John Gokongwei's speech to Ateneo Batch '04

[LongBow]

What say you, pexers?
Will you heed the call?


> Subject: [OFWNetFI] BE AN ENTREPRENEUR - Fwd: John G's speech to the
> graduates of Ateneo batch 04
>
>
>
> Commencement Address
>
> Ateneo de Manila University
>
> March 27, 2004 By
>
> John L. Gokongwei, Jr.
>
>
>
>
>
> I wish I were one of you today, instead of a 77-year-old man,
> giving a speech you will probably forget when you wake up from your
hangover
> tomorrow.
>
> You may be surprised I feel this way. Many of you are feeling fearful and
> apprehensive about your future.
>
> You are thinking that, perhaps, your Ateneo diploma will not
mean
> a whole lot in the future in a country with too many problems. And you
are
> probably right.
>
> You are thinking that our country is slipping-no, sliding. Again, you may
be
> right.
>
> Twenty years ago, we were at par with countries like Thailand, Malaysia,
and
> Singapore. Today, we are left way behind.
>
> You know the facts.
>
> Twenty years ago, the per capita income of the Filipino was 1,000 US
> dollars. Today, it's 1,100 dollars. That's a growth of only ten percent
in
> twenty years. Meanwhile, Thailand's per capita income today is double
ours;
> Malaysia, triple ours; and Singapore, almost twenty times ours.
>
> With globalization coming, you know it is even more urgent to wake up.
> Trade barriers are falling, which means we will have to compete harder.
>
> In the new world, entrepreneurs will be forced to invest their money
where
> it is most efficient. And that is not necessarily in the Philippines.
Even
> for Filipino entrepreneurs, that can be the case.
>
> For example, a Filipino brand like Maxx candy can be manufactured in
> Bangkok-where labor, taxes, power and financing are cheaper and more
> efficient-and then exported to other ASEAN countries.
>
> This will be a common scenario-if things do not change.
>
> Pretty soon, we will become a nation that buys everything and produces
> practically nothing. We will be like the prodigal son who took his
father's
> money and spent it all. The difference is that we do not have a generous
> father to run back to.
>
> But despite this, I am still very excited about the future. I will tell
you
> why later.
>
> You have been taught at the Ateneo to be "a person for others." Of
course,
> that is noble: To serve your countrymen.
>
> Question is: How?
>
> And my answer is: Be an entrepreneur!
>
> You may think I am just a foolish man talking mundane stuff when the
> question before him is almost philosophical. But I am being very
thoughtful
> here, and if I may presume this about myself, being patriotic as well.
>
> Entrepreneurship is the answer.
>
> We need young people who will find the idea, grab the opportunity, take
> risk, and set aside comfort to set up businesses that will provide jobs.
>
> But why? What are jobs?
>
> Jobs are what allow people to feel useful and build their self-esteem.
Jobs
> make people productive members of the community. Jobs make people feel
they
> are worthy citizens. And jobs make a country worthy players in the world
> market.
>
> In that order of things, it is the entrepreneurs who have the power to
> harness the creativity and talents of others to achieve a common good.
This
> should leave the world a better place than it was.
>
> Let me make it clear: Job creation is a priority for any nation to move
> forward.
>
> For example, it is the young entrepreneurs of Malaysia, Thailand, and
> Singapore who created the dynamic businesses that have propelled their
> countries to the top. Young people like yourselves.
>
> Meanwhile, in the Philippines, progress is slow. Very little is new.
> Hardly anything is fresh. With a few exceptions, the biggest companies
> before the war-like PLDT, Ayala, and San Miguel-are still the biggest
> companies today.
>
> All right, being from the Ateneo, many of you probably have offers from
> these corporations already. You may even have offers from JG Summit.
>
> I say: Great! Take these offers, work as hard as you can, learn
everything
> these companies can teach-and then leave!
>
> If you dream of creating something great, do not let a 9-to-5 job-even a
> high-paying one-lull you into a complacent, comfortable life. Let that
> high-paying job propel you toward entrepreneurship instead.
>
> When I speak of the hardship ahead, I do not mean to be
skeptical
> but realistic.
>
> Even you Ateneans, who are famous for your eloquence, you cannot talk
your
> way out of this one. There is nothing to do but to deal with it.
>
> I learned this lesson when, as a 13-year-old, I lost my dad.
>
> Before that, I was like many of you: a privileged kid. I went to Cebu's
best
> school; lived in a big house; and got free entrance to the Vision, the
> largest movie house in Cebu, which my father owned.
>
> Then my dad died, and I lost all these. My family had become poor-poor
> enough to split my family. My mother and five siblings moved to China
where
> the cost of living was lower. I was placed under the care of my Grand
Uncle
> Manuel Gotianuy, who put me through school. But just two years later, the
> war broke out, and even my Uncle Manuel could no longer see me through.
>
> I was out in the streets-literally.
>
> Looking back, this time was one of the best times of my life.
We
> lost everything, true, but so did everybody! War was the great equalizer.
In
> that setting, anyone who was willing to size up the situation, use his
wits,
> and work hard, could make it!
>
> It was every man for himself, and I had to find a way to support myself
and
> my family. I decided to be a market vendor.
>
> Why?
>
> Because it was something that I, a 15-year-old boy in short pants, could
do.
>
> I started by selling simple products in the palengke half an hour by bike
> from the city. I had a bicycle. I would wake up at five in the morning,
> load thread, soap and candles into my bike, and rush to the palengke.
>
> I would rent a stall for one peso a day, lay out my goods on a table as
big
> as this podium, and begin selling. I did that the whole day.
>
> I sold about twenty pesos of goods every day. Today, twenty pesos will
only
> allow you to send twenty text messages to your crush, but 63 years ago,
it
> was enough to support my family. And it left me enough to plow back into
my
> small, but growing, business.
>
> I was the youngest vendor in the palengke, but that didn't faze me. In
fact,
> I rather saw it as an opportunity. Remember, that was 63 years and 100
> pounds ago, so I could move faster, stay under the sun more, and keep
> selling longer than everyone else.
>
> Then, when I had enough money and more confidence, I decided to travel to
> Manila from Cebu to sell all kinds of goods like rubber tires.
>
> Instead of my bike, I now traveled on a batel-a boat so small that on
> windless days, we would just float there. On bad days, the trip could
take
> two weeks!
>
> During one trip, our batel sank! We would have all perished in the sea
> were it not for my inventory of tires. The viajeros were happy because my
> tires saved their lives, and I was happy because the viajeros, by hanging
on
> to them, saved my tires. On these long and lonely trips I had to
entertain
> myself with books, like Gone With The Wind.
>
> After the war, I had saved up 50,000 pesos. That was when you
> could buy a chicken for 20 centavos and a car for 2,000 pesos. I was 19
> years old.
>
> Now I had enough money to bring my family home from China. Once they were
> all here, they helped me expand our trading business to include imports.
> Remember that the war had left the Philippines with very few goods. So we
> imported whatever was needed and imported them from everywhere-including
> used clothes and textile remnants from the United States. We were
probably
> the first ukay-ukay dealers here.
>
> Then, when I had gained more experience and built my reputation, I
borrowed
> money from the bank and got into manufacturing. I saw that coffee was
> abundant, and Nescafe of Nestle was too expensive for a country still
> rebuilding from the war, so my company created Blend 45.
>
> That was our first branded hit. And from there, we had enough profits to
> launch Jack and Jill.
>
> >From one market stall, we are now in nine core businesses-including
retail,
> real estate, publishing, petrochemicals, textiles, banking, food
> manufacturing, Cebu Pacific Air and Sun Cellular.
>
> When we had shown success in the smaller businesses, we were able to
raise
> money in the capital markets-through IPOs and bond offerings-- and then
get
> into more complex, capital-intensive enterprises. We did it slow, but
sure.
>
> Success doesn't happen overnight. It's the small successes
> achieved day by day that build a company. So, don't be impatient or
focused
> on immediate financial rewards. I only started flying business class when
I
> got too fat to fit in the economy seats.
>
> And I even wore a used overcoat while courting my wife-it came from my
> ukay-ukay business. Thank God Elizabeth didn't mind the mothball smell
of
> my overcoat or maybe she wouldn't have married me.
>
> Save what you earn and plow it back.
>
> And never forget your families! Your parents denied themselves
> many things to send you here. They could have traveled around the world a
> couple of times with the money they set aside for your education, and
your
> social life, and your comforts.
>
> Remember them-and thank them.
>
> When you have families of your own, you must be home with them for at
least
> one meal everyday.
>
> I did that while I was building my company. Now, with all my six children

