A system built on the possibility of unlimited profits is guaranteed a foundation of exploitation.
If you own a business and at the end of the year, with all your costs and expenses paid, you are left with a sizable profit, you have failed. Plenty of people will tell you that you are a success, but they are mistaken. They have been deluded by the lure of profiteering and unlimited profits. Because you must understand that these profits are not conjured out of the æther, they come from somewhere.
The two primary sources of “profits” are:
- Overcharging your customers
- Underpaying your employees
The first one is easy. People blame “the market”. They’ll say that they are charging what the market will bear, but in the repurposed words of Dr. Ian Malcolm “so preoccupied with whether they could, they didn’t stop to think if they should”. If everyone is always pushing the upper boundary of what they can charge, this is part of how you get inflation. And everyone will claim they aren’t responsible because the few cents or dollars they upcharge isn’t enough to be a problem. Of course, if everyone is doing it, the aggregate is that it costs a consumer dozens, hundreds, or even thousands of dollars more to exist. You are extracting the profits from the consumers.
Also under the umbrella of overcharging your customers is producing an inferior product. If you make your goods from subpar materials but charge premium prices, you probably think you are a very smart business person, but you are just someone who doesn’t mind exploiting their customers.
The second is also easy, if you want to see it, but hard if you want to pretend that “cutting costs” is always desirable. While I listed it as “Underpaying your employees” it goes beyond simple low wages. You could be cutting corners on safety, or making people share desks, or not improving your working environments when you have the ability to do so. You could have better pay, better benefits, better working conditions for your employees, but you are choosing not to in order to maximize your profits.
All of this comes down to many people being unable to define “enough”.
When I was young, I figured out that if I could just get $3,000,000 and put it in a high yield savings account or index fund investments, and earn 5% per year on that principal, never touching the principal, I’d be making $150,000 a year, which at the time was more than my parents made. I could live the life my parents had – them, three kids, the occasional pet, a house, a couple of cars, a vacation or two a year – and I could have that without working, just relaxing, enjoying life, reading books, writing, etc. It was an amazing idea. And I couldn’t for the life of me understand why there were all these millionaires still working 40+ hour weeks and not spending time with their families and just hoarding more and more money that they weren’t even spending.
My vision hasn’t changed, though the amounts have because inflation has. I want to be there by now, at age 50, but the math hasn’t mathed yet. Another thing that hasn’t changed is that I still see these multi-millionaires and billionaires who continue to keep hoarding more and more money, though maybe I do understand them a little. Maybe they enjoy the work. Maybe they loathe their families. Maybe they don’t like reading or vacations. Maybe what they like is piles of money. And probably power. And I find that kind of sad.
I hope that one day I can retire. And if I don’t, it’s because I run a wildly successful company where I overpay and over-employ and have really nice offices and great benefits, and I’m making enough money to live a good life on, and not a penny more.