On Free Enterprise

Thomas L. Wayburn

Free enterprise means different things to different people.  To some it means the opportunity to devote one's creative and productive energies to worthwhile social goals; to others it means the opportunity to amass wealth without restraint regardless of the effect on society.  Competition, too, can cut both ways.  Competition for excellence can be justified in an atmosphere of cooperation if it doesn't lead to the exaltation of one person over another.  (People do not belong to partially-ordered sets to which the relations "less than" and "greater than" can be applied.)  It is not hard to show that competition for wealth and power is the cause of most of our troubles.  Also, it is easy to see that anything that can be done well with competition can be done better without it.  The ultimate competition is war.

Free enterprise and competition are supposed to lead to greater efficiency due to freedom from cumbersome bureaucracies, greater opportunities for innovation, and increased incentive, but sometimes the efficiencies of private enterprises turn out to be atrocities.  Some giant corporations have bureaucracies that dwarf those of small nations.  Also, if competition gets too heated, the costs of competition (sales, marketing, advertising, etc.) wipe out the gains.

In a society where competition is moderated by an atmosphere of cooperation, even between groups engaged in the same endeavor, free enterprise can be tolerated, provided each and every participant in the enterprise takes part on the same basis.  When free enterprise degenerates into a hierarchy of bosses and slaves, it ceases to be valid.  "No one is good enough to be someone else's boss."  People should be allowed to contribute to the group enterprise according to their own talents and inclinations, not according to the whim, or even considered judgment, of a "superior".  Have you ever noticed how much better work people do when they are doing what pleases them?

Some people believe that the founders of enterprises deserve greater rewards because they have taken greater risks including (i) almost always the sacrifice of income during the start-up phase of the new company, (ii) usually the expenditure of their own money, and (iii) sometimes the offering of their own homes as collateral for loans.  I do not see anything good or noble about risking one's future or the future of one's family.  Do we not discourage gambling in other contexts?  Is not gambling a vice?  Starting new enterprises without risk, as discussed in the section of Chapter 11 called Raising Capital, is much to be preferred.  In this way, the necessity for excess rewards for the founders is eliminated.

Most Americans have grown accustomed to the idea that achievement or seniority should be rewarded with higher wages and greater corporate power.  This is supposed to act as an incentive for good performance, but it leads to many undesirable consequences, not the least of which are dishonest and unscrupulous conduct, cut-throat competition, the dog-eat-dog corporate ladder, and the disillusionment of those who are treated unfairly.  What people really want and need is satisfaction, which comes only from spiritual growth and creative endeavor.  One need only observe the behavior of people who are actually achieving satisfaction to verify this spiritual law.

Houston, Texas

January 6, 1990