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Ayn Rand and Friedrich A. Hayek: A Side-by-Side Comparison – Article by Edward W. Younkins

Ayn Rand and Friedrich A. Hayek: A Side-by-Side Comparison – Article by Edward W. Younkins

The New Renaissance HatEdward W. Younkins
August 1, 2015
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Ayn Rand and Friedrich A. Hayek did more than any other writers in the Twentieth Century to turn intellectual opinion away from statism and toward a free society. Although they are opposed on many philosophical and social issues, they generally agree on the superiority of a free market. Rand’s defense of capitalism differs dramatically from Hayek’s explanation of the extended order. In addition, Hayek approves of state activity that violates Rand’s ideas of rights and freedom. The purpose of this brief essay is to describe, explain, and compare the ideas of these two influential thinkers. To do this, I present and explain an exhibit that provides a side-by-side summary of the differences between Rand and Hayek on a number of issues.

In their early years of writing, both Hayek and Rand were dismissed by intellectuals, but they were heralded by businessmen. Hayek began to gain some respect from intellectuals when he published The Road to Serfdom in 1944. He wrote a number of scholarly books, attained formal academic positions, and earned the Nobel Prize for economics in 1974. Rand never did write scholarly works or hold a formal academic position. Her philosophy must be extracted from her essays and her fiction.

Hayek was read in college classes sooner, and to a much greater extent, than was Rand. He was viewed by intellectuals as a responsible and respected scholar, and Rand was not. His vision of anti-statism was more acceptable to intellectuals because he called for some exceptions to laissez-faire capitalism. In his writings he permitted concessions for some state interventions. In his immense and varied body of work, he touched upon a great many fields, including anthropology, evolutionary biology, cognitive science, philosophy, economics, linguistics, political science, and intellectual history. During the last 25 years or so, Rand’s works have been increasingly studied by scholars. There is now an Ayn Rand Society affiliated with the American Philosophical Association and a scholarly publication devoted to the study of her ideas—The Journal of Ayn Rand Studies. In addition, her writings are now being covered in college classes.

A Summary Comparison

Exhibit I provides a summary comparison of Rand and Hayek based on a variety of factors and dimensions. With respect to metaphysics and epistemology, Rand holds that “A is A” and that reality is knowable. Contrariwise, Hayek argues that reality is unknowable and that what men see are distorted representations or reproductions of objects existing in the world. The skeptic Hayek goes so far as to state that the notion of things in themselves (i.e., the noumenal world) can be dismissed. Whereas Rand’s foundation is reality, the best that Hayek can offer as a foundation is words and language.

Hayek supports the view that the human mind must have a priori categories that are prior to, and responsible for the ability to perceive and interpret the external world. He adds to this Kantian view by making the case that each individual mind’s categories are restructured according to the distinct experiences of each particular person.   Each person’s neural connections can therefore be seen as semi-permanent and affected by his or her environment and experiences. The mind’s categories evolve as each specific person experiences the world. According to Hayek, there is pre-sensory knowledge embedded in the structure of the mind and the nervous system’s synaptic connections which can be further created and modified over time. For the neo-Kantian Hayek, knowledge always has a subjective quality.

Reason for Rand is active, volitional, and efficacious. It follows that she sees rationality as man’s primary virtue. She sees progress through science and technology as the result of the human ability to think conceptually and to analyze logically through induction and deduction. Rand also contends that people can develop objective concepts that correspond with reality.

In his philosophy, Hayek relegates reason to a minor role. He argues for a modest perspective of people’s reasoning capabilities. He contends that reason is passive and that it is a social product. Hayek’s message of intellectual humility is primarily aimed at constructivist rationalism rather than critical rationalism. As an “anti-rationalist,” he explained that the world is too complex for any government planner to intentionally design and construct society’s institutions. However, he is a proponent of the limited potential of critical rationalism through which individuals use local and tacit knowledge in their everyday decisions. Hayek views progress as a product of an ongoing dynamic evolutionary process. He said that we cannot know reality but we can analyze evolving words and language. Linguistic analysis and some limited empirical verification provide Hayek with somewhat of an analytical foundation. His coherence theory of concepts is based on agreement among minds. For Hayek, concepts happen to the mind. Of course, his overall theory of knowledge is that individuals know much more than can be expressed in words.

Rand makes a positive case for freedom based on the nature of man and the world. She explains that man’s distinctive nature is exhibited in his rational thinking and free will. Each person has the ability to think his own thoughts and control his own energies in his efforts to act according to those thoughts. People are rational beings with free wills who have the ability to fulfill their own life purposes, aims, and intentions. Rand holds that each individual person has moral significance. He or she exists, perceives, experiences, thinks and acts in and through his or her own body and therefore from unique points in time and space. It follows that the distinct individual person is the subject of value and the unit of social analysis. Each individual is responsible for thinking for himself, for acting on his own thoughts, and for achieving his own happiness.

Hayek denies the existence of free will. However, he explains that people act as if they have free will because they are never able to know how they are determined to act by various biological, cultural, and environmental factors. His negative case for freedom is based on the idea that no one person or government agency is able to master the complex multiplicity of elements needed to do so. Such relevant knowledge is never totally possessed by any one individual. There are too many circumstances and variables affecting a situation to take them all into account. His solution to this major problem is to permit people the “freedom” to pursue and employ the information they judge to be the most relevant to their chosen goals. For Hayek, freedom is good because it best promotes the growth of knowledge in society. Hayek explains that in ordering society we should depend as much as possible on spontaneous forces such as market prices and as little as possible on force. Acknowledging man’s socially-constructed nature, he does not view individuals as independent agents but rather as creatures of society.

According to Rand, the principle of man’s rights can be logically derived from man’s nature and needs. Rights are a moral concept. For Rand, the one fundamental right is a person’s right to his own life. She explains that rights are objective conceptual identifications of the factual requirements of a person’s life in a social context. A right is a moral principle that defines and sanctions one’s freedom of action in a social context. Discussion of individual rights are largely absent from Hayek’s writings. At most he says that rights are created by society through the mechanism of law.

Whereas Rand speaks of Objective Law, Hayek speaks of the Rule of Law. Objective laws must be clearly expressed in terms of essential principles. They must be objectively justifiable, impartial, consistent, and intelligible. Rand explains that objective law is derived from the rational principle of individual rights. Objective Law deals with the specific requirements of a man’s life. Individuals must know in advance what the law forbids them from doing, what constitutes a violation, and what penalty would be incurred if they break the law. Hayek says that the Rule of Law is the opposite of arbitrary government. The Rule of Law holds that government coercion must be limited by known, general, and abstract rules. According to Hayek certain abstract rules of conduct came into being because groups who adopted them became better able to survive and prosper. These rules are universally applicable to everyone and maintain a sphere of responsibility.

Rand espouses a rational objective morality based on reason and egoism. In her biocentric ethics, moral behavior is judged in relation to achieving specific ends with the final end being an individual’s life, flourishing, and happiness. For Hayek, ethics is based on evolution and emotions. Ethics for Hayek are functions of biology and socialization. They are formed through habits and imitation.

Rand advocates a social system of laissez-faire capitalism in which the sole function of the state is the protection of individual rights. Hayek, or the other hand, allows for certain exceptions and interventions to make things work. He holds that it is acceptable for the government to supply public goods and a safety net.

For Rand, the consciousness of the individual human person is the highest level of mental functioning. For Hayek, it is a supra-conscious framework of neural connections through which conscious mental activity gains meaning. He states that this meta-conscious mechanism is taken for granted by human beings. The set of a person’s physiological impulses forms what Hayek calls the sensory order. Perception and pattern recognition follow one’s sensory order which is altered by a person’s own perception and history of experiences

Aristotle is Rand’s only acknowledged philosophical influence. They both contend that to make life fully human (i.e., to flourish), an individual must acquire virtues and make use of his reason as fully as he is capable. Hayek was influenced by Kant and Popper in epistemology, Ferguson and Smith in evolutionary theory, Hume in ethics, and Wittgenstein in linguistics.

Although Rand and Hayek are opposed on many philosophical questions, they generally agree on the desirability of a free market and are among the most well-known defenders of capitalism in the twentieth century. The works of both of these intellectual giants are highly recommended for any student of liberty.

 Exhibit I

A Summary Comparison

 

Rand

 

Hayek

Foundation Reality Words and Language
Knowledge Reality is knowable. Skepticism – The idea of things in themselves can be dismissed.
Reason Reason is active, volitional, and efficacious. Reason is passive and a social product.
Progress Based on power of human reason and conscious thought Evolution and social selection
Analytic Method Logical analysis, including induction and deduction Linguistic analysis and empiricism
Theory of Concepts Objective concepts that correspond with reality Coherence or agreement among minds
Freedom Positive case for freedom Negative case for “freedom”
Free Will Man has free will. Man is determined but acts as if he has free will.
Subject of value and unit of social analysis Individual happiness Perpetuation of society (i.e., the group)
The Individual Independent Dependent—man is socially constituted
Rights Based on the nature of the human person Created by society through law
Law Objective Law Rule of Law
Ethics and Morality Rational objective morality based on reason and egoism Evolutionary and emotive ethics based on altruism which is noble but cannot be implemented because of ignorance. Established through habits and imitation
Desired Social System Laissez-faire capitalism Minimal welfare state that supplies public goods and safety net
Highest level of understanding and mental functioning Consciousness of the Individual Meta-conscious framework—neural connections
Philosophical influences Aristotle Ferguson, Smith, Kant, Hume, Popper, Wittgenstein
“Exploring Capitalist Fiction” – Allen Mendenhall Interviews Edward W. Younkins

“Exploring Capitalist Fiction” – Allen Mendenhall Interviews Edward W. Younkins

The New Renaissance Hat
Allen Mendenhall and Edward W. Younkins
February 16, 2014
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This interview is reprinted with permission from Allen Mendenhall’s blog.

Read Mr. Stolyarov’s review of Dr. Younkins’s book, Exploring Capitalist Fiction.

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AM:       Thank you for taking the time to do this interview.  I’d like to start by asking why you chose to write Exploring Capitalist Fiction.  Was there a void you were seeking to fill?

EY:          The origins of this book go back to the Spring of 1992 when I began teaching a course called Business Through Literature in Wheeling Jesuit University’s MBA program.  Exploring Capitalist Fiction is heavily based on my lectures and notes on the novels, plays, and films used in this popular course over the years and on what I have learned from my students in class discussions and in their papers.