> married, I ask that we spend every Sunday lunch together, when everything
> under the sun is discussed.
>
> As it is with business, so it is with family. There are no short cuts for
> building either one.
>
> Remember, no short cuts.
>
> Saint Ignatius of Loyola, your patron saint, and founder of
this
> 450-year old organization I admire, described an ideal Jesuit as one who
> "lives with one foot raised." I believe that means someone who is always
> ready to respond to opportunities.
>
> Saint Ignatius knew that, to build a successful organization, he needed
to
> recruit and educate men who were not afraid of change but were in fact
> excited by it.
>
> In fact, the Jesuits were one of the earliest practitioners of
> globalization. As early as the 16th century, upon reaching a foreign
> country, they compiled dictionaries in local languages like Tamil and
> Vietnamese so that they could spread their message in the local language.
> In a few centuries, they have been able to spread their mission in many
> countries through education.
>
> The Jesuits have another quote. "Make the whole world your house" which
> means that the ideal Jesuit must be at home everywhere. By adapting to
> change, but at the same time staying true to their beliefs, the Society
of
> Jesus has become the long-lasting and successful organization it is today
> and has made the world their house.
>
> So, let live with one foot raised in facing the next big opportunity:
> globalization.
>
> Globalization can be your greatest enemy. It will be your downfall if you
> are too afraid and too weak to fight it out. But it can also be your
> biggest ally.
>
> With the Asian Free Trade agreement and tariffs near zero, your market
has
> grown from 80 million Filipinos to half a billion Southeast Asians.
>
> Imagine what that means to you as an entrepreneur if you are able to find
a
> need and fill it. And imagine, too, what that will do for the economy of
our
> country!
>
> Yes, our government may not be perfect, and our economic environment not
> ideal, but true entrepreneurs will find opportunities anywhere.
>
> Look at the young Filipino entrepreneurs who made it. When I say
young-and I
> 'm 77, remember-I am talking about those in their 50s and below. Tony Tan
of
> Jollibee, Ben Chan of Bench, Rolando Hortaleza of Splash, and Wilson Lim
of
> Abensons.
>
> They're the guys who weren't content with the 9-to-5 job, who were
willing
> to delay their gratification and comfort, and who created something new,
> something fresh.
>
> Something Filipinos are now very proud of.
>
> They all started small but now sell their hamburgers, T-shirts and
cosmetics
> in Asia, America, and the Middle East.
>
> In doing so, these young Filipino entrepreneurs created jobs while doing
> something they were passionate about.
>
> Globalization is an opportunity of a lifetime-for you. And
that
> is why I want to be out there with you instead of here behind this
> podium-perhaps too old and too slow to seize the opportunities you can.
>
> Let me leave you with one last thought.
>
> Trade barriers have fallen. The only barriers left are the barriers you
have
> in your mind.
>
> So, Ateneans, Class of 2004, heed the call of entrepreneurship.
>
> With a little bit of will and a little bit of imagination, you can turn
this
> crisis into your patriotic moment-and truly become a person for others.
>
> "Live with one foot raised and make the world your house."
>
> To this great University, my sincerest thanks for this singular honor
> conferred on me today.
>
> To the graduates, congratulations and Godspeed.
>
> "Ad Majorem Dei Gloriam".
>
> Thank you.
>
>
>
>
>
>

[im_atheneo]

hey, I've missed this one. grr

"Ad Majorem Dei Gloriam" John Gokongwei is surely already an Atenean at heart.

Blue *owl* ---> the King!

[kyle618]

is he the one who made that speech... just wondering... kung siya nga, galing!

[lakitabadaga]

if i were not from ateneo, maiinggit ako sa ateneo.

sorry folks!

[mac_bolan00]

i think gokongwei wishes he was from ateneo. i'm sure he has no intention of being attached to UP in any way. :lol:

[im_atheneo]

what do you mean mac_bolan?

sorry i didnt quite get it.

Blue *owl* ---> the King!

[LongBow]

a middle aged chinese once told me, the problem with young people nowadays is that they want to graduate, find work and get their monthly salary. in short, be an employee. then he said, why be an employee, when you can be an employer. start from something small, then make your way up to the top. entrepreneurship is the key.

[mac_bolan00]

maybe not everyone wants to become a middle-age chinese who views being an employee as a problem.

why are there so many tsinoy teachers, doctors and lawyers? :rolleyes:

im_atheneo,

i made an allusion to JG's daughter robina who used to study at UP before going abroad. the family had a bad experience then.

[LongBow]

Originally posted by mac_bolan00
maybe not everyone wants to become a middle-age chinese who views being an employee as a problem.

why are there so many tsinoy teachers, doctors and lawyers? :rolleyes:



it's not "being an employee" per se, rather, the mentality that goes along with it. there's really nothing wrong with being an employee but we have to dream big. don't be an employee for the rest of your life, that's what he was trying to imply.

[mac_bolan00]

"employee for the rest of yourself..."

sorry my english is a disgrace. whaddaya mean?

but i think i get your drift. that old tsinoy thinks most young people don't dream big, or that they think their lives are sealed with a diploma and a regular paycheck. that chinese geezer looks even worse now.

[LongBow]

Originally posted by mac_bolan00
"employee for the rest of yourself..."

sorry my english is a disgrace. whaddaya mean?

but i think i get your drift. that old tsinoy thinks most young people don't dream big, or that they think their lives are sealed with a diploma and a regular paycheck. that chinese geezer looks even worse now.

i edited my post already. sorry about that. what i really meant "for the rest of your LIFE".

main point (from JG's speech):

"> Look at the young Filipino entrepreneurs who made it. When I say
young-and I
> 'm 77, remember-I am talking about those in their 50s and below. Tony Tan
of
> Jollibee, Ben Chan of Bench, Rolando Hortaleza of Splash, and Wilson Lim
of
> Abensons.
>
> They're the guys who weren't content with the 9-to-5 job, who were
willing
> to delay their gratification and comfort, and who created something new,
> something fresh."

[aticus]

There's nothing wrong with being an employee. Both my parents are employees, for example, and they've managed to provide a great life for me.

