SOLO-International Op-Ed: In Defence of the Businessman

* *By Philip Duck *

*September 23, 2008 *

When looking back at the financial crisis of 2008 you can be sure that most people won't be thinking about failures of the market or whether that market was truly free. They won't be thinking about whether it was interest rate policy or such laws as the Community Reinvestment Act that caused the problem either. And, they certainly won't be debating about whether government should have jumped in and bailed out failing companies.

What they will be thinking is that gluttonous businessmen screwed them again, as they did in the crashes of 1929 and 1987. What they will be thinking is that greedy businessmen — and they are all greedy — sought to profit at their collective expense. There will be plenty now cursing the businessmen for their unbridled greed and stupidity, and some of that cussing is richly deserved.

But it's at this point most particularly that we must stand up for the vast majority of businessmen who, while risking all, go about creating the wealth and jobs that we prosper from. This requires more than a defence of the 'free' market. It requires the celebration, education and promotion of the entrepreneur and an understanding of the qualities that they must possess, and the risks that they must take to succeed.

"The private equity wolves are in hibernation. The PE pirates have dropped anchor, the sharks have stopped circling, the vultures have picked the carcass clean," wrote Liam Dann, the *New Zealand Herald*'s business editor.

That will be their view of businessmen. Wolves. Pirates. And sharks.

Dann goes onto write, "As much as we remember the financial turmoil of the late 1980s for the economic pain it caused in this country, it is the images of cocaine chic, power dressing and yuppie style that endure."

He's correct; most remember that period as the decade of greed. But it isn't true. In the United States, as business grew the economic pie and incomes rose as tax rates fell, philanthropy increased at staggering rates. And charity contributions by the rich yuppie rose much more quickly than those of lower earners. Yet it was the businessman who was chastised again.

Of course you can be certain that one businessman, Sam Walton, won't be given a second thought, let alone gratitude, during any reflections on that time. Sam, who most certainly wasn't a yuppie, created more than 200,000 jobs in the 1980s while slashing prices on a whole range of consumer goods.

Dann once more: "Time and time again Wall St proves that greed is very bad indeed. It provides a powerful incentive to drive business and with it economic growth and prosperity. But left unchecked — as it was in the 1920s, the 1980s and for most of this decade — it blinds people to the common sense rules of commerce."

Again, it is the images of businessman cupidity — not of prosperity — that endure from the 1920s. It's the 1929 collapse that people recall, not the new, widespread availability of telephones, radios, washing machines and refrigerators which was made possible by huge stock market investments and smart entrepreneurs.

You can bet that not many will positively consider Charles E. Merrill's contribution during those years; it was Merrill's skill and verve that allowed a huge number of middle and lower income people to partake in investments that once were only available to the rich.

Paul Johnson, an English historian wrote of the 1929 crisis;

"The view that the 1920's was a drunken spree destructive of civilised values can be substantiated only by the systematic distortion or denial of the historical record. Some distortion has been pure ideology. Some has derived from guilt, as there is no shortage of moralistic commentators who assume that all pleasure must be accompanied by pain. Parties, after all, must be 'paid for.'"

This view still holds sway today; sadly almost as much with the right as with the left, and it is this guilt and public hatred or at least distaste for business that allows the politicians to attack the businessman with impunity whilst continually increasing regulation. Regulation that costs us all. In times of monetary meltdown the businessman is not only attacked, he is not defended. He is certainly not celebrated.

The trouble is that a celebration at anytime of the businessman is rarely found in the mainstream press, certainly not in our schools and in times of strife never from our politicians. The trouble is that the businessman is often his own worst enemy; big-business continually lobbies for government favours while small-business complains of big-business market dominance. And the trouble is that a few businessmen are simply crooks.

But that shouldn't mean that we allow the concept of the noble businessman to be fed to the communal wolves. Even now, as this financial mess continues to unfold, there are bright, risk-loving businessmen, just like Sam Walton and Charles E. Merrill, creating new products, prosperity and jobs. We should applaud, not attack, their profits, and their right to make them. They deserve respect and thanks. Not derision.

*Philip Duck **thonburi-1@hotmail.com

ENDS

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