There are a lot of people today who believe that capitalism is evil.
Turn on the TV or watch a movie and who will you see as the villain?
A CEO of a big company, a corporate executive, a rich politician, but rarely do you see the evil villain portrayed as a blue collar worker.
This has gone on so long that many believe that if you are rich, you are automatically evil.
It’s true, there are some people that are filthy rich and downright evil.
And it’s also true there are evil politicians, mechanics, coffee shop employees, middle managers and on and on.
Evil is everywhere, but good is everywhere as well.
I’m walking on egg shells here because I don’t want to get political and I promise I won’t, but lately it seems the easiest way to divide people is by pointing fingers at the rich and saying, they are the problem.
The worst part is, most of those pointing fingers have more money than the rest of us.
If you look for evil, you will find it and if you look for good you will find it.
You will find what it is that you seek if you look long enough and hard enough.
Let’s look at capitalism in its deepest sense and dissect it down to exchange of goods and services.
Most would agree that trading is good and has gone on since the dawn of civilization.
Trading says that what I receive from you is of more value to me than what I give you in exchange.
If I agree to pay you a dollar for an apple, I want the apple more than the dollar.
If you agree to pay Ford, $30,000 for an F150, you want the truck more than the $30,000.
You believe the value of the truck and all of the other benefits you will receive from the truck, is of more value than the 60 easy payments of $500 (at zero% interest).
If you agree to work for an employer for $25 per hour, that employer is banking on the fact that he or she will get more value from you than the $25 per hour they are paying you.
That employer takes a risk in paying you because they are banking on the fact that they can bring in more than enough work for you, so they can operate their business at a profit.
Any business without a profit is soon out of business.
Are you with me?
Have I described anything evil so far?
The employer/employee relationship is that of trading time for money and there is nothing evil about it.
The employee agrees that they are worth at least $25 per hour and the employer agrees to pay said employee the $25 per hour worked (plus benefits as required now by law).
Undoubtedly after a very short period of time, the employee will believe they are worth more than $25 per hour and if they are earning their employer far more than $25 per hour, it is highly likely that employer will pay said employee more money, in exchange for their time.
If not, that employee might find someone else who will pay them more for skills.
When you become more skilled it is natural to be paid more than a minimum wage.
People who start at minimum wage should not stay there unless they choose not to become skilled.
Sorry, I got off track.
Now, said skilled employee decides they will work on Saturday and get paid time and a half.
There is only one problem, their lawn needs to be cut on Saturday and takes about an hour to cut.
If they work they won’t have the time to cut the lawn and they can’t work on Sunday because that is their day of rest.
So they find someone who will cut their lawn for $20.
They are earning $37.50 an hour in overtime pay and they are paying out $20 for the lawn so they made a $17.50 profit while their lawn was cut!
This is capitalism 101, earning more money for your time than you are paying others who AGREE to work for less than you are earning.
Ford, has roughly 175,000 employees.
A company that big has to be run by people who are really good at knowing exactly how much it costs to operate the business at a profit and each and every one of those employees earns Ford more than whatever wage they are being paid in exchange for their time.
Let’s break this down on a smaller level.
If you own a heating and air conditioning company.
When you started the business it was just you.
You ran some ads and people agreed to pay you money in exchange for making their house cool.
I live in Florida and I can tell you in August, you will spend your very last dime to make it cool if your A/C breaks.
You realized that you could take care of more customers if you had some help, so you began to hire people.
You teach and train them to your ways of doing business and naturally you earn a profit.
Business is about solving customers problems or making their lives better and it is only natural that you should charge more than it costs you to do so.
When you do this right the customer will agree to pay you over and over again because you provide great value in exchange for their money.
Who is taking all the risk?
You are.
No one calls you greedy if you go out of business.
You are only greedy and evil if you take care of lots of customers, who agree to pay you to get their houses cool.
You are greedy and evil because when you make lots and lots of customers happy you make profits, sometimes lots of it.
But much of those profits go to pay for insurance, service vehicles your people drive to jobs, the desks in the office, the inventory in the warehouse, the building that houses everything and the advertising that keep customers coming in the door.
Just because those profits don’t go into your pocket you still have to pay taxes on them because after all, you are evil, right?
Can someone with half a brain please show me anything evil about what was just written?
I say half a brain because if you put 5 Hollywood stars together, you would have a tough time finding one congruent thought.
I help business owners, capitalists mainly, to market their businesses effectively and they pay me good money to do so.
The only reason they pay me is because the value they receive far exceeds the money they exchange to get me to agree to help them.
They get so many new customers that what they pay me pales in comparison.
We both walk away happy from the transaction because it’s a great trade.
This is how capitalism works and next time someone spouts off about capitalism being evil, ask them if they cut their own lawn.
To your lifelong prosperity,
David Mulvaney
P.S. If you would like to learn how you can get lots of new customers I am hosting a live webinar on Thursday. You can find out details and sign up by clicking here.