But I think that Mr. Gokongwei was trying to appeal to those who MIGHT want to be entrepreneurs, but who feel that it's too risky a proposition, and that being an employee is a "safe" and "more stable" job. If he managed to instill the entrepreneurial fire in even one of the Ateneans watching that day, I think his speech would be a success.

It's really a matter of perspective. There's nothing wrong with either life; it's just how you perceive your own wants and needs. If you really want to be rich, or to really make a difference in the economy of the Philippines, then I believe being an entrepreneur is your best bet. As Mr. Gokongwei himself has shown by his example, one man's life can make a difference in many other people... especially if he's the one paying their salaries. :D

[victory]

Building on aticus' point about "entrepreneurial fire," I would like to think that the underlying principles of entrepreneurship extends not only to people who start their own business, but individuals who constantly seek new opportunities, approach problems creatively and tackle them with hope and zeal, and "create value" for other people, organizations and larger communities of which they are part. So in this sense, you can be very entrepreneurial as a museum curator if you find innovative ways of raising funds, expanding your museum's collections, etc. You can be a very entrepreneurial teacher and scholar if you constantly seek to learn new ways of teaching, put in the time to learn and participate in the cutting edge discussions in your field through research and publications, etc.

Heck, the Philippines can sure use very entrepreneurial politicians (who seek opportunities to help the country develop -- not just for personal enrichment)!

So yes, you can be a very entrepreneurial employee if you keep on searching for new ways to add value to your company. You are also less likely to get fired during a downturn if you're known to be a real mover and shaker within company ranks!

So over and above the question of who captures the residual profits of added value, "entrepreneurial fire" may well be part of or even equivalent to the definition of "leadership" in the deepest sense of the word: Which great leader wasn't entrepreneurial?

An imperfect analogy to be sure, but I do not think it was a coincidence that the name of the starship in Star Trek is "the Enterprise," while their clarion call is "to boldly go where no man has gone before." ;)

[rabbaddal]

Entrepreneurship also transcends simply making money and getting rich. The probability-weighted expected value of what an independent businessman starting his own company can hope to earn could well be way below the amount that many lawyers or Wall St. professionals make, for example. Likewise, with new pay-for-performance executive compensation arrangements being implemented in large companies, even senior corporate managers could expect to make much more than small independent businessmen. If one were to focus mainly on making money, entrepreneurship may not be as attractive a vocation.

Rather than a means to make money, entrepreneurship is a way of life. Yes, even corporate managers and Wall St. professionals have to be entrepreneurial to succeed in their industries by finding creative ways to bring in new customers, improve productivity or help their clients succeed. Small businessmen love the adventure of starting new businesses from scratch and nurturing them into mature companies.

What kind of entrepreneur you should be is entirely up to you. If you choose a field that you are passionate about, the entrepreneurial spirit might well come out naturally.

[aticus]

Excellent posts from victory and rabbaddal. :) Couldn't have put it better myself.

Just to further the discussion a bit...

My father is a college graduate of a university in one of our provinces. He has no MBA, no special degree, and he has just turned 50.

But he is the president of one of the biggest banks in the country, in charge of people who have MBAs from top universities in the US, among others. He always works hard to introduce new products and new innovations, is very good at building morale and company loyalty among employees, and has always sought to make his company bigger and better. I believe this is an example of the "entrepreneurial fire" that the two previous posts are referring to.

My father has succeeded as an "employee" because he hasn't just focused on doing his job... he's focused on doing an exceptional job, and I think if all employees in the country do that, we will indeed progress at a much faster pace.

To be honest, I used to be an entrepreneur in the Philippines, but left in disgust at the stupid politicking and rampant graft and corruption that I saw everyday. Now I'm building a business in Thailand, which is much more peaceful and secure, and seemingly more progressive. After reading Mr. Gokongwei's speech, however, (sent to me by my sister), I am now seriously considering returning to my homeland to try to make a difference again. I just agree with so many things that Mr. Gokongwei says, and his message resonates so much with me. One day, I will be back. Hopefully, I will be able to make some sort of difference.

[KuyaDanny]

aticus's father exhibits many characteristics of someone whom, in our organization, is termed as having utak may-ari, ie, somebody who thinks like an owner.

Such characteristics are rare, and when we find somebody with these qualities, we work hard to grab him, if we can afford him. Unfortunately, aticus's dad is too expensive for us.

[LongBow]

Originally posted by aticus
Excellent posts from victory and rabbaddal. :) Couldn't have put it better myself.

Just to further the discussion a bit...

My father is a college graduate of a university in one of our provinces. He has no MBA, no special degree, and he has just turned 50.

But he is the president of one of the biggest banks in the country, in charge of people who have MBAs from top universities in the US, among others. He always works hard to introduce new products and new innovations, is very good at building morale and company loyalty among employees, and has always sought to make his company bigger and better. I believe this is an example of the "entrepreneurial fire" that the two previous posts are referring to.

My father has succeeded as an "employee" because he hasn't just focused on doing his job... he's focused on doing an exceptional job, and I think if all employees in the country do that, we will indeed progress at a much faster pace.

To be honest, I used to be an entrepreneur in the Philippines, but left in disgust at the stupid politicking and rampant graft and corruption that I saw everyday. Now I'm building a business in Thailand, which is much more peaceful and secure, and seemingly more progressive. After reading Mr. Gokongwei's speech, however, (sent to me by my sister), I am now seriously considering returning to my homeland to try to make a difference again. I just agree with so many things that Mr. Gokongwei says, and his message resonates so much with me. One day, I will be back. Hopefully, I will be able to make some sort of difference.

nice posts, people!!
very well said!
aticus, i do hope you come back to help and turn this country around.
(aticus- from "to kill a mockingbird"? hehe)

[aticus]

Originally posted by KuyaDanny
aticus's father exhibits many characteristics of someone whom, in our organization, is termed as having utak may-ari, ie, somebody who thinks like an owner.

Such characteristics are rare, and when we find somebody with these qualities, we work hard to grab him, if we can afford him. Unfortunately, aticus's dad is too expensive for us.

Thanks KD. That's kind of you. :) Not to worry, though... my dad couldn't afford you either. ;) You're both too darn good. :D


And, yes, my name came from the book, but I changed the spelling. In the book, it's spelled "Atticus." I try to live up to the same principles he believes in, though.

[LongBow]

Originally posted by aticus
Thanks KD. In the book, it's spelled "Atticus." I try to live up to the same principles he believes in, though.

yes, i noticed.

[Oscar01]

I've been wanting to read this speech for quite a while now, and I liked it as I did the novel Atlas Shrugged.

One speaker at my graduation in 2001 (not CJ Davide) harped about the "road less traveled" and the nobility of sacrifice to do social work, if I remember it right. I felt it was a stereotype-laden, myopic message for a class with a lot of business majors.

Reading that speech, I think I have a good answer to those people who criticize the name "John Gokongwei School of Management." :)

[YFU'ER]

Kudos to all the posters in this thread for keeping the discussion upbeat and lively. No bashing, very refreshing.

It is not often that you find most of the big hitters, at least according to my standards, contributing to the discussion. We have Kuya Danny, LongBow, Victory, Rabbaddal, Aticus, MacBolan and the long lost Oscar01. But I am wondering where is Lek, Ali, Hulk and Dekster?

