- The Washington Times - Sunday, October 13, 2002

After a year's worth of corporate CEO scandals, it is time to distinguish between the recent exposures of a few corporate malefactors and the prepon-derance of responsible, productive businessmen and women in this country. It is also time to realize that the blurring of the line between the two is no accident to many on the left, who see no distinction between the two.
While in no way apologizing for the guilty few, we need to be equally cognizant of the contributions of the good actors how overwhelming they are and how important is their contribution.
In approaching the issue of corporate malfeasance, it is important to recognize two things. First, everyone believes without hesitation that the Enron executives and their kind elsewhere, who knowingly cheated anyone in sight, should be punished. Second, a significant group on the political left doesn't see such behavior as the aberration it is but fundamental to the private enterprise system itself.
The first premise is so evident it needs no discussion. Yet the second is so overlooked that there is real danger in oversight. Simply, we must make sure we choose the prudent course of fixing a private enterprise system that works well in the absence of ethical aberration. And we must avoid the course of those who see the system itself as an ethical aberration and want to use recent scandals to pursue a broader agenda that is as dangerous or worse than the scandals themselves.
The magnitude of the scandals and their universal condemnation has momentarily eclipsed the fact that there has long been a group for whom private enterprise itself is suspect. These prophets of doom see in capitalism profits of doom.
For the profits of doom prophets, the paragon of enterprise is the nonprofit organization. Contrastingly, the for-profit operation is their pariah because the very idea of profits carries a taint and there is little if any difference between ill-gotten gains and gains at all.
Evidence of how easily this mindset insinuates itself is seen in the definition of the "good corporate citizen" as someone "who gives something back to the community" as if creating jobs and selling goods the public wants is somehow taking something away from the community in the first place.
For the left in general and the prophets in particular, wealth is something to be ashamed of and business is a zero-sum game whereby one person's gain automatically equates with another's loss. Not surprisingly, the wealthy most likely to accept this argument and therefore the prophets' idols are those of inherited wealth. Having done nothing themselves to create their wealth, they are especially susceptible to the guilt of the prophets' mercantilistic mentality.
We need to consciously step back from the precipice of systemic damnation to which it is so easy to unconsciously come. How many bad actor companies can we name 10, maybe 12? Now consider the universe from which they are drawn. In 2000, more than 25 million nonfarm business tax returns were filed and almost 6 million of these had employees. There are more than 13,000 publicly traded companies in the U.S.
What did the overwhelming number of these good businesses do? They created products and jobs that people wanted. And yes, they created profits because without these they could not have created the other two. For this they should neither be castigated nor ashamed. Instead that embarrassment should be left to those who have forgotten a basic economic fact: Without surplus or profits from somewhere, there would be no nonprofits.
Every job, every employee, every employer, every nonprofit, every charity, and yes, every government program, owes its existence to someone's profits. Conversely, no nonprofit and no government program ever did more than indirectly generate a job that was really the result of someone's direct gift or tax payment.
Therefore, we as a society are not bettered as much for the users of another's surplus as we are from the producers of it. Without the former, problems would still be solved because there is never a shortage of ideas for how to spend someone else's money. But without the latter, there would be no means to solve problems.
As we focus on reforming the egregious fraud perpetrated by a few abusers, let us not overlook private enterprises that are good producers. And let us be careful in the zeal to reform the wrongs that we not let ourselves be drawn into the left's broader agenda to undo what is right with the private enterprise system.

J.T. Young is a deputy assistant secretary at the U.S. Treasury Department.


Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide