30 LAND, LABOUR, CAPITAL AND ….
There are plenty of entrepreneurs in Breaking Bad. Part of the Thatcher and Reagan economic revolution was having to hear the often repeated message that the entrepreneurs are the good guys. Regressive taxation systems that penalise the poor are now defended by governments. The phrase business friendly is used as justification. The decision of the French to invent the word entrepreneur and share it with the rest of the world has not always been appreciated. George W Bush thought entrepreneurs were marvellous and believed somehow that their existence in the USA was unique. He criticised France for not having any entrepreneurs.
Comparisons between the various entrepreneurs in Breaking Bad are impossible but it is obvious that all are flawed. Mexican gangster Don Eladio is present in only two scenes but the moments are iconic. Don Eladio is overbearing, judgemental and a little creepy but he does at least share his best tequila with his employees. Unfortunately for him and the members of his team the tequila has been poisoned by Gustavo Fring. Poisoning rivals to the throne was advocated by Niccolò Machiavelli in his book or management textbook The Prince. Machiavelli believed that it was better for a prince to be feared rather than loved. He advocated poison as a way of removing those that coveted the top job. As far as we know, the troubled Prince Andrew has not yet read Machiavelli.
Management gurus lower their voices when they talk about the destructive dynamism of capitalism but it exists. It has to. Fostering change that undermines competitors is what successful entrepreneurs do. They win, redefine markets and leave wrecked losers. Sometimes it takes a lot of dosh. Virgin Media lost at least £1m every year in the first two decades of its existence. For a while the mission statement of Fuji film was Kill Kodak. Kodak defied the threat from Fuji and continues to exist. Last year Kodak lost $18m. There are victims in the latest Terminator movie whose wounds are less severe. Fuji successfully managed to switch from film to digital and merged with Rank Xerox. The market changed, and Fuji smart sized. They sacked people.
The mission statements of the entrepreneurs in Breaking Bad are not shared with the audience although there is no shortage of killing. Not all of it is done to maximise profits but all of it is about protecting a stake in the market. Economic models like to use graphs and equations based on perfect competition and quote them as examples of how capitalist systems work for the benefit of everyone. Businessmen, though, like to establish monopolies. Sometimes a bold innovative entrepreneur appears and challenges rigged markets. Walt persuaded Jesse to expand their crystal meth sales into additional streets. According to the rules of perfect competition the previously established rival would have reduced their price, evaluated operational costs and introduced innovations to retain customers. This does not happen in Breaking Bad. Instead poor salesman Combo is wiped out with a bullet to the heart.
Much money has been spent by certain political forces to ensure we appreciate the worth of entrepreneurs. There was a time when the four essential factors of production were identified as land, labour, capital and organisation. Then someone thought organisation paid insufficient tribute to the risk takers that drive the economy and make us all happy. The term organisation disappeared from the four factors of production and was replaced with entrepreneurial expertise. In Breaking Bad no one is a pure entrepreneur. All take management decisions. The employees may fire the bullets that leave people dead on street corners but it is the entrepreneurs who nominate the victims and attackers.
It is regrettable that some people have to die but we do need to give credit where it is due. The entrepreneurs in Breaking Bad are decisive, have a work ethic and are willing to accept managerial responsibilities. Those who remain squeamish about the murders that Gus, Tuco, Don Eladio, Walt and Jesse introduce into their business practices should remember that these men are genuine risk takers. Saul Goodman, Ted Beneke and Skyler White also operate businesses but they will be protected by limited liability although it is doubtful that Ted, who inherited his business from his father, has the wit to understand how limited liability operates. A UK businessman can establish a company and set his liability as low as £1. Most businessmen have a sense of decency and use the figure of £10. Why does limited liability exist and why is there hardly any protection for the creditors who have supported the business? Because when there was no limited liability the numbers of people daft enough to set up businesses was insufficient to make capitalism function. In the crystal meth making business there is no provision for limited liability. This is because Gus, Tuco, Don Eladio, Walt and Jesse run businesses that are not supposed to exist.
The behaviour of the legitimate entrepreneurs in Breaking Bad may be not as destructive as those on the front line of meth manufacture but none can be recommended as role models. Ted Beneke cheats the taxman and sleeps with at least one of his employees. Ted owing the USA Internal Revenue Service $630,000 while his company is struggling to make a profit and maintain sales is of course nonsense. Saul Goodman is a hard working lawyer intent on redistributing income to his mainly poor clientele. He does, though, also verbally abuse his employees. Neither is Goodman particular about the customers he accepts and the services he provides. Because he is clever and educated, Walter White has some positive moments. He could have been a valuable resource to a business organisation. Unfortunately Walt missed the training course on how aggression is transformed into constructive assertion. Initially, Jesse has informal but productive relationships with his business partners Badger and Skinny Pete. Jesse is not perfect. He is indecisive and, like everyone else in Breaking Bad, capable of poor decision making. Skyler White is the best of a bad bunch. She is good with customers, knows how to negotiate a good deal, has a practical nature and a good eye for detail. Because of her employment in accounting, she also has some valuable financial expertise. Her weakness is a willingness to rely on others who are far from principled. The previously criticised Saul Goodman is her legal advisor. All businessmen are required to be economical with the truth but Skyler is too willing to endorse malpractice. Her success in the carwash business has little relation to any model of perfect competition. Skyler receives substantial capital and subsidies from her husband Walter. This gives her an unfair advantage over competitors.
Tuco, Walt, Jesse, Skyler and Saul all have business models that share one glaring weakness. None are reinforced by adequate alternative revenue streams or what is called economic diversity. Gus Fring has a laundry business and a fast food chain but they are inadequate alternatives to his crystal meth ambitions. Contingency planning by them all is less than serious. Before the Breaking Bad series ends three of the six entrepreneurs will have died, one will be in hiding from the police and the other two will have to endure seriously reduced circumstances. This is what happens without diversity. For a while Walt and Jesse used a house disinfectant business as a cover and their shared business prospered. This business model had the potential for long term success but the relationship between Walt and Jesse, which was never good, deteriorated. The need to have an agreed mission statement was overlooked but it is doubtful that it would have helped them.
Ed Galbraith appears late in Breaking Bad. The vacuum cleaner business he operates will never be a market leader, and Ed is too laid back to be energised by a work ethic. He does, though, have one particular strength. Ed understands the benefits of diversity and alternative revenue streams. Ed is not a friendly man, and his manner is offhand, but despite that he has established what is identified by business economists as goodwill. His disappearing service for hunted criminals is a leading and established brand in the market. Ed also has the skill which is essential for all entrepreneurs. He knows how to set a price and how to resist those who will always demand unwarranted discount. In price negotiations his manner can be rigid and on occasions even unfeeling but Ed Galbraith knows what the market will bear. This skill or strength cannot be underestimated. Because of their ultimate failure, none of the other entrepreneurs in Breaking Bad can be regarded as a commercial success. Ed Galbraith prospers while everyone else flounders because he understands the needs of those who fail. Public sector worker Hank Schrader is not tempted to seek alternative employment in the private sector. His future looks assured but Hank encounters a group of fascist criminals. These people are so nasty they cannot, despite their economic aspirations, be described as entrepreneurs. Hank is murdered, and his wife Marie grieves. Marie works either in the public sector or for a large American health company. She has kept, as far as we know, her secure employment and will continue working until she receives her pension.
Howard Jackson has had nine books published by Red Rattle Books including novels, short stories, travel books and collections of film criticism. His latest book Light Work, which is about Jack the Ripper, is available here. The next book from Howard Jackson, No Tall Heels To Tango, will be available soon from Red Rattle Books.