Capitalism

Capitalism is a social system based on the recognition of inalienable rights in which people are free to produce and trade and thus precondition an economic system in which all property is privately owned^[1][2] and operated for profit,^[3] and in which investments, distribution, income, production and pricing of goods and services are determined through the operation of a market economy. It is usually considered to involve the right of individuals and corporations to trade, using money, in goods, services (including finance), labor and land.

A relatively simple definition. But, most of us are either very pro-capitalism or against capitalism. The corporation is probably the first thing people think about that are "against-capitalism." The first thing, I think about being a pro-capitalism guy is the entrepreneur. The entrepreneur as a symbol is the "baby" which metaphors into the corporation. All that is good and creative about the entrepreneur is why I hold capitalism dear. It has always been my ambition to be an entrepreneur, to grow a company that is providing a good quality product or service for a reasonable price, making a profit and providing a great place to work. As this company grows, it becomes more powerful - capable of doing more good (or bad) in the world.

To oversimplify things, the government defines the rules for capitalism. And to the extent that capitalism fails to do good for society, it is up to government to redefine the boundaries of fair operation of capitalism, usually this means a fair set of rules for corporations enforced by penalties and incentives to move in the direction that supports our long term goals as a nation.

Ok let's take Exxon. First, as a shareholder I am happy that their stock keeps rising in value. As a consumer of gasoline, you see their profits as adding to the cost of your gasoline. My guess is that their technology and efficiency is holding down the cost of your gasoline much more than their profits are raising the cost of your gasoline. They are the most efficient oil company in the world. Without them in the game, the second most efficient oil company would be making the profits that Exxon is making and would push the price up of gasoline even more. Let's face it, the U.S. is running out of oil that it controls either directly or indirectly. For a long time, companies like Exxon could talk countries out of their oil for a song and dance. Not any more, countries all over the world recognize they are in the driver's seat and now demand blood money even when their oil, like Kazakhstan, is many miles under the land and must be drilled from the ocean at an angle.

Ok, what gripe to I have with Exxon. Exxon is buying up all its stock. At the present rate it will not exist. Yes, that increases the value of the stock and from a profit motive for share holders is probably the best that can be done with the money. However, I want Exxon to be an energy company and make energy available to its customers. There is not a better management team in the world that is more capable of this than Exxon. I consider it as a moral shortcoming of Exxon not to be investing and developing alternative energy sources like BP is doing. It is true that companies have a legal responsibility to make the most profit they can from the money shareholders invest. But, the question is, on what timeframe. At some point, no matter how efficient Exxon in, the supply of oil from the planet will be too small for Exxon to make a reasonable profit. Perhaps solar panels or even "clean" coal or uranium will make more sense at that time. And, I suspect those that start investing money now will be better positioned, from a profit perspective, to make lots of profits in the future.

The biggest complaint I have against American Industry, against the American Corporation, is their obsession with short term profits. Not just yearly profits, but quarterly profits. I have worked inside of corporate America for forty years. Decisions are made every day to take actions that increase the quarterly profits at the expense of the long term health of the company, which is often tied to the long term health of our nation. Financial tools are available to track every company in the U.S., trying to estimate what is going to happen to their profits next quarter. Stock prices rise or fall by huge amounts when companies miss their earning estimates by one cent. It is stupid and short-sighted. It is also immoral. Wrong. We are selling out our future with the focus on next quarter. Research and development of new products and services, for instance, new sources of energy, require money to be spent today for tomorrow. Money that lowers the profits for the upcoming quarter, and usually many more quarters to come.

We need as a people to turn our sights on how we are going to get out of the energy crisis. My belief is that this energy crunch is the real thing, not a temporary shortage, but the beginning of a global crisis that will ultimately could end in a great war. Over dramatic, perhaps. No one can doubt that part of our motivation in Iraq was to provide stability to the middle east to insure that oil kept flowing, especially from countries that are friendly to the U.S. Most of us doubt that will work and many of us think it was wrong -- but that is not the current theme so we won't go there. But, when cars sit idly beside the road and our houses are cold, what do you think we as a nation are going to do. What do you think our military industrial complex, which has a mind of its own, is going to do.

Is this fate inevitable. No, the Exxon's of the world have the ability, if not the will, to change their narrow focus on oil, to the broader scope of energy. Entrepreneurial startup companies are already creating the concepts and new products to address the energy shortage. As their fruit ripens, the Exxon's of the world can implement the technologies at an astonishing rate. Will they. If they base their decision on short term profits, no. If they base their decision on the imperative for their company to survive and profit long into the future then yes. If they view themselves has agents of change of a new future that does not depend on oil, then good things can happen.

What is the current view of Exxon. They believe there are still large reserves of oil in the ground and that if they were given access to them, we would have plenty of oil. They believe as we run out of oil that we and all other nations will become desperate enough to let them drill for oil everywhere. For those of us that are the have-nots, this is probably true. But for those that have oil in excess of their domestic needs, the opposite is true. As they see oil prices climb, there will be tendency to hoard their oil, to demand more for access to their oil. They will look at oil as a means of modernizing their country, to padding their own pockets and raising the standard of living in their country. Oil becomes the seed money to modernize their own country. We are educating the children of the oil barons at our Harvard's, so what do you think is going to happen.

Oil companies have yet to accept this fact. Exxon is living in the past and for the moment making a lot more profits than they know what to do with. Perhaps, their is another way. We can take the profits we are making as shareholders and invest in energy companies that are investing in solar, wind, etc. Now to wrap up the good and evil theme of capitalism and their agents, the corporations, what is the government's role.

The government should reward companies that are producing energy based on alternative technology, embarking on a go-to-the-moon effort to increase alternative energy supplies. We should recognize that we are falling into a black hole, which is devoid of the energy to insure the prosperity of our children. It is the central issue in America's future prosperity, or alternatively the lack of energy is the one force that can mark the beginning of the end our country and our way of life.