The idea to write this book originated a few years ago when one of Wheeling Jesuit University’s MBA graduates, who had taken and enjoyed the Business Through Literature course, proposed that I write a book based on the novels, plays, and films covered in that course.  I agreed as I concluded that the subject matter was important and bookworthy and that the book would be fun for me to write and for others to read.  I went on to select twenty-five works to include in the book out of the more than eighty different ones that had been used in my course over the years.  I have endeavored to select the ones that have been the most influential, are the most relevant, and are the most interesting.  In a few instances, I have chosen works that I believe to be undervalued treasures.

I was not intentionally trying to fill a void as there are a number of similar books by fine authors such as Joseph A. Badaracco, Robert A. Brawer, Robert Coles, Emily Stipes Watts, and Oliver F. Williams, among others.  Of course, I did see my evenhanded study of business and capitalism in literature as a nice complement and supplement to these works.

AM:       I assume that you’ll use this book to teach your own courses, and I suspect other teachers will also use the book in their courses.  Anyone who reads the book will quickly understand the reason you believe that imaginative literature and film have pedagogical value in business courses, but would you mind stating some of those reasons for the benefit of those who haven’t read the book yet?

EY:          The underpinning premise of this book and of my course is that fiction, including novels, plays, and films, can be a powerful force to educate students and employees in ways that lectures, textbooks, articles, case studies, and other traditional teaching approaches cannot.  Works of fiction can address a range of issues and topics, provide detailed real-life descriptions of the organizational contexts in which workers find themselves, and tell interesting, engaging, and memorable stories that are richer and more likely to stay with the reader or viewer longer than lectures and other teaching approaches.  Imaginative literature can enrich business teaching materials and provide an excellent supplement to the theories, concepts, and issues that students experience in their business courses.  Reading novels and plays and watching films are excellent ways to develop critical thinking, to learn about character, and to instill moral values.  It is likely that people who read business novels and plays and watch movies about business will continue to search for more of them as sources of entertainment, inspiration, and education.

AM:       Who are the intended audiences for your new book?

EY:          My target audiences include college students, business teachers, general readers, and people employed in the business world.  My summaries and analyses of twenty-five works are intended to create the feel of what it is like to work in business.  The premise of the book is that fiction can provide a powerful teaching tool to sensitize business students without business experiences and to educate and train managers in real businesses.  Studying fictions of business can provide insights to often inexperienced business students and new employees with respect to real-life situations.

In each of my 25 chapters I provide a sequential summary of the fictional work, interspersed with some commentary that highlights the managerial, economic, and philosophical implications of the ideas found in the work.  My emphasis is on the business applications of the lessons of particular novels, plays, and films.  This book highlights the lessons that an individual can take from each work and apply to his or her own life.  It is not literary analysis for its own sake.

I do not delve deeply into these novels, plays, and films in order to identify previously-covered and previously-uncovered themes in existing scholarship.  My book is essentially a study guide for people interested in becoming familiar with the major relevant themes in significant works of literature and film.  The book can also serve as a guide for professors who desire to expand their teaching approaches beyond the traditional ones employed in schools of business.

Of course, literary scholars can use my book as a starting point, catalyst, or reference work for their own in-depth scholarly studies of these and other works.  For example, I can envision a number of scholars, from a variety of viewpoints, contributing essays to book collections devoted to different literary works.  One possible collection that readily comes to mind would be devoted to David Mamet’s Glengarry Glen Ross.  Other candidates for potential collections might include Howell’s The Rise of Silas Lapham, Norris’s The Octopus, Dreiser’s The Financer, Cahan’s The Rise of David Levinsky, Lewis’s Babbitt, Miller’s Death of a Salesman, Hawley’s Executive Suite, Lodge’s Nice Work, Sterner’s Other People’s Money, among others.  It would be great if some of the contributing literary scholars to these volumes would come from pro-business, pro-capitalist thinkers such as Paul Cantor, Stephen Cox, Ryan McMaken, Sarah Skwire, Amy Willis, Michelle Vachris, and yourself.  As you know most literary critics are from the left.  Those mentioned above celebrate individualism and freedom in place of collectivism and determinism.

AM:       What can be learned from business fiction?

EY:          Fiction can be used to teach, explicate, and illustrate a wide range of business issues and concepts.  Many fictional works address human problems in business such as managing interpersonal conflict and office politics; using different styles of management; the potential loss of one’s individuality as a person tends to become an “organization man”; the stultifying effect of routine in business; the difficulty in balancing work life and home life; hiring and keeping virtuous employees; maintaining one’s personal integrity while satisfying the company’s demands for loyalty, conformity and adaptation to the firm’s culture; communication problems a business may experience; fundamental moral dilemmas; depersonalization and mechanization of human relationships; and so on.  Fictional works tend to describe human behavior and motivations more eloquently, powerfully, and engagingly than texts, articles, or cases typically do.  Literary authors and filmmakers are likely to develop and present ideas through individual characters.  They depict human insights and interests from the perspective of individuals within an organizational setting.  Reading imaginative literature and watching films are excellent ways to develop critical thinking and to learn about values and character.

Many novels, plays, and films are concerned with the actual operation of the business system.  Some deal directly with business problems such as government regulation, cost control, new product development, labor relations, environmental pollution, health and safety, plant openings and closings, tactics used and selection of takeover targets, structuring financial transactions, succession planning, strategic planning, the creation of mission statements, the company’s role in the community, social responsibility, etc.  Assessing fictional situations makes a person more thoughtful, better prepared for situations, and better able to predict the consequences of alternative actions.  Fiction can address both matters of morality and practical issues.  There are many fine selections in literature and film which prompt readers to wrestle with business situations.

Older novels, plays, and films can supply information on the history of a subject or topic.  They can act as historical references for actual past instances and can help students to understand the reasons for successes and failures of the past.  Older literature can provide a good history lesson and can help people to understand the development of our various businesses and industries.  These stories can be inspiring and motivational and can demonstrate how various organizations and managers were able to overcome obstacles, adapt, and survive.  Fictional works are cultural artifacts from different time periods that can be valuable when discussing the history of business.  Many fictional works present history in a form that is more interesting than when one just reads history books.

Imaginative literature reflects a variety of cultural, social, ethical, political, economic, and philosophical perspectives that have been found in American society.  Various images of businessmen have appeared in fictional works.  These include the businessman as Scrooge-like miser, confidence man, robber baron, hero, superman, technocrat, organization man, small businessman, buffoon, rugged individualist, corporate capitalist, financial capitalist, man of integrity, etc.

AM:       How will your teaching approach change in your Business Through Literature course now that you have published your own book on the subject?

EY:          In the past students in this course have read, analyzed, and discussed novels, plays, and films.  Each student prepared a minimum of 6 short papers (2000 words each) on the assigned works.  Grades were based on these papers and class discussions.

I am experimenting this semester using my book in the class for the first time.  I am requiring each student to take notes on each chapter of the book to help them in bringing up topics for class discussion and in participating in class discussions.  Each student is also required to prepare and turn in three essay questions on each chapter.  These are turned in before each relevant class.  Grades for the class are based on class participation and two essay tests.

AM:       Isn’t the reverse also true that literature students ought to study economics or at least gain an understanding of business from something besides imaginative literature and film, which tend not to portray capitalists in a favorable light?

EY:          It would definitely be beneficial for literature students to study classes in business areas such as management, marketing, accounting, and finance.  It would help them somewhat if they took a course or two in economics.  Unfortunately, almost all college-level economics courses are based on Keynesian economics.  I would encourage anyone who takes such courses to read and study Austrian economics in order to gain a more realistic perspective.

AM:       You’ve written a great deal about Ayn Rand, and the chapter on Atlas Shrugged is the longest one in your book.  Rand can be a divisive figure, even, perhaps especially, among what you might call “libertarians” or “free marketers” or “capitalists” and the like.  But even the people in those categories who reject Objectivism tend to praise Rand’s novels.  What do you make of that, and do you think there’s a lesson there about the novel as a medium for transmitting philosophy?

EY:          I suspect that there are a lot of people like me who value “novels of ideas.”  There have been many good philosophical novels but none have been as brilliantly integrated and unified as Atlas Shrugged.  Rand characterizes grand themes and presents an entire and integrated view of how a man should live his life.  Rand’s great power comes from her ability to unify everything in the novel to form an integrated whole.  The theme and the plot are inextricably integrated.  Rand is a superb practitioner of synthesis and unity whose literary style and subject are organically linked and fused to the content of her philosophy.  She unifies the many aspects of Atlas Shrugged according to the principles of reality.  People from the various schools of “free-market” thought are in accord in promoting an appropriate reality-based social system in which each person is free to strive for his personal flourishing and happiness.

AM:       I want to ask about Henry Hazlitt’s Time Will Run Back, the subject of chapter twelve of your book.  Why do you think this book has not received much attention?  It has been, I’d venture to say, all but forgotten or overlooked by even the most ardent fans of Hazlitt.  Is the book lacking something, or are there other factors at play here?

EY:          Hazlitt’s novel may not be “literary” enough for many people.  However, in my opinion, the author does skillfully use fiction to illustrate his teachings on economics.  I think that the book also has a good story line.  Economics professors tend to shy away from using it in their classes.  Some may be so quantitatively oriented that they cannot envision using a novel to teach economics.  Others may perceive the Austrian economics principles found in Time Will Run Back to not fit in with the Keynesian economics principles found in most textbooks (and of course they are right).

AM:       Thank you again for doing this interview.  All the best in 2014.

Exploring_Capitalist_Fiction Edward W. Younkins. Exploring Capitalist Fiction:  Business Through Literature and Film. Lanham, Maryland: Lexington Books, 2014.

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Dr. Edward W. Younkins is Professor of Accountancy at Wheeling Jesuit University. He is the author of Capitalism and Commerce: Conceptual Foundations of Free Enterprise [Lexington Books, 2002], Philosophers of Capitalism: Menger, Mises, Rand, and Beyond [Lexington Books, 2005] (See Mr. Stolyarov’s review of this book.), and Flourishing and Happiness in a Free Society: Toward a Synthesis of Aristotelianism, Austrian Economics, and Ayn Rand’s Objectivism [Rowman & Littlefield Pub Incorporated, 2011] (See Mr. Stolyarov’s review of this book.). Many of Dr. Younkins’s essays can be found online at his web page at www.quebecoislibre.org. You can contact Dr. Younkins at younkins@wju.edu.

