By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
Nichols: Businesses focus on profits, politicians on losses
Placeholder Image

Although socialism promises to be a better system than capitalism, does it actually provide more benefits than a free market system that is based mostly on privately owned and managed institutions?

When a company is nationalized, its leaders shift from private to public. The road to the top governmental posts requires certain skills and provides unique experiences along the way to the top.

Business leaders follow a different path. They must have the vision and the drive to survive the sometimes intense struggle to the top of the business world. Thus business and governmental paths to the top differ greatly one from the other.

In the business world, the essence of growth and development is risk taking by investors in a new business, product or process. n the governmental world, the main objective is re-election that is best secured by not rocking the boat, and not advocating new radical policies.

In the business world, the main objective is profit, not loss. The two worlds thus see risk-taking in different lights.

Government officials generally try to make decisions thought to reflect the popular perspectives of the majority of their constituents. On the other hand, business officials formulate decisions aimed at minimizing expenses while maximizing profits.

To avoid financial disaster that might lead to bankruptcy, business leaders sometimes must make highly unpopular decisions. Politicians tend to avoid unpopular policies.

Some businesses have become global in scope. Consider Wal-Mart, or the huge financial institution AIG that required a vast bailout because it was so large and operating in so many countries that the U.S. could not afford to let it go under.

Global companies have operations in more than one country. Such companies are difficult to regulate because they can shift facilities from one place to another location to avoid close scrutiny or regulation that they do not like.

I know that the Pentagon is managing two wars in Iraq and Afghanistan. I wonder if any of the other agencies of our government have the capacity to manage the complex problems of the huge corporations that seem to control many aspects of the economy of the U.S. in the world today.

Where were the governmental regulators when Kenneth Lay led Enron into disaster in 2001? How did Bernard Madoff avoid discovery of his illegal actions that stole money from his clients? If individuals can so easily fool the government, complex organizations might spin out of control just as easily.

Cost is another consideration. Socialism provides many services that are free to all citizens. But all citizens have to pay for those services.

Some years ago I was visiting in the home of an exchange professor in Norway when he had to go pay his income tax for the year. Norway is a mostly socialist country with government-paid education and health care and many other free services. My host paid 75 percent of his annual salary as income tax. He did not complain. He remarked that I was probably paying a similar amount for services through higher costs that were just hidden taxes.

Recently, I asked a friend from Canada what he thought of the way health care was paid for in both Canada and the U.S. He said that in Canada, people were concerned with the health of society in general; everybody benefited and everybody paid taxes to support the program.

In the U.S., people are focused more on the individual, on individual instant gratification. Almost every town has drive-through fast-food shops, bank facilities and other places. Sick Americans usually rush to their individual doctor for treatment.

I think that comparison is valid. I believe President Barak Obama is going to have a difficult time getting his health care reforms through Congress, which still focuses more on the individual voter rather than on society at-large. Society at-large has no vote; individuals do.

America might well be on the path to socialism, but probably not in my lifetime.

Tom Nichols is a retired college professor who lives in Gainesville. His column appears regularly and on gainesvilletimes.com.

Regional events