Pursuant to the generic modus operandi, a brief recap. In previous parts, having professed that profit is the only logical pursuit at all levels, including the state, reflections had deduced that profit making skill is a birth right. It cannot be taught nor can it be inherited and the specific characteristics are infused in that element of humanity which science continues to struggle with. Essentially, profit-makers are like gold, and there is never an alchemist around when you need one.
Desiring riches and confounded on every other avenue, the final option is to pick a pan and venture out to prospect for profit-makers. Emphatically, a profit-maker is the primary ingredient for quantitative success and there are no two ways about it except for finding one. Nonetheless, one needs to be weary of "fool's gold".
"A person is born with a liking for profit" Xun Zi. Respectfully adding to this astute observation, all persons are, however, not born with the skills to make profit. Prior to delving into the current topic, with a view to placate and intrigue the impatient readers, an overview of what is to follow in this series might be fruitful. As currently perceived, once having headhunted profit-makers, the next hurdle is to disentangle the myth of business residing outside the domain of the state, followed by contemplating causes of state's failure to make profits, ruminating upon the optimum profit making environment, mulling over the ideal businesses for state intervention and so on so forth. A corollary: brainstorming is always more productive if it is interactive, accordingly it would be encouraging to get comments and feedback as this journey continues into the realm of profit.
"Civilisation and profit go hand in hand" Calvin Coolidge Moving ahead with the quest, it is necessary at the very beginning to distinguish between a profit-maker and a profiteer. The dictionary meaning of a profiteer is a person who seeks or exacts exorbitant profits, especially through the sale of scarce or rationed goods. Given the circumstances almost anybody, with a bit of common sense, has the wherewithal to be a profiteer. While some will quickly point out that common sense is in itself a scarce resource hence profiteers should qualify as well, nonetheless profiteering has a negative moral and ethical connotation and entrusting national assets to profiteers verges on insanity. Profit-makers are a creed who can churn a profit by selling the proverbial deep freezer to Eskimos.
Obviously there are no distinguishing marks to identify profit-makers at birth. As in all cases, the taste of the pudding is in the eating, which bespeaks a focus on people who have demonstrable and proven profit making skills ad rem. Sadly, unless the obvious are sifted for the probable, the antagonists, who benefit from the status quo, will remain defiant.
Perilously, shuffling through the bon vivant is an exercise in futility. Spending on a luxurious life does not necessarily imply that the person is a profit-maker. Inheritance, profiteering and/or theft might simply account for the extravagance. In any case while profiling profit-makers in Part III, it became evident that profit-makers loathe spending their hard earned money foolishly and therefore may not even be frequenting the jetsetters club. A list of the 100 richest men in the country may not necessarily mean that they are also the top 100 profit-makers. On a lighter note, this particular task can take an inordinate amount of time as estimates of undisclosed wealth will at best be feckless.
Regardless of having earlier established that profit making can't be taught, there is a need to tackle the economist issue. It is a generally accepted principle that businessmen are unsuited to manage state finances primarily due to their inexperience with development spending and its consequent impact on the economy. First off, businessmen is a broader term, we are concerned with successful businessmen residing on top of the food chain. A number of MNCs have budgets larger than most countries and effectively operate globally; it would be surprising if their CEOs were inept at understanding the global economy. Even if that was the case the necessary resource is a commodity.
Secondly development spending is subservient to available resources. Bill Gates is a heavyweight philanthropist because he earned more. People like him contribute more to society through funding charitable initiatives as compared to giving personal time to community service. Admittedly, taxation is a powerful weapon in the government's arsenal to generate resources; however its prodigious use makes it comparable with a WMD. In addition the recent global financial crisis cast doubts on a government's ability to raise taxes and/or to nudge the populace towards austerity.
"Nobody ever lost money making a profit" Bernard Baruch
In substance, a profit-maker is needed to initially generate resources and thereafter an economist can always be commissioned to assist in spending it wisely. In any case try recalling a rich economist whizzing around the globe in his personal Gulfstream?
"If writers were good businessmen, they'd have too much sense to be writers" Irvin S. Cobb. This probably is equally true for other professionals as well, including economists.
The "Self Made" man is the next category to be wrestled. As wisely articulated by a fellow golfer, everyone, good or bad, is self-made. Curiously, every successful man claims to be self-made and every unsuccessful ones blames luck or circumstances. Accordingly, self-made cannot be a mandatory attribute of a profit-maker. While the incumbent may have been fortunate to inherit wealth, what he did thereafter is the deciding factor.
Having narrowed down the "usual suspects", there is a need to stratify further. Rent extracted from land ownership strictly falls outside our definition of profit making. While land is a scarce resource, deriving economic benefits therefrom probably is not profiteering. Nonetheless, it is also not rocket science.
"As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce" Adam Smith
Lastly we need to discount politicians, the final contenders. The fundamental difference between the two explicitly differentiates them. While profit is the aphrodisiac of the profit-maker, power is the drug of choice for a politician. Ultimately, John F Kennedy, a politician reaffirms that they are different, "My father always told me that all businessmen were sons of *****, but I never believed it till now". This gem was apparently uttered while negotiating with the profit makers during the Steel crisis.
Having eliminated the pseudo segments from the sample the residue are the profit-makers. They are obviously affluent, may be self-made or may have inherited wealth, may or may not have university degrees, are not from the landed nobility or aristocracy and are not politicians.
Ignoring JFK's characterization but recognising that they are a breed apart, profit-makers are simply successful businessmen who have made profits.
"Well, you know, I was a human being before I became a businessman" George Soros
John D. Rockefeller, J.P. Morgan, Andrew Carnegie, Sam Walton, Steve Jobs, Warren Buffet, Bill Gates, Carlos Slim Helu, all belong to this exclusive cadre. Each and every country has its own share of profit-makers and historically, nations who entrusted their national assets to domestic profit-makers rank as the developed nations of the world today. Just peek across the border and observe the leverage and privileges enjoyed by businessmen and consequently what they have done for their country. Left alone and given a decent chance, a profit-maker will always be loyal to the habitat he thrives in.
Pakistan has its fair share of profit-makers, in each sector and industry, and given the criteria postulated above they can easily be spotlighted. With a view to remaining neutral while persevering with musings on profit, examples have deliberately not been included. However, remarkably, and contrary to norm, our profit-makers are themselves reluctant to step out into the limelight. Do they fear persecution or is it simply unprofitable for them to take this responsibility? Let the readers decide.
To elaborate and summarise earlier deliberation, the philosophy being expounded is not that profit-makers be entrusted with governance or the finance ministry for that matter, it is simply that they be entrusted with the national assets and allowed to operate in an enabling environment in the best interest of our beloved nation.
That brings us to the next question. Assume that Pakistan's profit-makers stand identified, which kind of encouraging environment, political and regulatory, will be needed for them to take up the mantle. Almost as importantly, which national assets are critical for this kind of intervention? The centuries old riddle, to nationalise or not to privatise! These questions will be taken up in the next part of these ramblings of a golfing accountant!