Thursday, January 13, 2011

Win-Win Free Enterprise System

During December, two discount stores were selling very popular items below the average price of the competition. First, it was E-Mart with their low-priced pizza, and then Lotte Mart joined in with their low-priced buckets of fried chicken for one third the price of the leading chicken delivery franchises.

What  was to be done? many were thinking.  'Dumping' to get people into the store is breaking the fair competition rule. E-Mart decided to keep selling its pizzas but Lotte decided to discontinue the sale. There was, according to Lotte, too much confrontation in society about the wisdom of selling at such a low price. Both discount stores only sold  a limited amount of the product, and they did not deliver. Many consumers had difficulty understanding why Lotte decided to discontinue the sale. It was the consumer who suffers and even the President agreed that the fried chicken on the market was too expensive.

The Catholic Times entered the discussion with an article on the issue, written by a  professor of economics. He agreed with the position that Lotte took to discontinue the sale of the fried chicken. It was going to put out of business many small stores. In the free enterprise system, success comes to the one who has a better product and competition is the driving force that makes this possible.  Much of the press sided with the discount stores in favor of the consumers. The professor saw another value.

The professor was happy to see that Lotte decided to be altruistic in its decision to stop its low-price campaign. He sees that as a healthy sign of our society, and dubbed Lotte's decision a win-win decision for all involved and a sign of introspection and self regulation. It was  a sign of  basing our actions on the dignity of man--one of the principles of Catholic spirituality-- and of the possible appearance of a new kind of capitalism. Since the beginning of  industrialization  of economic life, the professor goes on to say, the constant voice of the Church has been there to remind us to respect man's dignity. This would make for a healthy enviroment.

When the big corporations show this concern for the low-income competition, they will also receive acceptance and trust in return from the consumer, which will help them to  continue to excel in their field. This is enlightened self-interest, and good business practice. 

This way of thinking, the professor believes, is part of the Social Gospel. It shows a preferential option for the poor, the paradigm that we as Catholics should have not only in the world of big business but also in our daily lives. When those who invest, who consume, who produce, who employ and are employed--when all of us have a spirituality that takes this into account, we will have a win-win society.

1 comment:

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