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Peter J. Leithart

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Heroic Business

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To many Americans, business appears to inhabit a morally murky world where good is evil and evil good. I’m not talking about sweatshops, bribery of government officials, or cooking the books. Even the normal norms of business seem, to many, to violate the norms we adhere to elsewhere.

Peter J. Leithart Avarice and selfishness are vices in family and social life, in government and in church, but many regard them as virtues in business. Pastors and politicians are often enough relentlessly ambitious, but we expect them to put aside personal advancement for the common good. Not so businessmen. Already in the 1860s, the English critic John Ruskin stated a common perception when he wrote in his essay Unto This Last that “the merchant is presumed to act always selfishly.” However much he may benefit the community; the businessman’s motive “is understood to be wholly personal.”

Ruskin claimed to draw this description of commerce directly from the economic theories of his time. Economists treated human beings as “covetous machine[s],” and tried to formulate the “laws of labour, purchase, and sale, [by which] the greatest accumulative result in wealth is obtainable.” Economists assured Ruskin that economics is simply the “science of getting rich.”

Ruskin found this view of economic life intellectually reductive and practically disastrous. For starters, it robbed the business world of its proper share of heroes. In other professions, men and women are admired for their willingness to put aside personal advantage and self-interest for a greater cause. We honor soldiers who give their lives for their nation, doctors who care for patients at great peril and cost, clergy who sacrifice themselves for their flocks. Even lawyers in Ruskin’s day were considered heroic as they expended time and energies for clients. Because business was thought to operate by self-interest, however, “men of heroic temper have always been misguided in their youth into other fields.” Thus business, which Ruskin considered as “the most important of all fields” in his day, fails to attract the morally earnest who don’t want the value of their life’s work judged solely by net worth.

A business owner or manager can be as heroic as anyone, and like the solider, pastor, physician, or lawyer, heroism will take the form of sacrifice. “The man who does not know when to die,” Ruskin wrote, “does not know how to live.” Businesses must be ready “to admit the idea of occasional voluntary loss . . . sixpences have to be lost, as well as lives, under a sense of duty.” Waxing dramatic, Ruskin compared the sacrifices in business to the sacrifices required of a sea captain: “As the captain of a ship is bound to be the last man to leave his ship in case of wreck, and to share his last crust with the sailors in case of famine, so the manufacturer, in any commercial crisis or distress, is bound to take the suffering of it with his men, and even to take more of it for himself than he allows his men to feel.”

For Ruskin, the son of a sherry and wine importer, the economists had it wrong from the start. Selfish pursuit of advantage is “not commerce at all, but cozening.” Successful business requires “tact, foresight, decision, and other mental powers” that are at least equal to those of “the subordinate officers of a ship, or of a regiment, or in the curate of a country parish.” Merchants and manufacturers ought to put their ingenuity, courage, and skill to work in service to their community. As the soldier’s duty is to defend his country, a pastor’s to teach, a physician’s to heal, and a lawyer’s to “enforce justice,” so the merchant has the social obligation to provide the goods and services a nation wants and needs.

Business leaders have special obligations to their employees. Merchants and managers govern “large masses of men in a more direct, though less confessed way, than a military officer or pastor,” and therefore they have “in great part, the responsibility for the kind of life they lead.” Employers must not only search out ways to increase profits, but are also obliged “to make the various employments involved in the production, or transference of it, most beneficial to the men employed.”

American business has a p.r. problem. More businesses operate by principles closer to Ruskin than Gordon Gekko (“Greed is good!”) than Hollywood or the press imagine. Yet it’s not only an image problem. A friend of mine who works for a large international corporation recently lost his job. It was no surprise. I’ve known him for nearly a decade, and the threat of a layoff has been dangling above his head the whole time. Perhaps the company did everything it could to retain employees. Yet I wonder: What sacrifices might the corporate executives have made to keep my friend, and hundreds like him, securely employed? How much richer and less angst-ridden would his life be if the company had demonstrated a modicum of loyalty to him? His company will never know how much more productive he might have been if they had looked out for his interests as much as for the bottom line. As always, sacrifice is finally encompasses a higher form of self-interest. ‘Lose your life to save it’ is a principle also of business.


Many things have changed since 1860, but American business can still benefit from Ruskin’s Lenten lesson: “the market may have its martyrdoms as well as the pulpit; and trade its heroisms, as well as war.”

Peter J. Leithart is pastor of Trinity Reformed Church in Moscow, Idaho, and Senior Fellow of Theology and Literature at New St. Andrews College. His most recent book is Athanasius (Baker Academic).

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Comments:

3.9.2012 | 9:33am
Thank you for the thoughtful reflection. The concept of shared sacrifice is certainly alive and well in many small businesses and even in a number of large corporations. Readers may be interested in a book about Christian ethics and business, Managing as if Faith Mattered: Christian Social Principles in the Modern Orgranization (Univ. of Notre Dame Press, 2001). The authors are Helen J. Alford, OP, and Michael J. Naughton.
3.9.2012 | 10:08am
The Moz says:
The big issue, among many big issues in american business today is, as I see it, the disproportionate amount of talent and energy that is wasted on lawyering, analyzing, marketing, selling and all the other professions that neither produce any actual tangible good nor in some instances critical service.

This is not to say that a modern economy can do without its office class but when a vast amount of intellectual effort goes into trading, bartering and trying to convince people to think, act and buy, this that and the other thing, what begins to develop is a business culture increasingly detached from the realities of actual work and manufacturing and most importantly the basic rules of economics that underlie and govern even the most complicated financial arrangements. If a culture appears more interested in hedge funds, private equity and leveraged finance than revenues, expenses, debt servicing and taxes, it probably knows nothing of either.

American business, like much of western culture could use a trip down memory lane to when firstthings meant something real and most people could at least point them out.
3.9.2012 | 11:04am
Jim says:
"The big issue, among many big issues in american business today is, as I see it, the disproportionate amount of talent and energy that is wasted on lawyering, ..."

Could ever increasing government have something to do with it?
3.9.2012 | 2:54pm
Mary Anne says:
D. Kahneman, in Thinking Fast and Slow, points out psychological studies that indicate the public's willingness to "punish" those who behave unfairly. In fact, apparently people engaged in such "altruistic punishment" experience activity in the area of the brain that denotes a pleasurable feeling. In this way, people are Humans (who are motivated by such ideas as fairness and expect others to behave fairly), not, as Kahneman calls them, Econs (or the persons postulated by economists as acting always and only in self-interest). Unfortunately, it seems to me that economics has convinced many business people (and it was likely in their interests to be convinced) that their behaviour ought to replicate the Econ's indifference to anything but their own interests. Perhaps it is time to have a Human revolution against the Econs! As we understand more about how people really do behave, perhaps we can convince business leaders that concepts of fairness, justice and self-sacrifice are in fact necessary to maintain the free market system. However, from the personal experience of a mother with a son who has some disability issues, I can only agree with this post that compassion and fairness in our economic system are more talked about than lived at the moment.
3.9.2012 | 4:22pm
Seen it. says:
Your passing reference to loyalty in your second to last paragraph reminds me of something from my past. I was a young engineer at one of the telcos (an "RBOC") pieced-out from the dis-integration of ATT. They suggested some management-track training and handed me a glossy pamphlet with a sprinting cheetah on the cover. In the prologue there was some verbiage about how loyalty was an outdated liability. I didn't finish reading the rest of the booklet, and never got around to the training.

That RBOC does not exist today. Since then, it has been regurgitated by I think a couple of larger players in the field. I remember them slowly divesting themselves of their science & engineering staff, content to eventually be a vending machine. At their internal strategy meetings, I remember the lead speaker saying
we'd sell tupperware if it meant double-digit growth.
3.9.2012 | 4:47pm
Rick says:
"The Moz" puts it very well. Over the last three decades, the purely financial sector of the American economy grew to a corpulent 30% of GDP. It was enough to grossly distort our entire economic system and led directly to the 2008 collapse. There are certainly a few saints in business, but they are too few to change the basic character of the machine. Even in the manufacturing sector, the value we attribute to the ones who do the actual manufacturing is woefully inadequate. Why should a CEO make 200 times the salary of a factory worker, not counting bonuses, stock options, and the golden parachute?
3.9.2012 | 4:59pm
Rick says:
Another salient point about changes in our business culture:

A friend taking an MBA course recently loaned me her book on business finance. I was struck by a phrase that was repeated like a mantram throughout the book: "...to maximize profits for the shareholders." How revealing! The focus of modern business has overwhelmingly turned to serving the interests of investors. I searched through the book for even a token reference to "improving services to the customers" or "...to provide fairly compensated, stable jobs for the employees." I couldn't find even one such reference.
3.9.2012 | 6:34pm
I have a problem with automatically assuming a company isn't "loyal" because they laid off an employee. Most people who criticize a company for layoffs or raising prices or fees (see Netflix or BofA) have never run a business. They throw around words like "greed" as if they knew the internal motivations of management making those decisions. Making the right financial decisions can mean life or death for the enterprise, and because business success is so difficult and the challenges are ever present and ever changing, maximizing profits is literally a moral imperative, because many people’s livelihoods are at stake. At what point does making decisions to cut costs or increase profits move into the area of greed. I would argue that is an extremely difficult assessment to make, especially from the outside when one has no clue what their P&L looks like, or the competitive environment, or many other factors.
3.9.2012 | 8:33pm
I have a problem with automatically assuming a company isn't "loyal" because they laid off an employee. Most people who criticize a company for layoffs or raising prices or fees (see Netflix or BofA) have never run a business. They throw around words like "greed" as if they knew the internal motivations of management making those decisions. Making the right financial decisions can mean life or death for the enterprise, and because business success is so difficult and the challenges are ever present and ever changing, maximizing profits is literally a moral imperative, because many people’s livelihoods are at stake. At what point does making decisions to cut costs or increase profits move into the area of greed. I would argue that is an extremely difficult assessment to make, especially from the outside when one has no clue what their P&L looks like, or the competitive environment, or many other factors.
3.10.2012 | 8:44am
Joe DeVet says:
I commend for your reading a book called "Love and Economics", by Dr Jennifer Roback Morse, and economist and former econ professor at George Mason and at Yale. In it she points out that there are particular virtues that people must have for an economic system based on human freedom to work well. The virtues it takes for a free economy to operate can be boiled down to prudence, justice, temperance, and fortitude. These virtues are best inculcated by a sound family, built on the love of husband and wife for each other, and for their children. There really is no substitute. Dr Morse reminds other economists, and all of us, that their assumptions about "homo economicus", the economic man, often forget this aspect of the people and their attitudes which collectively make up an economic system.

I worked for one of the largest corporations, one that people love to hate BTW, and my second career is working for the Church. I daresay I saw as many instances of caring and virtuous actions in the corporation as I do in the Church--and as many venal and dysfunctional attitudes in the Church as I did in the business organization.
3.10.2012 | 11:49am
JP says:
I think the author here should revisit Hobbes, Locke, and Adam Smith, as well as the Rousseau's critique of thier thinking. Both sides use Nature as a means to form a better society. One is grounded on the bleak observation that life is "Mean, Nasty, Brutal, and Short"; while the other side tends to view what is considered higher in Man. The Anglo philosophy took a dim view of Man; Man at his most basic is selfish. But a society can be ordered around this selfishness. Enlightened Self Interest was never intended to build a City on a Hill. The Founders of our nation used the lowest common denominator in Man. Or as one thinker said, our democracy was built on low but very solid ground.

Rousseau, who had much respect for the English philosophers saw problems in thier thinking. Yes, past regimes were unjust. But, the glory of the Ancien Regime had much to look up to. It's glory towered over the mundane in life. The aristocracyt possessed a refinement in taste, not to mention a respect for the arts that the lower classes could never appreciate. And while the Church prepetuated the injustices of the aristocracy it gave voice to the Infinite. Without a King, the aristocracy, and the Church society would degenerate into a mass of vulgar, selfish, and calculating individuals. Rousseau's critique, in the long run, is much deeper than Marx. And while Rousseau's thinking helped fuel the Revolution, his critique was a conservative critique. In the end, he wished to conserve.

From this standpoint we can now look at our own society in a better light. Hobbes never believed that religious sentiment should or would govern the affairs of business. Rational self interest should guide the hand of the salesman, business executive or factory worker. But, I believe that almost all Enlightenment thinkers assumed that the religious instinct and the manners and mores it produces would at least govern people in thier day-to-day activities. What happens to a society that is no longer governed by anything transcendent - that is when it becomes nihilistic? Can a society filled with nihilism still produce rational, yet just business leaders?

