The tipping-point in a free-enterprise system turning gold into lead

There is a tipping point in a “free enterprise” system, that is a bit like alchemy’s turning lead into gold, except in this case it is like turning gold into lead.

It is the point where a business makes a subtle change in its guiding principle. It is when the dominant business motive changes from making a fine product or service and expect to receive appropriate reward for the value added by the business, into the primary goal being to make the most profit, and the provided goods or services is mere leverage to get that money.

It is when the R&D department comes up with a variety of potential new products, and management decides which to pursue. There is a choice between a product that is better for the customer and a better value for the money, VS a product that will maximize the company’s profit but provides the customer with a lesser value product. When management has to choose the inferior product that makes the company more profit, that was the tipping point.

More broadly, when you have a nation peppered with such businesses, all choosing the inferior product so as to make more money, and they have business territory control so competition cannot do anything, then you have a nation of customers stuck with the inferior products and services, and less money in the bank. That means the people of that nation have to cope and accomplish life stuck with the poorer resources of what the nation built and services provided. It is a weaker nation, due to lesser capability of resources provided by their goods and services.

It is possible that sometimes this tipping point happens when the company’s investors make demands for more dividends, applying pressure on the management. Or it might happen when a company is making good money and products and is bought at a price that cannot be refused; then new management comes in, trained only to maximize profit and invest in business territory control rather than base sales on better products for the customer.

When the larger business system collaborates to prevent customers any options other than what provides the aggregate business system with the highest profits, the tipping point has locked itself into place.

Labels: , ,


Post a Comment

Subscribe to Post Comments [Atom]

<< Home