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Opinion

Business, philanthropy: 2 sides of coin

Tucson, Arizona | Published: 02.17.2008
Comments by Steve Forbes
When we talk about markets, you'll hear the word "impersonal," or that markets do things that are bad for people.
Well, markets are people.
One of the pervasive clichés — it's been around for centuries — is the supposed contrast between commerce/business and charity/philanthropy.
Business is portrayed as a corrupt bargain, as appealing to greed, selfishness — to the baser instincts of people. It is grubby; you try to rise above it. We put up with this corrupt bargain because it delivers the goods.
On the other hand, charity is good, which it is. But think of it: How often do we hear the phrase "giving back," not "giving," but "giving back?"
"Giving back" implies you took something that wasn't yours.
You succeed; you've got to give back because you took something that did not belong to you. You succeed in business; you make up for it by giving your ill-gotten gains away.
Business and philanthropy are not polar opposites. They are, in fact, two sides of the same coin. The moral basis of commerce is meeting the needs of other people. You don't succeed unless you provide a product that others voluntarily want in a free market.
Land of contradictions
Productivity comes everywhere and this is the glory of free people, free markets. Our founders understood this. It's not selfishness because you don't succeed unless you meet the needs and wants of other people. A free system will allow you to develop your lawful talents to the fullest extent possible.
Now, philanthropy is meeting the needs and wants of other people. Obviously sometimes the skill set, say to run Intel, is different from say, running the Salvation Army but ultimately, it's the same ends.
That's why we have the seemingly contradictory nature of America. America is the most commercial nation ever invented. We're also the most philanthropic nation ever invented. But it's not contradictory, it's two sides of the same coin.
People say business has a lot of corruption. What you see in business, you see anywhere: the shortcomings of human nature. Ultimately, the system will flush you out.
We look around the world today. We know we've got huge challenges. If you step back, we're also, if you think about it, in a golden age. Never before in history have so many people advanced economically so far in so many parts of the world as we've seen in recent years. Hundreds of millions of people striving to join the middle class in India, China, central and eastern Europe, even parts of now Africa and parts of Latin America. Never before has such a thing happened on such a scale.
When we think of economic growth, we tend to think of more of the same. Economic growth is also disruptive. It means new products, new services, new ways of doing traditional things.
We tend to think of profit as a bribe: Draw out profit and you may do the right thing. Profit is like the bloodstream, the oxygen of free markets. Because you're destroying the old, you need profit to create the new.
When you have an environment where you have more change than ever before, people sort of feel their lives, even if they're successful, can be quickly disrupted and that leads to anxiety.
It's part of freedom — living sometimes with uncertainty, but it's the price you pay in advances and a higher standard of living. In a true free economy, government doesn't gum things up. We eventually will land on our feet even if we are, in the short-term, disrupted as we're going through [change], as in my industry with the rise of the Internet.
Five principles
Freedom has its underside, its messy side. But if we don't forget the five basic principles of economic growth, we can get through this. One is the rule of law allows entrepreneurs to challenge existing businesses.
Another basic principle is sound money. Money should be stable in value. It's like a watch — 60 minutes in an hour.
Then low tax rates. Taxes just don't raise revenue for government. Taxes are also a burden. The tax you pay in income, the price you pay for working.
The fourth principle relates to the first one: Make it easy to set up a legal business.
Fifth: Get rid of barriers to doing business, whether they're trade barriers or internal cartels and rules.
Five basic principles: rule of law, sound money, low taxes, ease of entry to doing business, removing barriers to doing business. Follow those basic principles and you'd literally change the world. It can make possible a more peaceful and prosperous world, and all of it is based on what you're fighting for — liberty.
The transcript of the remarks Steve Forbes delivered at the annual Goldwater Award for Liberty dinner, which include comments on sub-prime mortgages and about respect for America abroad, is available online at www.azstarnet.com/opinion.
Steve Forbes is ...
• An advocate for free markets and capitalism;
• President and chief executive officer of Forbes, Inc., a New York-based financial and business media enterprise, and editor-in-chief and a columnist forits flagship magazine, Forbes.
• The self-funded Republican presidential candidate in 1996 and 2000 whose platform included limited government and free markets.
• The founder and member of free-market think tanks, such as Empower America.
• Forbes was also the keynote speaker at the annual Goldwater Award for Liberty dinner hosted by the Goldwater Institute on Dec. 7.
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