In “I Spend, Therefore I am”, Philip Roscoe argues that economic thinking has become very influential in modern society, and this is certainly true of management and corporate strategy. Therefore, he gets two assumptions from economic thinking which are self-interest and fundamental individualism. He takes many economists whose ideas influenced the economy for proving his arguments. First, his real assumption is fundamental individualism which is “the idea that people take their own decision, individually responding to the incentives they find around them” (Roscoe, 2014, p.48). According to the article, Milton Friedman, who supported the freedom in the economy, has a book “Capitalism and Freedom” which influenced the neo-liberal economics. Moreover, Friedrich August von Hayek and Ludwig von Mises also agreed that socialist central planning would make people lose their freedom to decide to do everything in the market. Second, his value assumption is self-interest “as the basis for moral and personal freedom” (Roscoe, 2014,p.22). Based on the article, Adam Smith is one of the most influential people in self-interested economic with his theory “invisible hand”. “The invisible hand” is “the idea that a healthy market will, left to its own devices, self-regulate and turn competing self-interests into wealth for all” (Roscoe, 2014,p.23). Self-interest also helps market turn private virtue into public virtue.
According to another article “Wall & Main: GE, Amazon, and the future of corporations”, Peter Cohan also underlies real assumptions and value assumptions from economic theory. His real assumptions are competition and competitive free markets while his value assumptions are profit, risk-taking, growth and efficiency. Those assumptions are shown by two examples which are about the failure of GE and the success of Amazon. GE did not try to take the risk and they always followed many pieces of advice from others. According to the article, GE asked Peter Cohan how to “increase its stock price” (Cohan,2017). Then, GE followed that advice next decade; however, its revenue, profit and stock declined. In contrast, Amazon’s stock price rose at that time. Amazon could increase its stock price and revenue because of “creating a growth trajectory along five dimensions – customers, product, geography, capabilities, and culture.” (Cohan,2017). Moreover, Whole Foods also emerges into Amazon and Amazon also has clear objectives. Therefore, Amazon can develop itself because they took the risk and did everything efficiently. Amazon also has many deals which are good for its customers such as $99-a-year Amazon Prime service. Amazon knows what they should do to increase their revenue and profit.
In my opinion, I agree with the value assumptions of Peter Cohan because of risk-taking, profit and efficiency. People who do business always should take a risk and have an open view because if they do not try, they could not know whether it works or not. I think taking risk is important for the businessman. Furthermore, they also have to plan and carry out everything efficiently, so they receive good results. After taking a risk and planning efficiently, people can get what they want, especially profit. In conclusion, according to two articles, two authors want to talk about competitive markets and self-interest which stem from the economic theory