Do entrepreneurs run business honestly and create jobs?

[Copy from this article, as I liked perspective]

‘These are thousand times better than our neighbourhood grocery store,’ my wife told me, as I was about to help myself with a snack of scrumptious khakhras, a traditional Gujarati preparation.

‘And guess what, these are also 50% cheaper than what the grocer sells us. I bought them directly from the factory premise where they are mass produced and therefore saved up on the grocer margins,’ she added.

That’s not all she had to share with me.

She was a bit dejected with the scenes she saw at the factory. There were scores of poor women sitting in a long line. Each one of them working in tough conditions and going through the process of manually flattening balls of dough and then roasting them and creating the final product.

‘Don’t you think the system is a bit unfair? These and millions of other workers toil away day in and day out. Yet it is the owner of the factory or the middlemen like the grocer who walk away with most of the profits,’ she said with a tinge of sadness in her voice.

It was easy for the emotional brain to fall prey to her story. The system does indeed appear to be loaded against people who toil but only walk away with a pittance.

However, just as my heart was about to fill up with sympathies for the women workers, I invited views from my rational brain. I was curious what defence it could come up with. It didn’t take long for it to argue that my wife was taking a narrow view of things, however kind-hearted.

Agreed – the owner of the factory gets to walk away with maximum profits, but what if there’s a loss? Wouldn’t he have to bear the losses also if the venture is unsuccessful? Will the workers work for free if the business isn’t making money? Of course not. As soon as the monthly paycheques stop coming in, they will pack up and look for another job.

It is the owner who will lose his hard earned capital, quite possibly his entire life savings. I reasoned with my wife that there could be many crony capitalists in the country who don’t deserve their millions and billions. Also, the conditions the women were working under may not be ideal.

However, to assume every entrepreneur is cut from the same cloth is wrong. There’s always this tendency to paint wealthy business owners as villains. It is as if the only way the rich could have become rich was by making the poor poorer. Nothing could be further from the truth. Entrepreneurs take on massive risk. If they fail, they can lose everything. But if they manage to bring to market an innovation that people value, they have rightfully earned their success.

Our country can definitely do with the right kind of entrepreneurs – those who can go about running a business honestly and create jobs in the process. Painting each and every one of them as a villain and creating problems for them doesn’t get us anywhere. Indeed, it only delays our march towards growth and prosperity.