[LongBow]

thanks to everyone who contributed to this thread! =)

[mac_bolan00]

Originally posted by Oscar01
I've been wanting to read this speech for quite a while now, and I liked it as I did the novel Atlas Shrugged.

exactly what i wanted to say. anyone who read atlas shrugged would have given the same speech ---and be just as clueless as ayn rand when it comes to actual governance and economic policy formulation.

i'd rather have a fan of "the fountainhead" give the speech. the focus on the individual and professionalism will go down a lot smoother.

[aticus]

Originally posted by mac_bolan00
exactly what i wanted to say. anyone who read atlas shrugged would have given the same speech ---and be just as clueless as ayn rand when it comes to actual governance and economic policy formulation.

i'd rather have a fan of "the fountainhead" give the speech. the focus on the individual and professionalism will go down a lot smoother.

Not to seem too philosophical, but isn't it true that almost anyone COULD have given that speech, but not just anyone would do what was IN the speech?

The nature of entrepreneurship isn't that you necessarily do something special or different from what anyone else can do. AFter all, anyone could sell goods at any public market in the Philippines. The nature of entrepreneurship is that you actually do it. Many, many intelligent people have great ideas for the Philippines... and many, many politicians have all said that they are against corruption and against vote-buying, etc., etc... but how many actually put their money where their mouths are, so to speak?

Entrepreneurs are special because they risk ridicule and failure. They actually try to get things right, and often get things wrong in the trying. They actually do what they say they will. They don't just prognosticate in their armchairs and say, "If it were up to me..." That's why I respect them so much, successful or otherwise. It takes a lot of courage to try to live your dreams. After all, anyone can dream big; it takes a brave person to actually risk having a dream destroyed.

I agree that almost anyone who's read the book could do what Gokongwei did... give a speech. But the reason the speech resonated so much with me was it was from a man who actually lived the life of an entrepreneur... who successfully made something of himself and in the process contributed a great deal to the country.

I've given thousands of speeches in my career, first as an international debater, then as a consultant for businesses. I know the power of words, and how words can beguile, enchant and even twist the truth. That's why I'm never overly impressed when some politicians come to a school and extoll the virtues of honesty and integrity... I just don't see the credibility. But let's give credit where credit is due... regardless of how we may think or feel about Mr. Gokongwei, he IS an entrepreneur, he DID do a lot in terms of the economy, and he certainly HAS a great deal of credibility, at least where I sit.

This is why I say I'm seriously considering coming back. However, until I do, these will just be empty words. Quite the opposite of his, which are words of experience and truth.

[victory]

Originally posted by mac_bolan00
exactly what i wanted to say. anyone who read atlas shrugged would have given the same speech ---and be just as clueless as ayn rand when it comes to actual governance and economic policy formulation.

i'd rather have a fan of "the fountainhead" give the speech. the focus on the individual and professionalism will go down a lot smoother.

aticus, I don't think mac was trying to take away any of the value of entrepreneurial contributions in JG's speech. His point may simply be focusing on Ayn's (and JG's?) seeming naivete about how governance and policy works in the real world, where individuals trying to live as good a life as possible run smack against strong interest groups holding the reins of power, policies implemented with good intentions often have bad consequences, and overall conditions make it difficult for would-be entrepreneurs from plunging into their ventures and taking risks.

India has, for example, discriminated against larger firms supposedly to benefit "the small guys," the little start-ups and other entrepreneurs who are protected by laws that predetermine firms' market shares. While this has nurtured the existence of small labor-intensive cottage industries it is generally held that these policies helped choke the overall economy so much (the existing "small guys" ended up not growing or becoming more efficient, protected as they were) that many new entrepreneurs found it difficult to start their own businesses, preferring instead to work (most likely be underemployed) in the formal sector.

As 'good' a government as Singapore has had, for example, in terms of generating phenomenal economic growth since 1965, one of their current main problems is that new knowledge is not being created: There are relatively few entrepreneurs in Singapore, most prefer to work in the private sector or the government (which pays just as much if not more than the private sector). Public investments have crowded out private risk-taking, hence their new push to bulk up their universities, research institutes and subsidize industries like biotech which might yield spillovers. Guess where Singapore is recruiting many young fine scholars and researchers?

The point is that in many developing countries there are layers upon layers of policies and conditions that may make it difficult for people to make the choice of whether or not to become an entrepreneur. Credit and equity markets may be starved or incomplete, barriers to trade might be difficult, registering new businesses in the formal sector may just be close to impossible (as de Soto often emphasizes) -- (appropriate) financial and fiscal interventions may be warranted. The difficulty then in policy and governance goes beyond rah rah speeches about one individual's choice of whether to risk being an entrepreneur or not -- but it does affect these choices quite profoundly.

And so an even deeper bow to JG and other mega-entrepreneurs for succeeding in even more difficult conditions! Personally I admire entrepreneurs who sought and exploited opportunities in poor countries, with little but pocket change and a fierce will to succeed or die trying. In that sense I along with you raise my glass to JG's accomplishments.

But I also give my nod to mac_bolan00 by having an itch to temper the thesis of "want to help the country? Be an entrepreneur!" with a few sprinkles of how difficult it can be given economic and political (as you yourself experienced -- and as JG experienced during the Estrada administration) conditions in the Philippines, and how much more than just entrepreneurial risk-taking is necessary to help govern and improve the lot of a poor country. Entrepreneurial risk-taking is, as I noted in my last post, a necessary condition for effective, awe-inspiring, change-producing leadership -- whether it be in the private sector or in politics, teaching, heck even parenthood -- but it is not sufficient.

Note that I am not saying JG does not know all this: He is extremely savvy in terms of working with all the difficult politics that come with the territory -- he has to be, to succeed in so grand a way in a country like the Philippines, and as an ethnic Chinese at that! Not many people know that ethnic Chinese faced extreme explicit and implicit discrimination, barred from many of the professions and even manufacturing industries until well into the 20th century. Why do you think the tai-pans all started out in retail? That, or they changed their name/s or worked through others to scoot around laws and policies that kept them from exploiting opportunities.

So, baka naman gusto niyang sabihin rin lahat ito, pero wala na siyang oras! :D

My two cents, given my background as an entrepreneur and an economist.

[aticus]

Point taken, victory. :) In all fairness, it IS difficult to be an entrepreneur under any circumstances, much less the one we face today.

Just to move this discussion even further, in what ways may a budding entrepreneur deal with the economic shackles our nation places on him/her? We have issues with peace and order, individual and institutional corruption, very poor infrastructure, a continuing brain dran of top talent, extremely poor investor confidence, trade deficits, inept political leadership, traffic and pollution, and a constantly weakening currency. What's an entrepreneur of the future to do? :) (I'm not trying to be facetious... I'm actually serious about this question.)

Is there any hope left for our country? Or, put another way, is there any way a person of vision can help make a positive change, without having to join politics and get killed?

This is where the speeches promoting "social work" that Oscar mentioned come in... In the absence of hope, what's an older generation got left but an almost vain appeal to the social conscience of the youth? I also agree that it may probably seem irrelevant in many cases, but how else are we going to motivate young people to do good things for their country?

I've honestly been grappling with this issue for the last two years that I've been away. I gave up trying to do anything positive because I knew too many politicians and I knew what they were doing to wreck the country. I just didn't see any way forward, at least not for the next 10 years or so. There's no current Presidential candidate, for instance, whom I'd support in ANY election, much less for the Presidency of the Philippines.

