Tag: businesspeople

Rhodes Scholars and the Business World

On the weekend that next year’s Rhodes Scholars are announced, Elliot Gerson, American secretary of the Rhodes Trust and executive vice president of the Aspen Institute, writes in the Washington Post that he is greatly disappointed that a few Rhodes Scholars have gone into business.

Yes, you read that right. He’s disappointed that even a few Rhodes Scholars have chosen to go into business:

For more than a century Rhodes scholars have left Oxford with virtually any job available to them. For much of this time, they have overwhelmingly chosen paths in scholarship, teaching, writing, medicine, scientific research, law, the military and public service. They have reached the highest levels in virtually all fields.

In the 1980s, however, the pattern of career choices began to change. Until then, even though business ambitions and management degrees have not been disfavored in our competition, business careers attracted relatively few Rhodes scholars. No one suggested this was an unfit domain; it was simply the rare scholar who went to Wall Street, finance and general business management. Only three American Rhodes scholars in the 1970s (out of 320) went directly into business from Oxford; by the late 1980s the number grew to that many in a year. Recently, more than twice as many went into business in just one year than did in the entire 1970s.

Apparently Gerson believes that our best and brightest can accomplish more good for the world in such fields as writing, law, and bureaucracy than they can by creating, innovating, and improving lives in the world of business – the arena that not only provides all of us with more comfortable, more interesting lives, and has lifted billions of people out of the back-breaking labor and short lives that were the human condition for millennia, but also makes possible the luxuries of the Aspen Institute, which was founded by Walter Paepcke (1896-1960), chairman of the Container Corporation of America, and is supported by successful businesspeople and their heirs today.

Of course, it’s not clear that business needs Rhodes Scholars. Think of the businesspeople who have revolutionized our world in recent decades: Bill Gates and Paul Allen, Steve Jobs and Steve Wozniak, Larry Ellison, David Geffen, Ted Turner, and Malcom McLean, among others, either never attended or never finished college. Sam Walton, Bill McGowan, and Fred Smith did finish college but weren’t Rhodes Scholars. In the Washington Post Jay Mathews notes that the chief executives of the top 10 U.S.-based Fortune 500 companies attended Pittsburg (Kan.) State, Texas at Austin, University College Dublin, Texas Tech, Texas at Austin, Dartmouth, Kansas, Gannon, Georgia State and Central Oklahoma, not the usual sources of Rhodes Scholars.

But the elite hostility to business – a holdover from Europe, perhaps, where aristocrats looked down on “trade,” or an unconscious echo of Marxism – is unseemly and harmful to both general prosperity and the individuals who are influenced by it to avoid productive enterprise. It crops up in President Obama’s commencement addresses sneering at students who want to “take your diploma, walk off this stage, and chase only after the big house and the nice suits and all the other things that our money culture says you should buy” and in Michelle Obama’s urging hard-pressed women in Ohio, “Don’t go into corporate America.” It’s nice that some people, like senators’ wives, can make $300,000 a year in “the helping industry,” but it’s business that produces the wealth that allows such nonprofit generosity.

Gerson and the Obamas are disparaging the people who built America – the traders and entrepreneurs and manufacturers who gave us railroads and airplanes, housing and appliances, steam engines, electricity, telephones, computers and Starbucks. Ignored here is the work most Americans do, the work that gives us food, clothing, shelter and increasing comfort. That work deserves at least as much respect as “scholarship, teaching, writing, medicine, scientific research, law, the military and public service.”

Feds Giveth Jobs & Cars, Then Taketh Away Again

The bad news this morning on the impact of both the federal stimulus and the Cash for Clunkers program should not come as a surprise to anyone who has paid attention to the history of government intervention in the economy.

New data that the jobs created by the stimulus have been overstated by thousands is compelling, but it’s really a secondary issue. The primary issue is that the government cannot “create” anything without hurting something else. To “create” jobs, the government must first extract wealth from the economy via taxation, or raise the money by issuing debt. Regardless of whether the burden is borne by present or future taxpayers, the result is the same: job creation and economic growth are inhibited.

At the same time the government is taking undeserved credit for “creating jobs,” a new analysis of the Cash for Clunkers program by Edmunds.com shows that most cars bought with taxpayer help would have been purchased anyhow. The same analysis finds the post-Clunker car sales would have been higher in the absence of the program, which proves that the program merely altered the timing of auto purchases.

Once again, the government claims to have “created” economic growth, but the reality is that Cash for Clunkers had no positive long-term effect and actually destroyed wealth in the process.

Right now businesses and entrepreneurs are hesitant to make investments or add new workers because they’re worried about what Washington’s interventions could mean for their bottom lines. The potential for higher taxes, health care mandates, and costly climate change legislation are all being cited by businesspeople as reasons why further investment or hiring is on hold. Unless this “regime uncertainty” subsides, the U.S. economy could be in for sluggish growth for a long time to come.

For more on the topic of regime uncertainty and economic growth, please see the Downsizing Government blog.

Prosperity in Washington

 The current Attorney General, Eric Holder, left DC’s Covington and Burling to return to the Justice Department, where he held a senior post during the Clinton years.  Holder’s mission is to supposedly ”rein in the free market excesses of the last eight years.”  Bush’s people are done with their own crackdown and are now returning to DC’s big law firms to warn their client business firms about the coming crackdown by Holder’s prosecutors.  This is sorta like the GOP legislators who are now trying to lodge complaints about Obama’s spending.  Despite the rhetoric, both sides aggrandize federal power and then enrich themselves (pdf) while advising businesspeople on how to comply with myriad regulations  from the alphabet agencies.

For related Cato work, go here and here.