I was "downsized" almost 4 years ago. Corporate organizational structures and models preclude the kind of close interaction between those that run business and the people they manage. The term Human Resoucre should send out alamr bells to anyone interested in this subject. People (or workers) are reduced to nothing better than nuts and bolts (resources); they are to be "managed", molded, and directed in the pursuit of large profit margins.
3.10.2012 | 1:43pm
Seen it says:
Sure there are many hard realities and decisions that employers face which employees do not. One of them: how, exactly, to distribute the money within the corporation. Hence one justification for management and its opaque doings. A pure meritocracy/technocracy probably couldn't handle it.

Nonetheless I will indulge my engineering hubris. I think many of the problems in our corporate world come from the internal welfare-like state created by the layers of management. It is difficult not to ask the perilous question of many on that ladder: "What exactly do you do?"

I see no practical solution, except to step completely outside of it and start over, with your own business. Which will eventually encounter the same problems. Hopefully. But that way is filled with too much sleep deprivation.
3.10.2012 | 5:04pm
Clearly the author is talking about the Giants of Industry.But, doesn't the small business owner employ about 80% of the work force.They are the real hero's working 70+ hours weekly, hanging by their finger nails in hard times. Trying desperaqtly to keep every one working.
No time for greed or selfishness, and not a whole lot of time for their families.
My son is a small business owner. He is presntly working 7days a week to keep things moving.
You want busines hero's go to small business.

Semper Fi
3.11.2012 | 10:04am
Paul says:
As long as there is competition and a resonably informed market, self-interested actions on the merchants and producers will lead to the efficient provision of products and services that people in the market demand. This was the essence of Smith's "invisble hand" in The Wealth of Nation's (1776), but this same self-interest also provides a basis for providing help to others outside of market transactions. Indiividuals, in accordance with natural law, are sympathetic to the plight of their fellow human beings and act in accordance with this sympathy, but they value doing so. This is articulated in Smith's Theory of Moral Sentiments (1759) and remains present in his view of homo-economicus in The Wealth of Nations.
3.11.2012 | 12:05pm
ferd says:
Thank you Pastor. There really are millions of unsung heros at daily work, on the factory floor and in the office. However, the reason business has such an ever worsening reputation in the USA is because we are becoming ever more polluted with the fear-based philosophy of Leftists...e.g...Pres. Obama.
If one were to address the fear-based philosphy that infects modern Christianity in the West, one would more closely address the cause rather than the myriad effects of the anti-business climate of America.
3.12.2012 | 1:15am
Gian says:
A problem is the uncritical acceptance of the dogma of Invisible Hand by the conservatives.

Adam Smith is simply incompatible with traditional Christian ethics and I claim that his dogma and his sentiments that pepper his books ("a workman is kept honest only by his customers"-criticized by Ruskin in Unto the Last) have acted as a universal dissolver that has dissolving the traditional ethical world and culture.

All utilitarian thinking, such as involved in justifying abortion find their ultimate justification in the anthropology of Adam Smith.
3.12.2012 | 1:16am
Gian says:
A problem is the uncritical acceptance of the dogma of Invisible Hand by the conservatives.

Adam Smith is simply incompatible with traditional Christian ethics and I claim that his dogma and his sentiments that pepper his books ("a workman is kept honest only by his customers"-criticized by Ruskin in Unto the Last) have acted as a universal dissolver that has dissolving the traditional ethical world and culture.

All utilitarian thinking, such as involved in justifying abortion find their ultimate justification in the anthropology of Adam Smith.
3.12.2012 | 1:23am
Rick says:
@ferd: "the reason business has such an ever worsening reputation in the USA is because we are becoming ever more polluted with the fear-based philosophy of Leftists...e.g...Pres. Obama."

Oh, come on...give me a break! Obama's job at this time--getting himself reelected--has hardly led him into fearmongering about the catastrophic state of the economy. That's in about the same category as Speaker Boehner's remark that the current economic collapse can be attributed to the movers and shakers of our economy going on strike as a protest against excessive government regulation and taxation. (I think Boehner should find a more suitable bedtime reading book than "Atlas Shrugged.")

Let me tell you my personal story of how a giant corporation is earning infamy. I have worked for the same multi-national corporation for over 10 years. This corporation has been flourishing--especially during the last couple of years. They have had to hire many new employees, and they can hardly keep track of all their new customers. Their investors are making handsome profits. I am a professional with a specialized master's degree in my field. I have never gotten a raise in that 11 years. However, I have gotten several pay cuts. If you take the ravages of inflation into account, I now make about half what I did when I started with the company, or about the same per hour as a well-paid teenage babysitter. I get the same benefits package as the babysitter, too: absolutely nothing. The company operates internationally and has the habit of regularly moving their accounting and personnel operation from one country to another. American labor laws have no power over them.

