Economic Freedom And The Right To Rise

I can’t believe that I am on Christmas break and thinking about next semester. I am very excited about new possibilities on the horizon. I want to take a few moments to reflect on those possibilities by framing them within the idea of Economic Freedom and the Right to Rise.

I don’t know how many times in the last few months that I have heard and used the term Entrepreneur. The President and other political leaders have recognized the importance of providing a political system that supports entrepreneurs, allowing them to be successful. Colleges and Universities across this great nation have also recognized this, and are providing various classes to help prepare these future entrepreneurs. Both venues are attempting to connect money and talent (angel investors and entrepreneurs) with the customer. Start-Up America has discovered that disconnection is the biggest deterrent to successfully promoting entrepreneurial success. As Broughton stated in his WSJ article, “Startups are exciting and important area of economic activity, but their boosters often generate more heat than light. What America’s entrepreneurs don’t need is more people flapping their arms and shouting at them from the sidelines. It turns out what they need more than anything is each other.” This connectedness is what we want to promote with our new Social Entrepreneurship Major at WPC.

Entrepreneurship represents a Right to Rise.  Having watched the movie Lincoln recently, I have started thinking about my favorite President again. I ran across a great article discussing his reasons for abolishing slavery. It is a part of our history books that Lincoln encouraged a black exodus, leaving America to the whites. This paradox was discussed by Fredrick Douglas, first by his being appalled by Lincoln’s proposal, and secondly, by his noting that Lincoln was admirably unprejudiced at a personal level. “He treated me as a man; he did not let me feel for a moment that there was any difference in the color of our skins.” David Von Drehle describes Lincoln’s motivation for destroying slavery as not being centered in racial equality, or on abstract ideals of human dignity, but in the belief that liberty of all kinds “begins with economic freedom.” This is a debatable premise, one that I am not sure I agree with, but it warrants a discussion.

The discussion is around what Lincoln meant by economic freedom. “Gabor Boritt, emeritus professor of history at Gettysburg College and a leading authority on the 16th President, has called this cornerstone of Lincoln’s philosophy, the right to rise.” In other words, people have the right to work and be prosperous. Slavery did not allow a person to chose what they do for work, and it destroyed the ability to work hard leading to success. Although I am not committed to a premise that Lincoln was not concerned with race equality, I am convinced he was committed to “the Right to Rise.”

An entrepreneur, someone what is able to see the inefficiencies of a current process and change (or make new) it to perform at a higher level, is a critical part of the modern “Right to Rise.” Upward mobility has been a part of the American dream. This is what drives us to work hard and be successful. Therefore, we need to promote Economic Freedom. Michael Strong is his book, Be the Solution: How Entrepreneurs and Conscious Capitalists Can Change the World, argues that promoting Economic Freedom can be accomplished by:

  1. Providing access to capital and information.
  2. Providing political support with policies protecting essential human rights and secure property rights.
  3. Providing education, training and mentorships that foster creativity and innovation.

All of these will help to create an entrepreneurial culture, supporting the “Right to Rise.” I hope in this age of large trickledown government we don’t loose this “Right to Rise.

And that is my thought for the day!

 

 

Advertisements

That Used To Be Us: Time To Pay Attention

Thomas Freidman wrote a book entitled “The World is Flat.” He explored ten different flatteners that made the world smaller. Two examples of the flatteners are the Internet and Microsoft Windows. It is amazing how those two tools have brought the world closer, while creating a more integrated economy. Freidman’s recent offering is “That Used To Be Us.” In this book Freidman compares the United States with China. He views China as an emerging economic powerhouse, and we as a country with reducing opportunity. Nothing illustrates our dilemma more than the current Fiscal Cliff fiasco.

On the other hand, China has evolved from its Maoist foundations. Instead of denigrating business leaders as Mao did, the current Communist leadership has welcomed millionaires into its ranks. According to today’s WSJ seven of China’s new leaders are men who have made millions as businessmen. “For years the Communist Party filled key political and state bodies with loyal servants; proletarian workers, pliant scholars, and military 0fficers. Now the door is wide open to another group: millionaires and billionaires.”

The WSJ, using information from China, has identified that 160 of china’s richest individuals, with a collective net worth of $221 billion, are seated in the Communist Party Congress. Times they are a changing. Lenin, Russia, and Mao, China, are probably turning over in their graves due to the change occurring in their countries. I have seen Lenin’s tomb, and there is n upscale mall across Red Square from his tomb. However, Russia is not as aggressive economically as China.

