site author: Anthony Wheeler email: anthonywheeler72@hotmail.com
The Honorable Executive
Introduction
Modern western society stages constant and relentless attacks on corporate executives. Without exception, the modern media, movies and literature depict corporate executives as evil destroyers out to defile everything they touch. Can one character be named in any media sympathetically treated as a corporate executive? Mass murderers do better. Rapists, thieves, lawyers—all get treated well on occasion. But not corporate executives. With one possible exception, and that almost fifty years ago (Dagny Taggart in Atlas Shrugged) no corporate executive heroes exist. Anywhere. Ever.
And yet much of what people value in the world—cars, air travel, instant communication, affordable housing, modern medicine, cheap food, entertainment—business produce. The books people read, the movies they watch, the houses they live in—all published, produced or built by productive businesses, and every one of those businesses managed by executive leadership.
This is not to say that corporate executives are any more important than anyone else: they’re not. Only that they contribute to society in important ways, and should be so recognized and honored. Managing a business is simply one honorable profession among hundreds, all of them critical to social health.
Within the scope of a particular life, many important things must be balanced, including family, social relationships, personal fitness, spiritual pursuits, intellectual interests, artistic creation, and the productive activity that typically provides the opportunity to enjoy everything else. In most cases, this means working in some manner to earn the money necessary to feed oneself, or one’s family, and provide housing, clothing, and entertainment. While most of us do not consider work the most important priority in life, it’s important enough to be considered in balance with our other needs and interests.
Along with corporate executives, a free market (sometimes referred to by the Marxist term “capitalist”) system is also reviled, particularly within the press and academia. While a truly free market has never existed in a modern setting, some societies are certainly more free than others. Productive businesses flourish to the extent markets are free. They effectively produce what people want, and executives should recognize the value of such a system and their critical role within it.
As an example of criticism typical of free markets, Terry Eagleton, a Marxist literary critic, writes:
A socialist is just someone who is unable to get over his or her astonishment that most people who have lived and died have spent lives of wretched, fruitless, unremitting toil. Arrest history at any point whatsoever, and this is what we find. The sheer struggle for material survival and reproduction, in conditions of real or artificially induced scarcity, has tied up such enormous resources of human energy that we would surely expect to find its traces inscribed in the rest of what we do.
Terry Eagleton, Ideology
The only justification for a free-market system over any other known economic system is its efficacy in creating material goods. No other system creates things cheaper, better or faster than a free market. Yes, history is littered with wasted, labor-weary lives, but that is the nature of human existence. It has never been different in times past, and it has done nothing but improve to the extent societies have adopted western free market economies (none of which, even in the US, has done so in a pure manner). Humans have always had to strive to grow enough to eat, to clothe themselves, to construct shelter from the elements and defend themselves from disease (and from each other). If the only controversy was how to best to provide for material existence, the question would have been long since settled, and everyone would commit themselves to pure free markets and enjoy the tremendous physical wealth that such an economy bestows.
Even Marx and Engles in the Communist Manifesto acknowledged the materialistically creative free market…
The bourgeoisie during its rule of scarce one hundred years has created more massive and more colossal productive forces than have all preceding generations together.
Ironically, Marx and Engles felt that collective economies would actually increase the production of wealth, and not destroy it as it actually does, as indicated in the following passage from the same manifesto:
The proletariat will use its political supremacy to wrest by degrees all capital from the bourgeoisie, to centralize all instruments of production in the hands of the state, i.e., of the proletariat organized as the ruling class, and to increase the total of productive forces as rapidly as possible.
So Marx and Engles expected their society to grow materially wealthy, a notion utterly consistent with their materialist philosophy, yet at odds with empirical reality.
But that is not all that matters. Simply providing greater material wealth does not justify free markets, because there are more important aspects of human existence. Western free markets have been roundly criticized for two underlying reasons; the first unfairly, and the second fully justified:
- those effects that are the result of controlled/government dominated markets, not free ones (killing highways, drug-crime, the increase in father-less families, monopolies, depressions, inferior education, just to name a few)
- the simple fact that the value and meaning of human life extends far beyond material conditions and/or material wealth, and therefore, due to the agnostic aspect of free societies, people may choose to live within them in ways critical and criticized by others
How one should live in a truly free society is a seriously important question, and one without any obvious answer. What is the meaning of human life, and how should one properly be lived?
