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|Corporate Greed and Ayn Rand
by Steven D. Laib, J.D. M.S.
12 October 2002
This article analyzes the difference between today's corporate looters and the corporate heads of Ayn Rand's The Fountainhead.
The September 24, 2002 USA Today cover story headlined “Scandals Lead Execs To ‘Atlas Shrugged’ ”. Author Del Jones suggests that these executives are re-reading Rand’s epic tome to remind themselves that they are not the villains portrayed in the mass media following the Enron, Tyco, Worldcom and other corporate scandals. Perhaps they need this for a sense of reaffirmation, but, why should it be necessary for those who are avoiding unethical practices in the first place.
Executives who understand ethics and who are willing to build a business the right way, while providing jobs for workers, and products to the market aren’t the problem. Get rich quick schemers who have no interest in ethical or moral practices are. Not everyone can make a million over night, and some business owners never will. Many will be satisfied with doing well, and earning an honest buck. What sets them apart from the corporate con artist is what separated movie gangster Johnnie Rocco from the “million mugs with guns out there.” As Bogie put it in Key Largo, “Rocco wants more”, and unfortunately, these particular execs didn’t care how they got it; just like Rocco, or for that matter, Martha Stewart, for whom fame, fortune and recognition was not enough. She had to get involved in shady stock deals just to get a few more bucks.
Jones approach seems directed toward examining the motivation of honest business people, rather than the flaws in the ethical and moral fiber of the dishonest. He looks into, for example, the story of Milton Hershey who used some of his millions to pay for employee health care and the mortgages of local churches during the depression. Millionaires, he seems to say don’t have to be selfish. But how did Hershey get the money he spent and what purpose did it serve? Certainly, we know he made his fortune selling chocolate to the public, and it is unlikely that his company was started with the goal of making money to use for charity. And, with his charitable acts, one can see him buying greater community support, employee loyalty, and improved health in his work force. Perhaps his charity was selfish at the same time, and perhaps he got good value for his money while appearing altruistic.
The phenomenon of the wealthy person supporting charitable causes is not new. It dates back at least to Medieval times. The Judeo-Christian tradition always encouraged it, although some may opine that in some cases where the Catholic Church was concerned donors may have been attempting to buy their way into heaven. Today many universities, schools, churches, museums and other public institutions have received significant sums from Ford, McArthur, Carnegie and other benefactors too numerous to name. Hershey was not alone in Depression Era donations. It is quite clear that not every wealthy person is a Henry F. Potter or Ebenezer Scrooge.
At the same time, not every small businessman is a George Bailey. I recently came across the story of a company with three shareholders, one of whom was much sharper than the others. He began taking money from the company and putting it in his own pocket. In doing this, he doomed the company, but he figured that if his thefts killed the company, he could blame someone else, and start another, proceed to loot it too, and so on. There were no millions involved. His take was probably less than one hundred thousand, but the result was the same for his business partners as it was for Enron shareholders. In this case, Size did not matter. It was the ethics of the person in charge.
There are two things which set Rand’s business magnates apart from today’s business owners. First, Rand’s characters were imbued with an overwhelming sense of morality, not commonly found in real life. Second, in Rand’s world the government was much less limited in power. Government mandates of “charity” to essentially anyone and everyone who makes enough noise about not being treated fairly has not happened to us yet. The frustrated writer who couldn’t sell his books, the man who wanted to use the new high tech Reardon alloy to make silverware and complained that the price was too high, and so on are examples of the people we have today who want “equality” but who really want it all for themselves. Instead of working honestly for it, or stealing it under the table, they use government to take it for them. Anyone who makes his fortune by selling mountains of any product which performs as advertised should not need to go hunting through Atlas Shrugged to find justification for it. Instead, they should look at the benefits they have conferred upon society while making that wealth.
As for dealing with those who attack successful executives, there are two available answers, which can be easily applied. First, if the executive has been unethical in their business practices, then the attack may well be justified. No one can be faulted for anger over what happened at Enron. Second, if the attack is against an ethical executive who has benefited society by producing a good product, employing workers at a reasonable wage and who has not dipped into the company treasury for sweetheart loans, manipulated the stock price, or destroyed the company pension plan, then there is no basis for criticism. Except for the possibility that the critic is simply jealous and wants to have a piece of the action, which he has not earned.
America should be wary of how it handles corporate success. The looter executive is likely to be someone who believes that he or she will not be caught, or that they will receive a mere slap on the wrist in the event that they are. It is interesting that all of these cases of corporate looting had their beginnings under the Clinton administration. A president who engaged in questionable ethics in every elective office he has ever held and who has both given and solicited bribes can probably be counted on to look the other way when a major donor is found with his proverbial hand in the cookie jar. Or, perhaps the believed that law enforcement could be bought off by donations to someone’s political campaign. Fortunately, the scandals broke during a different administration.
The moral of the story can be found in s student handbook for Buena High School in the small town of Sierra Vista, Arizona, which this writer attended for a short while some years ago. “There is no freedom without responsibility” was the quote. Responsible political leaders and responsible business people can do much for any nation. Greed for money and power can bring a nation down. Critics of big business should follow Rand’s underlying doctrine of ethical and moral behavior and the responsible society that flows from them. Perfection is, of course, impossible, but that does not mean that we should give up striving for improvement and instead focus ourselves on the lowest common denominator.