The point of Freidman’s book is that we, the United States, have lost our passion and direction. Generally speaking we are more excited about playing video games than we are about being productive. We are more focused on the easy score than we are with producing an honest day’s work.  To illustrate this Freidman gives the example of China building a convention center safely in several months, when we can’t even get an escalator fixed in New York City in six months. We don’t know how to work anymore.

As I mentioned during the last couple of blog entries I am reading about Jefferson. One thing I have learned, our founding Fathers were not perfect men, but they were men who wanted to create a strong Republic of the people and for the people. They were willing to do whatever it took to be free. There was a willingness to pay attention, there was a willingness to work.

An example of this was when Thomas Jefferson spent a few years in France. He met many of the European thinkers of the time, and as a result honed his ideas about the Republic, especially when it comes to work. He wrote:

The basis of our governments being the opinion of the people, the very first object should be to keep that right; and were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter. But I should mean that every man should receive those papers and be capable of reading them.

In other words, we need to pay attention to the politics around us. Because if we don’t care, and if we don’t take initiative then, we become inattentive to the public affairs, resulting in you and I, and Congress, and Assemblies, judges, and governors becoming wolves….man is the only animal which devours his own kind.

I have taken two paths with this blog. The first involves our loss of a willingness to work, resulting in a reliance on government to take care of us. The second path involves the need for us to pay attention. If we want this great Democratic Republic experiment to continue, we need to pay attention. We must stop operating on autopilot. Put down the video games and read a book. Become a thinker, worker, someone who pays attention. Our country needs this.

And that is my thought for the day!

 

 

 

Jefferson The Republican

As I mentioned in yesterday’s blog, I am reading the book “Thomas Jefferson: The Art of Power.” I am over 100 pages into the book, and have determined that Jefferson, although flawed, was a disciplined thinker, influenced heavily by Patrick Henry, and could write very well. I have been inspired by his philosophy, and his ideas reflected in the Declaration of Independence:

We hold these truths to be self-evident, that all men were created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life liberty, and the pursuit of happiness. That to secure these rights , Governments are instituted among men, deriving their just powers from the consent of the governed, that whenever any form of government becomes destructive to these ends, it is the right of the people to alter or abolish it, and to institute new government, laying its foundation on such principles and organizing its power in such form, as to them shall seem most likely to effect their safety and happiness.

I find these words written by Jefferson very interesting; especially in light of the fact that he owned on average 200 slaves per year. Yet, these are powerful words defining the purpose of government. Jefferson has been identified as a Republican, but does the term mean the same thing today as it did in the early 19th century?. Jefferson was liberal, and he was a secular humanist, so politically he was probably closer to what we call a Democrat today. However, I am still intrigued with what was considered Republicanism in the early years of our nation.

Early Republicanism, first and foremost, stresses liberty and unalienable rights as critical values. Jefferson as a Republican believed what De Tocqueville said concerning the tyranny of the majority. Although John Adams first used the phrase in 1788, De Tocqueville helped the phrase gain prominence in 1835, but I will use Lord Acton’s comment to illustrate early Republicanism. “The one pervading evil in a democracy is the tyranny of the majority, or rather of that party, not always the majority, that succeeds by force or fraud, in carrying elections.”

The one thing that Revolutionary Republicanism was concerned with was the limitation of corruption and greed. Republicanism was recognized as giving up one’s own interest for the common good. Virtuous people then were those who stood up for liberty, challenging corruption and greed within the government. What did Thomas Jefferson say about the Republic? Jefferson defined the republic as “a government by its citizens in mass, acting directly and personally, according to rules established by the majority.” Another comment gives us a clearer sense of what the founding fathers thought a republic was. John Adams defined the term republicanism as referring to “a government, in which all men, rich and poor, magistrates and subjects, officers and people, masters and servants, the first citizen and the last, are equally subject to the laws.

So to say that Jefferson is a Republican in the same manner that John Boehner is today would be inaccurate. But the lesson for me today is, Jefferson understood what it took to create a republic. Do we know what it takes to keep a republic.

And that is my thought for the day!

 

 

The Evolution of Capitalism

About twenty-three years ago, when I married Pauline, I started a tradition that has now been adopted by several of my kids. I placed a gift under the tree, it was a book, but I can’t remember which one it was, and on the gift tag attached to the book it stated, to Roger from his most adoring fan. Needless to say everyone found it funny, and now the kids do this too. This year’s gift to myself was “Thomas Jefferson: The Art of Power.” I am fascinated by the man Jefferson, and will be taking this with me to Arizona to read while basking in the sun (hopefully there is sun).