The one great advantage of a genuinely free society over one that is forcefully engineered is that all humans in a free society have a chance to answer that question on their own terms, as opposed to living it on someone else’s. Again, Terry Eagleton would disagree, when he lays bare the underlying assumption for all interventionist policies:
…you have to have some idea of what counts as a specifically human kind of prospering. It is not just an individual affair. It is not up to you to decide what counts as this, any more than it is up to you to decide what counts as mental stability in a moose. You cannot say ‘Torturing Tyroleans feels like thriving for me’ – not just because it is not true, but because it is not up to you to lay down the law. Moral values are not just what you happen to plump for, as the decisionist or existentialist maintains. Some moral thinkers believe that they are what all of us happen to plum for – that they are intersubjective rather than subjective.
Terry Eagleton, After Theory
Humans are moral animals, which means that each individual must consciously make decisions virtually every day of their lives, perhaps even every hour, and every one of them moral in some manner. Deciding to rely on someone else’s judgment is itself a moral decision. Under normal circumstances, humans who wish to survive couldn’t avoid deciding if they wished to.
Terry Eagleton goes on to argue:
Another reason why you cannot know whether you are flourishing just by looking inside yourself is because the idea of flourishing is a complex one, involving a whole range of factors. You may be prospering in some ways and not in others. You have to ask yourself whether you are healthy, happy, at ease with yourself and others, enjoying life, working creatively, emotionally caring and sensitive, resilient, capable of fulfilling friendships, responsible, self-reliant and the like. A lot of these things are not wholly within your control. You cannot be happy or at ease with yourself just by an act of will. It requires among other things certain social and material conditions.
Terry Eagleton, After Theory
Terry is right, in that social, economic and political conditions impact the extent to which individuals “flourish”. He cares about the right things, for the right reasons, yet believes that certain individuals—presumably himself among them—more capable of deciding, planning and constraining the free activities of others in order to attain what he believes optimal, or at least better than what exists today.
But the basic point here is that material wealth is not enough—and not in and of itself justification for a free market economy. Even so, socialists who believe that their economics will actually produce more material wealth are simply and empirically mistaken. In addition, socialist organization requires less individual liberty, and therefore results in less freedom in society, not more, as socialist economics requires people to generally do something different than they would typically choose to do, and therefore they must be forced. In a free society, by definition, people are not threatened with organized violence (the State), and are free to do what they wish with their time, their energy, and their resources. Given that a general consensus as to the proper way to live one’s life does not exist, a free society provides infinite possibilities, allowing individuals to decide for themselves.
Criticism of free markets abound in academic literature. A classic text from the Frankfort School of Critical Theory, Dialectic of Enlightenment, reads:
They [Jews] are now [1944] experiencing to their own cost the exclusive, particularist character of capitalism.
This statement is both dangerous and irresponsible. “Capitalism” is an economic form. The Fascist act against the Jews was purely political. Capitalism, by definition, is the act of humans freely exchanging their goods, labor and services, and doesn’t contain within it the means to perpetuate violence. And on page 183:
The howling voice of Fascist orators and camp commandants shows the other side of the same social condition. The yell is as cold as business...
Lumping “camp commandants” with business managers is particularly offensive, as it is inappropriate to compare the “force” required to herd people into a concentration camp and kill them with “forcing” a person to work to support him or herself. The two are utterly different: one is violence and the other is not, and Adorno skirts dangerous shores when he can’t distinguish them in a meaningful way.
The confusion continues in the following statement by Derrida in the recent Philosophy in a Time of Terror:
…by democratic citizenship in providing protection against certain kinds of international violence (market, the concentration of world capital, as well as “terrorist” violence and the proliferation of weapons)…
Again, failing to make critical distinctions results in critical failure to communicate anything meaningful, let alone significant. In point of fact, “market” and “the concentration of world capital” is something, but under no circumstances can it be considered “violence” without again rendering the word “violence” meaningless.
