ALL
POV: What Is Capitalism?
by Ayn Rand | November-December 1965
In Pursuit of Wealth: The Moral Case for Finance
by Yaron Brook | September 30, 2017
Inequality Doesn't Matter If We’re All Paid According to the Value We Create
by Don Watkins | October 18, 2016
Who Cares about Inequality?
by Don Watkins | April 28, 2016
Equal Is Unfair: America’s Misguided Fight Against Income Inequality
by Don Watkins | April 19, 2016
Economic Inequality Complaints Are Just A Cover For Anti-Rich Prejudice
by Don Watkins | April 14, 2016
Equality of Opportunity Doesn’t Exist in America — and That’s a Good Thing
by Don Watkins | April 06, 2016
Inherit The Wind . . . And Not Much Else
by Don Watkins | April 05, 2016
Equal is Unfair: America’s Misguided Fight Against Income Inequality
by Don Watkins | October 20, 2015
Religion in America
by The Editors | December 05, 2014
Religion vs. Freedom
by Onkar Ghate | December 03, 2014
Debate: “Inequality: Should We Care?”
by Yaron Brook | May 08, 2014
Economic Inequality: Who Cares?
by The Editors | March 25, 2014
Our Poverty Problem?
by Don Watkins | March 11, 2014
Is Inequality Fair?
by Yaron Brook | March 05, 2014
Government tries to do too much: Opposing view
by Don Watkins | January 26, 2014
“You didn’t build that,” conservative style
by Steve Simpson | December 09, 2013
Why Do 1.4 Million Americans Work At Walmart, With Many More Trying To?
by Doug Altner | November 27, 2013
Atlas Shrugged Is A Book About Pride In One’s Work, And The Success That Results
by Steve Simpson | November 08, 2013
Bernie Madoff, Steve Jobs, and Wall Street Greed
by Don Watkins | September 26, 2013
Justice Department should let US Airways & American Airlines merger proceed
by Tom Bowden | August 16, 2013
What Are The Search Results When You Google ‘Antitrust’?
by Tom Bowden | April 18, 2013
To Be Born Poor Doesn’t Mean You’ll Always Be Poor
by Yaron Brook | April 12, 2013
We Should Be Embarrassed by the Sequester Debate
by Yaron Brook | March 20, 2013
“Give Back” Is One of the World's Most Impoverishing Commands
by Yaron Brook | March 12, 2013
Capitalism in No Way Created Poverty, It Inherited It
by Yaron Brook | February 25, 2013
3 crucial lessons Ayn Rand can teach us today
by Yaron Brook | February 02, 2013
Capitalism without Guilt
by Yaron Brook | January 21, 2013
President Obama Duels With Ayn Rand Over What Makes America Great
by Don Watkins | October 29, 2012
Why Ayn Rand’s Absence From Last Thursday’s Debate Benefits Big Government
by Yaron Brook | October 15, 2012
The Virtue of Employee Layoffs
by Yaron Brook | September 06, 2012
Ayn Rand’s Atlas Shrugged: A Paean to American Liberty
by Don Watkins | August 17, 2012
President Obama vs. My Grandfather
by Don Watkins | July 30, 2012
The Dog-Eat-Dog Welfare State Is Lose-Lose
by Don Watkins | July 12, 2012
Changing the Debate: How to Move from an Entitlement State to a Free Market
by Don Watkins | July 02, 2012
Private Equity Firms Want Acquisitions To Profit, Not Fold
by Doug Altner | June 05, 2012
Opposing view: Celebrate private equity
by Don Watkins | May 29, 2012
The “On Your Own” Economy
by Don Watkins | March 09, 2012
What's Really Wrong with Entitlements
by Don Watkins | February 21, 2012
Happy Birthday, Ayn Rand — Why Are You Still So Misunderstood?
by Don Watkins | February 02, 2012
America Before The Entitlement State
by Don Watkins | November 18, 2011