I am sure tomorrow I will have something to say about Jefferson’s Republicanism, especially in light of the current expression of what a Republican is, but more to come in the future. Today I want to discuss the end of one type of Capitalism and the initiation of another. One of the greatest debates in business involves the relationship of the shareholder with the business he or she invests in. Does the shareholder have a primary position in the hierarchy of returns, or is the shareholder on the same level as all of the other stakeholders? In 1976 Michael Jensen and William Meckling argued for a shareholder dominant position by creating a theoretical case for  shareholder Capitalism. In their article, “Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure,” they aregued that “Shareholder value provided the key to creative destruction and longer term economic growth.”

Peter Drucker, one of my favorite Managerial Theorists, wrote that shareholder Capitalism encouraged the worst kind of “short-termism.” Drucker wrote, “Long-term results cannot be gained by piling short-term results on top of short-term results.” Another of my favorite theorists is Roger Martin. Not me, the guy who is the Dean of the Rotman School of Business in Toronto. He too has come out against shareholder value as the prime driver for business. He states that companies which focus on shareholder value are focused on a “tragically flawed premise;” one that should be abandoned. Martin feels that shareholder Capitalism should be replaced by “customer-driven Capitalism.” This sounds very entrepreneurial to me, which in my estimation is a step in the right direction.

We constantly read that our mode of business has changed from being product focused to being service oriented. The question is what does that mean? I think Henry Ford summed up the product focus quite well when he stated that “his customer could buy a car from him any color as long as it is black.” That is what being product focused is. We have a product for sale, and we convince the customer that the product we have will meet most of their needs.

Being service oriented means being customer focused. This means providing a product or service that the customer wants and needs, not what we think they need. This is a human focused process, which means a different mission is required. Providing just a financial return to owners is not what business is about today, modern business is about providing a service to the customer. If we don’t provide that service then someone else will. Shareholder Capitalism is evolving into Stakeholder Capitalism because the consumer has more choices, and choice is a good thing.

And that is my thought for the day!

 

Stop The Craziness!

Obama, Boehner, shootings, increased permits for concealed weapons, Marc Boldt removed from office because he got along with the opposition, and on and on it goes. We are quickly losing our collective marbles. 2012 is quickly coming to an end, and maybe the world (according to the Mayans), but so is our civic sensibility.

Our current society seems to be in an uproar. Daniel Henniger reflected on this in his morning editorial, “As the saying goes, there was a time. And indeed there really was a time when life seemed more settled, when emotions, both private and public, didn’t seem to run so continuously at breakneck speed, splattering one ungodly tragedy after another across the evening news.” I would agree with him, tragedy has always happened in life, but within this modern era there seems to be much more anger under the collective surface of our culture.

Now, we are living in an era that could be characterized by the words of TS Elliot, “how did so many become undone.” Henniger tries to address this in his article, and argues that our society has lost self-restraint. He feels this happened in the 60’s when self-restraint was devalued. He points to this as the time where our society moved from self-control to self-indulgence.

He first wrote about this in 1993. “No Guardrails” was a synopsis against a no-limits culture, in other words a culture with no guardrails. He reiterates the warning this morning. “No guardrails was not a plea for retrieving a mythical past. It argued that a no-limits culture was destructive and that we would be better off if our intellectual, political and cultural elites rediscovered – and publicly revered – the protective virtues of self-control and self-constraint.” I think his assessment is correct.

Arthur Brookes, President of the American Enterprise Institute, went down a similar path this morning in his editorial. His offering was titled “America’s Dangerous Powerball Economy.” He references several research studies that explored what happened to people over time, which had won large lotteries.  He noted, “Rarely do people say, if I won the lottery, I’d marry someone who doesn’t love me, buy a bunch of things I don’t really want, and then start an ugly alcoholic spiral.” This was not a pro-con discussion about the philosophy of Capitalism, but an exploration into the idea of meaningful work. “The University of Chicago’s General Social Survey reveals that people are twice as likely to feel very happy about their lives if they feel very successful, or completely successful, rather than somewhat successful.” In other words, they have worked for and attained a relative level of achievement.

Warner Pacific is embarking on a new endeavor. We will be educating students in the area of Entrepreneurism. “Entrepreneurs of all types rate their well-being higher than do members of all other professional groups in America, according to years of polling by the Gallup organization.” Another study mentioned by Brookes demonstrates that earned success “facilitates the pursuit of happiness,” while “unearned transfers generally impede it.”

