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What’s Wrong with Traditional Capitalism

The ad starts off with “We’re making changes to make things right.”  This is the latest television ad campaign for Wells Fargo.  You may remember, or have been a victim of, their practice of creating millions of new bank accounts for their customers in order to meet sales quotas and win internal sales contests.  The only problem was the individual customers did not know of or approve the creation of these new accounts in their names. 

The ad continues by listing the three changes being made to make things right.  (Insert the background video of running horses pulling a Wells Fargo stagecoach through the Western country-side for dramatic effect.) 

  • Fully refunding those impacted 

  • Proactive new account confirmations 

  • Elimination of product sales goals (putting your interests first) 

Really?  Accounts shouldn’t even be created unless initiated by the customer.    Goals should always have been to put first the interests of the customers, not to see how many accounts could be opened. 

The Wells Fargo story serves as a perfect example of what has given capitalism a bad name over the last one-hundred fifty years or so since the advent of the industrial revolution.  For this entire period, profit was made the primary goal.  Customer service and the rest of it all took a back seat.  The results have led to unwise and inefficient use of natural resources and inequitable exploitation of labor that resulted in an unhealthy competition between business and labor unions.  We created an education system in support of this profit-priority capitalism that we’re just now starting to convert to a system that will produce the best innovators in the world instead of laborers willing to work in repetitive, non-creative environments.  Traditional business and entrepreneurship curriculum supports this idea that profit is the primary goal.  This is the reason I don’t like or use traditional business or entrepreneurship curriculum 

Here’s our message to today’s entrepreneurs and business owners.  The primary goal of business should always be to provide the best solutions and services always putting the customers’ needs first.  If you do that in the right way, people will gladly pay you for these solutions and thus, provide the profits you need.   All the successful businesses I know concentrate on providing excellent services while charging enough to be profitable.  That’s a big difference in philosophy; one that leads to great customer loyalty and plenty of profitability. 

Jim Correll is the director of Fab Lab ICC at the Center for Innovation and Entrepreneurship on the campus of Independence Community College. He can be reached at (620) 252-5349 or by email at jcorrell@indycc.edu. Archive columns and podcasts at www.fablabicc.org. 


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