How Did Ayn Rand’s Atlas Shrugged Predict an America Spinning Out of Control?
by Onkar Ghate | October 31, 2011
What We Owe Steve Jobs
by Don Watkins | October 06, 2011
What’s Missing From The Budget Debate
by Don Watkins | July 12, 2011
Does America Need Ayn Rand or Jesus?
by Onkar Ghate | June 29, 2011
When It Comes to Wealth Creation, There Is No Pie
by Yaron Brook | June 14, 2011
It’s Time To Kill The “Robin Hood” Myth
by Yaron Brook | May 06, 2011
Using Ayn Rand's Values to Create Competitive Advantage in Business
by John Allison | April 04, 2011
In Defense of Finance
by Yaron Brook | February 15, 2011
The Tea Party Will Fail — Unless it Fully Embraces Individualism as a Moral Ideal
by Tom Bowden | January 21, 2011
How About Tax Reparations for the Rich?
by Don Watkins | January 18, 2011
The Guilt Pledge
by Don Watkins | September 22, 2010
How To Succeed In Business: Really Try
by Don Watkins | September 13, 2010
The U.S. Anti-Business Epidemic
by Don Watkins | August 17, 2010
Atlas Shrugged’s Timeless Moral: Profit-Making Is Virtue, Not Vice
by Yaron Brook | July 20, 2010
Capitalism: Who Needs It — Ayn Rand and the American System
by Yaron Brook | June 09, 2010
Apple vs. GM: Ayn Rand Knew the Difference. Do You?
by Don Watkins | March 02, 2010
Commercialism Only Adds to Joy of the Holidays
by Onkar Ghate | December 18, 2009
Why is Ayn Rand Still Relevant: Atlas Shrugged and Today’s World
by Yaron Brook | August 10, 2009
The Corrupt Critics of CEO Pay
by Yaron Brook | May 2009
America’s Unfree Market
by Yaron Brook | May 2009
Energy at the Speed of Thought: The Original Alternative Energy Market
by Alex Epstein | Summer 2009
Is Rand Relevant?
by Yaron Brook | March 14, 2009
Stop Blaming Capitalism for Government Failures
by Yaron Brook | November 13, 2008
From Flat World To Free World
by Yaron Brook | June 26, 2008
Vindicating Capitalism: The Real History of the Standard Oil Company
by Alex Epstein | Summer 2008
The Right Vision Of Health Care
by Yaron Brook | January 08, 2008
Deep-Six the Law of the Sea
by Tom Bowden | November 20, 2007
The Influence of Atlas Shrugged
by Yaron Brook | October 09, 2007
The Morality of Moneylending: A Short History
by Yaron Brook | Fall 2007
Say “No Way!” to “Say on Pay”
by Yaron Brook | May 22, 2007
Atlas Shrugged — America's Second Declaration of Independence
by Onkar Ghate | March 01, 2007
Pay Is Company’s Prerogative
by Yaron Brook | January 08, 2007
Religion and Morality
by Onkar Ghate | October 18, 2006
Net Neutrality vs. Internet Freedom
by Alex Epstein | August 16, 2006
Why Are CEOs Paid So Much?
by Elan Journo | May 11, 2006
To Outsource or to Stagnate?
by Onkar Ghate | August 01, 2004
Ayn Rand's Ideas — An Introduction
by Onkar Ghate | June 02, 2003
Capitalists vs. Crooks
by Elan Journo | July 22, 2002
Forgotten Heroes of 9/11
by Onkar Ghate | May 17, 2002
Religion vs. America
by Leonard Peikoff | 1986
The Sanction of the Victims
by Ayn Rand | November 21, 1981
Egalitarianism and Inflation
by Ayn Rand | 1974
The Moratorium on Brains
by Ayn Rand | November 14, 1971
What Is Capitalism?
by Ayn Rand | November 19, 1967
Is Atlas Shrugging?
by Ayn Rand | April 19, 1964
The Fascist New Frontier
by Ayn Rand | December 16, 1962
America’s Persecuted Minority: Big Business
by Ayn Rand | December 17, 1961
The “New Intellectual”
by Ayn Rand | May 15, 1961
Capitalism vs. Communism
by Ayn Rand | 1961

