The Fear of Responsibility
We hear a lot these days about the outrages of CEO pay, of golden parachutes and the like. This is natural enough in a system where a few at the top manage the assets of the many shareholders. Democracy is a poor form of government and it leads to abuses, both in the private and public sectors.
The real mystery is why so many companies are public to begin with. Why don’t the Fords still own all of Ford? The reason is no one wants responsibility. The descendants of great men who start great enterprises want the benefits of ownership but not its responsibilities. And unethical men are more than willing to take a huge cut of the profits, sell rip-off common stock to the public and pocket the rest. Common stock is a pyramid scheme at present, and its true value will be apparent when baby-boomer retirement forces investors to attempt to live on dividends instead of ephemeral capital gains.
These great men failed to nurture in their families the desire for ethical leadership and dominion over assets. They produced trust fund babies. Much of this can be chalked up to hyperindividualism, a defect of the post-Enlightenment West. There is a construction company in Japan that has been in the same family for 1000 years. The world’s largest cymbal company, Zildjian, has been in the same family for almost 400 years.
The inefficiency of the corporate form of ownership, on so many bases, should be an encouragement to those willing to take the task of wealth-building and child-rearing seriously. Capital always flows to the hands best fit to manage it. But we have to stop seeing wealth as a means to avoid responsibility (or worse, reject wealth as evil based on pietist nonsense) but an opportunity for stewardship.