This has been a good week for capitalist backbone. As Kim Strassel discusses in the Wall Street Journal today, we’ve seen two high profile cases of the CEOs of large, prominent company give spirited defenses to the role of their firms in society. General Electric’s Jeff Immelt and Verizon’s Lowell McAdam both hit back against the charge that their firms were “destroying the moral fabric” of the country with greed.
As Strassel goes on to emphasize, however, the categorical defense of business as a moral enterprise delivered by Immelt and McAdam is conspicuous by its rarity. Not only do most CEOs not stand up for capitalist virtue when they have the platform and opportunity, all too many of the nation’s blue chip corporate players have taken one of two unfortunate paths: they either “retreat into spinelessness” by not challenging expanding government control of the economy, or they actively jump into the cronyist game by lobbying for favorable treatment from government officials. Even Immelt of GE, who Strassel and others are rightly praising for his recent public comments, has a decidedly mixed history in this regard.
So what we need is a response that also involves two parts. First, we need to augment the resolve of corporate leaders who see destructive policies and misleading arguments being put forward by their critics, and commit, as supporters of free enterprise ourselves, to forcefully criticize shady behavior and cronyism when we see it.
It may seem odd to some people that business leaders would need to be encouraged to defend their vocation. In the minds of many Americans, every CEO in American is another Charles Koch, aggressively advocating for political change and less government regulation of business. But not everyone in the business world has that resolve and intellectual clarity, a fact that is not surprising given the style of “antibusiness business education” that is increasingly to be found at universities today.
My colleague Fred Smith, of course, is also not surprised. He has been trying to get business leaders to fight back against government encroachment of the economy for decades now. Fred in particular argues that people in the business world need to form more effective alliances with allies in the nonprofit and academic world, combining both practical arguments (capitalism creates wealth) and moral ones (voluntary trade is superior to government coercion). That’s what CEI’s Center for Advancing Capitalism is all about.
As Strassel concedes, the path of accommodation and collaboration seems like the smart play for a lot of businesses—in the short term. But over the course of a few decades, those unprincipled tactics amount to a long-term strategy of moral bankruptcy and surrender.