The Washington Quarterly

The Biggest Loophole in the Free-Market System

Soon after arriving in Nigeria in 1961, I got into a conversation about how to do business in Africa with the director of John Holt Trading Company, a British-owned firm that had been around since the 1800s. When I asked how he priced his imported cars, building materials, and consumer goods, he said it was not his intention to produce a profit but rather to generate high turnover. Having spent two years at Harvard Business School reading balance sheets and income statements, I had no idea why anyone would run a business with disdain for the bottom line....