A Call for Moderation

In his interview with Lynn Neary of NPR, Bill Frezza presents several bitter truths. His perspective is myopic. His choice of words is blunt. The interview was placed immediately after coverage of the Occupy Wall Street movement. This all serves only to polarize the audience between rich and poor, liberal and conservative.

Use of the “cart and horse” analogy incorrectly assumes that either employment drives growth or growth drives employment. The reality, as usual, lies somewhere in between. “Chicken and egg” is the more appropriate analogy.

It is true, as Frezza says, that businesses hire not as a public service, but to serve growing demands from customers. It is true that they are likely to put off hiring during times of economic uncertainty. The truths that Frezza seems to ignore are that customers’ demand for many products disappears when their incomes are spent on food, clothing, shelter, education, transportation and medical care. Employee productivity is also diminished if these basic needs are at risk.

So, though businesses may not have a responsibility directly to feed, clothe, shelter and cure their customers and employees, it is in their best interests to have and show concern for those needs being met.

In a truly free market, businesses that treat people as nothing more than actual or potential revenue sources are at a competitive disadvantage to those that deeply understand customer needs. And by deeply understand, I mean identify their human problems and potential, and incorporate solutions and opportunities into products and services that provide increasing value. Of course, in a free market, businesses are welcome to demand higher prices for that value, based on the law of supply and demand. Similarly, businesses that deeply understand and adapt to employee needs have access to the most productive talent, retain that talent during down times, and avoid switching costs (replacement, training and reduced productivity) from attrition.

Many businesses would actually do better to treat employees like “inputs,” but only because they currently treat employees worse than other inputs. They invest heavily in maintaining, upgrading, adapting, and even responsibly disposing of facilities and equipment. Yet, they expect continually increasing levels of productivity from employees and the right to terminate employment, all at no cost.

Mr. Frezza, I’m sorry you feel like a “whipping boy.” Earning over $250,000 a year doesn’t justify being vilified by politicians or the press. I hope you mean to say that the legitimate businessman has become a whipping boy for financial criminals. I hope you are not comparing your disparagement to the real suffering of people who have been laid off, evicted, or forced to make financial choices between basic necessities.

By covering the occupation of Wall Street and then giving voice to broadcasting the blunt words of Frezza, the media is contributing to a dangerous polarization in our society. The fact is, responsible, enlightened capitalism has worked well for our society, creating enormous wealth and high standards of living. The revolutionary sentiments of the occupiers of Wall Street should be rejected along with the myopic vision of American business presented in this interview.

Tags: Economics, Finance, Politics

Updated at: 7 October 2011 6:10 AM