“Big business is the ideal social institution.” — Peter Drucker
Personal Note: Today is the 80th anniversary of D-Day. I salute all those soldiers who have sacrificed their lives so that we could live free.
Special Announcement: I’m happy to report that our full schedule of speakers, panels and topics at this year’s FreedomFest have now been posted. Check it out here: 2024 Speaker Lineup – FreedomFest. To join us this July 10-13 in Las Vegas, register here or call Hayley at 1-850-855-3733 ext. 201. Add code EAGLE50 to get $50 off — discount ends July 1! You can also email her with questions at hayley@freedomfest.com. See you in Vegas: Fly there, drive there, bike there, be there!
Last week, I attended the memorial service for my longtime newsletter publisher Tom Phillips. His four children spoke about Tom as a father, and others lauded his philanthropy in giving to good causes like the Young America’s Foundation and the Fund for American Studies, and his support of political campaigns.
Afterwards, the family organized a luncheon, and I was asked to speak.
I told the audience that his generous giving to good causes would never have taken place if it wasn’t for his highly profitable business enterprises.
Tom started his career as a publisher out of his garage in Chevy Chase, Maryland, with $1,000, and over the years built it into Phillips International, with $350 million annual sales and 500 employees by the year 2000.
In 1980, he started publishing my investment newsletter, Forecasts & Strategies. It turned out to be hugely successful, coinciding with the election of Ronald Reagan and the beginning of a 40-year bull market in stocks and bonds. By the early 1990s, over 75,000 investors subscribed.
In short, Tom made me rich through monthly income and quarterly royalties. We worked together as a partnership, each of us entrepreneurs and risk takers. I wrote the newsletter every month, giving timely investment advice, and he promoted, printed and fulfilled it.
He kept the lion’s share of the profits, but that was okay with me. Tom was tied down to his Maryland-based headquarters, while I had considerable freedom to live anywhere in the world (the Bahamas, London, Orlando, New York, California). We both benefited from this arrangement.
As the newsletter made more money, he made more profits, and I earned more royalties. It was “win-win.” We had few disagreements in our many years of working together.
My newsletter’s success allowed Tom to expand his business to include other newsletters on investing, retirement and healthy living (his vitamin business was hugely profitable).
How Everyone Wins Under ‘Democratic Capitalism’
Tom was a great businessman who treated his writers, his staff, his suppliers and his customers with generosity and fairness. He rejected the old-fashioned view of capitalism as a dog-eat-dog world of exploitation and selfishness.
He adopted the “stakeholder” philosophy of profit sharing (with year-end bonuses) and doing good. He was famous for taking his entire company to Disney World in 1993 and on a Disney Cruise in 1998.
Nor did Tom become a Scrooge investor, burying his fortune in a money bin and keeping it all to himself. Granted, he did live in several mansions and drove a Rolls Royce, but he also was liberal in promoting good causes and charitable works.
Tom gave millions to a variety of organizations, such as Young America’s Foundation and the Fund for American Studies. He helped create the Robert Novak Journalism Fellowship program, and the purchase of the Reagan Ranch in Santa Barbara, California.
He reminds me of Arkad, The Richest Man in Babylon:
“In old Babylon there once lived a certain very rich man named Arkad. Far and wide he was famed for his great wealth. Also was he famed for his liberality. He was generous in his charities. He was generous with his family. He was liberal in his own expenses. But nevertheless, each year his wealth increased more rapidly than he spent it.”
The Vital Role of Business in Society
In my textbook, “Economic Logic,” I highlight the importance of business as the ideal social institution. As John Mackey, former CEO of Whole Foods Market, states, “Corporations are probably the most influential institutions in the world today.”
And MIT professor Sholom Maital states:
“The health and the wealth of a large number of individual businesses — small, medium and large — determine the economic health and wealth of a nation. When they succeed, managers create wealth, income and jobs for a large number of people. It is business that creates wealth, not countries or governments. It is businesses that decide how well or poorly off we are.”
I would add: Business is a vital source of funding charities, churches, non-profits and other good causes, including free-market programs around the world.
Major corporations do a much better job than government in providing benefits to the average citizen — good paying jobs, paid vacations, healthcare, new training and retirement. As management guru Peter Drucker states, “Big business is the ideal social institution.”
‘Economic Logic’ — The Only True ‘Business’ Econ Textbook!
In reviewing business textbooks used in college MBA classes, I noticed that they are nothing more than standard econ textbooks with a cover called “Business Economics.”
My “Economic Logic” textbook is different. Students love my textbook because it is based on common sense and real business experience.
Only after learning the ropes of the business world and high finance for 30 years, I decided to write my own “Economic Logic” textbook.
Three Ways My Economics Book Is Unique
Based on my “real world” experience, my textbook is very different from other academic works in three significant ways:
First, instead of the traditional approach of starting with supply and demand diagrams (which can’t be drawn in real life!), I begin with the profit-and-loss income (P&L) statement. I’m the only economics writer to do so.
