Capitalism is the Best Company You Ever Worked For

(Published in the American Thinker on February 24, 2009 )

...and Socialism is the Worst.

by John Redding

For which of these two businesses would you like to work?

At Company A your boss is a control freak. There is only one way to get the job done—his way. His micromanages your work and dismisses your ideas. Some co-workers are good at office politics and get bigger raises and faster promotions. The management is more worried internal politics than it is about making good products. You hate getting up in the morning.

Company B is different. Your boss establishes goals and then holds people accountable for their work. He rewards on the basis of contributions, especially innovative ones. He treats everyone with respect. At Company B nearly everyone flourishes and strives to keep customers happy. You look forward to each new day.

Company As is all too real. I worked over 25 years for one until I could stand it no longer. Company B is a rarity. I recently had the good fortune to work for one until a company founder, a closet control freak, seized control of the company. He misled the Board of Directors into ousting the other founder, my mentor. I became expendable.

I have more time these days, enough to pay attention to the debate over which socio-economic system is better for the country, capitalism or socialism? This debate, of which there is surely not enough, has been prompted by the expansion of government under the Obama administration by means of the $787 billion stimulus bill and the pending $410 billion omnibus bill. Through the lens of recent experience I see the question in this way: under which system would a company rather work?

The parallels are not exact but isn’t Company B akin to the free market system and Company A to socialism?

According to the Small Business Administration (SBA), 99.7% of all employers have less than 500 employees. They hire 58 million people, half the private sector work force, and pay 45 percent of the private payroll. If the U.S. was a business, these would be your average employees.

But when it comes to performance many are anything but average. The SBA documents that they have generated about 2/3 of the new jobs in this country. They employee 40% of all high tech workers. Compared to large companies, they produce 13 times more patents per employee.

This performance is possible in a free market system. As in Company B, there is motivation to perform well. Businesses that provide good products and services are handsomely rewarded and sometimes grow into larger, even more successful companies. Think Microsoft and Dell Computer. Secondly, businesses are free to exercise their judgment when it comes managing their company and making important decisions. This is crucial. Good decisions require accurate and detailed information and no one has more of it than the company itself.

And isn’t this what distinguishes Company B and why we like working for them? Employees are given the freedom to use their knowledge and talents and are rewarded when they succeed.

When President Obama signed the $787 billion stimulus bill into law I had the same sinking feeling as when the unscrupulous founder took control. What I saw in the new legislation is what you find in a Company A. Our government is out to nationalize a large swath of our economy after which the micro-managing by Washington will begin. Small businesses will have the rewards of their success taxed away to benefit those who are politically connected, like General Electric and General Motors. If you have ever been passed over for promotions in favor of co-workers whose only talent is for schmoozing the boss, then you know how many business owners feel today.

Whether we are owners or employees, we are now working for a very large Company A otherwise known as the federal government. The sad thing is that in our personal lives we hate working for this type of company.

John Redding is a management and energy expert. He resides in Mendocino, CA.