Please tell me how this can be blamed on the "leftists."
3.12.2012 | 1:27am
I don't buy your line of argument based on your compassion for your friend's loss.

Who holds to a higher ethical standard? A climatologist funded with $450,000 in Federal grants like Peter Gleick of the Pacific Institute on Water in California? Or a used car salesman or real estate broker or appraiser?

Used cars salesmen and real estate brokers have to adhere to disclosure standards when selling a home or car. Real estate appraisers have to disclose any unusual assumptions used in estimating the value of a property, at risk of losing their license.

For example. Dr. Gleick continues to propagate that agriculture uses 80% of all water in California. But Gleick doesn't disclose what "all water" is. He doesn't disclose his assumptions.

A percentage is a ratio of the part to the whole. If the whole is defined small the part appears relatively bigger. This is what Dr. Gleick does. He estimates the amount of water that agriculture uses based on the smaller amount of "water for human use" (treated water). But if all "potential water " - that is rainfall and imports from the Colorado River are included - agriculture only uses 8% of all water in a WET YEAR; or about 28% to 42% in an AVERAGE YEAR.

Dr. Gleick doesn't disclose that his 80% figure is based on a smaller pool of "water for human use" in a DRY YEAR. No used car salesman, broker, or real estate appraiser could get away with such a misleading conclusion.

Who is more ethical: A scientist and PhD water expert or a used car salesman, broker or real estate appraiser. I will take the later any day.
3.12.2012 | 4:49pm
@Gian - "Adam Smith is simply incompatible with traditional Christian ethics." I am having trouble imagining the thought-process behind that. The free market is not a description of how an economy should work, but how it does work. It purports to describe forces as impersonal as gravity or magnetism. Market forces are variable in the short run, but inexorable in the long. If you have more accurate descriptions of how economies work, with illustration, we would be glad to contemplate them.

@Rick - for openers, in what economic system did that job come into being? Leftist? Why do you look to business to provide a guarrantee of fairness? Where does the anthropomorphising that they "should" be anything but efficient come from? When needs compete, being kind to one is of necessity a cruelty to another. You don't escape that by being run by a church or a school - or a tyrant.

I agree that the diverting of resources of intellect and attention into rent-seeking behaviors is bad for us all in the long run. The solution is to make rent-seeking less rewarding, not more. And that is done how? I don't want to keep seeing the same hands here.
3.13.2012 | 2:36am
Rick says:
@Assistant Village Idiot

When did I ever suggest that I would like my corporation to be less efficient? That would mean less wealth created for everyone. I'm talking about decisions made in board rooms by thoroughly anthropomorphised humans concerning the distribution of the profits that the entity's efficiency has produced.

You say that being kind to one is of necessity a cruelty to another. Of course it is. That's exactly what I'm proposing. I'm suggesting that the top management and the investors could tolerate a little "cruelty" (one less Mercedes in their personal fleet...one vacation home, rather than two) in order for the workers, whose labor, both physical and intellectual, actually created the wealth in the first place, to make a decent living. The same profits would be distributed more equitably. Those are decisions that are within the purview of the management itself.

There is no reason to suppose that the blind, mechanistic, material forces of economics make this sort of decision impossible or "inefficient." Consider the Japanese business model. They have a much smaller ratio between the salaries of top management and those of common workers than we have. And are they inefficient? How did they become (until very recently) the world's second largest economy? I spent a summer in Japan, and I was struck by the degree that their culture is dedicated to maximum efficiency in all things, with a minimum of waste.
3.13.2012 | 8:24am
Gian says:
@Asst Village Idiot-
1) You equate Adam Smith with free market.
Adam Smith wrote that a workman is kept honest b his customers. That is, man can not be honest by himself and is incapable of virtue and all his virtue is feigned.

"Why do you look to business to provide a guarrantee of fairness?"

Are commercial transactions exempt from the commandment to love, never mind justice?

"they "should" be anything but efficient come from? "
Efficient with regard to what?
3.18.2012 | 4:33pm
maria says:
Before I make any donations I would like to point out that as we understand more about how people really do behave, perhaps we can convince business leaders that concepts of fairness, justice and self-sacrifice are in fact necessary to maintain the free market system.
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