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Winners and Losers-Market Decides Best

Jim Correll, director Fab Lab ICC at Independence Community College, Independence Kansas 

When it comes to a pandemic, most of us have only experienced this one, so it’s all new, but the idea of some government official designating certain businesses as “essential” and others as “non-essential” is a lot like the idea of the government deciding which businesses are winners and which are losers. Even though essential/non-essential has a softer edge to it, the perception remains, you are either worthy, i.e. essential, to be open during the pandemic or you are not worthy, i.e. non-essential; winners and losers. 

I can’t think of a fair way to determine which businesses to shut down during a pandemic and maybe we won’t have to turn the economy off any more often than once every hundred years or so due to a pandemic, but we should be very careful when we go down the slippery slope of allowing the government to choose winners and losers. 

Some Reality Shows Improve Contestants' Lives 

Wife Susan and I really enjoy the segment of "reality" TV that celebrates and showcases talent and skill. "The Voice" just finishing it’s 17th season, the season-ending “live” shows conducted over the Internet with no live audiences, puts much emphasis on coaching the contestants to help them each become better performers. Since music is an integral part of so many of their lives, win or lose, the whole "Voice" experience improves their lives. So, when we watch, we not only see and hear great performances, but we see the contestants grow in their skill and self-confidence each week. Since I make my living helping people improve their skills and self-confidence it's a very enjoyable experience for me to watch the show and follow the contestants. 

Not a Good Predictor of Winner and Loser 

Still, it is a contest. America loves the contest where winners float to the top and "losers" go home. Every week, the contestants are pared down, the winners moving on and the losers going home. The implication is that the winners will make it big in the music industry; the losers may not. In reality, many of the losers can make it in the music business too. The marketplace of entertainment audiences will best decide. All contestants, making it to the TV shows regardless of whether or not they win have a great opportunity. The exposure to millions of viewers gives them a shot at the entertainment business, seeing if there are customers that will buy what they have to offer, a great performance. "The Voice" is good television and sells a lot of advertising, but it is not necessarily an accurate predictor of who is really a winner or loser. 

So it is with various kinds of business or business plan contests and even TV shows like "Shark Tank." Participation is a good experience, but whether or not a particular business or business idea is selected as a "winner" is not a good indicator of whether or not the business will actually work. The marketplace, with all its customers and all their various needs is really the ultimate judge. That's why, in all the training and business coaching we do, we emphasize the need to start small and make some sales before trying to determine if a business idea is good or bad. All of us that are in the business of supporting businesses, teachers, coaches, economic developers, chambers of commerce, etc. are really not very good at knowing whether or not a business idea is good or bad. Only the market can determine that. 

Marketplace Best Determines Winners and Losers 

In a previous column, I pointed out the fallacy of the fundamentals of socialism at least the part about everyone receiving the same regardless of effort. People don't do their best work when they know they are getting the same reward regardless of results. In many developed socialist models, the government ends up determining which business ideas are good in a centralized or managed economy. Thus, the government chooses the winning and losing business ideas. Governments will never be any good at choosing anything like that. Only a free marketplace can best choose the winners and losers. Hopefully, by the next time we need to shut down the entire economy, we will have developed a better system of knowing who should stay open and who should close.  

Jim Correll can be reached at (620) 252-5349, by email at jcorrell@indycc.edu or Twitter @jimcorrellksThe views and opinions expressed in this column are those of the author and do not necessarily reflect the policy or position of Fab Lab ICC or Independence Community College. Archive columns and podcasts at jimcorrell.com. 

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