I have heard the arguments that half of our society receives some level of public assistance. I have heard the statements that less and less of our population earn their way in America. I have read that America is becoming an entitlement state. If these claims are true, all of us should be concerned. If this is true then half of our population is languishing in the dungeon of despair, with entitlements encouraging them to stay in that dungeon even though the door is unlocked.

This is not a tax and spend issue; it is a moral issue! It is a moral issue because if half of our society is plummeting into these depths, because they can’t make it, then we need to overhaul the system in a manner that allows them to become productive. The question then is, where do we start? We start with ourselves first.

As Brian Johnson stated in Be The Solution, “If we – as enlightened entrepreneurs – are going to change the world, we must start with ourselves. We must strive to live at our highest potential while using our greatest strengths in the greatest service to the world.” This process is two-fold, internal and external. We work on ourselves and we serve others.

Arete is a Greek word that reflects important values needed today. It is a word that expresses the desire to attain excellence and achieving your highest potential. Seneca, a first-century Stoic philosopher stated, “Man’s ideal state is realized when he has fulfilled the purpose for which he is born. And what is it that reason demands of him? Something very easy – that he live in accordance with that nature.”

Our purpose is not sitting in front of a T.V. watching Modern Family, playing video poker in a tavern, or playing golf everyday. Entertainment is good, but what is our purpose? We, all of us, need to be productive, and we need to feel that we have achieved something. This isn’t easy, but if we sit around feeling sorry for ourselves, we lose. It is time to pick ourselves up, and say, enough is enough. Let’s stop this craziness and fight for what is right. Let’s take control of our future, and become all we were meant to be.  I think I might spend some time thinking about this subject.

And that is my thought for the day!

 

A Culture Of Virtue

I can’t stop thinking about what happened in Connecticut. All of these wonderful children cut down before they even had a chance to experience the fullness of life, and all these wonderful adults who were working hard to give these children a good education, killed. We are all asking how did this happen? Some are looking at stronger gun control. Others are calling us to repent. Others are looking at the weather report, which is reporting rain the next two days, then sun for two days, and then on the 22nd fire and brimstone. The Mayan calendar ends December 21st. I wonder if my son will see his 34th birthday?

I am one who is focused more on the repentance action. As a Christian I recognize the fallen nature of humankind and our propensity to do evil. But I also recognize redemption and how we can love and serve one another. Today, however, I want to look at our culture from a philosophical perspective through the lens of one of my favorite writers, Alasdair MacIntyre. In his book, After Virtue, he describes what constitutes a virtuous culture. “He intends these prerequisites to be abstract and general, to apply to any culture that wishes to develop any particular set of human virtues.”

The first characteristic is a “communal understanding of each individual’s life as a meaningful whole.” We must see our lives as a “lifelong contribution to society.” This service creates purpose, and saves us from a life of “one impulsive entertainment after another, or one political commitment after another, or any set of disconnected events.”

The second characteristic involves the existence of a moral tradition. “People, especially young people, must be raised in a morally coherent social universe.” Each of our children need to see some hero, some picture of what morality looks like. My picture is Jesus Christ. My prayer is that He is, by His Spirit, creating a new heart within me that involves service and a proper lifestyle. My fear is that our cultural heroes and stories are counter-productive to what our society needs. Our victory songs include profanity laced rap sonnets, declarations of sexual freedom, and the lifting up of a standard of morality displayed by Charlie Sheen in Two and One Half Men. This standard then undermines the third critical characteristic, sets of practices.

These practices “allow people to develop, practice, and perfect their virtues. If manners are important, then there will be social settings in which the best manners are modeled. If honor is important, then there will be social settings in which honor is recognized, acknowledged, exhibited,” all of which helps to establish a vision of excellence.

When our society had more of a religious foundation we had a vision of excellence. “This vision of excellence was transmitted by means of myth and heroic tales, it was transmitted by a multitude of comments, jokes, attitudes, manners, behavioral corrections, and so forth. The very texture of day-to-day life provided a consistent, coherent template that taught young people how they were to behave.” As much as we want to deny the existence of a paradise lost, there is something that our society is missing.

As much as I want to believe the reporters that are telling us that violent crime is down, when something happens to the magnitude of Connecticut, I have to say liar! This event, along with serial killing, child abuse, and the rape of women, tells us the condition of our society. Our politicians aren’t helping; they can’t even get along enough to make a decision.

