How success in business helps society.
As a business professor, I strive to teach sound principles and practices, focusing on the benefits of productivity and value creation. I want my students pursuing business careers to be proud of their chosen profession. While business ethics is a topic worthy of classroom coverage and discussion, I do not view my role as one of reforming students’ values or beliefs. They are individuals, each with their own capabilities and aspirations. I teach fundamentals, not fundamentalism.
If a student wants to manage a bar, I don’t scorn them for promoting alcohol consumption. If a student wants to open a tattoo parlor, I don’t consider that work less worthy. If anything, I enjoy a good craft beer, and I have a tattoo myself. If someone’s creation generates for someone else, then that work should be judged only by those involved in the transaction, so long as there are no adverse spillover effects.
Medical tattooing, for instance, restores confidence to those with unwanted scars. Many breweries support local farms in addition to providing a modern-day watering hole for community gathering. We are beneficiaries of the brewers, the bakers, and the candlestick makers. And these producers serve society best by continuing to do what they do best. The better they are, the greater the benefits and the profits derived from their productivity. And that is a good thing.
The dominant objective for business should be long-run profit maximization, not engagement with issues beyond a firm’s purpose or core competencies. Multinational CEOs as well as small business owners are free to use their personal wealth to support the campaigns they value. But imposing a social orientation on a business as a whole only encourages firms to dabble in matters that they might have no business taking part in. Moreover, it redirects attention to subjective concerns that could divert productive work away from serving consumer interests.
A profit orientation keeps businesses focused on the objective factors that sustain an operation’s success and cater to consumer needs and wants. Individuals have values; businesses should have products and services.
Individuals’ acting responsibly matters more than organizational posturing, since the former impacts the latter. Businesses are started by, staffed by, and managed by individuals. They cater to the wants and demands of individuals. If there’s a problem with a business, responsibility lies with the individuals involved.
Fortunately, most individuals care about societal well-being as long as it does not come at an undue cost to themselves. For instance, I will gladly donate to the local food bank when I have the means to do so and my own family’s needs are satisfied.
A crass but effective statement I learned when I was young was “The best way to help the poor is by not being poor.” The more wealth I create, the more value I generate. I can splurge on multiple boxes of Girl Scout cookies or support the arts by attending high-priced Broadway shows. I can travel to destinations that depend on tourism and leave a larger tip when eating out. My donations and my taxes grow in proportion to my income. The more I make, the more I can save, spend, or share—which is my right, since what I earn is my property. If I want to be viewed as a good neighbor, I will act as one. No oversight or pressure needed.
With all this in mind, it seems fitting to conclude by featuring a bit of Ayn Rand’s work. A Russian-born American philosopher, Rand was one of the greatest advocates for individuals and therefore one of the greatest champions for business. In Why Businessmen Need Philosophy, Rand rightly conveys why we need businessmen and why the inherently self-interested nature of productivity is a noble pursuit:
As a businessman, you make your profit by being the best you can be in your work, i.e., by creating goods or services that your customers want. You profit not by fraud or robbery, but by producing wealth and trading with others. You do benefit other people, or the so-called “community,” but this is a secondary consequence of your action. It is not and cannot be your primary focus or motive.
The great businessman is like a great musician, or a great man in any field. The composer focuses on creating his music; his goal is to express his ideas in musical form, the particular form which most gratifies and fulfills him himself. If the audience enjoys his concerto, of course he is happy—there is no clash between him and his listeners—but his listeners are not his primary concern. His life is the exercise of his creative power to achieve his own selfish satisfaction. He could not function or compose otherwise. If he were not moved by a powerful, personal, selfish passion, he could not wring out of himself the necessary energy, effort, time and labor; he could not endure the daily frustrations of the creative process. This is true of every creative man. It is also true of you in business, to the extent that you are great, i.e., to the extent that you are creative in organization, management, long-range planning, and their result: production.
