Key Question:
A: Are you willing to give up a paycheck and a title? Can you go get the business and empty the trash cans too? Can you work long hours without knowing where the next sale is coming from?
Small business is based on the willing buyer-willing seller premise. It is the market that defines the price of our goods and services. We all have competitors, other businesses selling a product or service that competes with ours. We know we have to stay on top of our game. We constantly invest in improving our products, minimizing our costs, and marketing directly to our customers. It's all very complicated! Owning a small business is like playing a very exciting, very challenging game. Unlike Monopoly, the properties and cash we accumulate are real. Wealth accumulation is one way, a very important way, in which we and others measure the success of our businesses.
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Think about it
Are you accumulating wealth from your business?
Clip from: Novak, Capitalism, Value Creation, and Economic Independence
Washington, DC: Let us all study the essential foundations of life, liberty, freedom, and human rights. Also, the essential foundations for American capitalism, this model could put just about any family on a path to economic independence.
Meet Michael Novak, a man whose life study is of the foundations of government systems that work. And here he discovered small business has the heart and spirit that sustains and nurtures democratic capitalism. Michael Novak strikes deep into the heart of public debate about what works and what doesn't work within economic systems, and he says that small business owners are demonstrators. They're on the front lines, risking and fighting the good fight every day. Small business owners take lofty principles and reduce them to nitty-gritty practice.
As a people, the debate about capitalism should no longer be the domain of economists. We all need to grapple with the first principles of ethics, economics, and government. Virtually overnight globalization is a reality and belief systems are butting against one another, often shredding civility and undermining any inherent ethics and morality.
Each of us needs to engage in the historic debate about economic models. What works? What is good for people? Is this singular focus on "Return to Shareholders" a truncation of capitalism? Do we need to be looking at a more balanced model that includes more than the growth of the bottom line?
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American Enterprise Institute
Michael Novak, Author
1150 Seventeenth Street, N.W.
Washington, DC 20036
202 862 5800
Visit our web site: http://aei.org
Office: 202 862 5800
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Year Founded: 1947
Give Up Titles And Trappings
MICHAEL: I always sympathize with the servants because that's where my family came from. We were serfs in the Austro-Hungarian empire and I learned people in my family didn't own property until the 1920's and they were only free from serfdom in the 1860's so.
Anyway, I began to think a little bit differently about business and I -- being a part of the left, it was very uncomfortable for me beginning to think positive thoughts about capitalism and I resisted it. I didn't want to tell my wife about it. I certainly didn't want to tell my friends.
HATTIE: You were a closet capitalist. You're a closet capitalist, Michael.
MICHAEL: The first piece I wrote, A Closet Capitalist Confesses, I did, in the Washington Post, 1977; but, I just realized I couldn't be a socialist. I couldn't find an example of socialism anywhere in the world that I admired. And, so I backed into capitalism. I wasn't pro-capitalist, but as I was trying to make up my mind. Am I a socialist, which is what I thought. Am I really a socialist? Do I want America to become more socialist? And I thought no, I don't want that. And so I backed into capitalism by abandoning socialism. If not socialism, then what.
HATTIE: Okay. What is capitalism?
MICHAEL: When I began I didn't know and I looked up in the dictionaries and they all have, I checked seven or eight of them, they all have the following definition. Different words.
(Voiceover) Three characteristics, market system, private property and private accumulational of wealth, the profit motive as I said.
MICHAEL: But after awhile I thought that can't be right. That's what everybody says, but that's not right because that was present in the bible in Jerusalem. Jerusalem was only a marketplace, a market between three continents. There were no smoke stacks. It wasn't a fertile area, it was a desert. All it was is a marketplace. So they had a market. They certainly had private property because the commandment says thou shalt not steal. Which doesn't make any sense unless you have private property. And they certainly had profit because people gave gifts to the temple. And the rich were expected to give more, that means they had profit.
HATTIE: Right. And Jesus talked about the widow's mite.
MICHAEL: But everybody says that's not capitalism because capitalism is something that grew up in the last couple of hundred years after the Protestant reformation.
(Voiceover) Max Weber the famous sociologist wrote a book in 1904, The Protestant Ethic & The Spirit Of Capitalism. What's new in the world is a new sprit. A new attitude toward the creation of wealth, which arose out of the individualism and the asceticism and the sense of hard work, that's a Protestant reformation which took the asceticism out of the monasteries and put it out into the world.
HATTIE: Into the street.
MICHAEL: Into the street. And this is why he argued the Protestant countries do better economically. And why the Catholic countries like Italy and Spain and Portugal, or even France are relatively slower in developing economically.
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