Wealth Creation Is No Crime

Author: Mark P. Mills

It's fashionable to take swipes at the greedy and ignorant boobs who run American business, but don't spread the blame universally.

"No man can become rich without himself enriching others," observed Andrew Carnegie, but it seems the steel titan's words fail to resonate with today's zeitgeist.

I recently participated in a public event where a prominent columnist put forward the notion that oil companies are unique in being home to an entire class of executive miscreants. For the right crowd, it's a cheap applause line in the fashionable recreation of class warfare and the politics of resentment. Perhaps cherishing this notion allows one to believe that executives of green companies are inherently more honorable people.

Setting aside the fact that all capital-intensive businesses--and green tech is inherently very capital intensive per unit of energy--depend on the eager involvement of financial institutions (captained by those other vilified players), does anyone really believe that green tech execs aren't chasing profits and wealth too? Or that an Exxon-scale biofuels or solar company would not enjoy "outsized" and even "windfall" profits with richly compensated chiefs? Please.

The sport of class warfare, scapegoating and fueling base instincts for resentment is certainly not isolated to the energy or environmental arena. If you make your money doing something the public or some journalist community understands and finds entertaining--whether in sports or Hollywood--you largely escape the opprobrium.

Even though the income discrepancies between, say, the movie's grip and the star are stunningly lopsided, such inequities escape public scorn. Not so in the general business world.

Business executives have two problems: The process of business creation is largely misunderstood, and the face of the business itself, the CEO, often lacks charisma. This state of affairs is nothing new, and in the current climate, when businesses too big to fail have helped to imperil the national economy, it almost seems to make sense.

After all, how much societal damage can come from failure on the football field or at the box office? Not much, because the entire entertainment business--and that includes spectator sports, Hollywood and all performing arts --employs fewer than 400,000 people nationwide. The U.S. business community, on the other hand, employs more than 120 million people. The group we love to hate is responsible for the livelihood of 90% of our nation's citizens.

One might argue that the business community's very success in underpinning so much of the economy, nearly all jobs, justifies the blame game that ensues when it fails in a spectacular way. But it's all too easy to vilify the entire class of business executives in the wake of the high-profile cases of indefensible abuse and law-breaking. In the current economic environment, it seems a weak defense to note that greedy, dishonest executives represent a tiny minority of thousands of stand-up, competent business leaders who shepherd these companies. The entire group is under suspicion.

America will be a less prosperous--and yes, a less environmentally pleasant--place to live if we discourage our best and brightest from business careers by vilifying the people at the corporate pinnacle. I have a theory (simplistic, maybe) as to why corporate executives are such easy targets for those decrying their "unfair gains" as opposed to say, a sports figure or entertainer--reasons that go beyond relative economics.

It is simply obvious what skills and talents a great athlete or entertainer is being rewarded for, and how they were achieved through practice, setting aside good genetic luck, which few seem to resent. On top of that, these people are often attractive, interesting--and, well, entertaining.

Contrast that with the corporate "fat cat," usually portrayed as a boring character who got to the top through sheer dumb luck or deviousness. The genuinely remarkable skills of management and leadership that are needed to do what he or she does are woefully opaque.