From Each According To His Ability…

Once upon a time there was a woman who started a business.  It was a simple business and consisted of her providing a service and a product needed by others.  She baked pies and then sold them to restaurants, coffee houses, truck stops, and other places where people might buy a piece of pie.  After many months of hard work, the exceptionable quality of her pies, spread by word-of-mouth and her own time-consuming efforts at marketing them, won her a growing list of customers.

She spent many 16-hour days, six or seven days a week, for many months to achieve her success.  She sacrificed and went without in her own home in order to have money to buy what she needed to make the pies.  But, finally, all her hard work paid off, and she was earning a steady income from her business.

As the months went by, and her business continued to grow, she hired a couple of employees to help her keep up with all the orders.  These two people were good workers, and were rewarded by the business owner with bonuses and generous benefits, and the business continued to grow by leaps and bounds.

Eventually the woman added three more workers.  The pie-making business flourished, and the woman who started the business became wealthy.  Her employees, whom she paid fairly and shared profits with them in the form of bonuses, each became more comfortable financially than they had ever been.  This one business had grown to the point of providing a very good living for six people and their families.

One day the government of her country, having been engaged for some time in making life “easier and fairer” to all citizens, passed some new laws concerning businesses.  For the sake of “social and economic justice” all businesses were required to “band together” with other similar businesses.  This was to negate the “unfairness” of some companies having more customers than others.  The woman was forced to join an association of “pie-makers” and each business was by law required to pool their profits into one pot, and then split up the profits equally among themselves.

The woman’s pie-making business was grouped with several similar “baking” enterprises in the region where she lived.  Her own business had been by far the most successful of them all.  The other businesses were run in different ways that she ran her own.  Some of the owners of the other businesses had not put in as much time perfecting their products, or marketing them.  Some of them did not buy the highest quality ingredients.  Some of the workers they had hired were not as energetic or as interested in the success of their employers’ businesses, and did nothing on their own to further the interests of the company they worked for.

Within a few months, the woman’s personal income had dropped substantially, as the “profits” returned to her from the “profit pool” were significantly less than her business had been earning.  As her pie-making profits continued to fall, she was heartbroken to realize that she would now have to let two employees go.  The profits would no longer allow her to pay her employees what she had been paying them, give bonuses, and buy the health care coverage they had all shared.  Sadly, she terminated the employment of the two with the least seniority.

The loss of these two assistant pie-makers caused a sharp drop-off in earnings for her business, as she could no longer fill all her orders.  She referred some of her customers to the other pie-making businesses in her “pool” but soon, those customers stop ordering pies altogether, as the quality of the other pie-makers did not match what they had been receiving from the woman.

The pie-making pool’s profits continued to decline, and as they declined, some were facing bankruptcy.  The government’s law saw to it that the companies in the deepest of financial trouble were given the most money.  A new law came into being which stated that those with the greatest need would be given a larger share of the profits.  As the woman’s business was the only one still operating in the black, barely, she began receiving the smallest share.

Within a few months, the woman decided to end her enterprise, as it was no longer providing enough income to support herself and her remaining workers.  Her employees departed with tearful farewells, and she made pies, alone once more, until her stock of ingredients were gone.  When the last pie was baked and sent to its purchaser, she closed the door to her business for the last time.

The remaining pie-makers couldn’t make any profits and their own businesses continued to decline.  One by one they went out of business.  Finally, only one remained.  It received a large grant from the government to stay in business, as the country needed pie-makers so badly.  They weren’t very good pies, and customers had to wait a long time to get them, but at least “economic justice” was served.

Inspired by and with gratitude to Ayn Rand.

Be Sociable, Share!

• 

Tagged as: Ayn Rand, business competition, capitalism, economic fairness, economic justice, small business, Socialism