Is business a calling? — with Michael Novak (1996) | THINK TANK


Ben Wattenberg: Hello, I’m Ben Wattenberg. Corporate responsibility has become sizzling
politics. Among the issues du jour are downsizing, moving
jobs overseas, and CEO compensation. These raise issues about the relationship
between moral behavior and commercial gain. Michael Novak is the author of a new book,
“Business as a Calling: Work and the Examined Life.” It is a different take on an issue that touches
all of our lives. The question before this house: Is business
a calling? This week on “Think Tank.” Michael Novak has written or edited more than
25 books about philosophy, religion, and culture, including his seminal work, “The Spirit
of Democratic Capitalism.” He has taught at many universities, including
Stanford and Harvard, and in 1994, he was awarded the Templeton Prize for Progress in
Religion and cited as the progenitor of a new discipline, the theology of economics. He is currently the George Frederick Jewett
chair at the American Enterprise Institute. Michael Novak, welcome to “Think Tank”
today. Michael Novak: Thanks a lot, Ben. Ben Wattenberg: What do you mean when you
say business is a morally serious calling? We normally think of a calling as something
for a priest or perhaps a doctor, but not a businessman. Michael Novak: Well, many businessmen discover,
sometimes later, sometimes earlier, that they’re really good at something, that this is something
they were made for. There are three or four signs of a calling. One is that it’s what you want to do. There may be somethings you’re good at you
just don’t want to do. The second is you’ve got the talent for
it, you’ve got the knack for it. The third is you really enjoy doing it, it
invigorates you, it makes you feel at the top of your form when you’re doing it. And many people in business discover that’s
what they were made for. This is what they seem to do best, what their
talent is for. If they’re believers, and most probably
are, they believe this is what God made them for, and they’re glad they found it. By the way, a fourth sign of a calling is:
It’s often hard to find. You don’t find it right away. You do some trial and error, feeling your
way toward it and maybe back into it. Ben Wattenberg: If a doctor says, “This
is what God meant for me to do on this earth,” I think we all sort of understand that. But if a widget salesman says, “God meant
me to sell widgets,” that’s OK? Michael Novak: Yeah, it may or may not be
true. He may be taking it just as a job, but a lot
of people feel as though, look, this is what I’m good at it. This is what I do well, this is what I enjoy
doing. It’s worthwhile doing; people need widgets. It’s a very humble thing, but there are
lots of humble jobs in the world that you either do well or you do badly. Ben Wattenberg: But the other moral aspect
of widget selling is that you earn your bread, support your family at it. I mean — Michael Novak: Oh, yeah. Ben Wattenberg: — and he might not enjoy
widget selling. Michael Novak: Well, that’s a different
thing. His calling in that case may be — my father
was a lot like that for a good part of his life. Ben Wattenberg: Your father? Michael Novak: My father. He didn’t like the selling job that he had
to do in certain aspects of it, and it was a grind for him. But it was the Depression period, it was hard,
he was very glad to have a job. At least he had a job that made him — he
was selling life insurance — that helped him to meet people, and he came to think of
it as this is something very important. He saw the effects of a life insurance policy
if somebody was killed at the mill or something like that. We lived in Johnstown, Pennsylvania, a mill
town, and to be able to deliver a check to a widow from a life insurance policy, he began
to think, this is a very old profession, and it’s a very important one, and this is financial
security for people when disaster strikes. So he changed his mind over time about it. But at first, he hated it. He hated just the effort of finding new people
and trying to sell them something. Very hard. Ben Wattenberg: Is any business, as you call
it, a morally serious calling? Michael Novak: Well, there’s one person,
one executive I quote in the book who was debating between some jobs, and he happened
to be standing in an airport and saw a rack of magazines, “Playboy,” “Penthouse,”
whatever. And he was saying to himself, gee, I’m glad
I’m not producing those things. So from his point of view, that was not something
he’d like to spend his life doing. And so I think people do make that determination. Some things are better than others in their
viewpoint. Ben Wattenberg: But if Hugh Hefner was in
this chair, in your chair, he would argue that what he did with “Playboy” magazine
was a morally serious calling. Michael Novak: Yeah, he sure did, in installment
