Coyote Blog

I accidentally watched a few minutes of a morning show today, something I try really hard to avoid.  Matt whats-his-name was interviewing Richard Branson, and they were talking about the importance of corporations "doing good".  Once startups get going, Branson said, they need to start doing good for people, meaning I guess that they buy carbon offsets or something.

Guess what?  If my startup is succesful, I am already doing good.  I can't make a dime unless I create value for people net of what they pay me.  Every customer walks away from our interaction better off, or they would not have voluntarily elected to trade with me (and if they are not better off, I will never see them again and I will find lots of nasty stuff chasing future customers away on the Internet.)  I am tired of this notion that a succesful business person's value can only be judged by what he or she does with their money and time outside of business.  I understand the frustration with a few Wall Street and GE-type executives who are living like fat ticks on their connections with government, but most of us only are succesful if we do something useful.

This, from Carpe Diem, is along the same lines.  He looks at an editorial from the DC paper about the entry of Walmart, which says among other things

Despite the peacocking by Gray and others after the agreement was signed, the District is receiving mostly crumbs. Walmart has committed to providing $21 million in charitable donations over the next seven years, an average of $3 million a year. That's a pittance."

Walmart does not have to do squat for the community beyond its core business, because selling  a broad range of goods conviniently and at really low prices is enough. Or if it is not enough, they will not make money.  The promise of $21 million to some boondoggle controlled by a  few politician's friends is just a distraction, I wish they had not done it, but I understand that this is essentially a bribe to the officials of the DC banana republic to let them do business.

Postscript:  I have no problem with doing charitable work outside of work.  Both my company and I do, by choice, though unlike Richard Branson I don't need to have a crew of paid PR agents making sure everyone knows it.

Via Volokh:

Richard Branson is offering a $25 million prize for the development of a technology capable of removing carbon dioxide from the atmosphere.

I Win!

OK, I get that he is actually looking for some solar-powered device that plates out carbon from the air on a cathode, or whatever.  Or maybe a big nuclear-powered Air Products plant pumping liquid CO2 down an old oil well. 

By the way, I wonder if it will occur to anyone that if you really want to offset carbon, you probably need to clear cut old growth forests, bury the logs, and plant new trees.  I would guess that a newly growing forest absorbs a lot more CO2 than old-growth redwoods (anyone know?)  And no, I am not really suggesting it.  I got in enough email hot water a year ago when I suggested that if global warming was really to become a problem, we could reverse it pretty quickly with about 30 man-made Krakatoa's, made from the creative use of some of those H-bombs still lying around.  Maybe we could even use them to dig a new canal across Nicaragua, killing two birds with one stone.

Anyway, I like Branson's idea.  This kind of price approach has yielded some interesting results in other fields.

I have never been a Richard Branson groupie, but I must say for once I am appreciative of his efforts.  Branson has helped to make crystal clear the process by which governments take control of the economy.  The story comes to us via the Mises Economics blog, and starts this way:  According to Branson:

"The big oil companies are making extortionate profits out of the current oil
price," he announced, in his most calculating, populist style.

How anyone who runs the Virgin Megastores can complain about someone else's high pricing is beyond me, but lets let him run a little further:

"The biggest problem with the oil price is the lack of refinery capacity. There
is enough oil for everyone in the world, but the refineries are just not there."

And they are not there because...governments do not allow oil companies to build new refineries.  The government having created the problem, the solution would seem to be for the government to repeal the offending restrictions that caused the problem.  But here is where we get to the great tool of statism:  The problem created by the government is blamed on private enterprise and "market failure" and portrayed as necessitating... more government intervention:

"There has been talk of a windfall tax on big oil companies. Perhaps the
Government should use that money to invest in refinery infrastructure."

Of course, the big oil companies would invest those windfall profits in refining capacity on their own had they been allowed by government, but lets ignore that messy detail.  Ahh, but here is the best part.  Not only does the government now get to invest in refineries, but it gets to do it by channeling the money to the political supporters (i.e. Branson) of those in power, thus cementing their power and control.

According to the paper, Britain's favourite "entrepreneur" aims to put $100
million behind his latest scheme to build an oil refinery for airline fuel. Yes,
the Bearded Wonder is said to be about to launch a new company called - you
guessed it! - "Virgin Oil" within four or five months and is "seeking to attract
funding from other airlines and the Government...."

But, not content with this, our man from the tropical paradise has scented an
easier mark, for Sir Richard has seemingly exploited the crass celebrity-worship
of our New Labour masters, while also playing up to our ineffable Chancellor's
ever present desire to meddle in the markets.

For those of you who have held up Branson as some archetype of entrepreneurship: Stop it.  Here you see a man who is attempting to finance his entry into an industry by getting the government to take money by force from the current competitors in that industry and to give it to him to finance his startup.  I have always suspected Branson of being from the Orrin Boyle school of business and this just proves it.

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