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Key Idea: Play By The Rules

The Sherman Antitrust Act of 1890 is the law of the USA and is still used to keep backroom business deals and monopolistic tendencies in check. Transparency in business is the backbone of democratic capitalism. It cannot work without integrity and ethics.   Homepage

Key Question:

A: 

While very small companies and one-person companies need to learn the rules of business and stick to them, if you plan to grow this is mandatory.  Attorneys and CPAs will play a key role in your business the larger and more complex it becomes.

Q:  Do we really need the government interfering with our businesses?

A: Unequivocally, yes. Law brings morality to business. Whether it's the EPA or OSHA or some other regulatory agency, the Federal government is charged with the responsibility to keep profit- taking within the boundaries of what's good for the citizenry. A good example is petcoke, a by-product of the oil refinery process. Petcoke is considered waste material in the United States because burning it is such a pollutant to the environment. So what do the oil refineries do? They sell it to European and Asian nations, who burn it as fuel. Congress passed child labor laws when unscrupulous businessmen exploited children as workers. The DOL and INS work diligently to ensure that immigrants are not exploited today. As a citizenry, through our government, the officials and the laws, we insist on a certain level of behavior, we do not tolerate the worship of the dollar.

Think about it

Are there rules you would like to see changed?  Are you working with your local lawmakers to make laws more business-friendly?

Editor's Footnote:  Many people believe that an inherent part of business seems to force people to compromise their values.  Yet, when people stick to their core values and focus on a problem as given, new ideas and opportunities arise.  Take as an example, Don MacInnis bought a vinyl record business just before the onslaught of the CD and DVD revolution.  Vinyl record manufacturers began closing up shop at a breath-taking pace.  Instead of looking to cut back, Don looked for ways to improve.  And, he did.   The technology upheaval  ultimately landed him at the top of a segment of a business that  everybody thought was dying. Today, his company, Record Technology, makes "the best grooves in the world." His market is the many audiophiles who prefer vinyl over the "perfect" sound of a digital CD. 

Like every owner, Don knows the rules of business; he played by them, and he won.

Clip from: Capitalism: Path to Prosperity

Washington, DC:   What are the essential foundations of life, liberty, freedom, and human rights?   The USA as a working experiment is a good model to study.  Here we can study the earliest documents and concepts and see how these also became the foundations for American capitalism.  Within this structure, we can see how just about any family can get 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

Business Classification:
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Year Founded: 1947

Play By The Rules

HATTIE: You gave us your encyclopedia definition of capitalism, but what about democratic capitalism?

MICHAEL: Well, I want to say a word about democracy and about capitalism. It struck me that in the United States, long before the Catholic church or other churches talked about it, there was the Sherman Antitrust Trust Act, 1890, which was an attempt to control monopolies.

In other words, we always had the sense that the economy shouldn't just grow wild. There should be -- it should be within a framework of law.

So in the United States we've always thought from the beginning, without being socialist, that there's a role for government and there's a role for law and only within that context can capitalism develop. That's why I speak about democratic capitalism. You even need the external law and you need the habits in people that if they say they're going to do a good day's work, you can trust them to do a good day's work. If you have a manager who's seven miles away who said we did thus and so, you can believe him. And by goodness if you don't believe him you fire him, because we depend on honesty. 

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