The American Spectator

Ms. Fabrizio writes a very good column this time. She is undoubtedly correct in her analysis of the situation. I am concerned, however with one of her points. I believe that our modern society MAY have left the point too far in the rear view mirror.

Lisa writes; “We used to salute as ‘Captains of Industry,’ risk-takers who invested their own money in order to found solid companies which used their profits to create jobs for all classes of people. These men drove the machine that fueled the American dream.”

Lisa, I am not convinced that we do not still salute them, on the rare occasions that we can find one. I am also not sure that there are enough of them left to count on the fingers of one hand without fingers left over. It seems to me that you would be hard pressed to identify an individual or company that invested significant sums of their own money in some new idea or process. At least not without a considerable contribution, in the form of subsidies and grants from state and national levels of government, our tax dollars at work, whether we like it or not. When was the last wonder drug brought to market without government funding for research and development. When was the last energy source or system developed without significant government funding. Even the Internet was developed in university labs by researchers that were in whole or in part funded by government grants — the grants were not specifically for the Internet, but money in fungible. And these are just examples. I would argue that the point applies across the spectrum of business, industry, and innovation.

Lisa, please identify a dozen or so current “Captains of Industry” that are risk takers. They are, for the most, part folks that went to school until they had their MBAs in hand. They then hired on to some semi-large to gigantic corporation and rose within the ranks on bureaucratic skills, along with making good safe decisions that could not get them in trouble. In due time, after serving their time in the ranks, they were given the keys to the executive elevator, and they were on their way, they had broken through. Now they could sign on to their executive contracts that guaranteed good salaries, giant bonuses, plentiful stock options, and no take backs for poor performance. If fact, if you manage to lose money, to tank your company, you will be released from the Captain’s chair with a severance package that would have made King Midas steal off like a thief in the night. They are, too often, little more than the private sector equivalent of a GS-18 or so in the federal Civil Service. Think the auto companies, think ENRON, think Wall Street, think the whole financial industry, think on and on.

Would you seriously argue that FedEx or UPS is the same excellently run company that it started as, that they have not deteriorated from the start up risk takers? Are you seriously suggesting that Sam Walton is not doing 9000 RPMs in his grave to see what WalMart has become? Do you even remember when everything sold in WarMart was made in the USA? Did you even know that Mr. Sam used to visit each and every store every year, and that he opined that if you could be reached on your office phone, you were not doing your job? If you can’t think of a hundred more examples, then you aren’t trying.

Now I don’t completely blame the corporate executives alone. A good start on the problem would be to disbar 25% of the lawyers in America and reduce the admissions to law school by 50% per year ad infinitum. Nevertheless, I would suggest that the people and companies that fulfill the perimeters that you lay out in the quoted paragraph above are a rare breed indeed. The folks in the very top strata of business today are a very hard group to love and admire, even for a hard core, Milton Friedman, Conservative, Capitalist like myself.