Monday, May 28, 2007

Riveting History of Ideas

Tibor R. Machan

Last weekend I had the good fortune to watch a fascinating, informative, and very disturbing DVD, produced and written by Professor of Philosophy Stephen Hicks of Rockford College in Illinois, titled Nietzsche and the Nazis. ( I am an avid fan of the history channel and other forums where the theme that ideas have consequences can be encountered but this piece of work was better than nearly everything else along these lines I have seen.

The Nazis, who murdered roughly 12 million people—among them the 6 million plus or minus Jews we have all heard of—were a really vicious bunch. But what is more interesting and important is that they were not barbarians but came from Europe’s most educated population, the Germans. Their main theme was that idealization of Das Volk, “The People,” not severally but collectively, as a noble tribe for the welfare and advancement of which everything could be sacrificed, especially individual liberty and independence.

Here was a group of fanatics who wholeheartedly believed in the righteousness of their own zealotry and urged it upon all their followers, of whom there were millions—the Nazi party was voted into power several times and by the end some 90% of Germans voted for it. Hitler came to power democratically, by “the will of the people” (a phrase we have recently heard in these United States as well). Nazism was openly in favor of irrationalism, championing instinct over reason, order over liberty, and self-sacrifice over the pursuit of happiness.

Nazis hated the classical liberal ideals represented by the United States of America; they despised free enterprise and imposed a version of socialism—national socialism, to be precise—wherever they could. The main difference between their version of socialism and that of the Soviet Union was that they advocated socialism for the nation, unlike the Soviets who wanted it spread internationally.

A persistent question that has bothered historians, psychologists, sociologists, and nearly anyone who has given the matter any thought is how could this horrid regime arise in the midst of a relatively civilized place like Western Europe and its crown jewel of a culture, Germany. Among the many hypothesis that have been advanced one has always been both intriguing and controversial. This is that certain ideas that have come to dominate German culture had a great deal to do with the rise to power of Nazism. And the central figure who has been proposed as responsible for these ideas is the 19th century German philosopher Friedrich Nietzsche.

I will not give away the story Professor Hicks tells with such clarity and subtlety but I do wish to mention that as far as I can tell—and I have studied some of these matters over my career as a philosophy teacher—he gives a very well balanced presentation of just why Nietzsche did in fact encourage the Nazis and in what way his views different from theirs quite significantly. On first inspection, for example, it is not easy to believe that the Nazi’s demand for subservience and unselfishness fit well with Nietzsche’s ideal of “the will to power.” But if one looks deep enough one will realize that the will to power was not to be put in the service of the individual person but of the tribe or culture. Individual flourishing didn’t interest Nietzsche; collective triumph did. And on this the Nazis fully agreed with him. No wonder they invoked his legacy over and over again in their literature.

On the other hand, Nietzsche would not likely have favored the sort of politicization of the ideal of the superman that the Nazis promulgated. He would have left politics aside concerning how the future of humanity was to unfold so long as it involved a revolution in our moral values. (He deemed conventional—especially Judeo-Christian morality—perverse, an enemy of a fully flourishing, instinct-driven human life!)

Professor Hicks’ presentation is immensely rich with facts, quotations, analysis, and insight. Especially fascinating is the list of very erudite Europeans—Noble Laureates and the like—who eagerly supported the Nazis, as well as the slogans Nazis loved which are often exactly what our own politicians urge us to internalize—for example, about the superiority of the public versus the private interest.

Anyone with just an ounce of interest in recent intellectual and political history will find watching this DVD a disturbing as well as riveting experience.

Sunday, May 27, 2007

What Social Responsibility?

Tibor R. Machan

Over the last several decades the field of business ethics has become very popular in colleges and universities, including business schools around the world. Actually, all professional ethics courses have gained entry into the curriculum—medical, legal, engineering, and the other ethics. (Oddly, though, the ethics of education and scholarship have not joined this trend!)

In the field of business ethics the focus has tended to be on what has come to be called the Social Responsibility of Corporations (SRC), as if it were a foregone conclusion that what corporations ought to do is to benefit society. One explanation of this focus is that in the field of economics, which is regarded a social science, it is widely accepted that what corporate managers will do—not so much what they ought to do—is to improve the company’s bottom line.

Back in 1961 the late Milton Friedman did write an article for The New York Times Magazine, widely republished, insisting that the moral responsibility of corporate managers is to strive to make the company profitable. Up until that time it was simply accepted as given that this is what corporate mangers would be doing—this follows from the general assumption in economics that in the market place everyone embarks upon the maximization of utilities, which is pretty much the same thing as trying to make a profit. But Friedman change this somewhat by claiming that this isn’t only what corporate managers do but it is also what they are morally obliged to do. Why? Because that is what they promised to do to the company’s shareholders and investors.

In response to Friedman a great many people who came from the field of philosophical ethics began to write extensively about business ethics and insisted that what corporate managers ought to do is to mange companies so they would benefit stakeholders. Which is to say, the moral responsibility of corporate managers is not to improve the bottom line but to help all those who could benefit from what the company is doing, all those who have a stake in the company’s fortunes. This is what became the SRC movement. And today there are journals, magazines, conferences, and many books that advance the idea that the moral responsibility of corporate managers is to benefit society, not the owners—shareholders, investors, stockholders—of the company.

This line of thinking is a not altogether subtle attack on the nature of capitalist economy. In a capitalist system, companies are owned by those who buy shares and invest in them and their purpose is to succeed in the market place, measured, naturally, by how profitable they are, how good a return they bring in from their owners’ investment. The details depend on the kind of firm in question of course but this is the general understanding of capitalist business.

From the beginning the idea of capitalism has been criticized by many people because it treated profit making as a good thing. Going into the market place with the intention of bringing home a good return on one’s investment just appeared to be too greedy, too avaricious. Never mind that, in fact, once one makes a good return on one’s investment, it is an open question what one will do with the wealth one has accumulated. So the practical impact of rejecting the capitalist model is not so much a rejection of wealth but a rejection of the private allocation of wealth. Critics of capitalist business, in other words, do not want private individuals to be in charge of spending the profits made in business. They would like the public—that is, government—to decide what happens to the wealth.

This used to be called socialism but now that the grand experiment in that political economic system has had innumerable setbacks across the globe, the term “socialism” has been dropped. Instead we have SRC or stakeholder theory. If some such idea can catch on, it will have the same impact that socialism does—undermine the rights of individuals to allocate their wealth and place this power into the hands of politicians and bureaucrats. All this without having to fess up to favoring socialism.

What needs to be debated in the field of business ethics is whether ownership confers the rightful power to allocate resources. There should be no question-begging presumption that companies must serve society—after all, if they do their business well, they do that anyway while they are seeking to make profits. How profits should be used should be left to those who earned them.