Adventures in Economics

Great reads about business here and abroad.

Did you know that up until approximately 1800, the average daily wage for labor had not changed appreciably since the Stone Age? The average person in 1800 earned $1-$3 a day, as did the average person who lived 100,000 years ago. They each lived in extreme poverty. So, what generated all the prosperity we have now come to enjoy? The advent of free markets and specialization as envisioned by Adam Smith in his seminal book, The Wealth of Nations. The governments and businesspeople that put his ideas into practice have lifted billions of people out of extreme poverty in less than 250 years. Anyone who doubts that business and the free market has accomplished this need look no farther than China to see what freeing people from the yoke of communism has done for them.

Even though this has happened, there is still a lingering feeling among many people that business is morally suspicious. That is the subject of a timely new book, Honorable Business—A Framework for Business in a Just and Humane Society, by Professor of economics James R. Otteson, the Ryan Chair of Business Ethics at the University of Notre Dame. Otteson maintains that there are only two methods to attain wealth: extracting it from others through coercion or generating it by creating value for others with honorable business practices. His litmus test for what is ethical is very simple: Any willing transaction that creates value for both parties is ethical; any transaction that extracts value through means of theft, fraud or coercion is unethical. He states that all transactions up until 1800 were extractive, and that is why almost everyone lived in extreme poverty.

Honorable Business is filled with many examples that give great weight to Otteson’s assertions and demonstrates why business is an honorable profession—because it provides the wherewithal for all the improvements in people’s lives we have witnessed. I put more dog ears on this book than there are at the Westminster Kennel Club. This is an especially important book for all businesspeople in these times when young people are being led to socialism by teachers, professors and ignorant politicians who condemn business and the market economy. It exposes socialism as a destructive philosophy of wealth extraction, not wealth creation. That is why it has always failed and always will fail. As Margaret Thatcher said, “Socialism is fine until you run out of other peoples’ money.” Read this book and then give a copy to your children and grandchildren.

 

Flight Plan

Cross Winds by Steven Myers is a book about flying and entrepreneurship. Myers is an accomplished pilot and a renowned consultant to the aerospace industry. He was invited by the post-Soviet Russian government to look at business opportunities for their space program located on the Kamchatka Peninsula. The first half of the book is about flying his Aero Commander turboprop across Alaska and the Bering Sea down the Kamchatka Peninsula of Russia.

Myers thought he was the first American to ever make this flight, only to learn in 2017 that he was the second. The first was Charles Lindbergh, 60 years earlier. The preparations and planning for this adventure were almost as daunting as the flight itself. The state of disrepair of the airports and navigation systems he used as technical stops in Russia tested his skill as a pilot … and made for suspenseful reading. One doesn’t have to be a pilot to enjoy this section of the book. It is a lesson in how proper planning and preparation are valuable in any endeavor.

Myers did find an exciting business opportunity: refueling cargo jets coming out of Asia going to the United States. He realized that Petropavlovsk was the ideal location, and could substantially reduce costs for cargo operators. This should have been a home run. His story of what it took to develop the business and operate it is a great lesson for anyone interested in doing business in Russia. This was a golden opportunity for the people of Petropavlovsk and Russia in general. The effort it took to deal daily with theft, corruption and alcoholism is a testament to the ingenuity and fortitude of Myers and his people. It is also an insight into why Russia, with all its resources, is rapidly becoming a second-rate power. This is a shocking tale of power and corruption that is well worth reading.

RALPH STAYER, an avid reader and former CEO of Johnsonville Sausage, leads a book club in Naples with about a dozen other high-power friends. The group only reads non-fiction as a way to keep learning and sharpening the mind. Every month, Stayer shares the latest page-turners earning a permanent spot on his ever-expanding bookshelves.