[Oscar01]

Originally posted by mac_bolan00
exactly what i wanted to say. anyone who read atlas shrugged would have given the same speech ---and be just as clueless as ayn rand when it comes to actual governance and economic policy formulation.

i'd rather have a fan of "the fountainhead" give the speech. the focus on the individual and professionalism will go down a lot smoother.
Well, looking at the context, it's a speech after all, and meant more to inspire than to deliver the substance of a doctoral dissertation. :)

In all honesty, I think it did focus a lot on the individual and on professionalism. Again, too many people look at "John Gokongwei School of Management" and decry a perceived commercialization of education, or a banal monument to filthy lucre. And yet, all I saw was a gesture by a son for a father that resonates with the best of traditional Chinese values.

About my "social worker" quip, just imagine how a young graduating class would react to exhortations to shun the perceived shallowness of making an honest living, and go make some perceived grand, noble sacrifice with your life. I'd rather have JG's less earthshaking message where you can make the country a better place simply by trying to stand firmly on both feet, and touch the lives of your family and employees as best as you can. A society and an economy, after all, emerge as the sum of their parts.

Simply, from a young person still studying or still trying to solidify his financial base, what good things do you expect? A cure for cancer, world peace, the eradication of foreign debt a la Eddie Gil? But again, is there anything less noble about going through the early years of your life without dreaming of any of these grand things as your end goal?

Without necessarily limiting this entrepreneurial spirit to business, I think opening one's mind, shunning complacency, and embracing the world as the oyster you want to make a carve your niche in is a good enough, realistic start.

After you get past that point, then maybe you can turn philanthropist and put up the "Victor Calanog Institute for Hubbies Who Let the Wife Foot the Internet Bill" as your family's legacy to the world as a bonus, but I wouldn't fault anyone who doesn't go that far. :D

[Oscar01]

Originally posted by aticus
I agree that almost anyone who's read the book could do what Gokongwei did... give a speech. But the reason the speech resonated so much with me was it was from a man who actually lived the life of an entrepreneur... who successfully made something of himself and in the process contributed a great deal to the country.
Precisely.

Picture yourself back at 21 years old, listening to an old taipan tell you that if you open your mind a little and put in a lot of hard work, you can be just like him. Tell you that he didn't even have an Ateneo diploma, and that he began as a teen-ager in the palengke.

It's simple with no frills, it doesn't preach anything about shortcuts, and it doesn't praise the comforts of riches as much as it does emphasize the fulfillment of braving the process.

And yes, not everyone could deliver that speech and not need to say a word about presenting results as proof. :D

[victory]

Originally posted by Oscar01

After you get past that point, then maybe you can turn philanthropist and put up the "Victor Calanog Institute for Hubbies Who Let the Wife Foot the Internet Bill" as your family's legacy to the world as a bonus, but I wouldn't fault anyone who doesn't go that far. :D

A more realistic start may be the "Oscar Tan Foundation for Supposedly Promising M.E./Eco-H Grads Who Still Let Parents Pay For Continued Schooling Instead Of Earning Their Own Keep." Given the very small number of M.E./Eco-H grads to be served you might think this is an easy job, but be warned: Judging by the overall body composition of the namesake you may be supporting the consumption habits of much more than the average Filipino!

:D

[Oscar01]

Nananadya ka na ata, Bakal Boy a. Teka at hahanapin ko si Ali para may kakampi naman ako rito. :D

Though, in all fairness, it's funny how my part-time job in UP more than covers the tuition and related expenses.

[victory]

Originally posted by aticus
Point taken, victory. :) In all fairness, it IS difficult to be an entrepreneur under any circumstances, much less the one we face today.

Just to move this discussion even further, in what ways may a budding entrepreneur deal with the economic shackles our nation places on him/her? We have issues with peace and order, individual and institutional corruption, very poor infrastructure, a continuing brain dran of top talent, extremely poor investor confidence, trade deficits, inept political leadership, traffic and pollution, and a constantly weakening currency. What's an entrepreneur of the future to do? :) (I'm not trying to be facetious... I'm actually serious about this question.)

Is there any hope left for our country? Or, put another way, is there any way a person of vision can help make a positive change, without having to join politics and get killed?

This is where the speeches promoting "social work" that Oscar mentioned come in... In the absence of hope, what's an older generation got left but an almost vain appeal to the social conscience of the youth? I also agree that it may probably seem irrelevant in many cases, but how else are we going to motivate young people to do good things for their country?

I've honestly been grappling with this issue for the last two years that I've been away. I gave up trying to do anything positive because I knew too many politicians and I knew what they were doing to wreck the country. I just didn't see any way forward, at least not for the next 10 years or so. There's no current Presidential candidate, for instance, whom I'd support in ANY election, much less for the Presidency of the Philippines.

Issues best discussed over (lots of) coffee.

On a personal note, these are the same issues we discuss very often when we are among friends who are in the same boat. One of your colleagues and friends from the international debating circuit -- one of our batch's resident geniuses who is now taking up formal med studies in WA -- stayed with us when he visited New York a few months ago. A good proportion of our time was spent talking about these things, with some fairly concrete plans for implementation. He too is an entrepreneur, and we both own and help run businesses in the Philippines, but from here in the US where we are finishing our studies (we have good managing directors). Are you in touch with him?

[victory]

Originally posted by Oscar01
Nananadya ka na ata, Bakal Boy a. Teka at hahanapin ko si Ali para may kakampi naman ako rito. :D

At the exact time of this posting, malapit nang kumanta si Ali ngayon sa Alexandria, VA as part of the Bukaspalad choir on their US tour. They sang in NYC last Friday.


Though, in all fairness, it's funny how my part-time job in UP more than covers the tuition and related expenses.

Sige na, huwag ka na masyadong defensive. Dyino-dyoks lang naman kita eh. 'Lam mo namang (sort of) bilib kami sa iyo, diba? :D

By the way, a batchmate of yours stayed with us in NYC during her visit from April 14 to today. She is your resident MIS Summa Cum Laude, one of the TOSP during your time. She may in the future marry into my family (the Yu/Yeh side) -- she will formally become my aunt-in-law! She already fits right in.

[Oscar01]

Wonderful, though hardly unexpected news. :D "Historical inevitability" na yan. Her best friend is my blockmate right now, and she had to scramble to catch her before she left on her mini world-tour.

[victory]

Originally posted by Oscar01

Again, too many people look at "John Gokongwei School of Management" and decry a perceived commercialization of education, or a banal monument to filthy lucre. And yet, all I saw was a gesture by a son for a father that resonates with the best of traditional Chinese values.

About my "social worker" quip, just imagine how a young graduating class would react to exhortations to shun the perceived shallowness of making an honest living, and go make some perceived grand, noble sacrifice with your life. I'd rather have JG's less earthshaking message where you can make the country a better place simply by trying to stand firmly on both feet, and touch the lives of your family and employees as best as you can. A society and an economy, after all, emerge as the sum of their parts.

You already know my firm opinions on this matter.

Remember this fun thread?

Ateneans, Meet the John Gokongwei School of Management (http://www.pinoyexchange.com/forums/showthread.php?s=&threadid=86044)

[Oscar01]

Well, I vaguely remember your mass e-mail campaign in reaction to that. Man, how do you dig up these old threads? Bet you have them all bookmarked. :D

Ah, yes, the Vagina Monologues issue. I refused to attend my graduation in 2002 out of utter disgust for that one.