after installment when he first started out, practically a philosophy — Ben Wattenberg: A pleasure philosophy or whatever. Michael Novak: Yeah, pleasure philosophy. Ben Wattenberg: Particularly for Hugh Hefner. Michael Novak: And I don’t think that did
a great deal of good for the country over time. In other words, if the country went down that
route, goodbye to a capitalist system, goodbye to a democracy. Ben Wattenberg: But is the test of — Michael Novak: I just want to say for the
system’s sake, capitalism requires a lot of people willing to sacrifice today for tomorrow,
a tomorrow they may not see, but their children will see. And so it’s really not compatible with the
hedonistic principle. Those are at war with one another. Ben Wattenberg: Why is there so much talk
these days about corporate greed? Michael Novak: There’s always been talk
— there weren’t corporations in very early history, but there’s always been talk of
greed. In almost all the major religions and all
the major literatures, people of business have been looked down upon, looked down upon
as hucksters, looked down upon as middlemen. I think it was St. Ambrose of Milan that once
said, you know, God intended the seas for fishermen, not for merchants. And he had some very nasty words to say about
merchants. That’s been a constant theme in the pagan
West, in the Christian West, and it’s one reason why in the English language, it’s
hard to think of a novel or a playwright or a poet who has a kind word to say for commerce
or for corporations or for industry. Blake wrote about those “dark, satanic mills.” Ben Wattenberg: You have sort of devoted your
life to putting together the idea of religion and economics in some sort of a unified field
theory. Is that fair? Michael Novak: Well, I didn’t intend to
when I first started out, but I got driven to that. I wanted to — I did want to spend my time
thinking about the connections between religion and society. Both Judaism and Christianity are culture-shaping
religions. They’re like yeast and dough, and they aim
to make religion down-to-earth and relevant and part of everyday life. “Earn your daily bread by the sweat of your
brow.” Very early in the Bible, that’s the method,
and this is holy work. So that sort of thing interested me, and how
was it expressed in society? Now, most books on that subject, as you’re
coming through college and so forth, are written from a socialist point of view. Tawney and Fanfani, and Max Weber on the Protestant
ethic and greed and avarice. And the literary people despise it as these
are people who buy and sell, mere commerce, and so forth. And literary people tend to imagine themselves
aristocrats of the spirit. They do better things than that. Ben Wattenberg: Tell me about the role of
envy, which is something that I know I’ve heard you talk about in terms of the Soviet
Union and Eastern Europe, but you also deal with it in this book in America. Michael Novak: The most destructive passion,
the one that James Madison, whose tie I’m wearing, and others thought was what most
destroyed republics. It’s forbidden seven times in Deuteronomy. In the Ten Commandments, “thou shalt not
covet this, thou shalt not covet that.” In other words, it’s a perpetual, perpetual
passion of human beings to bring down others to their own level, to take what others have. Ben Wattenberg: What was that story you used
to tell about envy in the Soviet Union? Michael Novak: Well, that’s a little bit
round about, but a cannibal king captures a Frenchman, a Brit, and a Russian, and he’s
going to boil them alive on Monday. They get to do whatever they want on the weekend. The Frenchman wishes a weekend with his mistress,
no questions asked, no promises made. The Brit wishes for a weekend walking the
fields of Oxfordshire with his setter reciting Wordsworth and Shelley. And the Russian wishes that his neighbor’s
barn will burn down. So it’s a powerful emotion in the former
Soviet Union. If you tell that story in Eastern Europe,
everybody roars. There is a deep desire to keep everybody even. It’s perpetual, but it was reinforced by
socialism, a kind of philosophy of envy. And so you have to be careful in any republic
that you don’t nourish the seeds of envy. That’s why I think executive compensation,
if it’s very high — even with ball players and so forth, too — if it’s very high,
it starts generating the fires, stoking the fires of envy, which is politically destructive. They might have a very good argument for it. Michael Jordan is so good that he’ll bring
out more attendance than you’re ever going to pay him. Just one game is worth 20,000 people. I don’t know, whatever the number is. So you make a good economic argument. A CEO like Jack Welsh of General Electric
is one in a million. The right personality, the right financial
talents, the right talents for understanding technology and for motivating people. It’s hard to find people — you can make
a good economic argument. But politically, it just raises the feeling
