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Promote the Values of Principled Capitalism

Chairman's Column - February 2016

Richard W. Schwartz, NAW 2016 Chairman of the Board, and Chairman of the Board, Winsupply, Inc.

A disturbing trend is occurring that has already impacted America’s economic freedom and appears to be getting worse. While millions of people worldwide are moving from poverty to the middle class thanks to the rise of free enterprise capitalism, America is moving further from free markets. Even worse, the majority of our young people appear to believe socialism is a better choice.

The 2016 Index of Economic Freedom, an annual publication by The Heritage Foundation, shows the United States has slipped from 6th to 11th place among the freest economies because of more government regulations, higher government spending, and rising debt — all contributing to our underperforming economy.

Many young people seem to think that’s not a bad thing. In her January 29 Wall Street Journal column, “Socialism Gets a Second Life,” Peggy Noonan observed that younger generations have no memory of the failures of socialism and are responding to a message from Senator Bernie Sanders that says, "We are in terrible trouble because our entire system is rigged, the billionaires did it, they are the beneficiaries of the biggest income transfer from the poor to the rich in the history of man, and we are going to stop it.” To young people socialism is a new idea, Noonan wrote, that promises free education, high minimum wages, single-payer health care, and income equality.

The capitalism versus socialism perspective is certainly shifting. A national survey earlier this month by Pew Research Center found most Americans saying the federal government doesn’t provide enough help for the middle class. And Democrats said the government needs to do more for the poor and for older people. 

But, as Margaret Thatcher said, “The problem with socialism is that you eventually run out of other people’s money.”

A nationwide Marist poll in November showed 60 percent of Democratic voters under the age of 45 supporting the democratic socialist Sanders over Hillary Clinton. And no wonder. Many of our universities have been pushing socialism for several generations. The prevalence of left-leaning news media and social media further promotes the idea that socialism is a better way.

At the NAW Executive Summit last month, our company sent three young, up-and-coming people in our organization to expose them to the NAW values and expertise available to help them grow personally and professionally. They networked with other key association and industry peers. We are trying to ensure that they understand that these associations and relationships helped bring us to the dance and are making us more successful.

There’s another important reason we sent them. We feel a higher calling to instill the principles of free enterprise capitalism. This system respects private property and limits government, encourages competition and industry, celebrates achievement based on merit, and creates individual opportunity.

The wholesale distribution industry provides personal satisfaction and earned success through actually building a business. We have the satisfaction of building customer and vendor relationships, building efficiencies in the channel, buying and selling as a career, and the personal financial rewards that come with these.

Ultimately, free enterprise is about freedom. It can best be summed up in our Declaration of Independence with this moral promise: We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

It is this freedom to pursue happiness and fulfillment that helps America thrive. In his December NAW Chairman’s Column, Manny Perez de la Mesa wrote, “This ability of free people to exercise choice and be rewarded is why free enterprise has unleashed the power of the people.”

This is something we want to ensure that young people understand. Our company, Winsupply, was formed with an entrepreneurial spirit. When our younger generation employees come to business meetings and get involved, they start to get it. From the very beginning, our company has had a shared ownership business model in which the vast majority of our locations has management and employees who have an equity stake in the business, giving them pride of ownership, a sense of achievement, and financial rewards.

In his book, The Road to Freedom, author Arthur C. Brooks wrote: “Earned success, not materialism and government redistribution, is the way to understand the Founders’ moral promise of the pursuit of happiness in America today. The free enterprise system allows the most people to earn their success, going far beyond the benefits of mere money. Free enterprise is therefore not an economic imperative; it is a moral imperative.” That’s why I say we as an association have a higher calling.

It’s vital that we as members of NAW focus on principled capitalism under which our companies were built. We need to help today’s up-and-coming employees and leaders understand the satisfaction of building a business and earning success, thanks to free enterprise. NAW helps them with networking and education to assist them in achieving their dreams. Just as important, NAW helps them by fighting excessive and ill-founded government regulations and policies that stifle their business opportunities, penalize or limit their success, and drive up costs.

We must sustain the NAW brand equity already in place, helping members stay focused on industry trends and threats, as well as technical and strategic changes. Our calling is about ensuring that the next generation understands what NAW has accomplished and can accomplish, why it exists, and how we can make it work for us.