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Allen Mendenhall is a writer, attorney, editor, speaker, and literary critic.  As of January 2013, he is a staff attorney for Chief Justice Roy S. Moore of the Supreme Court of Alabama.  He holds a B.A. in English from Furman University, M.A. in English from West Virginia University, J.D. from West Virginia University College of Law, and LL.M. in transnational law from Temple University Beasley School of Law.  He is a Ph.D. candidate at Auburn University, where he received a Graduate Dean Fellowship. He is managing editor of the Southern Literary Review and has been an adjunct legal associate at the Cato Institute as well as a Humane Studies Fellow with the Institute for Humane Studies in Arlington, Virginia.  He is a member of The Philadelphia Society and an associate of The Abbeville Institute and soon will serve as an ambassador for the Foundation for Economic Education (FEE).

He has studied at the University of London (Birkbeck College), the Shakespeare Institute of the University of Birmingham, Centro Universitario Vila Velha, Fundacao Getulio Vargas (Direito Rio), and the Tokyo campus of Temple University Beasley School of Law.

He is the author of over 100 publications in such outlets as law reviews, peer-reviewed journals, magazines, newspapers, literary journals and periodicals, and encyclopedias.  He lives in Auburn, Alabama, with his wife, Giuliana, and son, Noah, and blogs at The Literary Lawyer, The Literary Table, Austrian Economics and Literature, and TheMendenhall.

Review of Edward W. Younkins’s “Exploring Capitalist Fiction” – Article by G. Stolyarov II

Review of Edward W. Younkins’s “Exploring Capitalist Fiction” – Article by G. Stolyarov II

The New Renaissance Hat
G. Stolyarov II
October 12, 2013
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Exploring Capitalist Fiction, a new volume of literary analysis by Dr. Edward W. Younkins, offers perceptive, relevant, and engaging commentaries on 25 works of fiction which portray the business world and its relationship to all areas of human life. The novels, plays, and films featured in the book span 125 years of literary culture – from The Rise of Silas Lapham (1885) by William Dean Howells to the 2010 Oliver Stone film Wall Street: Money Never Sleeps. This volume offers thorough coverage of both works that portray heroic entrepreneurs and economic liberty in a positive light – such as Ayn Rand’s Atlas Shrugged, Garet Garrett’s The Driver, and Henry Hazlitt’s Time Will Run Back – as well as works that are more critical of the business world – including Edward Bellamy’s Looking Backward, Sinclair Lewis’s Babbitt, Frank Norris’s The Octopus, and the Wall Street films. In each of his essays, Younkins provides a sequential summary of the fictional work, interspersed with commentary that highlights the philosophical and economic implications of major elements and integrates them with the historical context of the time period in which the work takes place.

Younkins is to be commended for emphasizing the value of fiction as a teaching tool for both students of business and individuals immersed in the business world. A thorough reading of the book’s Conclusion is highly recommended for attaining an understanding of the unique ability of fiction to communicate memorable lessons rooted in specific, richly detailed situations which render the conflicts, dilemmas, and options faced by individuals in the business world more palpable and engaging than would a sole reliance on lectures, case studies, and outlines of business and economic concepts. In addition, the Conclusion offers a fast-paced chronological overview of many more fictional works which address business themes and which have made their mark on the world of artistic culture.

As with his previous volumes, where Dr. Younkins provided integrated presentations of the thoughts of great philosophers and economists throughout the centuries, this book provides a refreshing focus on human flourishing and the application of the lessons of particular novels, plays, and films toward the improvement of both one’s own condition and the degree of prosperity found in the broader economy. This is not literary analysis for its own sake, but rather a book that highlights the lessons an individual can take from each great work and apply to his or her own life.

Younkins combines his support for free markets, entrepreneurial innovation, individualism, reason, and moral responsibility with an ability to point out the many valuable insights in those works which criticize capitalism as conventionally understood. He utilizes the insights of Austrian economics and his extensive knowledge of economic history to show how the bleak portrayals of businessmen and the business world in these books stem from the consequences of situations where the principles of honest free commerce and individual rights were violated. When critics of capitalism express their objections through fiction, they inevitably portray situations where fraud, corruption, morally questionable manipulation, corporatist special privileges, thoughtless conformity, and zero-sum thinking are involved. All of these are indeed negative attributes from the standpoints of free markets and rational philosophy as well, and Younkins’s analysis shows that the works of the critics do make valid points – provided that one understands that the system they are criticizing is the one that has actually prevailed in the Western world over the past century. This is the system which mixes aspects of capitalist free enterprise with significant aspects of corporatist cronyism as well as central planning. It is a system quite different from the free-market capitalism advocated by Henry Hazlitt, Garet Garrett, and Ayn Rand. Indeed, in Atlas Shrugged, the protagonists go on strike precisely against this sort of cronyist system, though one that is farther-gone than our own. In Tucker: The Man and His Dream, an excellent movie to which Younkins devotes  a chapter, this is also the system which attempts to suppress a genuine forward-thinking capitalist innovator, Preston Tucker, through the use of political force, motivated by the lobbying of the staid Big Three automobile companies.

For readers of all persuasions, Exploring Capitalist Fiction is an excellent means to appreciate the richness and variety of fictional portrayals of business, especially since the Second Industrial Revolution of the late 19th century. The book offers a concise introduction to many works and endeavors to motivate readers to seek out and experience the original novels, plays, and films. Hopefully, it will inspire many people to explore these great works of fiction, as it has already inspired me on multiple occasions.

Disclosure: The author received a free copy of the book in advance of publication.

The Best Novels and Plays about Business: Results of a Survey – Article by Edward W. Younkins

The Best Novels and Plays about Business: Results of a Survey – Article by Edward W. Younkins

The New Renaissance Hat
Edward W. Younkins
May 10, 2013
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My Koch Research Fellows, Jomana Krupinski and Kaitlyn Pytlak, and I conducted a survey of 250 Business and Economics professors and 250 English and Literature professors. Colleges and universities were randomly selected and then professors from the relevant departments were also randomly selected to receive our email survey. They were asked to list and rank from 1 to 10 what they considered to be the best novels and plays about business. We did not attempt to define the word “best”,  leaving that decision to each respondent. We obtained sixty-nine usable responses from Business and Economics professors and fifty-one from English and Literature professors. A list of fifty choices was given to each respondent and an opportunity was presented to vote for works not on the list. When tabulating the results, ten points were given to a novel or play in a respondent’s first position, nine points were assigned to a work in the second position, and so on, down to the tenth listed work, which was allotted one point. The table below presents the top twenty-five novels and plays for each group of professors. Interestingly, fifteen works made both top-25 lists. These are noted in bold type.
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The Best Novels and Plays about Business

Business and Economics Professors
Points
English and Literature Professors
Points
1.   Atlas Shrugged, Ayn Rand
457
1.   Death of a Salesman, Arthur Miller
282
2.   The Fountainhead, Ayn Rand
297
2.   Bartleby: The Scrivener, Herman Melville
259
3.   The Great Gatsby, F. Scott Fitzgerald
216
3.   The Great Gatsby, F. Scott Fitzgerald
231
4.   Death of a Salesman, Arthur Miller
164
4.   The Jungle, Upton Sinclair
143
5.   Time Will Run Back, Henry Hazlitt
145
5.   Babbitt, Sinclair Lewis
126
6.   The Jungle, Upton Sinclair
136
6.   Glengarry Glen Ross, David Mamet
121
7.   The Gilded Age, Mark Twain and Charles Dudley Warner
95
7.   The Rise of Silas Lapham, William Dean Howells
98
8.   Glengarry Glen Ross, David Mamet
89
8.   American Pastoral, Philip Roth
85
9.   God Bless You, Mr. Rosewater, Kurt Vonnegut, Jr.
57
9.   The Confidence Man, Herman Melville
75
10. Other People’s Money, Jerry Sterner
57
10. The Fountainhead, Ayn Rand
75
11. Bartleby: The Scrivener, Herman Melville
55
11. A Hazard of New Fortunes, William Dean Howells
66
12. A Man in Full, Tom Wolfe
48
12. The Octopus, Frank Norris
65
13. Babbitt, Sinclair Lewis
47
13. Atlas Shrugged, Ayn Rand
62
14. The Man in the Gray Flannel Suit, Sloan Wilson
43
14. Nice Work, David Lodge
62
15. Rabbit is Rich, John Updike
41
15. The Big Money, John Dos Passos
59
16. Major Barbara, George Bernard Shaw
39
16. The Gilded Age, Mark Twain and Charles Dudley Marner
58
17. Dombey and Son, Charles Dickens
33
17. Rabbit is Rich, John Updike
55
18. The Goal, Eliyahu M. Goldratt
33
18. Seize the Day, Saul Bellow
55
19. The Driver, Garet Garrett
32
19. Mildred Pierce, James M. Gain
54
20. Executive Suite, Cameron Hawley
32
20. The Financier, Theodore Dreiser
53
21. The Way We Live Now, Anthony Trollope
32
21. Dombey and Son, Charles Dickens
51
22. American Pastoral, Philip Roth
29
22. Sometimes a Great Notion, Ken Kesey
45
23. The Octopus, Frank Norris
29
23. The Last Tycoon, F. Scott Fitzgerald
44
24. Sometimes a Great Notion, Ken Kesey
28
24. The Moviegoer, Walker Percy
43
25. North and South, Elizabeth Gaskell
27
25. God Bless You, Mr. Rosewater, Kurt Vonnegut, Jr.
39

 

Dr. Edward W. Younkins is Professor of Accountancy at Wheeling Jesuit University. He is the author of Capitalism and Commerce: Conceptual Foundations of Free Enterprise [Lexington Books, 2002], Philosophers of Capitalism: Menger, Mises, Rand, and Beyond [Lexington Books, 2005] (See Mr. Stolyarov’s review of this book.), and Flourishing and Happiness in a Free Society: Toward a Synthesis of Aristotelianism, Austrian Economics, and Ayn Rand’s Objectivism [Rowman & Littlefield Pub Incorporated, 2011] (See Mr. Stolyarov’s review of this book.). Many of Dr. Younkins’s essays can be found online at his web page at www.quebecoislibre.org. You can contact Dr. Younkins at younkins@wju.edu

Reflections on Victor Hugo’s “Les Misérables” – Article by Edward W. Younkins

Reflections on Victor Hugo’s “Les Misérables” – Article by Edward W. Younkins

The New Renaissance Hat
Edward W. Younkins
February 18, 2013
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This essay is not a review of Tom Hooper’s recently released film of the tremendously popular 1980s stage musical. However, the release of this film has given me the occasion to read and to reflect upon the original text of Victor Hugo’s 1862 classic, Les Misérables, a mosaic of social indictment, history, social philosophy, sentimentality, and spirituality.