of envy throughout the public, and you have to deal — if you want business to be allowed
freedom, you have to deal with its political problems. Ben Wattenberg: Well, so should we accommodate
the envy and say therefore CEO salaries should be limited because it’s a political necessity? Michael Novak: I don’t know what the precise
mechanics of the solution is. I know it’s a serious problem. Our colleague, Irving Kristol, has been talking
about this at least 20 years, that it was going to, and it wasn’t so bad 20 years
ago. It’s going to catch up to business. And the procedures by which compensation is
set need a really close look. Who are these committees? What’s going through their heads? Aren’t there other things we can give CEOs? Aren’t there honors we can give them? If corporations don’t have the will of a
democratic people behind them, they’ll be throttled. In most countries on this planet, you can’t
have free corporations. You know, free air for corporations is more
rare than oil. Ben Wattenberg: What happens when the CEO
improves the economic condition of the corporation by downsizing and throwing people out of work
in East St. Louis, and then picks up $10 million in stock options and the other guys are out
looking for a job? Michael Novak: Yeah. Well, look, there are two main arguments here. The first one is, the most destructive, evil
part of capitalism as a system is the downsizing part. It’s a system of creativity and new technology. The underside of that is creative destruction,
as the economist Joseph Schumpeter called it. A new technology puts out of business an old
one. When I went up to Syracuse University more
than a decade ago, it was not too long after I think it was Maytag had a big plant up there. It was gone by the time I got there. New technology — they weren’t building
the kind of washing machines that they had for a generation or more. It just emptied out. Those jobs are gone. That’s an evil, destructive part of capitalism. The only argument for it is a system which
generates the new is better than the alternatives, better than the stagnation. But it’s not good. Ben Wattenberg: And creates jobs. Michael Novak: Yeah. And on the other side of it, we can do a better
job, now that technology changes so much more quickly and now that we’ve come abreast
that that’s a — it’s not on a 30-year cycle, it’s on five- or six-year cycle. We can adjust the policies of firms so that
they pay more in capital and stock options to their workers so they have a little capital
nest egg for these bad times that come along. We can do more with the health insurance to
make it portable. Ben Wattenberg: In the 1980s, there was this
movie called “Wall Street,” and the central character is one Gordon Gecko, who says in
a speech, “Greed is good.” Michael Novak: “Greed is good,” he says. Ben Wattenberg: Greed is good. Is that what business as a calling is about? Michael Novak: I don’t think so. Greed is an excess, greed is an evil passion,
and it usually brings the firm or the person involved in it to grief. No. But what the corporation — the corporation
began, first of all, in monasteries, Egyptian burial societies, then the monasteries, as
a form that outlasted individual life, a legal entity that goes longer than any one individual,
that’s social without being part of the state, independent of the state. And as that form began to be used in business,
began to be the way in which people took more ideas, raised money to produce them, stock
associations, and so forth, and produce goods, for the first time, the world had a way of
sustaining wealth in a sustained and systematic way. And that meant for the first time in history,
you could take that biblical phrase, “the poor ye shall always have with you,” and
understand it in a very different way. The vast majority of the people of the world
do not have to be poor. We can create sufficient wealth so that there’s
a firm material base under virtually every man and every woman on this planet. And that’s — the engine is the business
— of that is the business corporation. Ben Wattenberg: Isn’t the purpose of a corporation
to make money? Michael Novak: Yes, to create new wealth,
to create new wealth for its investors, for its workers, for the society at large. Ben Wattenberg: But yet you talk about a corporation
having a conscience. Michael Novak: Well, there is an ambiguity
in that. Corporations don’t have conscience, but
the people in them do, and that can be appealed to. And that — and it’s there, it’s often
the leading edge of conscience in a country. It’s often the — Ben Wattenberg: In a corporation? Michael Novak: It’s often the heads of business
— let’s take a country like South Korea under a dictatorship, as it was when it first
started experimenting with the American economy. Well, as people from small villages who had
