Planetcaveman's Blog

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Fixing the economy?

Recently President Obama recently went on TV and spoke about the troubled economy, one point he stressed in particular was the “problem” that many companies aren’t hiring new employees but rather they’re trying to squeeze more productivity out of their existing employees, and that this is something “we need to work on”.  I think there are several problems not only with Obama’s claim but about the economy in general that I will address:

First off, a company does not exist for the sake of employing people, it exists to take in more money than it spends, employees are simply a means to achieve that objective: profit.  Unfortunately the term “profit” has taken on a negative connotation in our culture, there is the idea to profit from a transaction one must exploit the other party to achieve that profit, nothing could be farther from the truth.

One profits when they exchange one item of a certain value for something of greater value, people do this every day when they exchange a certain amount of their time in exchange for an amount of money they deem more valuable than that time.  The Caveman with a surplus of apples doesn’t have a whole lot of use for those they can’t consume, so they might trade those excess apples for corn, meat, animal hides, etc, which have more value than those apples they can’t eat.

Because of the physical limitations in the world we don’t have infinite resources, we can only spend so much time hunting, gathering, eating, sleeping, etc.  If we sleep all day we’d have no time to hunt, if we only hunted we’d have no time to eat or sleep, not exactly strategies that would lead towards long term success.  That scarcity is what requires us to economize, to place different values on things and come up with better means of attaining them.  A caveman who figures out that hanging around certain places allows him to take more game is using his resources to be more profitable, no different than a company that decides to restructure the way it does business so that they make more money without taking on additional expenses (employees in this case).

Ok, now that we established that profit is good as is doing more with less, how do we fix the job situation?  For starters, before one goes and tries to “fix” something it’s probably a good idea to ask ‘why it’s broken in the first place’?  Many times people make problems worse when try to “fix” them, especially when things would improve drastically if they would simply stop breaking them.  When you have a situation like we do, with a government that regulates just about every activity possible and has among the highest business taxes in the world, why would you expect the economy to flourish?  Why would you expect more of the same to produce something other than what it has?

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December 15, 2009 - Posted by | Uncategorized

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