Habermas contributes to the dialogue with the following:
Without the political taming of an unbounded capitalism, the devastating stratification of world society will remain intractable. The disparities in the dynamic of world economic development would have to at least be balanced out regarding their most destructive consequences—the deprivation and misery of complete regions and continents comes to mind.
The “destructive consequences” Habermas speaks of are directly related to the lack of rule of law, the lack of societal and/or political respect for individuals (particularly women), and the devastation wrought by political regimes that have violently (meaning the use of destructive force against largely helpless humans) ruled these lands and decimated the peoples and the economies without limit. The Saddams and Somozas and Amin’s are just a few examples from representative corners of the globe in recent decades, and if governments without principle have supported these regimes than they are rightly criticized for doing so, regardless of the particular expediency that seduced those statesmen into such support. Corporations, capital and markets do not control the means to wield the necessary force or threat of force to perpetuate such ruthless dictatorships—only governments such as the US, France and Britain are capable of it. To the extent that governments with armies, navies and air forces allow themselves to be influenced by such commercial interests, they are doing so only by casting aside their principle responsibility, and that is the immediate physical defense of their citizens.
The notions of “power” within a society are exclusively related to the willingness and/or the ability to use, or threaten to use, violent force, whether it be by a common criminal, or representatives of the State (police, military). Economic “power” is utterly different, has no inherent ability to “threaten” or “injure” without the explicit support of the State. Executives don’t carry guns—policemen do. The ability to “fire” someone is no different than a person’s right to “quit”. Notions that “influence” can be equated to “violent power” are meaningless. Advertising, commercialization, TV, cultural events, education—all those influences that we may agree with or not, depending on our specific point of view—are nothing compared to the violence-supported political activity of the State. Citizens can freely choose to respond or not to that which surrounds them, and to the extent they are influenced (not forced) to adhere to some behavior or attitude is utterly different to their being forced through the threat of violence.
No thinking person has ever been satisfied with the current state of society. Even in the golden age of 5th Century Athens, a time almost universally revered as being the epitome of civilization, Plato, perhaps the most influential thinker in history, felt it necessary to write the Republic, a scathing critique of that very same society. And such criticism has never ceased: Schopenhauer, Nietzsche, Veblen, Spengler, Mencken, Heidegger, Bloom, Steiner, Sartre, Foucault, Derrida, Horkeimer, Adorno, Marcuse, Benjamin, Habermas, Wittgenstein, Rand—the list is endless—have all profoundly criticized the society in which they live. George Steiner summarized this reality when he wrote:
Yet the indistinct intimation of a lost freedom or of a freedom to be regained—Arcadia behind us, Utopia before—hammers at the far threshold of the human psyche.
At no point in history has consensus ever been achieved as to what is best. Individuals and groups debate politics, religious truth, interpretations of the past, what the future holds, regional uniqueness, the superiority of their generation, the best music, art, entertainment. Nobody agrees on anything—ever. And in particular, intellectuals have criticized popular culture in every age. The common folk can never quite climb to the cultural heights the superior believe necessary to fully achieve an actualized existence. Considering the pervasive popularity of country music, professional wrestling, reality T.V., and fast food, it’s hard to blame them, but the fact is, in a free society, people will pursue that which they value, and there is not one person who has the undisputed insight into the meaning of human life, or how best to realize it.
All this is said to prove that social criticism is pervasive and unending. Despite this fact, there should be general agreement that the world is better without polio, tuberculosis, small pox, and high infant mortality. Needless suffering is simply needless, and to the extent modern society can banish it from the human universe, all the better.
In general, more wealth is better than less. What people do with more time, money, and health is another question, one that each person must answer for themselves. Having choices is better than living life without any, and that’s what businesses provide—choices. Business provides products and services people need and desire, along with the productive opportunity to earn the privilege of obtaining them. And the more effectively those are provided, the more creatively and cheaply they are produced, the more wealth people will enjoy.