Victor Hugo’s Les Misérables (1862) is the great prose epic of the nineteenth century. Interweaving the social and spiritual threads of human life, the novel has been influential in making people desire a more just world. In Les Misérables the author condemns the unjust class-based social structure in nineteenth-century France for turning good people into criminals and beggars. He makes a case that crime and poverty can be eliminated through universal education, a criminal justice system that is flexible and focused on rehabilitation rather than punishment, and the more equal and humane treatment of women. Despite these broad recommendations, Hugo offered no practical solutions for reforming schools, the police, the courts, and the prisons. Les Misérables is a call for a wiser and nobler civilization. When it was released, it inspired a great deal of sympathy for hapless people oppressed by the state. It was also viewed as a celebration of revolution against tyranny.

Les Misérables is an epic novel focused on characters fighting against their exploitation and oppression. We see the injustices and disproportionate sentences piled upon Jean Valjean, the abuses suffered by Fantine, the brutality foisted on Cosette, the maltreatment of Enjolras  and his fellow revolutionaries, the plight of homeless children, and so on. All of these are examples of society’s injustice toward the lower classes. Through these stories, the novel exudes sympathy from the reader for the most wretched in society. The message is that, if men murder and steal and women fall from grace out of desperation, it is not their fault because they can find no honorable path to sustainability within the constructs of society. Rather, it is the fault of society and its creations, the state and the law. The state and its legal system are shown to be disinterested in the conditions of the dangerous classes. Society is thus culpable for dehumanizing the poor and for the crimes committed by the dregs of society. Les Misérables chronicles the corruption of police power, shows that society gives the convict no chance for redemption, and illustrates how France’s prison system not only continues, but also accelerates, the downward spiral of criminals. On the one hand, Valjean represents suppressed and destitute people whose place in life is determined by positive laws created by society’s elite in order to perpetuate their own superiority. On the other hand, Valjean illustrates that it is possible for men to rise above their circumstances.

Bishop Myriel is not a typical bishop or even a conventional Christian. He operates on his own innate sense of morality—it is not provided by Christianity. True morality is higher than, and separate from, any particular religion. Religions pass away but God remains. Myriel acts out of genuine sympathy and caring for the weak and the downtrodden. The Bishop has chosen a consistent belief system and life path and has dedicated his life to the active service of humanity by performing good deeds and engaging in heartfelt charity. Myriel believes that it is each man’s duty to perform good acts despite the fact that he may never know if the good acts he has performed for people will lead them to change their lives for the good. His religious humanism is far from orthodox Christianity.

When Myriel, the Bishop of Digne, forgives Jean Valjean for the theft of the silver, he offers him his initial opportunity for redemption. After this incident, Valjean has a choice to make. He could either continue on a path of crime or he could follow the example set by the Bishop. Having learned from his past, Valjean goes on to help the poor and the wretched. He adopts a new life, identity, and mentality. His new life includes honesty, love of neighbor, love of enemy, and love of God. Throughout his life, the Bishop is always with him as symbolized by the candlesticks. Myriel acts as a model and an inspiration for Valjean for the rest of his life. Throughout the novel, Valjean imitates more and more the Bishop’s asceticism, renunciation of worldly pleasures, and emphasis on sacrifice.

The moral duty to help the poor that Valjean accepts does not come from any social institutions. Rather, it flows from an expansive notion of God. Valjean illustrates that reason is inadequate in the resolution of moral problems. However, thought does direct Valjean toward the consideration of a dilemma, but at every decision point his emotions serve as the guide to right behavior. The hero performs good deeds intuitively as if he is acting in response to an inner voice. This Kantian perspective is that each person has an inner voice (perhaps his conscience), the source of moral laws, that tells him what his duties (i.e., moral obligations) are. The message seems to be that faith can transform one’s life. For Valjean, merely believing in God is not enough. He does not just contemplate the divine. Having learned from his experiences, he goes on to act to help people by his own initiative. For him, God, fulfillment, and salvation are attainable without the help of any organized religion.

Choice is difficult for Valjean who has a double nature—he has the experience of a convict and the instincts of a saint. He is a product of the social conditions that led him to steal a loaf of bread for his sister’s family and his prison time for punishment of that crime. Despite that, he still has the potential for good in him. Over and over he has to choose between doing what is right and doing what is safe and secure. At virtually every turn Valjean doubts and questions himself before making the morally correct choice. Les Misérables is very much a story of a man’s conscience at war with itself. After meeting the radiantly spiritual Bishop Myriel, Valjean’s life becomes a continuing struggle between his activated moral sense and his life-long criminal tendencies.

As Monsieur Madeleine, Jean Valjean redeems himself by becoming an innovative entrepreneur who creates a successful manufacturing business that brings about progress and prosperity for an entire region. This successful and kind person voluntarily does good deeds to help the less fortunate. Valjean’s actions exhibit justice to individual people rather than observance of the requirements of some abstract legal order. In addition to providing a reasonable standard of living for his employees, he builds schools and hospitals with his own money and distributes a large share of his wealth to the poor. Then, of course, he takes care of Fantine and rescues, raises, and protects Cosette. Ironically, the tolerant Valjean sympathizes with others but is unable to sympathize with himself. He understands that, although a person can repent of a crime, he can never escape the dishonor from committing it.

Inspector Javert cannot accept transgressions of the law regardless of circumstances. He represents the idea of punitive secular justice and is solely concerned with detection and retribution. Javert is absolutely committed to rules and to their administration. As a defender of France’s legal system, he is dedicated to following the letter of the law rather than the spirit of the law. The well-intentioned, rigid, and dogmatic Javert wants to protect society from the criminal element and has total faith in the system of laws that he represents. Javert, the personification of public authority, contends that theft is wrong regardless of mitigating factors. Myriel, representing morality, would say that theft should be forgiven in the case when one acted to keep people from starving. Of course, our hero, Valjean, is caught between these two worldviews. Toward the end of the novel, Javert comes to understand that Valjean is concerned with a moral law higher than positive state law. At the end he empathizes with Valjean and comprehends that divine law has supremacy. Javert commits suicide because this realization disaffirms everything in his life that he believed in. The story of Javert provides a lesson about the limitations of the law of men. At the end of his life, Javert understands that Jean Valjean’s resistance to Javert’s tyranny is rooted in a belief in a higher power and law than the laws of men.

Enjolras and his diverse band of revolutionaries have a dream of a better world and do all they can to make that world a reality. They love man, tend to reject organized religions (including Christianity), and attempt to overturn the existing social order. Enjolras, the leader of the ABC (the Abaissé or the abased) Society wants to elevate men. The ABC’s 1832 revolt demanded legislation that would make possible liberty, justice, equal education, equal opportunity, and so on. Enjolras is a devoted, purposeful, political idealist who inspires others with his utopian vision of future progress. The other revolutionaries turn to Enjolras for the meanings behind their actions.

The novel teaches that individual men are dignified, honorable, and benevolent, but that social institutions are not, the result being the corruption of individual human beings. Like Rousseau and Turgot, Hugo subscribes to the idea of the natural goodness of man. All three believed in progress and in the perfectibility of man. They viewed progress as a basic law of the universe. Created by God, man has the capacity to become a civilized moral person if he is not corrupted by society. It is the corrupting influence of society that is responsible for the misconduct of the individual. If individuals are properly educated then they would not want to do evil.

Hugo maintains that society must be changed, but also that it is individuals who must first be transformed. It is these transformed individuals who can then foster the advancement of society. Accepting the Platonic idea that the individual’s soul is noble but the body is degraded, the author of Les Misérables teaches that one must achieve spiritual grandeur and a virtuous character in order to battle for justice in the here and now. Some individuals have the ability to triumph over evil both in themselves and in society and its institutions if they are willing to actively respond to the divine. In Les Misérables the life of each character influences others. It follows that, if each individual comprehends and accepts his influences on other persons, then society may become more just, caring, and merciful. Hugo contends that the requisite love of humanity can only come from faith in the divine. Faith in God is thus placed at the heart of this work. For Hugo, belief in God by acting people of good will is necessary to instill the social order with kindness and to make society more humane. Like Pascal, Hugo urges his readers to bet in favor of the existence of God and perhaps even in the possibility of an afterlife for the soul. In Les Misérables there are only a few exceptional virtuous individuals such as Myriel, Jean Valjean, and Enjolras, who can attain this level of existence. It follows that rehabilitation and elevation of the social order is most likely impossible given the above requirement and reality.

The novel’s ethic of social service emphasizes the alleviation of poverty. It portrays poor people being helped by the charitable works of a private individual (Valjean) rather than by government. Depicting the abject poverty of the poor, Les Misérables questions the morality of a political and economic system that permits children to be orphaned and homeless, mothers dying in the streets, and good men imprisoned for minor transgressions committed to feed their families. Hugo’s goal was to elicit his readers’ compassion and to stimulate their moral sensibilities by portraying how poverty brutalizes and dehumanizes people and how strict and relentless law enforcement creates the savages that it wants to eliminate. He wanted to educate the bourgeois and to awaken their consciousness and concern for France’s social problems. Hugo wanted people to take action to ease the burden of the less fortunate through good deeds and through changes in the social system. Les Misérables is Hugo’s plea for social change that vacillates between human and institutional reality and his hope for, and vision of, a better world.

