a position where I can be “Chris Matthews-ed.”

In other words, if we’re going to make a statement of fact or attempt to persuasively advance our idea, we need to not only know what we’re talking about, we need to be able to communicate that we know what we’re talking about. Especially, if pressed to do so.

Of course, I believe we should do this with tact, kindness and respect for the other person, even if we do not agree. Part of being able to do that effectively is knowing — really knowing — from whence we speak.

Your thoughts?

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Seeking The Ultimate Freedom

Wednesday, January 29th, 2014

FreedomIn the final sentence of one of her recent daily emails, Esther Hicks wrote:

“You are determined to be freedom-seekers in a Mass Consciousness society that is determined to make you the same.” 

What a powerful statement, and on so many levels!

In the context of her entire message, she was referring to internal freedom.

Yet, we can think about why physical, personal and economic freedom/liberty (what my favorite magazine, Reason would call “free minds and free markets”) is such a high ideal.  The more freedom one has individually, the more prosperous and happy will be the society.

Yet, society, by its very nature, seeks to conform the individual.

While we cannot control society (even if we could, that would simply be another form of mass consciousness control Mrs. Hicks referred to) and we should not try and control other individuals, we can control ourselves.

In his classic, Man’s Search for Meaning, Nazi concentration camp survivor and psychiatrist, Dr. Viktor Frankl considered choosing one’s attitude in any given set of circumstances to be the highest level of freedom; the last of human freedoms. The one type of freedom that could never be taken.

So long as we do that, we can — to paraphrase the title of one of Harry Browne’s most famous books — “find freedom in an unfree world.”

The Only Possible Way To Profit…

Friday, July 19th, 2013

Harry Browne The Secret of Selling AnythingRecently, on my Facebook page, I posted:

“Profit is a reward for satisfying the desire of someone else.”

~ Harry Browne, The Secret of Selling Anything*

Sounds pretty simple, doesn’t it? And, it is. But it’s something many don’t realize. Yet, in a free-market based economy, that’s what it all comes down to.

If we desire to have a healthy and profitable business, we must please the marketplace of consumers we serve.

This is why Free-Market Capitalism, to the degree it is allowed to exist, by it’s very nature actually benefits the consumer even more than the business person. After all, it’s the consumer who ultimately makes the decision. And he or she says yes only if they value owning the product or service more than the money they are being asked to exchange for it.

Thus, only those business people who are focused on pleasing the consumer will have that healthy and sustainably profitable business.

As Harry said, the secret of success is:

“Find out what people want and help them get it!”

And, to do this, the successful salesperson must recognize that — when it comes right down to it — it’s all about the consumer, not the salesperson.

Your thoughts?

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* This magnificent book was published posthumously from a manuscript written by a hero of mine and a treasured mentor, Harry Browne in 1966. It may be ordered in paperback form online via The System Press or directly by telephone at 1-845-757-5037. Or, you can order the kindle version at Amazon.com.

“Conscious Capitalism” GREAT Book, Just Mistitled

Tuesday, June 18th, 2013

Conscious Capitalism book coverFirst things first: The book, CONSCIOUS CAPITALISM: Liberating The Heroic Spirit Of Business is outstanding. As a case study on why companies that honor all of their stakeholders and not just their shareholders actually do much better financially than those who don’t, it’s terrific! As a look at how companies can create an enthusiastic and happy team, ultra-loyal customers, and feel great about the value they provide, it’s amazing!

John Mackey, co-founder and co-CEO of Whole Foods Market, along with Dr. Raj Sisodia, Bently University marketing professor and author of Firms of Endearment, show why the companies they call “Conscious Companies” simply do better.

But, that’s just it. It’s really about conscious companies. Putting the modifier before the word “Capitalism” simply furthers the incorrect premise held by so many that Free-Market Capitalism, in and of itself, isn’t good enough. In other words, the title implies that for Capitalism to be “legitimate” it needs to have a word like “conscious” in front of it. ARRGHHH!

Now, if the author (here, I’m referring to Mr. Mackey, as it’s written in his voice) really believed that, there could be a respectful debate on the topic. However, that isn’t the case. He is a believer and noted defender of true, Free-Market Capitalism. (Chapter One is even entitled, “Capitalism: Marvelous, Misunderstood, Maligned”.) He even makes the distinction a number of times between what’s often called “Crony-Capitalism” and Free-Market Capitalism.

{Note: I often say that I wish the great defenders of Free-Market Capitalism, such as Mackey, as well as one of my heroes, John Allison, would stop using the term, “Crony-Capitalism” as it only serves to confuse people into thinking that it is a legitimate form of Capitalism. It is not. Crony-Capitalism is to Capitalism what Chinese Checkers is to Checkers; Nothing! Instead, it would be much more accurate to simply call it, “Cronyism.”}

Even Bill George, the iconic former Chair and Chief Executive of Medtronic, Inc., who provided a glowing Foreword, wrote: “In these pages, they call their version conscious capitalism. I consider it just capitalism, as it is the only authentic form of capitalism.”

The authors begin by discussing the benefits of pure Capitalism as “the greatest system for innovation and social cooperation that has ever existed.” And, they are correct. Capitalism creates an environment where the citizenry lives longer, healthier, happier and more financially prosperous lives. Even the poor in a mainly free-market based economy are much better off than those in countries not based on such.

But…the term, “Conscious Capitalism.” This is the name of Mr. Mackey’s and Dr. Sisodia’s organization, and this book is one excellent manner in which they are spreading the word.

Their intent is more than noble, but I believe the name is counter-productive. Free-Market Capitalism works for everyone living wherever it exists. Entrepreneurs create value for the marketplace. They and the buyer voluntarily exchange financial value for the product or service. Both parties come away better off after the exchange than they were before.

The profit enjoyed by the company can be invested in expansion which results in more employees. This allows for more value creation. The employees have money to spend with other companies that, as a result can expand, hire more employees and create more value for the marketplace. And on and on and on.

When entrepreneurs are left free to operate with minimal interference from government, abundance and a booming economy results. There are enough jobs for everyone who wants one, and sufficient charity for everyone who truly needs it. No, it’s not Utopia. However, it is so, so much better than any other economic system. (Of course, protecting the citizenry from force and fraud are indeed legitimate functions of government. Creating unnecessary roadblocks, red tape and unfair advantages through cronyism are not.)

Capitalism does not need to become more conscious. Literally, it cannot; it is simply an economic system.  However, those who want to operate successful companies within that economic system do indeed need to be more conscious in the way they do business, if they want the resulting benefits. As the authors magnificently demonstrate, those companies with a higher purpose than simply financial, and who honor all of their stakeholders; employees, customers, suppliers, community, the environment, etc., actually make substantially more money than those who don’t.

Please understand, there is nothing theoretical about this; the evidence is abundant. Throughout the book, the authors cite a number of companies and provide many very specific examples. And, of course, Mackey has run his company exactly as he describes in the book and the proof is in the pudding (though, in his case, it would be a very healthy pudding). :-)

It’s really a tremendous book. I’m so glad I read it and had the opportunity to benefit from it.

And, in my opinion, it would have been so much more accurate to have titled this book, Conscious Companies or something similar.

That aside, whether you are a solo-preneur, have just a few employees, or the leader of a huge organization, or believe that one day you might be at the helm of any of the above, the wisdom in this book will put you nine steps ahead of the game…in a ten-step game.