The P&L statement does so much more than supply and demand curves to demonstrate the dynamics of the economy — why new and improved goods and services are constantly being created, why some companies flourish and others go out of business, etc.
In fact, using the P&L statement, I show that there is NO equilibrium in the economy — the quantity, quality and variety of goods and services are constantly changing.
That’s not to say supply and demand diagrams aren’t useful. They are, and I introduce them in chapter six.
Second, I reject the standard “circular flow” diagram in favor of the “structure of production” model using a general “four-stage” model of the economy, which is more realistic of how the economy actually works.
Third, I introduce gross output (GO), the new “top line” in national income accounting, and fully integrate it with gross domestic product (GDP) as the “bottom line.” Students, especially business students, love my new approach.
As Sir John Hicks (Nobel prize economist) writes, “The concept of production as a process in time… is the typical businessman’s viewpoint, nowadays the accountant’s viewpoint, in the old days the merchant’s viewpoint.”
My textbook also benefits from my living in six countries and traveling through all 50 states as well as 78 countries.
And yes, I do devote an entire chapter to investing and the financial markets, essential for a vibrant capitalist system.
How to Order ‘Economic Logic’ at a Super Discount
“Economic Logic” is THE guide to sound economics, all in one book. It’s ideal for students and adults alike and is used in introductory courses in colleges around the country. It is now in its new 6th edition published by Capital Press/Regnery.
It is a 738-page guidebook on all aspects of sound free-market economics. It is dedicated to Milton Friedman and Friedrich Hayek. Read the book and see why.
For all the details, including chapter headings, click here.
The price on Amazon is $82 plus shipping, but if you order through www.skousenbooks.com, you pay only $44. I autograph each book and mail it at no extra charge anywhere in the 50 states.
What Economists Are Saying
“By number, the top five books in my home library are: Hayek, then Mises, then Keynes, then Sowell, then Skousen’s Economic Logic!” — Steve Hanke, Johns Hopkins University
“Eureka! Skousen has done the impossible. Students love it! I will never use another textbook again.” — Harry Veryser, University of Detroit-Mercy
“Mark Skousen is the only economist I can understand.” — Dr. Lawrence Hayek
“An excellent balance of theory and the real world that no other text has achieved.” — Charles Baird, California State University, East Bay
“Better than any book out there! Skousen presents real business economics in a clear, provocative and logical fashion.” — Ian Mackechnie, University of Wales
“Perfect for any economics student — designed to maximize learning while minimizing monotony. Simple, direct and comprehensive.” — K. Au, Homeschool instructor
“My college econ classes, filled with perplexing theories like the paradox of thrift, GDP and Keynesian fiscal policy, were completely refuted by this excellent free-market textbook. Students, if your professors don’t use this text, get it for yourself so you can really understand the concepts of sound economics.” — Amazon review
Good investing, AEIOU,
Mark Skousen
You Nailed it!
Bill Walton, Happy Warrior, RIP
Last week, Bill Walton, one of the greatest NBA players and a dynamic color commentator, died last week of cancer. I always admired him, despite our differences in politics.
I met Walton one time at the Milken Conference, where he told us in excruciating detail about the two-and-a-half years he was flat on his back suffering from a life-changing back injury. He had to crawl to the bathroom and had to have his food served to him. He thought of committing suicide many times.
He describes the entire story in his autobiography, “Back from the Dead.” The title is a play on his painful injury and his favorite band, “The Grateful Dead.”
Walton narrates his story with great gusto — from growing up to his life in the NBA and beyond — without the use of vulgar language (highly unusual in today’s world of cultural decline).
Courtesy of Shutterstock.com.
I’m listening to the audiobook now and thoroughly enjoying it. The book is available in paperback or audiobook on Amazon. Click here to check it out.
Highly recommended.
Interesting that when Walton showed up to play for John Wooden’s UCLA team in the early 1970s, he told his coach that he would not cut his hair or his beard to play for UCLA. Even though Walton was the #1 ranked college center in the country, Wooden thanked him for coming to UCLA but he would not be wearing a UCLA uniform. Walton left and in half an hour came back clean shaven and ready to play for Wooden’s team, and went undefeated for 100 games.
Walton and his coach Wooden couldn’t be more different in their politics and cultural attitudes and dress, but they stayed close friends for the next 50 years, talking to each other almost every day.
Walton continued his career in the NBA winning MVP and leading the Portland Trailblazers to the NBA championship in 1977. He spent half his career on the bench due to painful foot injuries… and ended his career playing backup center for the Boston Celtics.
His story does have a good ending. Walton benefited from a new form of back surgery and fully recovered, and was able to continue his career as a color commentator in NBA and NCAA games, especially when his alma mater UCLA played. Will miracles never cease?
