Recently I have been asked by two of our Mannkal Alumni almost identical questions covering the same difficulty of defending ‘free market capitalism’ when we are surrounded by imposters of capitalism, tarnishing the free market’s historic reputation for bringing universal benefits to the world.
The below is my attempt to answer their questions:
This behaviour, of vested interests, often operating as government granted cartels, is called Crony-Capitalism.
In March this year, I briefly touched on this during my welcome comments to Mannkal’s visiting speaker, Gloria Alvarez.
“Gloria Alvarez, our visiting speaker tonight, mentioned earlier this week that this so-called trendy socialism is a disease of the rich. She is right, because it is only in a free and prosperous country that it is so easy to take capitalism for granted.
In the corporate world this has given us a generation of corporate leaders, we could call them Generation Mush who have protected themselves from competition and set up the most extravagant employment conditions so that they are awarded those millions of dollars in ‘prize money’ if they fail and are terminated.
Collective historical ignorance is becoming a real threat to us, indicated by the lack of public concern for this practice of prizes going to the ‘moochers’ (as was the case in the former Soviet Union).
Gloria Alvarez; and our other guest speaker, Larry Reed, President Emeritus of the Foundation for Economic Education, can speak with authority as they have had first-hand experiences with the outcomes of communism and socialism. They know the dangers of this socialist flirtation that has become so popular throughout our education system.”
Right now, there are three distinct views of the world. (Not two conflicting philosophies, now there are three.)
The first view is held by those who think capitalism is the best and fairest economic system that the world has ever seen. Unfortunately, these people are not often articulate enough to effectively explain that capitalism has raised so many millions from the abject poverty of previous centuries.
We forget that poverty is the historical default position, and that we have only been rescued by brief periods of free-market capitalism. Why do I favour capitalism? Dr Richard M. Salsman explains it thus:
“Capitalism has proved to be the most hospitable habitat for humans. But what is capitalism, exactly? Why do so many humans, oddly enough, oppose it? Should it not win wide acclaim? Humans have free will and, equipped with reason, they can elect to achieve great things and scale great heights, surpassing all other species. But having no pre-programmed guide to good life, they do not automatically choose what is best.“
View Salsman’s full article on the Supposed “Varieties” of Capitalism here.
The second view is held by those who think that socialism is the answer to a whole range of problems from climate change, to inequality. Socialism can only survive until they run out of “other people’s money.”
The third view are those who are peddling a watered-down or hyphenated capitalism which is, in fact, the slow path to socialism.
These such advocates, including the Business Roundtable in the U.S., wish to make business the servant of politics.
As has been said, there are few things more dangerous than big governments in cahoots with big business (Adam Smith even warned us about this over 200 years ago when he commented that business-people wherever they gather often conspire against the general consuming population).
The moves by the Business Roundtable and many corporate heads, in Australia too, are motivated with a view to give government more power over business, workers and families.
Often these Crony-Capitalists are prepared to surrender independence and responsibility in return for “trinkets” in the form of lower taxes.
We are seeing these examples of Crony-Capitalism which do little more than give free enterprise a bad name. Unfortunately, Crony-Capitalism gives conventional Competitive Capitalism a bad name.
Our challenge is to embrace true capitalism, true free-markets, true individual responsibility and to promote the values of self-responsibility, as a way to rebuilding the character and courage of our country.
Business Roundtable Comments:
If we care about humans flourishing, including our own, we should acknowledge the fruits of capitalism by defending capitalism against its attackers such as the Business Roundtable (these attackers are destroyers and plunderers who, with time on their hands, continue to whip up this self-serving mischief).
This hyphenated capitalism (“new-capitalism”) with a focus on stakeholders, rather than shareholders, is not capitalism at all. It is socialism-lite and just as dangerous as the full-strength version of communism / socialism.
Some of these comments may not be popular but I feel they must be said, even if it is only to open our own minds to the opportunities that Competitive Capitalism and individual responsibility present to each of us.
Apart from individual responsibility the other qualities of true leaders are, Character, Courage and Humility. These are qualities that are effectively explained by our many Mannkal visiting speakers.
Now, so far, all I have managed to do is restate the question as presented to me by our scholars.
The challenge given to me, by you, indicates that there is a shortage of business leaders to set an example for you to follow.
This same question is increasingly being asked by many astute observers, such as Alan Moran in Whatever happened to economic leadership from business? and Helen Trinca (Managing Editor of The Australian) in her article New challenge for ‘woke capitalism’.
(If you are perplexed by the need for passwords for these links, please request a PDF from us.)
The answer that you are looking for will be found by examining first principles, to enable you to set your own compass, for your business career.
To my knowledge, there is only one modern book that covers the necessary building blocks of establishing and building your career free of conflicts and moral stumbling blocks. The book is available in print, Kindle or audio book – How to be Profitable and Moral: A Rational Egoist Approach to Business by Professor Jaana Woiceshyn (University of Calgary, Canada).
The Amazon / Audible summary for the book explains its content as follows:
“A basic dilemma confronting today’s manager is how to be both profitable and moral. Making profits through immoral means—such as deceiving investors or customers—is unsustainable. Likewise, remaining moral while losing money will cause a business to fail.
According to conventional morality, either a business manager maximizes profits and necessarily compromises on ethics, or necessarily sacrifices profits in order to be moral. Woiceshyn explains why this is a false dichotomy and offers rational egoism as an alternative moral code to businesspeople who want to maximize profits ethically. Through logical argument and various examples, this book shows how to apply principles such as rationality, productiveness, honesty, justice, and pride for long-term self-interest.”
Let us talk again, after you have studied this recently released book. I only wish that this book was available during my earlier corporate career as it would have saved me much puzzlement whenever I reached one of the many “forks in the road”.
In the meantime, Dominic Frisby does a great job in the video below describing what Crony-Capitalism is, and how it will not be tolerated!
We invite your responses, feedback and suggestions. Please write in the comments box below.