Over the years, it has become increasingly difficult to discuss the power and challenges of global capitalism and laissez-faire philosophy to the average student. Here is a quick sports analysis of economics.
First, every business or worker is similar to an NBA or NFL team. Each team competes against many other teams who have: players, owners, managers, rules along with regulations, taxes, and neigborhoods.
Here are 12 tenets to help people understand what affects the success of a nation, team performance, team players, capitalism and fair trade.
- In economic theory, the team or stakeholders are composed of: your company, your customers, your community, your employees, your suppliers, and your investing risk takers.
- On any sports team, you may have one top player who is excellent at what they do, and you take advantage of that person being on your team. A great team member changes the entire ability of your organization to excel, create or compete. Example: The Basketball or Football Legend such as Michael Jordan or Tom Brady
- Major challenges to organizations would be: how to reward your top players, how to incentivize the rest of the team to support each other. One might ask: “Is it fair for Michael Jordan to get the ball more than others or shoot too much?” It is right and fair for other players to learn how to best feed the ball to the top player to score.
- As for recruiting, if your organization or country can strategically recruit team members from diverse regions of the country and the world, you could secure the best talent based on skill and competency.
- Even when you have a superstar player who is an incredible at scoring against the other teams, you cannot succeed unless you have smart coaches, smart players, smart schedule, a great offense, smart defense, smart play calling strategy, and healthy players. If the players on YOUR TEAM do not maintain their health, skills, or continue to contribute, it will hurt the entire team and the community at large.
- If the team succeeds, it puts food on the table for the: community, staff, coaches, players, families, and so forth in the form of: revenues, jobs, tourism, rights, ticket and merchandise sales and more.
- If your team or country is competing against 180 other teams or countries, wouldn't it be smart to allow your people to compete without excessive regulation, toxic fees, debilitating taxes or penalties. If you don’t reward and compensate your team producers, will they underperform? Will they leave to go to another country? Or take their technology offshore to another team? How much does our local economic environment tax the team corporation, how do you tax the players, how are tickets taxed etc. If taxes or regulations are too high, will players or owners go to another team, city, or country to play?
- Shouldn’t we, as citizens, applaud all those who contribute to the government in “for profit” activities? Remember that big earners are the big contributors to the government? The average superstar athlete or CEO only makes big money for just a few years and pays huge taxes to government when he or she earns big, and pays taxes to both state and the federal governments.
- Without profits, no company survives. If every business was not-for profit, the government could not feed our orphans and widows, build roads or schools, or pay government teachers, police, and employees. Without profits, the community fails, the team players lose their jobs, the suppliers fail, the public schools fail, teachers lose their jobs, hospitals go broke, and the investors take their money elsewhere.
- If the local opportunities for investment are unreasonable, then the “investment cash” will flow to the other 180 jurisdictions who have cheaper business environments such as Mexico, Japan, China, UAE, Kenya, India, or the Philippines.
- There is nothing wrong with the other teams or countries, but the fact remains that, your local team needs to build its own schools, fix roads, construct hospitals, and feed local widows and orphans as a priority so that the team can produce and work in a sustainable environment .
- As a note, some innovators and inventors are creating services and products that DO NOT compete but rather solve problems such as disease, suffering, disasters, or just mitigate regular problems. Thus, the economic pie continues to expand with innovations of: science, internet, communications, medicine, technology, globalization and more.
These are just a few economic 101 lessons regarding competition between nations or teams. Yes, we need team players and superstars to cooperate, innovate and compete in this global economic environment, but we also need to realize that a team must have a sustainable business environment conducive to success to compete on a global level against other states or other countries. As an example, New York lost the multibillion dollar Amazon relocation deal due to an adverse economic environment.
In contrast, President Donald Trump created a tax incentive for companies to bring money home where billions came back to the U.S. and some of the money was used to buy back stock from U.S. citizens which created vast tax revenues on the state and federal levels.
With 96% of the world’s population outside of the U.S. and 40% of the S&P revenues coming from offshore, the U.S. in particular must sell to customers of other nations to grow the economic pie for everyone around the world which would increase global productivity, global health, and global prosperity. Amazingly, poverty has been reduced globally in a dramatic fashion in the last 75 years, and the expansion of business friendly forms of capitalism is chiefly responsible. Moreover, U.S. companies are routinely taking advantage of economic climates and jurisdictions offshore which are more business and employee friendly which increases availability of U.S. products and services worldwide while profits can effectively be brought home under the new Trump Tax Code.
Technology and globalization has crushed the old ideas regarding taxation and free markets. Given enough bureaucratic intervention, people and business will leave the U.S. and establish companies offshore to sell stuff to the rest of the world’s 96% of the global population. Recently, even Uber set up offshore tax schemes just like Google and other big players to retain earnings offshore which limit payments of U.S. federal and state taxes. This is the direction that global business is headed, and we must continue to enhance laws and regulations to make sure that local workers have localized opportunities for the American Dream so that our local team players may create and innovate in an entrepreneurial friendly environment.
Remember, it not about having the lowest taxes, it is more about being one of the top countries to work and do business in the world.
George Mentz JD MBA CWM Chartered Wealth Manager ® is a licensed attorney and CEO of GAFM ® global education, which is an ISO 29990 Certified professional development company operating in over 50 nations. Mentz is an award winning author and advisory board member to several companies around the world in education, charities, and crypto currency.
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