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Bartering is a very cumbersome way to run a society. For example, a
plumber in New York who wants maple syrup from Vermont can hardly arrange
to fix the pipes of a Vermonter who has the maple syrup. In fact, the Vermonter
may not even need any plumbing work, but electrical work instead. Yet,
with money as a medium, the two exchange services, if only in a very roundabout
sense.
Most adults choose some employment that happens to be available within relatively easy commuting distance. To be more specific, they choose to work for somebody else. It takes a fair amount of initiative to start a company, and those who have the initiative can't always find the financial backing. It is usually easier to work for an existing establishment. It is also safer, but less rewarding than a successful venture. It is not always easy to see why some people bother to establish companies that produce goods or services. Still, it's a fair guess that the entrepreneurs hope to fill a niche _ creating a small monopoly _ thereby gaining income. At the very least, one hopes to have a decent salary from the business, but one probably has hopes for profits as well. The first rule of business is to stay in business. The income must be enough to cover all of the bills, whatever they may be. Almost always, a business needs some financial backing to get started (or even to expand), so one of the bills is repayment of loans with interest. Another (for corporations) is dividends paid to investors from profits. For most companies, the profit is a mere fraction of the expenditure for salaries and wages. A negative profit is a loss, and a zero profit means that the company is just breaking even. That anybody is actually willing to invest money in a business venture is an act of faith (see George Gilder, Wealth and Poverty, ICS Press, San Francisco, 1993). Investors and banks put up the funds in the expectation that the venture will at least stay in business, and better yet, turn a profit. It is hard to imagine a product we use that is not brought to us by
the profit motive, and all too easy to forget that businesses do us a favor.
I have yet to find somebody who prefers to refine his own gasoline from
crude oil, generate his own electricity, or produce his own light bulbs.
Yet, there is no shortage of business-haters that complain bitterly about
the "filthy profits" of oil companies, utilities, and manufacturers.
A twig the diameter of a pencil may well grow to the diameter of a broom handle because of the ice coating. Everything _ tree branches, roofs, automobiles, power lines, traffic lights, you name it _ gets the same thick coating of ice. The weight is often too much for the structure to stand. Tree branches break, often falling on power lines already overburdened with their own ice load. In the recent ice storm, the additional weight carried by the metal towers carrying the high-voltage transmission lines was enough to collapse them en masse. The towers were designed to carry a load of ice of 1.7 inches (4.3 cm) thickness, whose likelihood was expected to be once per century, but the ice load turned out to be about 3.5 inches (8 to 10 cm). Well over a million people were without electrical power, and hundreds of thousands will spend weeks without power as the workmen brought in from as far away as Hawaii work in the bitter cold to rebuild the system. The storm is already responsible for about a dozen deaths, many of them from freezing at home in the dark. After all power has been restored, people will be grateful, but the gratitude will soon be replaced by hostility. In short order, people will complain about how and where the utilities generate their power, and about unsightly power lines, "environmental damage," "dangerous emfs from power lines," and "industry profits." If the old paradigm was to kill the messenger who brought bad news, the new one is to slay the bearer of useful commodities. |