Tax Guru-Ker$tetter Letter

Wednesday, September 04, 2002

Understanding Capitalism

Too many people think that the main functions of big companies are to provide places to work for people and to support charitable causes. Neither is true. Their purpose is purely to legally earn a decent rate of return for their owners, the shareholders. If they can't do that, they should shut down.

I obviously had these cold hard facts of the capitalist corporate world drummed into me in my business classes in college. I'm not sure exactly where Joe Bob Briggs (aka John Bloom) learned this, but he has an excellent discussion of it in today's column. He mentions that, rather than function as jobs programs, the best corporate officers do everything possible to avoid hiring new employees. He makes the very accurate point that an ideally run corporation, the epitome of perfection, would earn income for its owners with zero employees.

If I didn't know better, I would have suspected that Walter Williams, the premier economics professor in this country wrote this piece. Well done.

KMK
- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 9/04/2002 11:09:00 PM Send this post: