Let me start by saying I believe in laissez-faire capitalism and freedom as defined by libertarians. It pains me to see “Wall Street greed” being the public discourse of the day. It pains me to see a CEO being questioned if it was “fair” if he earned what he earned. It pains me to see the very concept of pursuit of self interest (even greed if you must call it that), being challenged. Not here, not in America.
And as we shift through the causes and explore alternatives to the financial setback. Let’s not ignore the crisis of credibility in professional management. Most managers are vanguard of resources that they do not themselves own, and one hopes their incentives are aligned to pursue the best interests of their shareholders, employees, and customers in that order. However, that by itself has been proven to be insufficient. I do believe there is a crisis of leadership which needs to be addressed by those in professional management. If we don’t do something about it soon, the day is not far when the society will lose faith. We will be bound by regulation and adjudicated by courts.
I was heartened to see an article (“It’s time to make management a true profession”) in Oct 2008 issue of HBR that calls towards professional accreditation for managers, something along the lines of the bar for the lawyers, or a license for those in medicine. That is but one idea that could help, but we need to think more critically to protect our collective reputation. It’s no longer just a matter of ethics, it’s bad for business. I appeal to your self interest.
As we plan the future of this nation, I implore you to simply listen to its great leaders and thinkers. Milton Friedman (July 31, 1912 – November 16, 2006) was an American Nobel Laureate economist and public intellectual. In this interview held years ago Friedman teaches us lessons we are yet to learn.
In my last post I favored empowering the treasury secretary, Hank Paulson, to deal with the financial crisis. This to me was the best of all bad choices available. It wasn’t a good outcome by any stretch of the imagination; it was a necessary bitter pill. As far as my personal values are concerned, I am a libertarian, and am opposed to government intervention in any form. Lest I am misunderstood, let me clarify my position.
I am deeply suspicious of the ideas of the left. The talk about universal health care, more regulation (Nancy Pelosi recently called it “market discipline”), government programs for poverty alleviation, etc. have always sounded utopian and unrealistic to me. After all I come from a country where we tried that approach, with arguably much more altruistic leadership than politicians at Washington, and it simply doesn’t work. We remained poor until the businesses stepped forward to build their own future.
Normally small scale socialistic experiments are harmless. They are the most inefficient way to target a problem, but they do help some people in need. So be it, we can live with that. But under reversals of years of an expensive war, negative economic outlook, and a “big idea” socialistic presidential candidate, they are starting to look scary. These are dangerous times. It’s in times of hardship, that we are most susceptible to forgo our freedom. It’s now that it’s most dangerous to ignore the voices of freedom.
Today, I would like to introduce the voice of Friedrich Hayek, a Nobel laureate, and a champion of free market capitalism. In his book “The Road to Serfdom (1943)”, he lays out the fallacies of socialism. The book has widely been regarded as one of the most influential and thought provoking book of the 20th century. However if you are pressed for time, you will do well to at least see this six minute cartoon illustration of his ideas.