[mac_bolan00]

thanks victory, for portraying my super-ego.

to aticus, i can sum up my feelings towards this thread by saying, "in any society, the success becomes the sage." top physicists talk about economics, top economists talk about morality and tycoons talk about governance.

an entrepreneur who works for others is a contradiction in terms. jews view honest businessmen as the most just and moral people on earth because they're the most selfish. now anyone who understands a smidgeon of business and economics knows the value an enterprise gives to its host country. an enterprise IS a thing of value. the businessman's contribution ends there.

but if you want businessmen to put a conscious effort towards helping the host country and not sound hypocritical, they only have to do their businesses justly, and in accordance with the law.

[victory]

Originally posted by mac_bolan00
thanks victory, for portraying my super-ego.

to aticus, i can sum up my feelings towards this thread by saying, "in any society, the success becomes the sage." top physicists talk about economics, top economists talk about morality and tycoons talk about governance.

an entrepreneur who works for others is a contradiction in terms. jews view honest businessmen as the most just and moral people on earth because they're the most selfish. now anyone who understands a smidgeon of business and economics knows the value an enterprise gives to its host country. an enterprise IS a thing of value. the businessman's contribution ends there.

but if you want businessmen to put a conscious effort towards helping the host country and not sound hypocritical, they only have to do their businesses justly, and in accordance with the law.

Very Friedman.

Full text here:

"The Social Responsibility of Business is to Increase its Profits," by Milton Friedman (http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html)

[Oscar01]

A bit like old Chinese philosophy, in that you don't consider a carriage maker virtuous because he prays that people will get rich and a coffin maker evil because he prays that people die. :)

In that sense, you'd expect more ads about family values from Jollibee than from Napoleon Brandy.

[mac_bolan00]

that wasn't friedman, most of that came from Das Kapital. :D

[victory]

Full text of the Friedman article, for those who would care to read it. Reactions?

And lest anyone think Milton is just some goof who was lucky enough to have an unsolicited piece chosen for publication in the New York Times, here's his background:

Milton Friedman: Winner of the 1976 Nobel Memorial Prize in Economic Sciences (http://www.nobel.se/economics/laureates/1976/friedman-autobio.html)

The Social Responsibility of Business is to Increase its Profits

by Milton Friedman

The New York Times Magazine, September 13, 1970.
Copyright @ 1970 by The New York Times Company.

When I hear businessmen speak eloquently about the "social responsibilities of business in a free-enterprise system," I am reminded of the wonderful line about the Frenchman who discovered at the age of 70 that he had been speaking prose all his life. The businessmen believe that they are defending free en_terprise when they declaim that business is not concerned "merely" with profit but also with promoting desirable "social" ends; that business has a "social conscience" and takes seriously its responsibilities for providing em_ployment, eliminating discrimination, avoid_ing pollution and whatever else may be the catchwords of the contemporary crop of re_formers. In fact they are–or would be if they or anyone else took them seriously–preach_ing pure and unadulterated socialism. Busi_nessmen who talk this way are unwitting pup_pets of the intellectual forces that have been undermining the basis of a free society these past decades.

The discussions of the "social responsibili_ties of business" are notable for their analytical looseness and lack of rigor. What does it mean to say that "business" has responsibilities? Only people can have responsibilities. A corporation is an artificial person and in this sense may have artificial responsibilities, but "business" as a whole cannot be said to have responsibilities, even in this vague sense. The first step toward clarity in examining the doctrine of the social responsibility of business is to ask precisely what it implies for whom.

Presumably, the individuals who are to be responsible are businessmen, which means in_dividual proprietors or corporate executives. Most of the discussion of social responsibility is directed at corporations, so in what follows I shall mostly neglect the individual proprietors and speak of corporate executives.

In a free-enterprise, private-property sys_tem, a corporate executive is an employee of the owners of the business. He has direct re_sponsibility to his employers. That responsi_bility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while con_forming to the basic rules of the society, both those embodied in law and those embodied in ethical custom. Of course, in some cases his employers may have a different objective. A group of persons might establish a corporation for an eleemosynary purpose–for exam_ple, a hospital or a school. The manager of such a corporation will not have money profit as his objective but the rendering of certain services.

In either case, the key point is that, in his capacity as a corporate executive, the manager is the agent of the individuals who own the corporation or establish the eleemosynary institution, and his primary responsibility is to them.

Needless to say, this does not mean that it is easy to judge how well he is performing his task. But at least the criterion of performance is straightforward, and the persons among whom a voluntary contractual arrangement exists are clearly defined.

Of course, the corporate executive is also a person in his own right. As a person, he may have many other responsibilities that he rec_ognizes or assumes voluntarily–to his family, his conscience, his feelings of charity, his church, his clubs, his city, his country. He ma}. feel impelled by these responsibilities to de_vote part of his income to causes he regards as worthy, to refuse to work for particular corpo_rations, even to leave his job, for example, to join his country's armed forces. Ifwe wish, we may refer to some of these responsibilities as "social responsibilities." But in these respects he is acting as a principal, not an agent; he is spending his own money or time or energy, not the money of his employers or the time or energy he has contracted to devote to their purposes. If these are "social responsibili_ties," they are the social responsibilities of in_dividuals, not of business.

What does it mean to say that the corpo_rate executive has a "social responsibility" in his capacity as businessman? If this statement is not pure rhetoric, it must mean that he is to act in some way that is not in the interest of his employers. For example, that he is to refrain from increasing the price of the product in order to contribute to the social objective of preventing inflation, even though a price in crease would be in the best interests of the corporation. Or that he is to make expendi_tures on reducing pollution beyond the amount that is in the best interests of the cor_poration or that is required by law in order to contribute to the social objective of improving the environment. Or that, at the expense of corporate profits, he is to hire "hardcore" un_employed instead of better qualified available workmen to contribute to the social objective of reducing poverty.

In each of these cases, the corporate exec_utive would be spending someone else's money for a general social interest. Insofar as his actions in accord with his "social responsi_bility" reduce returns to stockholders, he is spending their money. Insofar as his actions raise the price to customers, he is spending the customers' money. Insofar as his actions lower the wages of some employees, he is spending their money.

The stockholders or the customers or the employees could separately spend their own money on the particular action if they wished to do so. The executive is exercising a distinct "social responsibility," rather than serving as an agent of the stockholders or the customers or the employees, only if he spends the money in a different way than they would have spent it.

But if he does this, he is in effect imposing taxes, on the one hand, and deciding how the tax proceeds shall be spent, on the other.

This process raises political questions on two levels: principle and consequences. On the level of political principle, the imposition of taxes and the expenditure of tax proceeds are gov_ernmental functions. We have established elab_orate constitutional, parliamentary and judicial provisions to control these functions, to assure that taxes are imposed so far as possible in ac_cordance with the preferences and desires of the public–after all, "taxation without repre_sentation" was one of the battle cries of the American Revolution. We have a system of checks and balances to separate the legisla_tive function of imposing taxes and enacting expenditures from the executive function of collecting taxes and administering expendi_ture programs and from the judicial function of mediating disputes and interpreting the law.

Here the businessman–self-selected or appointed directly or indirectly by stockhold_ers–is to be simultaneously legislator, execu_tive and, jurist. He is to decide whom to tax by how much and for what purpose, and he is to spend the proceeds–all this guided only by general exhortations from on high to restrain inflation, improve the environment, fight poverty and so on and on.

