Tuesday, August 16, 2005

Capitalists ARE conservationists

I, myself am an entrepreneur and thus, a capitalist at heart. I hear a lot about how government should force (by whatever means they can) businesses to be more environmentally conscious. What I don't understand is why business leaders don't decide to do it of their own free will.

What is the sole purpose of a business? To maximize shareholder wealth. You might be the only shareholder, or you might have thousands as a public company would. Let's take a look at the word "maximize". To put it in terms of math, a maximum is a point on a graph where the slope goes to zero and starts negative again, i.e. the top of a sine wave. That is a "maximum" Take a look at the whole graph, and you have a maximum, then a minimum, then another maximum, and so forth and so on. Basically, it never really goes anywhere. Just up and down. Now, if you want to "maximize" the area under that graph, it has to keep going up and up to the right. It can't peak and then come crashing down.

That might have been a little complicated, but what I wanted to say is that for a business to "maximize" shareholder wealth, that wealth must continue to increase over time, not just peak out (like with a fad) and then fall back into obscurity.

I, myself, want my business to keep increasing my wealth (one of 5 shareholders). To do that, I want to want to make sure that I don't destroy the environment from whence I get my raw materials. I don't want to destroy the air I breathe while I'm making my product. I really don't want to upset my customers by destroying their property and endangering their life. I want to make a quality product that I can continue to make "forever". That is the very definition of conservation, and likewise, the very definition of capitalism.

The two are one in the same. Some businesses don't want to make a buck tomorrow, they just want to make it today. The market will take care of them without government intervention.

For more information about me, my business, and essentially my business ethics, take a look at my website... http://www.charliesoap.com