In Les Misérables Hugo depicts that society is nothing more than the collection of individuals whose lives affect one another. For example, it is clear that Jean Valjean is concerned only with the individuals who make up society. In the novel, the circumstances and conduct of various seemingly randomly introduced characters converge and become intertwined with the struggles of Valjean. From the beginning of the story, there is a web of influence that builds as characters affect one another. Early on we see G______, a representative of the assembly during the French Revolution that dissolved the monarchy, humbling Bishop Myriel who recognizes his moral devotion to humanity and progress prompting the Bishop to redouble his own tenderness and love for the weak and the suffering. The network of interconnections grows as characters such as Valjean, Fantine, Cosette, Javert, Fauchelevant, the Thénardiers, Marius, M. Gillenormand, Colonel Pontmery, Champathieu, Enjolras, and others appear. The author brings many of these characters together toward the climax of the novel.

Les Misérables illustrates that in every idea, and that for every person, perspective is partial and, therefore, insufficient by itself alone. Hugo shows that the complexity of life requires that no one philosophy, perspective, emotion, tradition, or behavior is capable of providing a total picture of what it means to be human. Like Kant, Hugo laments the fact that a person can only perceive and comprehend things through his own consciousness. According to Kant, man’s knowledge lacks validity because his consciousness possesses identity. For Kant, knowledge, to be valid, must not be processed in any way by consciousness. Hugo, like Kant, seems to be looking for knowledge that could be called absolute, unqualified, pure, or diaphanous. Kant maintains that identity, which itself is the essence of existence, invalidates consciousness. To know what is true, a man would have to abandon his own nature, which is an absurd impossibility. It follows that for both Hugo and Kant, reason must be forsaken and the emotions must be embraced, if one wants to deal with the fundamental concerns of existence. Hugo does seem to imply that knowledge can be enhanced by dialectically relating each perspective with opposing viewpoints. However, he realizes that, even with this dialectic interaction, one’s knowledge would still be limited. Even when many angles of perspective can be coordinated simultaneously, one’s understanding of a process, experience, or event is still limited.

Les Misérables is a fascinating maze of characters, emotions, ideas, paradoxes, and antitheses. The novel co-mingles ever-shifting and blurred shades of criminality, heroism, misery, resilience, good, evil, irony, pathos, poetry, free will, providence, action, the social, the spiritual, and much more. Hugo thus deals with the emotions, hopes, fears, passions, and doubts that are reflective of people’s common humanity. Les Misérables is a detailed reporting of men’s feelings and ideas that transcend time and place. It follows that this great novel is as relevant today as when it was published more than 150 years ago.

Dr. Edward W. Younkins is Professor of Accountancy at Wheeling Jesuit University. He is the author of Capitalism and Commerce: Conceptual Foundations of Free Enterprise [Lexington Books, 2002], Philosophers of Capitalism: Menger, Mises, Rand, and Beyond [Lexington Books, 2005] (See Mr. Stolyarov’s review of this book.), and Flourishing and Happiness in a Free Society: Toward a Synthesis of Aristotelianism, Austrian Economics, and Ayn Rand’s Objectivism [Rowman & Littlefield Pub Incorporated, 2011] (See Mr. Stolyarov’s review of this book.). Many of Dr. Younkins’s essays can be found online at his web page at www.quebecoislibre.org. You can contact Dr. Younkins at younkins@wju.edu.

Workplace Freedom and Right-to-Work Laws – Article by Edward W. Younkins

Workplace Freedom and Right-to-Work Laws – Article by Edward W. Younkins

The New Renaissance Hat
Edward W. Younkins
December 14, 2012
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On Tuesday December 11, 2012 Michigan, the birthplace of the nation’s organized labor movement, became the country’s 24th right-to-work state. This short excerpt from pages 81-83 of my 2002 book, Capitalism and Commerce, explains the propriety of right-to-work laws.

Before the Norris-La Guardia and National Labor Relations Acts (NLRA) in the 1930s, the employment relationship consisted of voluntary exchange contracts between employers and employees. A return to the common law of contracts, property rights, and tort would permit each person to decide if he wanted to contract with or join any union for representation services. Under such an arrangement there would be competitors among labor organizations and the possibility of having workers represented by a variety of unions and other workers having no representatives. Instead, they would bargain for themselves as individuals.

Before these acts, an employer had the common-law right to fight the unionization of his company. The employer could enter into “yellow dog contracts” with the employees in which the two parties would agree not to have a union—one reason for such contracts was the desire of the employees to avoid the loss of work and wages that would occur during strikes. Because these agreements were voluntary, they must have been to the mutual benefit of both parties. In addition, before the 1930s, the employer was free to attempt to persuade workers that unionization would not be to their benefit. Also, in his efforts to gain loyalty to his firm, the employer could refuse to hire workers who wanted to engage in union-related activity. The employer also had the common-law right to establish a company union. Then, of course, the company always had the right to voluntarily agree to hire workers who belonged to a specific union.

Unions were subject to the antitrust laws before Norris-La Guardia—not so thereafter. The National Labor Relations Act then destroyed the common-law right of an employee to join a union of his own choosing or to represent himself. After such New Deal legislation, unions operated with the help of laws and court decisions to force employees to join them to gain a monopoly of particular jobs. Unions were free to use violence (picketing) against competing workers and intimidation against the employers through the strike.

After a union has been certified as an exclusive bargaining agent, it is presumed to have majority support indefinitely (unless there is a decertification election) even if all the workers who originally chose it are no longer with the company. Section 8(a) 3 of the National Labor Relations Act empowers unions with monopoly bargaining privileges to agree with employers that all workers represented by the unions must join the union or at least pay union dues. Section 14(b) of the Act permits states to forbid such arrangements. Twenty-one right-to-work states have chosen to do so by banning all forms of union security. In these states workers can be forced to have a union (selected by majority vote) represent them, but they cannot be forced to join or pay dues to any unions. However, in the twenty-nine other states, security clauses are permitted. In these states, workers who do not want to be represented by a union (but are forced to because of monopoly representation) may be compelled to pay for the unwanted representation or be fired. Nonunion (i.e., union-free) workers who don’t want to become members of a union may be forced to pay dues (or their equivalent) as a requirement of their employment.

If a union security agreement specifies a union shop then the worker must join the union after a probationary period. However, if it specifies an agency shop, the worker does not have to join the union but must pay dues or their equivalent. In an agency shop, workers do not have to become members, but they all must pay dues or “service fees” to the unions that represent them. Unions employ a free-rider argument to justify this coercion. They argue that, without the imposition of forced dues, some workers would choose to receive the benefits of union representation but not pay for them. The goal of compulsory union dues is apparently to prevent free riders. Of course, if a union simply represented those who wanted it, there would be no free-rider problem. The union’s free-rider problem stems from section 9-A of   the National Labor Relations Act that requires that a certified union be the exclusive representative that bargains with the employer for all workers, both union and non-union. Unions that have gained monopoly bargaining privileges by majority vote must represent all workers, whether those workers want it to or not. The unions created the free-rider problem themselves when they persuaded the authors of the NLRA to permit monopoly bargaining. They now use monopoly bargaining as an excuse for forced dues!

By empowering labor unions the government did away with the old common-law rules of contract, property, and tort that applied equally to all involved parties. They were replaced with a coercive legal framework designed to help labor union leaders attain their goals. As a result, common-law courts were replaced by administrative tribunals (e.g., the National Labor Relations Board) which could be relied upon to implement prounion policies. The government thus promoted unions by failing to apply laws of equal applicability to unions and employers alike, used its power to support unions, and allowed unions to use force in pursuit of their ends.

Dr. Edward W. Younkins is Professor of Accountancy at Wheeling Jesuit University. He is the author of Capitalism and Commerce: Conceptual Foundations of Free Enterprise [Lexington Books, 2002], Philosophers of Capitalism: Menger, Mises, Rand, and Beyond [Lexington Books, 2005] (See Mr. Stolyarov’s review of this book.), and Flourishing and Happiness in a Free Society: Toward a Synthesis of Aristotelianism, Austrian Economics, and Ayn Rand’s Objectivism [Rowman & Littlefield Pub Incorporated, 2011] (See Mr. Stolyarov’s review of this book.). Many of Dr. Younkins’s essays can be found online at his web page at www.quebecoislibre.org. You can contact Dr. Younkins at younkins@wju.edu.

Flourishing and Happiness in a Nutshell – Article by Edward W. Younkins

Flourishing and Happiness in a Nutshell – Article by Edward W. Younkins

The New Renaissance Hat
Edward W. Younkins
June 3, 2012
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By integrating features found in the writings of Aristotle, Austrian economists, Ayn Rand, and a number of contemporary thinkers, we have the potential to develop a powerful, reality-based argument for a free society in which individuals have the opportunity to flourish and to be happy. Modern contributors to this approach include Tibor R. Machan, Douglas B. Rasmussen, Douglas J. Den Uyl, Frederick D. Miller, Roderick T. Long, Chris Matthew Sciabarra, George Reisman, Eric Mack, Neera K. Badhwar, Lester H. Hunt, Geoffrey Allan Plauché, among many others.

At the big-picture level, it can be argued that Aristotelian and neo-Aristotelian theories of morality and human flourishing can be compatible with Objectivist teachings regarding the nature of reality and man’s distinguishing characteristics of reason and free will and with Austrian ideas with respect to value theory, decision making, action, and social cooperation. It may be possible to construct an integrated conceptual framework that coordinates the ideas of Aristotle, the Austrian economists, Ayn Rand, and a number of current philosophers, economists, political scientists, positive psychologists, and others.

My inquiry in my book, Flourishing and Happiness in a Free Society: Toward a Synthesis of Aristotelianism, Austrian Economics, and Ayn Rand’s Objectivism, does not extend beyond a systematic level that relies heavily on logic and common sense. My purpose has been to outline the essentials of a worldview leaving it to philosophers and economists to fill in the details and to evaluate, critique, revise, refine, and extend my systematic understanding. What follows here is a brief summary of my attempt to formulate ideas and to relate them logically to other ideas and to the facts of reality. Although a person’s ideas are derived from reality and are about reality, there are differences between one’s ideas and the identity of the things that we can know. The rules of logic are determined by the facts of reality. In a sense, logic is both epistemological and ontological.

A proper philosophy must appeal to the objective nature of human beings and other entities in the world. There is a world of objective reality that exists and that has a determinate nature that is intelligible. Reality will not yield to permit a person’s subjective desires. Reality establishes the conditions for objectivity. It follows that realism is a necessary, instrumental means for a person’s success in the world. To be morality efficacious, a person must discern and use proper means to attain his truly valuable ends.