I think MacIntyre is correct, we need to create a structure that supports a virtuous culture, but I also think we need to change our mind. We need to experience a metanoia, one that pulls us closer to the one whose birth we celebrate this season, one that will help us create a culture of virtue.

Merry Christmas and Happy Holidays

And that is my thought for the day!

 

Right-To-Work And Union Value

It has been a very busy week. Fall classes are done, final exams completed, and final grades in. I haven’t had much time to write, and there is so much to write about. The shootings here in the Northwest and Connecticut are terrible. I am saddened by the inhumanity of humankind. I am sickened by our willingness to express our anger by taking others out with us. However, I am encouraged by the love we express to each other, when even during a joyous graduation celebration we can stop for a moment and remember those who have lost so much when evil visits malls and small towns.

There has been so much happening, or not happening, with the fiscal cliff. We have politicians and editorialists discussing who has the political upper hand in the fiscal negotiation, and who will be able to declare fiscal victory. But what is missing is the concern for our people, who, when we go over the cliff, will have thousands of dollars coming out of their paycheck due to Presidential and Congressional inaction.

And, Michigan has become the twenty-forth right-to-work state. Now in a state where unionism has been an incredible force, unionism cannot force employees to join a union or pay union dues. Depending on which side of the issue you are this will either be seen as an inspiration or warning. State governments, which are hungry to create jobs, are attempting legislatively and with incentives, to encourage big companies to build their facilities their states. South Carolina spent $450 million in incentives to encourage Boeing to build a facility there, while Alabama has given Airbus $158 million in incentives to locate a airframe manufacturing facility, and Virginia now is doing the same thing with Rolls-Royce jet engines. They have provided $57 million in incentives for a new jet engine manufacturing facility to be built in Virginia.

All three of these states using incentives are right-to-work states. This means that employees of a company in those states cannot be forced to join a union. The other twenty-seven states are called forced-unionism states. These states have laws that require union membership and dues when a company has a union. Both Washington and Oregon are forced participation states.

There have been many articles the second half of this week that dealt with Michigan and its recent establishment as a right-to-work state. Titles have run from “Unions Dealt Blow,” to “Centrist Republican Tacks Right In Turbulent Michigan.” My favorite was entitled “An Inspiration and a Warning From Michigan.” This editorial was in today’s Wall Street Journal, and was written by Vincent Vernuccio and Joseph Lehman.

Vernuccio and Lehman called the Michigan event a tectonic shift in a state that has had its legislature traditionally controlled by big labor. However, big labor may have attempted to be a bit too aggressive, and as a result pushed the state into a right-to-work mentality. It appears that last month Big Labor in Michigan attempted to push through an amendment to the state constitution, which somehow initiated a public dialogue on union influence. As a result, “Voters rejected by 15 points an amendment that would have outlawed right-to-work and given government unions effective veto power over legislature.” Subsequently, Michigan politicians prepared legislation that would label the state as right-to-work, and after a hard fought battle it was passed. This was not the first state this year to become right-to-work.

According to the WSJ, Indiana became a right to work state on February 1st of this year. “Since the start of the year, the Hoosier state has welcomed many new employers and added 43,000 jobs, while Michigan has lost 7,300. Between 1980 and 2011, “total employment in right to work states grew by 71%, while employment in non-right to work states grew 32%.” The argument for or against right-to-work is said to be the issue of freedom of choice. People have the right to choose to be a part of a union or not. And, as a result of that freedom, there is a waning of the influence of Big Labor.

Big business is fighting collective bargaining in many ways. Obviously, big business is fighting Big Labor for control legislatively, but I don’t think that is the most effective way. The most effective way to battle unionism is to provide a fair and livable wage with good benefits. If Big Business does that then the value that Big Labor brings to the table is negated. On the other hand if Big Labor addresses the fact that its influence is retracting, whether it is an image problem, or absolute value, and needs to sit down to create a new strategy, then Big Labor’s influence may be able to turn around.

If companies are moving to right to work states, Caterpillar is moving its London, Ontario plant to Muncie, Indiana, then Big Labor needs to demonstrate its value to employees. If they don’t demonstrate value to people, then the other twenty-seven states will probably move in the same direction as Michigan. The last state to become a right to work state was Oklahoma in 2001, that is until this year when two states in the union-dominated Midwest took the plunge. If I were a union leader I would be looking for a new strategy.

And that is my thought for the day!