The whole justification for permitting the corporate executive to be selected by the stockholders is that the executive is an agent serving the interests of his principal. This jus_tification disappears when the corporate ex_ecutive imposes taxes and spends the pro_ceeds for "social" purposes. He becomes in effect a public employee, a civil servant, even though he remains in name an employee of a private enterprise. On grounds of political principle, it is intolerable that such civil ser_vants–insofar as their actions in the name of social responsibility are real and not just win_dow-dressing–should be selected as they are now. If they are to be civil servants, then they must be elected through a political process. If they are to impose taxes and make expendi_tures to foster "social" objectives, then politi_cal machinery must be set up to make the as_sessment of taxes and to determine through a political process the objectives to be served.

This is the basic reason why the doctrine of "social responsibility" involves the acceptance of the socialist view that political mechanisms, not market mechanisms, are the appropriate way to determine the allocation of scarce re_sources to alternative uses.

On the grounds of consequences, can the corporate executive in fact discharge his al_leged "social responsibilities?" On the other hand, suppose he could get away with spending the stockholders' or customers' or employees' money. How is he to know how to spend it? He is told that he must contribute to fighting inflation. How is he to know what ac_tion of his will contribute to that end? He is presumably an expert in running his company–in producing a product or selling it or financing it. But nothing about his selection makes him an expert on inflation. Will his hold_ ing down the price of his product reduce infla_tionary pressure? Or, by leaving more spending power in the hands of his customers, simply divert it elsewhere? Or, by forcing him to produce less because of the lower price, will it simply contribute to shortages? Even if he could an_swer these questions, how much cost is he justi_fied in imposing on his stockholders, customers and employees for this social purpose? What is his appropriate share and what is the appropri_ate share of others?

And, whether he wants to or not, can he get away with spending his stockholders', cus_tomers' or employees' money? Will not the stockholders fire him? (Either the present ones or those who take over when his actions in the name of social responsibility have re_duced the corporation's profits and the price of its stock.) His customers and his employees can desert him for other producers and em_ployers less scrupulous in exercising their so_cial responsibilities.

This facet of "social responsibility" doc_ trine is brought into sharp relief when the doctrine is used to justify wage restraint by trade unions. The conflict of interest is naked and clear when union officials are asked to subordinate the interest of their members to some more general purpose. If the union offi_cials try to enforce wage restraint, the consequence is likely to be wildcat strikes, rank_-and-file revolts and the emergence of strong competitors for their jobs. We thus have the ironic phenomenon that union leaders–at least in the U.S.–have objected to Govern_ment interference with the market far more consistently and courageously than have business leaders.

The difficulty of exercising "social responsibility" illustrates, of course, the great virtue of private competitive enterprise–it forces people to be responsible for their own actions and makes it difficult for them to "exploit" other people for either selfish or unselfish purposes. They can do good–but only at their own expense.

Many a reader who has followed the argu_ment this far may be tempted to remonstrate that it is all well and good to speak of Government's having the responsibility to im_pose taxes and determine expenditures for such "social" purposes as controlling pollu_tion or training the hard-core unemployed, but that the problems are too urgent to wait on the slow course of political processes, that the exercise of social responsibility by busi_nessmen is a quicker and surer way to solve pressing current problems.

Aside from the question of fact–I share Adam Smith's skepticism about the benefits that can be expected from "those who affected to trade for the public good"–this argument must be rejected on grounds of principle. What it amounts to is an assertion that those who favor the taxes and expenditures in question have failed to persuade a majority of their fellow citizens to be of like mind and that they are seeking to attain by undemocratic procedures what they cannot attain by democratic proce_dures. In a free society, it is hard for "evil" people to do "evil," especially since one man's good is another's evil.

I have, for simplicity, concentrated on the special case of the corporate executive, ex_cept only for the brief digression on trade unions. But precisely the same argument ap_plies to the newer phenomenon of calling upon stockholders to require corporations to exercise social responsibility (the recent G.M crusade for example). In most of these cases, what is in effect involved is some stockholders trying to get other stockholders (or customers or employees) to contribute against their will to "social" causes favored by the activists. In_sofar as they succeed, they are again imposing taxes and spending the proceeds.

The situation of the individual proprietor is somewhat different. If he acts to reduce the returns of his enterprise in order to exercise his "social responsibility," he is spending his own money, not someone else's. If he wishes to spend his money on such purposes, that is his right, and I cannot see that there is any ob_jection to his doing so. In the process, he, too, may impose costs on employees and cus_tomers. However, because he is far less likely than a large corporation or union to have mo_nopolistic power, any such side effects will tend to be minor.

Of course, in practice the doctrine of social responsibility is frequently a cloak for actions that are justified on other grounds rather than a reason for those actions.

To illustrate, it may well be in the long run interest of a corporation that is a major employer in a small community to devote resources to providing amenities to that community or to improving its government. That may make it easier to attract desirable employees, it may reduce the wage bill or lessen losses from pilferage and sabotage or have other worthwhile effects. Or it may be that, given the laws about the deductibility of corporate charitable contributions, the stockholders can contribute more to chari_ties they favor by having the corporation make the gift than by doing it themselves, since they can in that way contribute an amount that would otherwise have been paid as corporate taxes.

In each of these–and many similar–cases, there is a strong temptation to rationalize these actions as an exercise of "social responsibility." In the present climate of opinion, with its wide spread aversion to "capitalism," "profits," the "soulless corporation" and so on, this is one way for a corporation to generate goodwill as a by-product of expenditures that are entirely justified in its own self-interest.

It would be inconsistent of me to call on corporate executives to refrain from this hyp_ocritical window-dressing because it harms the foundations of a free society. That would be to call on them to exercise a "social re_sponsibility"! If our institutions, and the atti_tudes of the public make it in their self-inter_est to cloak their actions in this way, I cannot summon much indignation to denounce them. At the same time, I can express admiration for those individual proprietors or owners of closely held corporations or stockholders of more broadly held corporations who disdain such tactics as approaching fraud.

Whether blameworthy or not, the use of the cloak of social responsibility, and the nonsense spoken in its name by influential and presti_gious businessmen, does clearly harm the foun_dations of a free society. I have been impressed time and again by the schizophrenic character of many businessmen. They are capable of being extremely farsighted and clearheaded in matters that are internal to their businesses. They are incredibly shortsighted and muddle_headed in matters that are outside their businesses but affect the possible survival of busi_ness in general. This shortsightedness is strikingly exemplified in the calls from many businessmen for wage and price guidelines or controls or income policies. There is nothing that could do more in a brief period to destroy a market system and replace it by a centrally con_trolled system than effective governmental con_trol of prices and wages.

The shortsightedness is also exemplified in speeches by businessmen on social respon_sibility. This may gain them kudos in the short run. But it helps to strengthen the already too prevalent view that the pursuit of profits is wicked and immoral and must be curbed and controlled by external forces. Once this view is adopted, the external forces that curb the market will not be the social consciences, however highly developed, of the pontificating executives; it will be the iron fist of Government bureaucrats. Here, as with price and wage controls, businessmen seem to me to reveal a suicidal impulse.

The political principle that underlies the market mechanism is unanimity. In an ideal free market resting on private property, no individual can coerce any other, all coopera_tion is voluntary, all parties to such coopera_tion benefit or they need not participate. There are no values, no "social" responsibilities in any sense other than the shared values and responsibilities of individuals. Society is a collection of individuals and of the various groups they voluntarily form.