There is a human nature and it is man’s nature to be individual, volitionally conscious, rational, and purposive. Because each individual has a specific identity as a human being, we can say that there are particular things and actions that are appropriate to him and for him. Individuality is essential to one’s nature. Possessing reason and free will, each individual has the capacity and responsibility to choose to try to actualize his potential for being a flourishing, individual human being. Each person is a metaphysically unique self who is responsible for discerning what is good for himself. A person discovers his individual strengths and virtues through a process of moral development. A particular man’s own life is his purpose or goal. One’s aspirations are the aspirations in the only life he has to live. One’s entire life can be viewed as a project or overall goal which is subject to continual evaluation.

The goal or function of an individual human being is to perfect himself by fulfilling the potentialities that make him who he is. One’s flourishing is teleological consisting in fulfillment of his unique set of potentialities to be a mature human being. Each person has an innate, unchosen potentiality for his mature state along with the obligation to attempt to actualize that potentiality. Each person is responsible to discern and to live according to his daimon (i.e., true self) which includes his aptitudes, talents, and so on. This involves a process of progressive development, unfolding, or actualization in which a man attains goals that are in some way inherent in his nature as an individual human being. What constitutes a person’s daimon at a given point in time is a function of his endowments, circumstances, latent powers, interests, talents, and his history of choices, actions, and accomplishments. We could say that the fulfillment of one’s daimon is not static or fixed. An individual uses his practical rationality to assess himself and to work on his life in accordance with the objective standard of his flourishing as a singular human person. He can increase his generative potential to attain his own flourishing. A person is able to critique what he has done in the past and can change what he does with respect to the future development of his potentialities. Possessing free will, a man can adjust his actions in response to feedback that he has received.

Morality is an essential functional component of one’s existence as an individual human being. Moral knowledge is possible and can be derived from the facts of reality including human nature. Possessing rationality and free will, a person needs a proper moral code to aid him in making objective decisions and in acting on those decisions in his efforts to attain his true self-interest. Morality and self-interest are inextricably interrelated. Morality is concerned with rationally determining what best contributes to a person’s own flourishing and happiness.

Flourishing is a successful state of life, and happiness is a positive state of consciousness that flows from, or accompanies, a flourishing life. The legitimate function of every human person is live capably, excellently, and happily. This involves an ethic of aspiration toward one’s objective well-being that is actively attained and maintained. A person should aspire to what is best for him taking into account his given potentialities, abilities, and interests. Limits for self-fulfillment are set by reality including the type of being that we are and our individual characteristics.

Rationality is the foundational means to the end of human flourishing. Rationality is necessary to effect the appropriate means to a person’s ends and to integrate them. To be rational, a man must be committed to reality, truth, and logic. Not solely instrumental with respect to a person’s flourishing, rationality can also be viewed as partially constitutive of his flourishing. Rational introspection by a specific individual can enable him to determine the type of life that he should be leading.

Practical wisdom, an aspect of rationality, involves the ability to discern the relevant and important aspects of one’s circumstances in order to make the most proper response to them. The use of practical wisdom (or prudence) can only take place through self-direction or human agency. An individual requires practical wisdom to contend with the specifics, contingencies, and circumstances of one’s life. Practical wisdom is needed to guide oneself regarding the progressive fulfillment of his own potential to flourish. A prerequisite for one’s flourishing is self-direction or autonomy. Human flourishing requires self-direction and practical wisdom.

Natural rights are based on the common attributes of human beings and, therefore, apply universally to all people and to all actions. A metanormative system of negative rights that provide a context of self-directedness can be derived from a proper conception of human nature. Such a system of rights allows for value pluralism and for a variety of approaches to living one’s life. A conception of negative rights emphasizes where one individual’s life begins and another individual’s life ends. A political and legal order that protects natural rights is a necessary precondition for individual self-direction and for the possibility that human flourishing can take place in a social context. Protected self-directedness is necessary for social cooperation, specialization and trade, freely-chosen productive work, private property, free markets, voluntary contracts, and so on.

There is an important interrelationship and complementarily between the ideas of natural rights and human flourishing which together comprise a two-level ethics. At a metanormative level, rights protect people’s liberty to pursue (or not to pursue) their own good. They simply regulate the conditions under which moral conduct may (or may not) occur. In turn, what is good for the life of each individual person is found in the realm of personal virtue, morality, and flourishing. The ideas of natural rights and human flourishing describe different but related sides of what it means to be a human being. Together they provide a rational ethical framework.

The only enforceable limits on one’s actions are other people’s rights. We must recognize other individuals as purposive beings with ends of their own choosing. It would be contradictory to advocate my own rights and not to recognize the rights of other individuals. If a person does not acknowledge the rights of others, then he cannot declare that his own rights are valid. Each individual is thus permitted and limited in both the private and social spheres with respect to the types of actions in which he can engage.

People are born with physical, philosophical, and psychological needs specific to them as individual human beings. Human beings have needs embedded in their nature. We could say that value derives only to the extent that something satisfies an objective human need. The term value implies the personal importance or significance of an activity or object. Self-interest refers to the objective needs of a flourishing human life. Values promote and constitute one’s life and happiness. They have a metaphysical foundation in the nature of reality. There is an inextricable connection between values and natural facts. A value relationship exists due to the nature of a living beings and the nature of other existents in the world. Something in the world can be a value to a specific man even though he does not view it as valuable or even if he is not aware of its existence.

A flourishing life, including the happiness that accompanies it, is a person’s ultimate value. Everything else in life is aspired to because of this chief value. All of a man’s other values are instrumental and/or constitutive of the ultimate value. Means that serve the end of a flourishing life can be part of that end. Constitutive values such as a productive career, friendships, and so on are not simply means to a flourishing life but are also vital parts of such a life.

In order to flourish and to be happy, each man must select values, place them in a hierarchy, and strive to attain them. A person must experience many aspects of reality in order to discover values that are proper for him and that interest and inspire him. This active learning process highlights the exploratory nature of individual human interests and values. A person decides to live a particular type of life because he sees the value of it. He should select and pursue specific meaningful values that are metaphysically appropriate for him. He needs to identify the positive relationships in which things exist in relationship to his life. The meaning of particular projects in a person’s life is a function of his individuality.

There are differences among needs, values, and goals. Whereas needs are inborn, values are acquired. Values prioritize needs. People require a value hierarchy in order to be able to make choices. Goals are values applied to particular circumstances. Goals achieve values and values fulfill needs. A person’s goals and values should be consistent with his needs. Values are translated into reality through the means of goals. Value attainment requires setting and pursuing goals. Needs lead to values, values lead to goals, and goals lead to action.

Human beings are goal-directed. Goals are specific forms of values. Values provide a strategic underpinning for a person’s goal-setting activities. They supply meaning and purpose to a person’s goals. We could say that goals depict values as related to particular states of affairs. Because not all goals are equally valid, a person needs to examine the values underlying his goals. It is important to realize that goals are not isolated from one another. A person should strive to create a rational system of goals aimed at his flourishing and happiness.

Human flourishing is related to a number of general goods and virtues that provide structure but not specific direction or content with respect to living one’s life. Because there is a wide diversity of human beings, it follows that a flourishing life is not universal. Generic goods such as knowledge, health, and friendships need to be integrated in various measures and the virtues need to be applied in specific circumstances.

Each person needs to consider a variety of values, goods, and virtues in order to determine the relationship among them that will best achieve his flourishing as an individual human being. This requires rational insight into the particular and the contingent. Reason is the basic means used by human beings to create the values necessary for life and to interrelate and integrate goods and virtues into their lives. Virtues may be viewed as a set of fundamental principles that a rational person uses to guide the long-term course of his life.

Virtues can be viewed as principles of action which promote the flourishing of an individual who, by following them, engages in consistent actions that are in alignment with practical rationality. Virtuous actions enable a person to gain (and keep) the values he pursues. The virtues are required for one’s practical efficacy and happiness. Of course, virtue, by itself, is not enough to guarantee practical efficacy. A person also needs to have the relevant skills, resources, and so on. The fundamental virtue is rationality and the other virtues are particular expressions of that basic virtue. The virtues are both instrumental to, and a constitutive part of, an agent’s flourishing. They are valuable, not merely as means to flourishing, but also as partial realizations of it. Virtuous action begins with the ability to discern the aspects of a situation that are the most relevant and that fit the circumstances at hand. A man needs to possess the ability to decide which virtues are required in a particular situation and the optimal way of applying them. Virtuous actions tend to foster further virtuous actions. Applying the virtues is heavily dependent upon the context of a situation. People tend to take pleasure in virtuous actions—affect is related closely to virtue especially when one’s emotions are properly aligned with his rationality.

Ayn Rand makes a powerful case that the rational pursuit of one’s flourishing requires the consistent practice of seven essential virtues—rationality, honesty, independence, justice, integrity, productiveness, and pride. She saw rationality as the master virtue and the other six virtues as derivative from the primary virtue. Some scholars have pointed out that Rand did not specifically discuss the intellectual virtue of practical wisdom (i.e., prudence). It is likely that she considered practical wisdom as part of rationality. Others have suggested that her version of virtue ethics might be improved by including positive qualities such as benevolence, kindness, generosity, charity, tolerance, and so on in her prescription for moral perfection.

Emotions are an important part of one’s life experience and are relevant to his moral character. A case can be made that many emotions are the products of a person’s judgments of value as integrated by his subconscious mind. Such emotions stem from a person’s values and estimates which, in turn, depend upon his knowledge. They are about personally meaningful values and circumstances. These emotions are directed by one’s chosen values. It follows that a change in one’s values can bring about a change in his emotions. Emotions can encourage or discourage goal-directed actions. Correctly programmed positive emotions can be indicators that we have located objective values. Such emotions both signal and promote a person’s optimal functioning and flourishing. Justified positive emotions are fundamental conditions of human existence. We could say that emotional and psychological well-being is a crucial part of human flourishing.

Happiness occurs to the extent that one leads a flourishing life. We could say that happiness is an emergent effect of living a good life. Happiness has both cognitive and affective dimensions and depends upon the degree to which a person responds realistically, morally, and efficaciously to his life circumstances. Successful people tend to be happy people who continue to intentionally seek new, not-yet-attained goals. There are various degrees of personal growth, development, and happiness. A person can be happy and still strive to be even happier. Happiness is an issue of living a particular type of life—it is not just a case of having positive feelings. However, happiness is related to emotion-laden experiences such as flow and self-esteem.

