Business leaders are going John Galt
ANDREW ABELA writes that in today’s difficult and over-regulated economy, many business leaders are dropping out of the marketplace–to the detriment of the entire economy. He suggests that business leaders engage rather than retreat by helping young and upcoming entrepreneurs learn to navigate today’s challenging business climate . . .
There’s a growing, disturbing phenomenon among business leaders and entrepreneurs. Perhaps you’ve noticed it among some of your acquaintances; perhaps you’ve even been tempted by it yourself.
The phenomenon is called “going John Galt,” named after a leading character in Ayn Rand’s novel Atlas Shrugged. Fed up with the socialistic world he’s living in, Galt decides to leave and encourages numerous other entrepreneurs to follow him. As a result, the economy more or less grinds to a halt.
At Legatus chapter meetings across the country where I’ve been speaking — and with individual and groups of Catholic entrepreneurs and business leaders who visit us at the Catholic University of America — I’m meeting more and more people who are basically just walking away. Whether because they have had enough of fighting the EPA over every aspect of their business or they are concerned about going to jail because they didn’t comply with the umpteenth new regulation this week, they believe that the fun and sense of accomplishment in building a business is being sucked away by big government.
Blogger David McElroy posted a real life example of this from a hearing on environmental issues in Birmingham, Ala. At one point, a man stepped up to the microphone:
“My name’s Ronnie Bryant, and I’m a mine operator. I’ve been issued a [state] permit in the recent past for [waste water] discharge, and after standing in this room today listening to the comments being made by the people…. [pause] Nearly every day without fail — I have a different perspective — men stream to these [mining] operations looking for work in Walker County. They can’t pay their mortgage. They can’t pay their car note. They can’t feed their families.
“And as I stand here today, I just … you know … what’s the use? I got a permit to open up an underground coal mine that would employ probably 125 people. They’d be paid wages from $50,000 to $150,000 a year. We would consume probably $50 million to $60 million in consumables a year, putting more men to work. And my only idea today is to go home…. If there’s so much opposition to these guys making a living, I feel like there’s no need in me putting out the effort to provide work for them. So as I stood against the wall here today, basically what I’ve decided is not to open the mine. I’m just quitting. Thank you.”
The implications of business leaders “going John Galt” are obvious and dire: declining competitiveness, decaying economic dynamism, and lack of employment growth. Pope John Paul II, in Sollicitudo Rei Socialis, wrote that “experience shows us that the denial of this right [of economic initiative], or its limitation in the name of an alleged ‘equality’ of everyone in society, diminishes, or in practice absolutely destroys the spirit of initiative” (#15).
Pope Benedict XVI affirmed in Deus Caritas Est that “the State which would provide everything, absorbing everything into itself, would ultimately become a mere bureaucracy incapable of guaranteeing the very thing which the suffering person — every person — needs: namely, loving personal concern. We do not need a State which regulates and controls everything, but a State which, in accordance with the principle of subsidiarity, generously acknowledges and supports initiatives arising from the different social forces” (#28).
Earlier this year, CUA created its own School of Business and Economics. One of the major motivators in creating the School is the urgent need to re-propose to society that business is a moral endeavor, that business leaders serve society by their very actions of creating products and services, wealth and employment.
How can you help? By doing whatever you can to educate others on the value and values of ownership. Do you have a successful business model? If so, have you considered franchising as a way to grow your business without additional capital investment on your part — and as a way to help others become business owners? Do you have an Employee Stock Ownership Program (ESOP) so that your employees can become owners too? Have you considered “spinning out” parts of your business by selling ownership stakes to the management teams that run them?
The greater the proportion of citizens who are owners and investors, the less ability others have to vilify the business economy. The more people who understand how a culture of ownership brings political and economic stability, the less temptation there will be to attack business, and hopefully the less of a tendency to “go John Galt.”
ANDREW V. ABELA, Ph.D. is the dean of the newly created School of Business & Economics at The Catholic University of America, and a charter member of Legatus’ Northern Virginia Chapter.