been born poor showed terrific economic talent and became heads of corporations, they began
to think, hey, we’re smarter than the general, and they began to envisage a new Korea — democratic,
representative government. And they slowly helped to provide, and especially
in small businesses, that spread, they helped to provide the crucial mass that enabled Korea
to move toward democracy. You could predict it in advance, as in fact
I did, that it was coming. And I think in the same way in China, you
can predict that the spread of business in China is going to lead to a critical mass
of people who are going to know that they’re smarter than the communists and the commissars,
than the generals, and they’re going to demand republican government. Ben Wattenberg: But what happens when an executive
in a corporation is faced with a choice that would be a superior moral choice versus a
choice that, while not illegal, would make more money for the corporation? That’s one of the things you deal with in
“Business as a Calling.” Where do you come out on that? What should it do? Michael Novak: Business is a morally serious
thing, and different people handle it differently. You can do good and great good in business,
or you can do evil or just snotty, not very good things, maybe not terribly evil. But business is an arena of human activity
in which you see very bad things and you see very good things. No businessman can escape it by saying, “I’m
in business, I can’t help it, it’s the business way to do it.” Ben Wattenberg: Now, wait a minute. But — Michael Novak: Let me give you an example,
Ben, a real clear one. A CEO told a group in a seminar, myself included,
that he was in a firm that had a branch in East St. Louis, and that branch in East St.
Louis, compared to other plants that they had, was marginal. Another guy coming in might close that plant. But he said, “They’re marginal, they’re
just making it, but they’re making it. And given the social problems in East St.
Louis, I am not going to close that plant as long as I am CEO of this company. I’m not going to do it. I think we’re important to East St. Louis,
and we’re going to stay there as long as I can keep it there.” Another guy might have called it differently. That’s what I mean about the discretion
that’s there in the business. Ben Wattenberg: Here is this marginal plant
in East St. Louis. It’s barely profitable for this company,
all right? The same amount of capital invested in another
place will not be marginally profitable, but substantially profitable. Michael Novak: Yeah. Ben Wattenberg: All right, now, it’s one
thing to say, “Well, I’m not going to close this plant in East St. Louis and all
these people’s jobs.” But in the modern era, particularly with the
role of pension plans, if he does that morally desirable, wonderful thing, he is taking money
out of the mouths of widows and orphans who have invested in his stock. So which is the moral way? Michael Novak: Ben, morality is not a cut-and-dried,
simple business in any aspect, any more here. There is sometimes more than one moral thing
to do, and people are going to have to make a prudential judgment, weighing the good and
evil involved in those things, and bank their souls on it. And you could — Ben Wattenberg: But you can see — Michael Novak: — I can see an argument either
way on that. In other words, if at a certain point you
decide, look, I’d like to keep it open, but this firm is losing money or using money
badly here; much as we’d like to do it, we are not in the end a welfare agency, and
investing this money somewhere else is going to end up doing a lot better for the country,
for the business, for the investors, for everybody else in it, and that’s our long-term responsibility
— I think that’s also a responsible case. You know, you hate to go through life and
be in one moral dilemma after another, but that’s life, and you define your own character
by the choices you make. Ben Wattenberg: Is the purpose of your new
book to tell businessmen to feel good about themselves? Michael Novak: No. Ben Wattenberg: To get rid of the inferiority
complex because everybody’s beating up on them? Michael Novak: No. Ben Wattenberg: No. Michael Novak: No. I don’t mind if they do that, but what it
is, is to set certain ideals for them. I think mostly people in business are quite
idealistic. I was stunned when I had my first encounters
with businessmen, beginning in a steady way some 20 years ago or so. And if you set ideals for them and show them
what’s inherent in business itself as a practice, they’ll get more out of themselves
morally, politically, for the sake of democracy, for the sake of humanitarian purposes, and
so forth, than otherwise they might. If you didn’t talk about business purely
in an economic manner and in terms of the bottom line, but about its moral possibilities
and its humane possibilities. All those things are inherent in business,