A person is apt to be in a psychological state of flow when he is engaged in meaningful, self-controlled, and goal-related activities. Flow involves focused immersion in an activity, lack of self-consciousness, and the merging of awareness and action. A man is in the flow state when he is vitally engaged in enjoyable activities that offer him scope.

Self-esteem refers to a person’s legitimate attitude of self-affirmation. Self-esteem is connected to a sense of agency and control of one’s environment. A person with self-esteem tends to be competent, optimistic, and virtuous, and to have self-respect. A person who does not practice the virtues (such as rationality, honesty, justice, and so on) is not likely to possess self-esteem. Virtuous action leads to self-respect and self-esteem.

People should take virtuous actions in alignment with their objective values. A person must use his practical wisdom to examine and judge the context of a situation before freely choosing to exercise virtuous action. Deliberation itself is an action aimed at an end. The final end of the actions of a human being is his own flourishing life. People are capable of taking self-directed, deliberate, reasoned, and planned actions directed by a notion of an ultimate end. Of course, they can choose to act and live in a variety of ways that are not conducive to a flourishing life.

Austrian Economics and Objectivism agree on the significance of the ideas of human action and values. The Austrians explain that a person acts when he prefers the way he thinks things will be if he acts compared to the way he thinks things will be if he fails to act. Austrian Economics is descriptive and deals with the logical analysis of the ability of selected actions (i.e., means) to achieve chosen ends. Whether or not these ends are truly objectively valuable is not the concern of the praxeological economist when he is acting in his capacity as an economist. There is another realm of values that views value in terms of objective values and correct preferences and actions. Ayn Rand’s Objectivism is concerned with this other sphere and thus prescribes what human beings ought to value and act to attain.

Austrian economists contend that values are subjective and Objectivists maintain that values are objective. These claims can be seen as compatible because they are not claims about the same phenomena. These two senses of value are complementary and compatible. The Austrians view actions from the perspective of a neutral examiner of the actions and Objectivists suggest values and actions for an acting human being as a moral agent himself. The Austrian economist does not force his own value judgments on the personal values and actions of the human beings that he is studying. Operating from a different perspective, Objectivists maintain that there are objective values that stem from a man’s relationship to other existents in the world. For the Objectivist, the purpose of ethics is to live a flourishing and happy life by recognizing and responding to the significance of human action.

It is possible for these two schools of thought to be combined into an integrated framework. At a descriptive level, the Austrian idea of demonstrated preference agrees with Ayn Rand’s account of value as something that a person acts to gain and/or keep. Of course, Rand moves from an initial descriptive notion of value to a normative perspective on value that includes the idea that a legitimate or objective value serves one’s life. The second deeper level view of value provides an objective standard to evaluate the use of one’s free will.

Austrian praxeological economics (i.e., the study of human action) has been used to make a value-free case for liberty. This economic science deals with abstract principles and general rules that must be applied if a society is to have optimal production and economic well-being. Misesian praxeology consists of a body of logically deduced, inexorable laws of economics beginning with the axiom that each person acts purposefully.

Although Misesian economists hold that values are subjective and Objectivists argue that values are objective, these claims are not incompatible because they are not really claims about the same things—they exist at different levels or spheres of analysis. The value-subjectivity of the Austrians complements the Randian sense of objectivity. The level of objective values dealing with personal flourishing transcends the level of subjective value preferences.

The value-freedom (or value-neutrality) and value-subjectivity of the Austrians have a different function or purpose than does Objectivism’s emphasis on objective values. On the one hand, the Austrian emphasis is on the value-neutrality of the economist as a scientific observer of a person acting to attain his “subjective” (i.e., personally-estimated) values. On the other hand, the philosophy of Objectivism is concerned with values for an acting individual moral agent himself.

Austrian Economics is an excellent way of looking at methodological economics with respect to the appraisal of means but not of ends. Misesian praxeology therefore must be augmented. Its value-free economics is not sufficient to establish a total case for liberty. A systematic, reality-based ethical system must be discovered to firmly establish the argument for individual liberty. Natural law provides the groundwork for such a theory and both Objectivism and the Aristotelian idea of human flourishing are based on natural-law ideas.

An ethical system must be developed and defended in order to establish the case for a free society. An Aristotelian ethics of naturalism states that moral matters are matters of fact and that morally good conduct is that which enables the individual agent to make the best possible progress toward achieving his self-perfection and happiness. According to Rand, happiness relates to a person’s success as a unique, rational human being possessing free will. We have free choice and the capacity to initiate our own conduct that enhances or hinders our flourishing as human beings.

A human being’s flourishing requires the rational use of his individual human potentialities, including his talents, abilities, and virtues in the pursuit of his freely and rationally chosen values and goals. An action is considered to be proper if it leads to the flourishing of the person performing the action. A person’s flourishing leads to his happiness. Each person is responsible for voluntarily choosing, creating, and entering relationships in civil society that contribute toward his flourishing.

Long ago, Aristotle observed that social life and social cooperation in a community are essential conditions for one’s flourishing. Today, it is generally held that a person’s social networks have strong effects on a person’s well-being. Mediating institutions such as charitable societies, fraternal organizations, churches, clubs, and so on, provide individuals and communities with valuable interaction networks. Most people hold memberships in a number of value-providing associations. It follows that civil society is important to the pursuit and attainment of our individual ends.

Unlike the state, which is based on coercion, civil society is based on voluntary participation. Civil society consists of natural and voluntary associations such as families, private businesses, unions, churches, private schools, clubs, charities, etc. Civil society, a spontaneous order, consists of a network of associations built on the freedom of the individual to associate or not to associate. The voluntary communities and associations of civil society are valuable because human beings need to associate with others in order to flourish and achieve happiness.

One’s personal flourishing requires a life with other people. Sociality is essential to a man’s attempt to live well. Benefaction (i.e., charity) can be viewed as an expression and specific manifestation of one’s capacity for social cooperation.

The interpersonal realm is integral to a well-lived life. We love our friends because we appreciate their potential to advance our well-being. Friendship and love have an egoistic basis in a person’s love for, and pride in, himself. The well-being of a person who is a value to an individual increases the individual’s own ability to flourish and to be happy. The fundamental reason for performing other-regarding actions is to enhance one’s own well-being. Other people’s interests can be viewed as contributive to, or interrelated with, one’s own interests as evidenced in the case of production and free trade. It can be said that a person’s authentic self-interest cannot conflict with the self-interests of other people.

Dr. Edward W. Younkins is Professor of Accountancy at Wheeling Jesuit University. He is the author of Capitalism and Commerce: Conceptual Foundations of Free Enterprise [Lexington Books, 2002], Philosophers of Capitalism: Menger, Mises, Rand, and Beyond [Lexington Books, 2005] (See Mr. Stolyarov’s review of this book.), and Flourishing and Happiness in a Free Society: Toward a Synthesis of Aristotelianism, Austrian Economics, and Ayn Rand’s Objectivism [Rowman & Littlefield Pub Incorporated, 2011] (See Mr. Stolyarov’s review of this book.). Many of Dr. Younkins’s essays can be found online at his web page at www.quebecoislibre.org. You can contact Dr. Younkins at younkins@wju.edu.

Objectivist Virtue Ethics in Business – Article by Edward W. Younkins

Objectivist Virtue Ethics in Business – Article by Edward W. Younkins

The New Renaissance Hat
Edward W. Younkins
April 24, 2012
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Virtuous actions can lead to the achievement of values. When one’s context is reduced to business, virtue theory contends that pursuing virtuous principles, strategies, and actions can result in firms realizing their values including their mission, purpose, profit potential, and other goals. Virtuous employees tend to carry out their roles in a competent manner that is congruent with the firm’s goals. Virtues are instrumental allowing a person to act to gain values. When business people conform to the Objectivist virtues, they increase the likelihood of achieving their values and goals. Virtue ethics stresses the importance of each individual employee being able to make contributions of value. Valid virtue concepts are required to describe what it means to be an excellent director, leader, manager, or employee. To be successful, a business needs to espouse a set of virtues that are reality-based, non-contradictory, integrated, and comprehensive.

Virtue theory holds that ethics is an inherent part of business and that it is necessary to integrate moral theory into management theory and practice. The role of the virtues in business is to direct and motivate behavior toward the success of the business. Strategic management and business ethics converge because each area has an explicit interest in the nature and goals of business. In business, the virtues facilitate successful management and cooperation and enable a company to attain its goals. The Randian virtues can provide a moral framework and integrating strategy to guide a business in achieving its goals.[1]

The virtues connect ethics to business positively and provide a sound logical foundation for business ethics. Given the laws of nature and of human nature, there exists a set of virtues that fit reality and that are most likely to lead to success and happiness in business. Ayn Rand’s Objectivist ethics specifically recognizes production as the central human value. In addition, the personal virtues that she advocated have a direct bearing on work: rationality, honesty, independence, justice, integrity, productiveness, and pride. These virtues can be used as guiding forces in a business career and in the management of a business. They define the excellent manager (or other employee) and provide the principles that a corporation should adopt with respect to investors, employees, customers, vendors, and others.

A case can be made that virtue ethics has priority over, and perhaps grounds, other competing ethical approaches to business. In most cases being virtuous will be sufficient for leading a morally decent life in the world of business. Virtue theory is more attractive, positive, unified, comprehensive, and practical than are traditional approaches to business ethics because it is concerned with the type of person that one should be rather than with rules that tell people how they ought to act. Virtue theory is concerned with the cultivation of character and provides a framework through which a person can lead a flourishing and happy life. Moral growth comes from choice rather than from conformity to rules or codes.

Traditional approaches to business ethics (i.e., deontology, consequentialism and codes of conduct) are viewed as formulaic, prescriptive, constraining forces that legislate the form of moral deliberation. Conventional approaches focus on a set of prohibitive principles or rules that tell people how they ought to act. Kantian and utilitarian act-oriented approaches concentrate only on the development of principles while neglecting the cultivation of an individual’s character. Neither deontic nor consequentialist judgments are apt to supply sufficient action guidance for resolving particular dilemmas. Virtue ethics should be viewed as a precondition of, and complement to, moral reasoning based on a deontological focus on one’s obligation to act and on a teleological focus on the consequences of an action. Virtue ethics is more fundamental, and in many cases, preempts the consideration and application of deontic and utilitarian rules. An emphasis on virtuous behavior is motivational because it depends upon a person’s ability to aspire to excellence through virtuous acts. Virtue ethics emphasizes the process of individual moral character development. Above all, virtue ethics is concerned with the flourishing and happiness of the human agent (Mintz 1996, 537-38; Arjoon 2000, 159-78; Whetstone 2001, 101-14).

