Excerpt Of The Day: Business Is Not A Zero-Sum Game
“At the time I started my business, the Left had taught me that business and capitalism were based on exploitation: exploitation of consumers, workers, society, and the environment. I believed that “profit” was a necessary evil at best, and certainly not a desirable goal for society as a whole. However, becoming an entrepreneur completely changed my life. Everything I believed about business was proven to be wrong.
The most important thing I learned about business in my first year was that business wasn’t based on exploitation or coercion at all. Instead I realized that business is based on voluntary cooperation. No one is forced to trade with a business; customers have competitive alternatives in the market place; employees have competitive alternatives for their labor; investors have different alternatives and places to invest their capital. Investors, labor, management, suppliers — they all need to cooperate to create value for their customers. If they do, then any realized profit can be divided amongst the creators of the value through competitive market dynamics.
In other words, business is not a zero-sum game with a winner and loser. It is a win, win, win, win game — and I really like that. However, I discovered despite my idealism that our customers thought our prices were too high, our employees thought they were underpaid, the vendors would not give us large discounts, the community was forever clamoring for donations, and the government was slapping us with endless fees, licenses, fines, and taxes.
Were we profitable? Not at first. Safer Way managed to lose half of its capital in the first year — $23,000. Despite the loss, we were still accused of exploiting our customers with high prices and our employees with low wages. The investors weren’t making a profit and we had no money to donate. Plus, with our losses, we paid no taxes. I had somehow joined the “dark side” — I was now one of the bad guys. According to the perspective of the Left, I had become a greedy and selfish businessman. At this point, I rationally chose to abandon the leftist philosophy of my youth, because it no longer adequately explained how the world really worked.” — John Mackey, CEO of Whole Foods Market