and they don’t do it. Ben Wattenberg: What are the moral possibilities
of business, that they create more material wealth for people so they can live better
material lives? Michael Novak: Well, that’s the first moral
obligation of business. I mean, that’s what they’re founded to
do. You know, if they don’t do that, they’re
misusing the public trust. But beyond that – well, let me just say
one thing they’re not doing. Businesses do most of the commercial advertising
on television and so forth. A lot of that is morally schlocky. Ben Wattenberg: Schlocky. Michael Novak: It’s preaching a hedonism. Ben Wattenberg: The advertisement or the shows? Michael Novak: The advertising. Let’s start with just the advertising, which
the business has control over. I once told Ray Crock at McDonald’s — he
was broadcasting “you deserve a break today” — I said, “Ray, your grandmother didn’t
believe that.” She was from the Czech Republic, as mine was
from the Slovak Republic. I said, “Mine didn’t either.” You know, nothing ever good happened in Central
Europe in the last thousand years. They sort of had the idea that if somebody
tells you good news, they’re pulling your leg. You’re glad to get through the day. You not only don’t deserve a break today,
you’re not going to get one, and get used to it. And I said, “Besides, if the American people
start believing that ‘you deserve a break today,’ turn out the lights.” I mean, you can only make this system work,
you can only make this company work if people are willing to sacrifice and forgo some pleasures
today to build for tomorrow. And they’re going to be putting some of
the — Ben Wattenberg: Yeah, but that’s not the
way to sell hamburgers, Michael. I mean, let’s be realistic. I mean — Michael Novak: Well, look. He took — here’s exactly what happened. He took the ad off. As near as I can tell, the ad went off for
a good many months, and then for the reason you said, it came back on. It worked to sell hamburgers. But my point remains. Businessmen have a responsibility for the
messages they put out, and I don’t think they take that very seriously. I don’t think they think about that very
much. What I want to do is call their attention
to their responsibilities to the society, and you can only make business work in a certain
kind of society. Unless you have the right sort of political
institutions, unless you have the right sort of habits in the people, you can blow all
the corporate hot air you want, it isn’t going to work. There are lots of countries in the world where
you can’t get businesses going very well, a majority of countries, so you’ve got to
nourish the kind of culture that makes business possible in the first place. Ben Wattenberg: Which is a market, consumption
society. I mean — Michael Novak: No, honestly, it isn’t. People don’t live by bread alone. And people work harder, people are honest,
they do a good day’s work in some cultures (more) than in others. And that is a precious economic resource. The economists are asking, what’s it worth
to the Japanese to have the kind of work ethic the Japanese have? It’s worth an awful lot. They are moral components, they are a form
of human capital of enormous value. We have them in this country, but we’re
losing them, Ben. You know as well as I do that in many — along
many lines, this is not as morally serious, as morally rigorous a country as it used to
be. Ben Wattenberg: But I don’t know that that’s
necessarily hurting our economy. Our economy compared to the Japanese in this
last half a decade or so is doing pretty damn well, and compared to the Europeans. Michael Novak: No, I don’t want to undersell
that, but at the same time, our companies are finding it harder and harder to recruit
enough Americans — engineers, to name one subcategory. But AT&T and other communications companies
are having a much harder time finding the kind of work force they used to find easily,
people who are literate, who are responsible, who have great habits about showing up, who
have great courtesy with the public, and so forth. Those things aren’t as widespread as they
once were. That’s a great cultural resource, which
I think is being weakened. In any case, if I’m wrong, I just want the
argument addressed and treated in a morally serious way. People will solve moral problems in different
ways, but they are morally serious issues. Ben Wattenberg: OK. Thank you, Michael Novak, the progenitor of
a new discipline, the theology of economy. And thank you. We enjoy hearing from our viewers. Please send your questions and comments to
New River Media, 1150 17th Street, NW, Washington, DC, 20036. Or we can be reached via email at [email protected]
or on the World Wide Web at www.thinktank.com. For “Think Tank,” I’m Ben Wattenberg. Announcer: This has been a production of BJW
Inc., in association with New River Media, which are solely responsible for its content.

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