A Call to Free-Market Arms

The current attack is on inversions, which have captured the attention of all Americans as a symbol of greed and give the impression that American business is rotten (this, despite the fact that fewer than 50 inversions have occurred since 1982). Inversions are simply the latest front of a wider war, one in which labor unions motivate their members by distorting the realities of executive pay, the media obsesses on those rare instances of corporate abuse and provides the narrative that such anomalies are the norm and academia teaches an alternate—or fantasy—reality.

Then, there is inequality, which President Obama has called the defining issue of our time. The book by French economist Thomas Piketty, Capital in the Twenty-First Century, makes the case that inequality is no accident but rather an expected result of capitalism that can only be reversed through state intervention.

In fact, Piketty preaches that capitalism is inherently at odds with democracy. These ideas are not confined to fringe economics circles: Piketty’s book is the all-time best selling title of the publisher, Harvard University Press.

“Face reality as it is,” advises legendary CEO Jack Welch, “not as it was or as you wish it were.” If we, as business leaders, do not act now to change the realities and perceptions of our free-market system, change will be forced upon us.

We have a terrific product to work with: we know that the vast majority of CEOs uphold the high ideals of integrity and trust upon which our free market system is based. And we also know the positive role that free-market capitalism has in our society. Arguably, no other organization of mankind has done more to improve the well-being and quality of life of more people in human history. But not enough people share this view—or are even exposed to this perspective.

We propose that CEOs act in three ways, together and individually:

1. Initiate systemic change—Remove the regulatory burdens, market-distorting preferences and crony capitalism that undermine the integrity and effectiveness of our system—even when we have benefited from such programs in the past.

2. Change perception—Combat the perception that capitalism is inherently unfair, and we must educate people about the unique power of the free market to spur innovation and fuel economic growth.

3. Ensure mobility—Restore the ideals of our meritocracy. This means engaging with people throughout our society and making business more inclusive.

As CEOs, individually, we have the ability to act in each of these areas. The next time we rub shoulders with local or national politicos, it’s up to us to let them know that business leaders support transparency and the removal of market- distorting preferences; it’s incumbent upon us to speak out frequently about the power of free markets to spur growth innovation and improve the human condition; and we need to pick up the phone and reach out to local schools to give kids,
who otherwise wouldn’t have such access, exposure to our businesses.

Granted, changing public perception and countering the mass media is no easy challenge. But by each of us taking up the fight in our own backyards with purpose, we CEOs have the ability to stop the enemy before they breach our final defenses.

Our future depends upon it.