The Standard Send-Off
August 30, 2019 (1,236 words)
When the billionaire philanthropist David Koch recently died at age 79, he got the standard send-off from The Wall Street Journal. It praised his well-known faith in free markets and limited government as “keys to delivering a broadly based prosperity and free way of life for all Americans.”
He and his brother Charles helped build Koch Industries into the second largest privately held company in America.
“Long before the Business Roundtable endorsed the idea that business contributions to society must be broader than profits, David Koch was demonstrating what a businessman with conviction could do for society.
In his case that included satisfying customers, providing jobs for thousands of employees, meeting America’s energy needs, promoting policies to spread freedom – and stepping in with the philanthropy he believed is preferable to waiting around for the government to do it.”
I find more than one suspect cliché embedded in this short eulogy.
“Providing jobs for thousands of employees” is not necessarily worthy of praise, if the jobs created do little to promote the full human flourishing of those forced to work them. That flourishing involves much more than money, of course, but can only get off the ground with a living wage, decent benefits, and safe working conditions.
If David Koch gave away $1.295 billion in his lifetime, as the WSJ reports, that is a clear indicator he a) probably skimped on the wages and benefits offered to the bulk of his thousands of employees, and b) probably also dodged his fair share of tax liability.
asking libertarians to grasp a basic principle…
Our highly-successful libertarians don’t seem to comprehend this basic principle: If they behaved with a bit more social conscience in their everyday business dealings, the needs of society would be getting met to a much greater degree. And we could all stop “waiting around for the government to do it.”
The rugged individualism exemplified by the Koch brothers is a quality many of us take pride in and try to emulate. This has an unfortunate trickle-down effect, in my opinion. Consider this common refrain, heard from purveyors of business, large, small, and in-between:
“You, as the owner, have shouldered all of the risk for all of these years. That in itself is worth a lot. As valuable as any employee is to the success of a business, at the end of the day they are not taking on the risk of ownership. So it makes sense that they do not share in all of the proceeds.”
“Hopefully, they share a lot – their salaries and bonuses probably already reflect their contributions. But still the business is yours to succeed or fail. And remember when times were tough, you are the one that did not take a paycheck.”
Here again, folks, there is a veritable trail of over-ripe bromides, lurking like landmines in our fairy-tale legend of entrepreneurship.
To begin with, the risk-reward dynamic has been thoroughly overplayed by the ownership class, if you ask me. All employees are taking on a measure of risk, in the sense that if this thing goes under, they will have to go out and find other employment. Not an easy thing to do in this day and age. They may have to forfeit assets, too, if this thing crashes and burns and they are left on the unemployment line.
what goes on behind the platitudes…
And sad to say, the “I took all the risk” mindset can serve as little more than rhetorical cover for using privately-held companies as a license to print money, in support of the owners’ lifestyle. This is often what’s going on behind the platitudes. As for “not taking a paycheck,” the people who can forego that bi-weekly bank stub are frequently playing with house money, carried forward from previous ventures.
Sure, there are still a raft of honest entrepreneurs who really do sleep on their sister’s couch, and subsist on nuts and berries. But why do we think of business in this way – as a sort of casino where high-stake wagers yield windfall pay-outs if everything comes up aces. As if this constitutes a higher order of thinking.
In pointing these things out, I am not trying to undermine the common understanding of the American Dream.
Okay, maybe I am. Too often our chamber of commerce types deploy conventional wisdom indiscriminately, and use it as a sort of diversionary tactic, to camouflage how their hometown membership fails in living up to the new, “broader” mission statement recently published by the Business Roundtable.
This organization, which represents the largest corporations in the country, just went public with a clear, if somewhat counter-cultural, message: American businesses need to focus on more than making profit; delivering shareholder value is not enough.
Talk about a revolution in the making. Before you know it, the Roundtable will come right out and declare a corresponding need: To adequately compensate rank-and-file employees who help bring entrepreneurial dreams to life, and get them across the finish line.
discussing nuts-and-bolts stuff out in the open…
There is a reason this nuts-and-bolts stuff needs to be discussed out in the open. When you are a flawed human being, as many of us happen to be, and especially if you are one of those who subsist on nuts and berries for any length of time, it’s just way too easy to talk yourself into believing YOU took all the risk, and YOU did the lion’s share of the work.
The other part of the problem emanates from the audience’s perspective: We think the success achieved by business people – be it on a grand scale like the Koch Brothers or a more modest one – could be duplicated by any of us, if only we were willing to “take on the risk of ownership” and “put in those insane hours.”
But this is simply not the case. Successful entrepreneurs have been endowed with a unique gift. Just as each of us mere mortals have also been blessed with an equally unique gift. And we all have a responsibility to use the gifts we have been given to benefit not just ourselves, but those around us.
Some gifts end up benefiting family members and friends, neighbors and co-workers. But other gifts have been designed to find their ultimate expression in the public square.
Which brings us to the heart of the matter: Trail-blazers who shoulder risk, assume the responsibility of ownership, subsist on nuts and berries and postpone financial return, are merely doing what they were born to do.
And doing what comes naturally should not warrant any special, outsized reward. There is no immutable law that states a lead dog must automatically suck up all the oxygen in the room, financially speaking.
Let’s try to outgrow this me-first, aren’t-I-great mentality that is born of the American Dream and held in such high regard. We’re all here to work out some kinks in our character, regardless of where life slots us on the org chart. In the final analysis, when this trial run is over, we have it on good authority the last shall be first and the first last.
And let’s also remember to whom much is given, much is expected in return. This is the higher order of thinking business people should be using as their inspiration.
Robert J. Cavanaugh, Jr.
August 30, 2019