Making a great deal of money is a natural objective of businesses and individuals.
Business profits finance enterprise growth and new product development. If a business isn’t profitable, it is unlikely to grow or bring added benefit to customers.
High profit margins will attract competition and competition in free markets will result in a lowering of profit margins. It is and should be forbidden for companies to conspire in product pricing.
The creation of personal wealth for entrepreneurs’ which results from company growth and increased market valuation is dependent upon the percentage of the company which continues to be owned by founders. Founders using revenue royalties, instead of equities, will recue their equity dilution. Many of these factors are beyond the control of the companies, as they are based upon stock market levels and investor aggregate belief in the company being able to continue to generate increased profits.
I have been prompted to observe the above truths by the flurry of writings questioning the social benefit of companies and individuals which/who are extremely successful. These essays are empty of facts, envy driven and negative in terms of public good.
Successful companies are both good and necessary. They are good for individual founders, employees, investors, communities, the nation, and the world. They are successful because they offer products or services found desirable by increasing numbers of customers.
Those few individuals who have become billionaires are subject to high taxation and usually allocate a significant amount of their wealth to philanthropy. They have become exceedingly wealthy because the companies they have created benefit to others and because investors believe that the companies will continue to be successful.
The politicization of financial success is counterproductive for society. It should be applauded and not attacked. We all benefit from the financial success of individuals and companies. I favor the public and government attacking entities causing harm, but not those which benefit to others. Of course, the determination of harm versus benefit is subject to time and test. Tobacco and alcoholic beverage companies, sugar candy companies, casinos, companies producing unsafe vehicles and other products, are all candidates for penalties, including prohibition, but not companies doing overall good.
In the end, it’s all a matter of social benefit versus harm and large-scale financial success is usually a positive and should be publicly encouraged.
Arthur Lipper, Chairman
British Far East Holdings Ltd.
Del Mar, CA 858 793 7100
arthurlipper@gmail.com
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