The Death of Capitalism

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What is the American Dream? I believe everyone has their own idea of what the American Dream is, but at it’s core the American Dream is about having the opportunity to make your life better, regardless of where you live, your social or economic status, your religion, race, or overall status in life. In a word, the American Dream is “Capitalism”!

I wanted to talk about capitalism because it is something we are slowly losing in the economy of today. Sure, it is still possible to buy a home or create a business from the ground-up, but there are more obstacles to accomplishing today than any other time in the past 50 years. In part we can thank the self-centered, greedy people involved in the real estate and financial scandals of the 21st Century. Their actions have imposed processes that force the working-class people of America to battle the contradictions of risk-averse controls, some of which are excessive measures in what is commonly referred to as CYA (cover your a**). I am not suggesting that we do not need controls, specifically in in processes that involve the exchange of money, but I am suggesting that the controls be imposed at the correct location in the process. The consumers were not the ones who got us into the financial crisis, it was the financial institutions who loaned the money and sold off the bad debt to other companies engaging in one of the largest scale games of “hot-potato”. So, who wins and who loses?

Now let’s talk about a scenario that is a little closer to home. Someone I know, we will call him Ted, has recently begun to explore the possibility of starting his own business in the form of a retail store and as it is with most things these days, this process has been a bit more complicated than it really needs to be. The process began with exploring the products that Ted wanted to sell in his store. Ted wrote a business plan, ironed out details on the financial feasibility of his business and began making calls to the brand-owners and manufacturers to explore the potential of buying their products at wholesale prices to re-sell to consumers. The initial communications went extremely well, but as Ted began to approach the time where he wanted to start his business, the brand-owners began to waffle on the idea of Ted selling their products because Ted did not yet have his retail location set-up. So, Ted began exploring locations in which to set up his retail store…

Ted explored commercial real estate all over town, locations off of main roads, locations on the outskirts of town, and locations a little off the beaten path. At one of the potential locations Ted received questions from the developer regarding the type of business Ted was planning on opening, normal questions considering developers and landlords like to know what type of business will be in their properties. Ted answered the questions with enthusiasm and resolve, but the response he received from the developer were that of concern. The developer was not concerned that Ted would succeed or fail in his business venture, but rather he was concerned that some of the products Ted was planning to sell could potentially compete with other businesses in the retail center. Imagine that, Ted was going to be competing with other businesses! Since he was not keen on the idea of this developer telling him what he could or could not sell, because it would be competition, Ted decided to explore a retail location in a different part of town, one that would not fault him for the products he wanted to sell, one that would not try to restrict his ability to succeed. Ted finally found a piece of real estate that met all of his needs, he ironed out a letter of intent to occupy that was predicated on his ability to lock-in the agreements with the brand-owners of the products he wanted to sell, since thy did not want to sell him their products before because he did not have a retail location.

Now that he had the retail location ironed out, he re-engaged the brand-owners and began the process of, once again, setting up his accounts to buy and resell products. This time, the brand-owners realized he was serious and as such they setup some time with Ted to tour his retail location before setting up their account. This being a little bit of a game of “What comes first, Chicken or the Egg?” Ted agreed to meet with the brand owners to discuss his business model and the potential of his business to meet a need in the community where was looking to establish his store. The brand-owner met Ted at his store and they discussed the store concept. Both the brand-owner and Ted were very enthusiastic, but upon conclusion of the discussion the brand-owner indicated that he had “concerns”. At this point, the thought running through his mind was “CONCERNS….I have been talking with you for months about my business, where I was planning to have the store, and what I was planning to sell, and you have CONCERNS!!!”. Ted simply asked, “What are the concerns you have?”, where he was met with the response, “The location you have selected appear to be good and the model you have setup sounds exciting, but we have other successful stores that sell our products within about 10-15 miles and we are concerned you might compete with them.” “Again with the competition, why are people so afraid of competition?” was the only thought going through Ted’s mind. To respond to the brand-owner Ted simply said, “go talk with your boss and let me know whether we can setup an account for my store to sell your products and if your decision is NO, then I need to know what will make it a YES.”. After that discussion the meeting was over and Ted was asked to await feedback as to whether his store would be able to sell the brand-owner’s merchandise. At this point in time Ted’s store still has not opened…

The thing to question here is what has happened to capitalism? There was a time when people who were interested in buying and people who were interested in selling could work together to get things done, but now it seems bureaucracy and maintaining status quo takes precedence over productivity and capitalism. I am not sure of what has caused this to happen and I am not sure when it started. What I am sure of is that when we stop fostering competition, it will compromise our ability to be the best whether it is in sports or in business. Competition and struggle is what this country was built on, our desire for freedom to succeed or fail, and our ability to reach for our dreams is what made this country great. I am not saying we should revert to the ways of the past, after-all times have changed, people have changed, and the world moves at a much faster pace today than it did 200 years ago. What I am saying is that we need to open our eyes and open our minds. Competition is what holds us back, it is what sets us apart, it is what makes us great. Capitalism is competition, and competition makes us stronger, faster, and smarter! There will be a day….Ted will continue to pursue his dream, progress will mark his every step, and capitalism will kindled! However, for now Ted is going to have a beer!

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