In a free society, business is generically agnostic, and should remain so. This means they don’t decide what is best, or what is right or wrong—individuals do. And the businesses that most effectively support those individual desires will in turn be more successful.
In a modern free society, people can choose to live alone in a cave in the woods, if they wish. They can donate everything they own to charity, if that is their desire. Nothing prevents someone in a modern, wealthy society from going without. If someone hates the pervasive connectedness that cell phones represent, they can choose not to carry one. If a person wants to live a purely natural life, that option is open to them. If someone craves danger and excitement, they can take a trip down the Amazon on a raft alone. That should do it. Or they can climb Mount McKinley without a coat. For most people, living in a modern free society means living without fear of accidental freezing to death or attack from killing tigers (unless they work in Vegas).
In times past people lived terrible lives with few choices. Read Dickens. Study the history of sub-Sahara Africa (or go there today). Poverty may be good for the soul, but not for much else. While some people in the past have worshipped suffering, it’s likely they did so in order to make the best of a bad situation. The Buddhist divined the four noble truths, and proceeded to inflict so much pain on themselves they became inured to it and therefore felt nothing, bringing them one step closer to Nirvana, otherwise known as “perfect nothingness”. In the sad past, the Church preached a paradise here-after, and made suicide a mortal sin to keep the flock from collectively taking a final Lemming-leap.
Those fortunate enough to live and work in America today are blessed. Anyone willing to show up, pay attention, and exert themselves can earn a living. And those who wish to work harder, educate themselves, improve their skills, cultivate a talent, can achieve even more, virtually without limit.
A tremendous range of cultural, social, intellectual, artistic and community activities are routinely available for anyone wishing to pursue them. One can play guitar in a rock band, learn a foreign language, skateboard, ride motorcycles, write a book, see a movie, play in a park, or just sit around and watch T.V. For those who can’t handle so much time and money, and as a result make a mess of their lives (movie stars, professional athletes) the fault is theirs. There is no excuse for it, and they’re lack of character reflects on themselves, and not their society.
The Honorable Executive
The purpose of business is to create new wealth in the world. New wealth is generally represented as profit. Profit is defined as the difference between how much is sold (revenue) less how much resources (time, capital, labor, material) that it took to produce the goods and services that were sold. The difference represents what comes to exist in the world that didn’t before. There are several ways to represent this new wealth: cash flow, EBIDTA, net income, for example. The current value of a business is based on current profit level (EBITDA, net income, cash flow) and some projection of the ability to generate profits in the future.
Consistently creating profits in a free market is a daunting task, and one that never ceases. In a free market, every business strives daily for the good-will of its customers. Businesses succeed by consistently providing high quality products and services cost effectively and bringing them to the market at competitive prices. This should be considered an honorable endeavor, and the executives leading such businesses, to the extent they achieve the purpose of the business and act in an ethical manner, should be so respected. At the very least, they should respect themselves and the work they do.
The Humble Executive is an Honorable Executive, which means they act ethically. They:
- Treat people with respect
- Obey the law
- Deal honestly with colleagues, suppliers, owners and customers
- Do not seek or willingly accept government support for their business or industry
- Do not seek, willingly accept or grant compensation over and above what has been earned
Executives should be compensated from created wealth, not from potential future streams. They should be rewarded for what they accomplish. In too many cases today they are paid in stock options. Too often this simply takes money from investor pockets and delivers it into executive pockets without anything of substance having been created. Instead, executives need to be rewarded for actually generating profits—something that can only be done in a free market if products and services that people want are provided at competitive prices that more than cover the cost of delivering them. This is difficult to consistently do, and it is the only economic activity that creates new wealth in the world. Those who succeed at it should be compensated out of that newly created wealth, and not burn through somebody else’s hard earned capital.
Final Words
The Humble Executive:
- Focuses on supporting the people in the business
- Projects the vision
- Adheres to the Primary Criteria
- Lives the Core Values
When this is properly done, he or she leads a business that effectively delivers high-quality products and services cost effectively. Doing so honorably creates new wealth in the world, wealth that can be used to make the lives of people better than they are today.
Modern Executive