MORE FROM THE BLOG:

Government And Business in Voice for Reason
Government & BusinessCapitalism

Capitalists vs. Crooks

by Elan Journo | July 22, 2002

According to Federal Reserve chairman Alan Greenspan, “infectious greed” is to blame for the scandals engulfing firms like Enron, WorldCom and Global Crossing. On this view, which virtually all public voices now embrace, businessmen are a breed of predators, eager to lie, cheat and steal in pursuit of profit. In other words, the extent to which people are motivated by making money is the extent to which they are motivated to be crooks. And it is only through government controls, therefore, that society can be protected against the inherent corruptness of capitalist profit-seeking.

In fact, the opposite is true. Engaging in fraud undercuts a company’s value — as the market is amply demonstrating. What money-making requires is honesty and integrity. And the “greedier” a businessman is, the more committed he must be to scrupulous practices.

The fundamental principle of business is trade: the voluntary exchange of value for value, to mutual advantage. To succeed, companies vie with one another to ensure that what they offer — be it cars, tomato soup or bookkeeping — is of consistently high quality. A company whose product is defective, or which seeks to cheat its customers, loses its business. Consider the fate of Arthur Anderson, Enron’s accounting firm. This spring, although Arthur Anderson’s wrongdoing had not even been established, its major clients swiftly took their business elsewhere. Today, Arthur Anderson is effectively defunct.

The need for straight-dealing is inescapable, even in a company’s own bookkeeping. Companies routinely have to raise capital and must therefore meticulously guard their credit ratings. A corporation’s stock price and financial reports indicate its current worth and its ability to create wealth in the future. By earning a reputation for objective accounting statements, a company secures the trust of bankers and stockholders.

Any stain on its credit rating — or even the suspicion of wrongdoing — could mean overnight bankruptcy. Late last year Enron was accused of trying to inflate its worth by hiding $27 billion of liabilities. As the rumors of malfeasance emerged, Enron’s stock price plummeted, as did its ability to borrow money.

To create wealth means to create goods and services which offer a value to the buyer — and that requires an unremitting dedication to improving the product and to giving the customer exactly what he believes he is paying for. Introducing a new car, for instance, requires about $2 billion dollars of R&D, years’ worth of engineering studies — and considerable risk of failure if the product does not match the market’s demands. It is only the manufacturer’s quest for profits that has transformed the automobile from a luxury to an affordable necessity of every family. Today’s cars are cheaper, safer and better equipped because manufacturers know that the way to make money is by offering us ever-enhanced vehicles — not by fleecing us through shoddy goods.

Far from being too “greedy,” too many of America’s CEOs are not greedy enough. They are pragmatic corner-cutters, who fail to recognize that there is far more wealth to be achieved by a consistent, long-range policy of honesty — by creating a quality product and maintaining the company’s reputation over many years — than by squeezing out some range-of-the-moment advantage.

The antibusiness lobby is clamoring for more regulations to protect consumers and investors. But the laws necessary to prove fraud and to punish the guilty already exist, and should be objectively applied. New regulations won’t deter the dishonest few — but will hamstring the innocent. For instance, one proposed regulation would have CEOs personally certify the accuracy of everything on their financial statements. Imagine the potential for innocent, inconsequential errors on the statements of large corporations. Companies would have to expend far more time and money on their accounting than would be necessary were they assumed innocent until proven guilty. That effort earns them nothing; it merely shields them from the predations of zealous bureaucrats.

Nearly four decades ago, an astute economist got it right when he observed that “it is precisely the ’greed’ of the businessman or, more appropriately, his profit-seeking, which is the unexcelled protector of the consumer.” That economist, writing in Ayn Rand’s Capitalism: The Unknown Ideal, was . . . Alan Greenspan.

About The Author

Elan Journo

Senior Fellow and Vice President of Content Products, Ayn Rand Institute