The Expanded and Annotated My Life and Work

Opportunity Cost of Not Doing Business
Accounting systems recognize the cost of what an organization does, 
but their design does not equip them to identify foregone revenues from 
the decision to do nothing: “The loss of idleness.” An organization must 
instead be proactive, and seek to get its prices down to what customers will 
pay. Concentration must be on service rather than on prices.
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That is always the choice that a man in business has. He can take the direct 
loss on his books and go ahead and do business or he can stop doing business 
and take the loss of idleness. The loss of not doing business is commonly a loss 
greater than the actual money involved, for during the period of idleness fear 
will consume initiative and, if the shutdown is long enough, there will be no 
energy left over to start up with again.
There is no use waiting around for business to improve. If a manufacturer 
wants to perform his function, he must get his price down to what people will 
pay. There is always, no matter what the condition, a price that people can 
and will pay for a necessity, and always, if the will is there, that price can be 
met.
It cannot be met by lowering quality or by shortsighted economy, which 
results only in a dissatisfied working force. It cannot be met by fussing or 
buzzing around. It can be met only by increasing the efficiency of produc-
tion and, viewed in this fashion, each business depression, so-called, ought 
to be regarded as a challenge to the brains of the business community. 
Concentrating on prices instead of on service is a sure indication of the kind 
of business man who can give no justification for his existence as a proprietor.
This is only another way of saying that sales should be made on the natu-
ral basis of real value, which is the cost of transmuting human energy into 
articles of trade and commerce. But that simple formula is not considered 
business-like. It is not complex enough. We have “business” which takes the 
most honest of all human activities and makes them subject to the specula-
tive shrewdness of men who can produce false shortages of food and other 
commodities, and thus excite in society anxiety of demand. We have false 
stimulation and then false numbness.
Economic justice is being constantly and quite often innocently violated. 
You may say that it is the economic condition which makes mankind what 
it is; or you may say that it is mankind that makes the economic condition 

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122  •  The Expanded and Annotated My Life and Work
what it is. You will find many claiming that it is the economic system which 
makes men what they are. They blame our industrial system for all the faults 
which we behold in mankind generally. And you will find other men who 
say that man creates his own conditions; that if the economic, industrial, 
or social system is bad, it is but a reflection of what man himself is. What 
is wrong in our industrial system is a reflection of what is wrong in man 
himself. Manufacturers hesitate to admit that the mistakes of the present 
industrial methods are, in part at least, their own mistakes, systematized 
and extended. But take the question outside of a man’s immediate concerns, 
and he sees the point readily enough.
No doubt, with a less faulty human nature a less faulty social system would 
have grown up. Or, if human nature were worse than it is, a worse system 
would have grown up—though probably a worse system would not have 
lasted as long as the present one has. But few will claim that mankind delib-
erately set out to create a faulty social system. Granting without reserve that 
all faults of the social system are in man himself, it does not follow that he 
deliberately organized his imperfections and established them. We shall have 
to charge a great deal up to ignorance.
Take the beginnings of our present industrial system. There was no indi-
cation of how it would grow. Every new advance was hailed with joy. No 
one ever thought of “capital” and “labour” as hostile interests. No one ever 
dreamed that the very fact of success would bring insidious dangers with it. 
And yet with growth every imperfection latent in the system came out. A 
man’s business grew to such proportions that he had to have more helpers 
than he knew by their first names; but that fact was not regretted; it was 
rather hailed with joy. And yet it has since led to an impersonal system 
wherein the workman has become something less than a person—a mere part 
of the system. No one believes, of course, that this dehumanizing process was 
deliberately invented. It just grew. It was latent in the whole early system, but 
no one saw it and no one could foresee it. Only prodigious and unheard-of 
development could bring it to light.