Sunday, January 15, 2012

Getting our terms right: free enterprise isn't the same as capitalism

The real divide in our political economy is the Wall Street versus Main Street outlook amongst the business management folks.

"At many companies," says Felix Salmon writing at Wired, "both public and private, the optimal course of action is a modest one — run the business so that it makes a reasonable profit, and can continue to operate indefinitely. If you chase after growth, you often end up in bankruptcy: that’s one reason why the oldest companies in the world are all family-run. Families, unlike public companies or private-equity shops, don’t need growth: they’re more interested in looking after their business over the very, very long run."

Yep. Even though "in the long run we're all dead", as John Maynard Keynes observed we at least have something to pass on.