What is the modern idea of success in business? If you are a publicly traded company the only measure for success is the increase of total profits this year (or this quarter) compared to the previous year (or quarter). The majority of conversations I’ve had with people about business end with this being seen as acceptable and the natural course of Business. In the world of business morality this is seen as the only moral imperative.
I strongly disagree.
The problem is obvious, how do you increase revenue quarter over quarter? There are a few ways that you can do it that most companies shoot for. You can attempt to increase your consumer base and make more money by quantity, you can increase the cost of your goods by some marginal but acceptable amount, or you can decrease the cost of manufacturing your good or providing your service.
I’m going to tackle each of these in turn. The first problem is increasing a consumer base, in order to do this you must first appeal to more people than you previously did. There is only a single surefire way to make anything more appealing universally and that is to make it less offensive. Now being offensive is not just like the smell of flatulence or the sharp prick of “adult language”. Something being offensive merely means that it challenges any kind of idea or culture.
In the world of food this is accomplished by making your food less flavorful. The worlds highest selling beers also are some of the blandest. Fast food shares a similar fate. Best selling music in iTunes? You can find the same thing in clothing, electronics, and television. Video games certainly don’t escape this reality. This isn’t to say I think that makes these things bad, there is plenty in those three links that I like.
But that’s the thing, they were made for me to like them. They appeal to the basest level of my most basic desires. Nothing on any of those lists titrates me in any way. They don’t surprise my taste buds with a sharp new flavor, impact my emotions with a deep new kind of sound, or impact me in any meaningful way. They are, at their core, boring and inoffensive.
Want to make your Soda more popular? Give it a slightly less strong flavor. Want your music to be more popular? Use less unique experiences in your lyrics and reference topical events or popular movements in your country.
However these tactics have a dark side, they often require higher marketing budgets to get people in the door in the first place. When your good or service is bland and inoffensive it needs some kind of kick to convince people they want it. The profit race capitalist knows that they are not answering a market, they are creating one. The highest selling products in nearly any field are also the most heavily marketed.
This creates a feedback loop as well. The higher the budget for a project the more inoffensive it will become to increase the likelihood that it will recoup the budget. You can be certain that the most expensive products or services in any field will be the most consistent because they will be the least innovative. Consistent however does not often (and may rarely) mean a good thing.
The second problem is increasing the cost of goods. This isn’t inherently a problem but it does exist in profit race capitalism. Look at Comcast, a company so reviled that they changed their name just to wipe the slate clean. When your goal is infinitely increasing profits you have little incentive to actually improve the quality of your good or service when you increase the cost on your consumers. This is because it reduces the over all profits you make per cent of increase and that is immoral in this business model.
It is much more common, instead, to merely increase the cost at a small enough amount to lose the least amount of customers while seeing a net increase in profits. This is on top of any increases made by actual inflation and certain institutions, like education, have increased at rates massively higher than inflation. In many cases inflation is used as a scapegoat for deeper more serious problems, usually with integrity.
The third and most serious problem is lowering the cost of manufacturing your good or providing your service. This is where the most insidious activities take place. Cheaper quality parts in everything you own and cheaper quality ingredients in everything you eat. That is nothing to say of the environmental damage done because companies avoid any additional costs that come with protecting the environment, leading to terrible damage [I’m not linking to it but clear cutting of rainforests, dead zones surrounding the united states, and mercury in every single fresh water source in the US are some other great examples. Wait you know what, lets link to the mercury one. You are welcome.]
And if the environment isn’t your friend, certainly the inhuman treatment of millions of human beings to keep costs low is something of concern. Poisonous dog food, baby formula, and other surprises have popped up in just the last decade. Air pollution, climate change denial, and all sorts of other symptoms rise from this practice.
This is all because the actual expectation is ridiculous. It is something that cannot be sustained because the amount of wealth in the world is not growing without end. This sort of business will always, always, always, create bubbles. The Video Game AAA market is going to crash, just like the automotive market crashed, just like the banking sector crashed, just like the stock market crashes, and just like entire nations crashed.
This will never be a sustainable model because it is not based within the world of reason. There is no math that supports it. It exists for a single reason and that is to quickly generate revenue for people. It is simply a matter of hedonism and narcissism.
The only sustainable business model is one of generating profit, period. Simply profit. If your company makes more money than it spent it is a success. Even if you only made an additional dollar this year your business has succeeded. Any business that follows this model is noble and their ventures are just as far as their growth goals are concerned.
This is where indie companies and niche markets are prime. These are companies acting in the correct business. They are answering markets and providing quality services. They are more expensive because they did not take the immoral routes.
If you do grow that is great! But it should never be expected. A business that makes 9 billion dollars in profit is not a failure because it made 10 billion the year before. This mentality is what leads to environmental destruction, government corruption, and all sorts of negative ramifications. Because there is no other way.
Modern Capitalism kills quality, it kills innovation, and to put it bluntly…its killing you.