Virtue theory provides a context in which strategies, plans, tactics, policies, and procedures can be developed to attain a business’s stated mission and other relevant values. Virtues can play a causal role in achieving economic success. Virtues-driven firms tend to maximize profits. However, acting virtuously does not always result in wealth creation because other factors can come into play. Despite such an occurrence, virtuous employees still can experience the internal rewards of pride, self-esteem, and the joy of knowing that they did their jobs well.

The achievement of a firm’s telos, mission, purpose, ultimate end, or ultimate value requires virtuous action on the part of the company’s employees. The ultimate value for a business is financial value. The purpose of a business is to maximize owner value over the long-term by selling goods and/or services. Most corporation mission statements explain this purpose explicitly, or at least implicitly. It is necessary to recognize a business’s distinctive purpose when organizing and integrating human effort into purposeful long-term activities. Purposeful behavior requires a single overarching valued objective function. In a corporation market price per share can be a surrogate for owner value. More specifically, the ultimate purpose of maximizing total long-term market value can provide a criterion for management decisions and choices among competing alternatives, Virtues are instrumental and support a firm’s overall telos.

To accomplish a corporation’s ultimate purpose requires the attainment of a number of goals within a business. It is possible look upon both a firm’s ultimate purpose and its goals as values that need to be achieved. Although technically a value is an object of goal-directed action, in general parlance, the terms, goals and values, are often used interchangeably. For our purposes, we can consider both the ultimate end of a corporation (i.e., the long-term maximization of firm value) and the goals that can lead to the ultimate end to be values.

Goals (sometimes referred to as objectives) are specific quantitative targets that a business needs to meet in a manner consistent with ethical principles in order to accomplish its purpose. Typical goal areas in a business include: profitability, sales, sales growth, return on investment (ROI), profit margin, cash flow, market share (or position), customer loyalty, productivity, efficiency, cost control, research and development, product leadership, employee development, employee attitudes, employee loyalty, expansion or contraction of product and service lines, reducing business risks, and so on. Each and every goal should be analyzed to determine the potential impact on firm value and whether or not they are contributing to the attainment of the firm’s target valuation. Goals whose achievement does not contribute to increasing shareholder value should be eliminated.

To succeed a business must have a superior vision and purpose to work toward and the strategic focus and direction of effort to achieve them. The Objectivist virtues can enable people to direct their actions toward the attainment of a company’s goals and values including the maximization of owner value. Virtuous actions can lead to better customer service, gains in productivity and efficiency, higher employee retention rates, reduction in employee absenteeism, improvement in employee morale, better communications both internally and externally, honest and reliable internal and external financial reporting, the flexibility necessary to adapt to market conditions, increased innovation and the more frequent and more timely launching of new products and services, higher sales and profits, sustainable competitive advantages, greater flourishing and happiness of the firm’s employees, and so on.

Virtuous behavior is required at all levels of a company from employees who realize that business is a natural and moral means by which they can satisfy their needs and attain their actualization as individual human persons. Virtuous employees are energetic, productive workers who: (1) focus on reality; (2) think objectively, rationally, and logically in applying relevant knowledge; (3) ask clear, pertinent, insightful questions and listen carefully; (4) search for facts in their total context before judging and evaluating business situations; (5) use time efficiently and effectively; (6) organize their lives and work toward accomplishing worthwhile endeavors; and (7) set value-producing goals and strive to accomplish them.

A virtuous employee begins by understanding what the facts are and does not evade the distinction between the real and the unreal. Evasion detaches a person from reality. Virtue begins with the effort to confront reality as it is. Given that there is no standardized algorithm for making business decisions, an employee needs to use his reason to make rational, logical decisions based on the facts of reality. One needs to apply conscious, prudent, rational judgments and choices in various business contexts in order to identify, execute, and implement profitable and ethical internal and external exchange transactions.

Much of morality in business falls under the rubric of honesty. Honesty means being in accord with reality. Honesty is basic to the structure of human relationships in virtually all contexts. Dishonesty is self-defeating because it involves being in conflict with realty. Morality in business involves objectively recognizing and dealing with customers, employees, creditors, stockholders, and others as autonomous rational individuals with their particular goals and desires. The trader principle should govern the course of all human interactions because voluntary value-for-value relationships are consonant with human nature.

Honesty is closely related to the virtue of justice. Justice, a form of faithfulness to reality, is the virtue of granting to each man that which he objectively deserves. Justice is the expression of man’s rationality in his dealings with other men and involves seeking and granting the earned. A trader, a man of justice, earns what he gets and does not give or take the undeserved. For example, a virtuous manager must make sure that customers get what they pay for. In addition, he needs to identify employees for what they accomplish and treat them accordingly. Employees should be objectively appraised and compensated based on their contribution toward achieving a firm’s mission, values, and goals. A virtuous manager will discriminate among all those that he deals with (i.e., customers, suppliers, workers, etc.) based on relevant qualities and personal merits such as ability, competency, performance, and character. He will not improperly discriminate based on irrelevant characteristics such as sex, race, nationality, and so on.[2]

Although individuals can learn from each other, the fact remains that each of us thinks and acts alone and is responsible for his own actions. Independence requires the acceptance of one’s intellectual responsibility for his own existence, requires that a man form his own judgments, and that he support himself by the work of his own mind. It is not a corporation’s fault if someone does not attain his goals. Each employee is responsible for his favorable or unfavorable outcomes in a business setting where responsibilities are defined by, and arise out of, his particular role. Of course, a goal may not be completely under one’s control. It may require interdependence with or on other employees who co-contribute to whether or not someone attains a goal. Positive change and innovation in a company are based on the creativity of logical independent thinkers. It is through such employees that a firm discovers and invents ways to improve the fiscal bottom line thereby increasing the firm’s market value.

Integrity is the refusal to permit a breach between thought and action. It means acting consistently with rational principles that will lead to success and happiness. In business, an employee’s rationally-made plans are integrated with his actions in order to bring values into existence. From more of a macro viewpoint, we could say that the integrity of a business is maintained if the purpose for which it was created is followed (i.e., the maximization of owner value).[3]

Productiveness, the virtue of creating material values, is the act of translating one’s thoughts and goals into reality. Productiveness comprises an important existential component of virtuousness and is a responsibility of every moral person. It involves a commitment to creating value and to being self-responsible for bringing what one needs and wants into existence. Workers in a business are committed to producing wealth and bringing about well-being by taking the actions required to achieve the firm’s mission. Profits are an indicator of productive work on the part of people who want to achieve, produce, and improve well-being. Because people differ with respect to their intelligence, talents, and circumstances, the moral issue becomes how a particular employee addresses his work given his facticity, including his potentialities and concrete circumstances. In a business, the Randian virtues (including productiveness) offer a set of principles for getting the most value from one’s work. Rand’s Objectivist ethics recognizes that individuals search for meaning and purpose in the various components of one’s life (i.e., one’s work life, love life, home life, social life, and so on). Each of these is an end-in-itself and a means to the end of one’s life in total. One’s life in total is an end-in-itself and an ultimate value.

Pride, also called moral ambitiousness, is a man’s commitment to achieving the best in his life thereby effecting his moral perfection. Pride is the reward we earn by living by the other six Objectivist virtues. A businessman’s drive for success is a result of his taking pride in the business portion of his life. Each employee needs to work in a way as to be able to be rightfully proud of what he has done. Work is needed not only for sustenance, but also for one’s psychological well-being—it can be viewed as a means by which a man can maintain an active mind, attain purposes, and follow a goal-directed path throughout his lifetime. Through work a man can achieve his highest potentials. Doing work well in accordance with the goals of a firm (which are aligned with the personal goals of the worker) can cause an employee to positively enhance his self-esteem.

Dr. Edward W. Younkins is Professor of Accountancy at Wheeling Jesuit University. He is the author of Capitalism and Commerce: Conceptual Foundations of Free Enterprise [Lexington Books, 2002]. Many of Dr. Younkins’s essays can be found online at his web page at www.quebecoislibre.org. You can contact Dr. Younkins at younkins@wju.edu.

 


[1] Ayn Rand’s Objectivist ethics is specifically related to business and business ethics in Kirkpatrick 1992; Greiner and Kinni 2001; and Hicks 2003.

[2] See Locke and Woiceshyn 1995 for an argument for honesty in business from the perspective of rational egoism.

[3] Paine 1994 provides an interesting perspective on how to manage for organizational integrity.

References

Arjoon, Surendra. (2000). Virtue theory as a dynamic theory of business. Journal of Business Ethics, no. 28: 159-78.

Greiner, Donna and Theodore Kinni. (2001). Ayn Rand and Business. New York: Texere.

Hicks, Stephen R.C. (2003). Ayn Rand and contemporary business ethics. Journal of Accounting: Ethics and Public Policy 3 (1) (Winter): 1-26.

———. (2009). What business ethics can learn from Entrepreneurship. Journal of Private Enterprise 24 (2): 49-57.

Kirkpatrick, Jerry. (1992). Ayn Rand’s objectivist ethics as the foundation for business ethics. In Business Ethics and Common Sense. Edited by Robert W. McGee. Westport: CT: Quorum Books 67-88.

Locke, Edwin A. (2001). and J. Woiceshyn. (1995). Why businessmen should be honest: The argument from rational egoism. Journal of Organizational Behavior 16: 405-14.

Mintz, Stephen M. (1996). Aristotelian virtue and business ethics education. Journal of Business Ethics, no. 15: 827-38.

Paine, Lynn Sharp. (1994). Managing for organizational integrity. Harvard Business Review 72 (March-April): 106-17.

Rand, Ayn.  (1964). Objectivist ethics. In The Virtue of Selfishness. New York: New American Library.

Whetstone, J. Thomas. (2001). How virtue fits within business ethics. Journal of Business Ethics, no. 33: 101-14.