The political principle that underlies the political mechanism is conformity. The indi_vidual must serve a more general social inter_est–whether that be determined by a church or a dictator or a majority. The individual may have a vote and say in what is to be done, but if he is overruled, he must conform. It is appropriate for some to require others to contribute to a general social purpose whether they wish to or not.

Unfortunately, unanimity is not always feasi_ble. There are some respects in which conformity appears unavoidable, so I do not see how one can avoid the use of the political mecha_nism altogether.

But the doctrine of "social responsibility" taken seriously would extend the scope of the political mechanism to every human activity. It does not differ in philosophy from the most explicitly collectivist doctrine. It differs only by professing to believe that collectivist ends can be attained without collectivist means. That is why, in my book Capitalism and Freedom, I have called it a "fundamentally subversive doctrine" in a free society, and have said that in such a society, "there is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."

[victory]

Sorry for the extra "_"'s, etc. Bad copy and paste issues, none are Friedman's typos. :D

[mac_bolan00]

very nice. i like the way he touched on collectivism. a lot of people don't see it but communism is actually a lot like ayn rand's objectivist society.

[Stampede]

maiba lang since i;ve never seen this much allusion to ayn rand...off topic...

ayn rand must be turning in her grave...

i'm curious why you say that communism is a lot like objectivism. this could a whole new thread so no need to reply...

[mac_bolan00]

just this: adhere too much on one reference and you could become dependent on it to the point of total exclusivity. the best example of this is those fundamentalist bible-based groups. "anything not of the bible is not of god and is therefore of satan."

so what about an atheist who does charity work for his own satisfaction and not for dei gloriam?

[aticus]

Great discussion so far. :) Clearly my favorite thread on PEx at the moment. :D

To victory: I'm not currently in contact with Alex, but I count him as a close personal friend indeed. He was my teammate for two tournaments (Asians in 94 and Worlds in 96). He's a wonderful guy. He'll make a great doctor/entrepreneur (now there's a seeming contradiction in terms!). :)

I have to finish some business right now, but I will definitely reply shortly, especially to Friedman's text. :)

[Stampede]

maiba lang since i;ve never seen this much allusion to ayn rand...off topic...

ayn rand must be turning in her grave...

i'm curious why you say that communism is a lot like objectivism. this could a whole new thread so no need to reply...

[OliverWood21]

I hope none of you would mind if I bump this thread up.

I still haven't read all of the posts and discussions here.. :glee: But the heck, looks like reading those points makes me feel I had just taken up my MBA..

[aticus]

Sorry it's been a while since I've posted. :) Been busy with a client.

Regarding Friedman's article... I have a few thoughts (aside from the fact that this man is the one responsible for "Reagonomics," which I don't particularly agree with... but that's another matter):

1) The article is well-written, but relies on some assumptions, for example: that any executive who acts in a way that is consistent with public interest, but which costs his shareholders money, is not fulfilling his corporate duty. I accept that the main duty of a corporate executive is to maximize shareholder wealth, but even Friedman reckons that acts of public goodwill are acts of corporate self-interest (ex. spending money to support a local school). If an executive chooses one alternative to another, he is making a business decision. Perhaps he won't be able to produce a net benefit greater than merely going for profits, but I don't think it's as cut and dried as saying he's "taxing" the shareholders unfairly.

It would be very different, of course, if he specifically opposes a direct, written mandate from the Board of Directors. Then he's clearly subordinating their desires to his own... but even then, some executives have, in the past, gone against their boards to make the RIGHT calls for their businesses... and when they become successful, no one calls this a "tax." I think, therefore, that if an executive goes against the express mandate of the board to make their company "profitable," but does end up creating a net positive benefit through the public goodwill acts of the company, he would still be acting like many other executives have in the past. In business, after all, success is the ultimate measure of right or wrong.

2) This is going to be a bit idealistic, and I expect some comments on this point, but I just don't subscribe to the undertone of his essay: that as long as a business is legally trying to make money, the executives should just mind their own business (pun intended).

There are many, many kinds of businesses which I don't agree with. Abortion clinics, for instance, as well as child pornography web-sites. Even if these were legal, I cannot in any way support a businessman who would exploit this to make money. If a pornography business, for instance, legally created a child porn web-site (in Thailand, for instance, the age of consent is 15 years old, so you can legally have sex with a 16 year old), I can't blame an executive of that company for going against its publishing online, on simple moral grounds. Understandably, those defending the shareholders' rights would say "but it's legal... if the guy doesn't want to do it, he could always resign..." To which I would say, fair enough. But what if the executive can actually make a positive impact by staying? What if that executive can influence enough people to just kill the web-site, even without shareholder approval? In that brief time before they fire him, would he be doing the wrong thing? Honestly, I don't think so. Why? I have two reasons:

a) There are many examples in business of when an executive does something on moral grounds, and reaps positive benefits (ex. The Dodgers letting Jackie Robinson play, thereby breaking the color barrier in baseball). Heck, the whole LEAGUE was against that move, but they did it anyway... and Robinson became an MVP. Naturally, there will be those who will say that it could have been a calculated business move... that the Dodgers wanted to get positive publicity or something. Fair enough if they did. But regardless, they still faced major opposition, and they stood their ground. Sometimes, these things work. If they don't... hey, that's business. You win some, you lose some;

b) You cannot now ignore the current business climate. It is now part of good business to recognize the public good. Any company that operates with no regard for public opinion or the goodwill of the people does so at its own peril. Rather than being a merely individual choice of the executive (as Friedman implies), it is now a choice that is externally demanded by society. That's why you have oil companies like Shell promoting itself as a pioneer of alternative fuels... not because it's a "good guy," but because there is a public backlash against perceived industrial polluters. It is now proper business to factor in this public mood and sentiment. It's not just politicians who worry about the environment now, but oil companies, car companies, etc., etc. It is now an unavoidable fact of business life that the public good must be taken into account when doing business. Heck, that's why we have "dolphin-free tuna." :)

In summary, I do agree that the first and primary goal of any executive is to maximize shareholder wealth. I just disagree with the cynical tone of Friedman's article, and would like to say that he contradicts himself when he says that doing public good is an unnecessary and financially-unhealthy thing, while at the same time pointing out that a lot of "public goodwill" acts have direct or indirect business benefits. Why isn't it good business to be good? In many cases, it is better to be perceived as good, because it leads to better business. Lastly, it is now a fact of business life that the public often demands a greater level of public accountability, or even just plain "niceness" (why do you think most movies have a disclaimer that says "no animal was harmed in the making of this movie..." which is more than I can say for some stuntmen ;) ).

Just my two-bits. :D

[LongBow]

bump!up you go!

[riddler888]

this is the best thing it heard from him:

"> I say: Great! Take these offers, work as hard as you can, learn
everything
> these companies can teach-and then leave!
>
> If you dream of creating something great, do not let a 9-to-5 job-even a
> high-paying one-lull you into a complacent, comfortable life. Let that
> high-paying job propel you toward entrepreneurship instead."

jg admires the jesuits and i admire him for bringing it straight to the heads of us ateneans to become entrepreneurs and not be content with being an employee.
with most ateneans going to multinationals its a welcome break that someone pushes for entrepreneurship--for the sake of the rp.