“Unlike government, a corporation has no legal authority to force anyone to do anything. Bottom line: If you don’t like a corporation, you can avoid it. You do not have this choice with government."

“Unlike government, a corporation has no legal authority to force anyone to do anything. It can’t tax you, arrest you, or conscript you. It can’t force you to work for it. It can’t force you to invest in it. It can’t force you to buy its products. [Anti-business author Joe] Bakan, however, says corporations 'determine what we eat, what we watch, what we wear, where we work, and what we do.' No, they don’t. They make us offers, which we can accept or refuse. But those offers give us countless options to improve our lives—options we wouldn’t have otherwise. Far from a threat, the earned economic power of corporations brings us great benefits.
    "People interact with corporations voluntarily. If a corporation sells a shoddy product, people can refrain from buying it. If it sets prices they regard as too high, they can negotiate or look for a better deal. If it pays low wages or lays off employees, they can work elsewhere or start their own business. If people think Google and Facebook collect too much personal data while failing to properly safeguard it, they can use other platforms or services. Bottom line: If you don’t like a corporation, you can avoid it. You do not have this choice with government, though. Ignore the IRS, and fines, penalties, or prison await you. You can opt out of Google and Facebook, but you can’t opt out of the surveillance dragnet of the [surveillance state].”

~ Michael Dahlen, from his article 'The Assault on Corporations'

So what's wrong with "ethical investing"?

 

What's the ESG movement, and how is it making you poorer? How are things like "triple bottom lines" destroying human flourishing? And how has government coercion increased the power of this "socially conscious" movement?

If you've noticed the move to so-called "ethical investing" and "divestment," and wondered where it came from -- and where it might be going -- then this is the interview for you. And if you're an investor (or you have a pension plan) , and you haven't yet noticed it, then this is definitely the interview to get you up to speed.

In this segment from Alex Epstein's Power Hour, he and Yaron Brook discuss this influential and destructive movement, how the culture of altruism and so-called "stakeholder theory" give it wings, how helps destroy economic value, and what you might do to challenge it. 

A great demonstration of how philosophy (even bad philosophy) has the power to move the world.

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160 Harvard MBAs from whom you should run like the plague

A few friends spotted this in the New York Times:

A new oath to be taken by graduates of Harvard Business School next week says, in effect, that greed is not good . . . -- that the goal of a business manager is to “serve the greater good” . . . that Harvard M.B.A.’s will act responsibly, ethically and refrain from advancing their “own narrow ambitions” at the expense of others.

“What happened,” asks the Times, “to making money?”

Fair question.  As Paul McKeever says, “here are 160 Harvard MBAs from whom you should run like the plague.”

NB: So you’re probably asking yourself, is greed good?  Well, depends what you mean by “greed,” says Yaron Brook.

The successful Mr Ha

A lot of commentators spent a lot of yesterday talking about the "sub-prime" mortgage market in America and about "loan sharking" here in NZ, and (at least on Radio New Zealand) promoting restrictions on borrowing "especially among immigrant communities." According to this patronising view, "members of immigrant communities" -- that is, individuals who have the gumption to move to New Zealand seeking a better life for themselves and their families -- are just too dumb to understand all the complicated stuff about interest and repayments and the like.

Following this patronising line to its logical conclusion, the all-too-dumb Judith Tizard has has now revealed the Clark Government plans to "deal with" loans sharks by restricting the activities of finance companies in immigrant areas.

I thought of that patronising advice and those restrictive plans as I read the story of Don Ha in NBR's Rich List this morning, a man who came to NZ in 198o from Vietnam penniless (presumably landing first in the Mangere immigration hostel up the road from where I was in 1980) and who is now worth $60 million. Tizard's restrictions on lending to immigrants would not have helped Mr Ha, who I feel confident knows his way around a balance sheet far better than Ms Tizard and any of her colleagues working on her plans would.

The irony is too much for me. People like Tizard with a barely functioning brain suggest that immigrants (of which Mr Ha is the supreme example) are too dumb to be allowed out in finance houses on their own. Perhaps I might suggest that she and her fellow nannies could think of people like Don Ha next time they feel like offering their opinion on the abilities of immigrants. The Herald has a brief account of Ha's career in its report on the Rich List:

The self-made-man model is alive and well in the form of 38-year-old Manukau real estate magnate Don Ha, who comes in at 143rd equal overall with his financial worth estimated at $60 million.Not bad for a Vietnamese refugee who was just a kid when he arrived in New Zealand in 1980 with his penniless family.The family opened a string of bakeries in South Auckland but Mr Ha went his own way, importing shoes and belts from Asia, only beginning his real estate career in 1994. Mr Ha became a top salesman in the Professionals Group, selling 86 properties in his first year.

He was headhunted by the Ray White Group in 2004 and now owns Ray White Manukau, which has subsequently achieved record-breaking sales. Mr Ha shelled out $2 million on a Zabeel colt from champion racemare Sunline at the Karaka yearling sales in January.

More on the Rich List and the very smart Mr Ha here at the Herald. And you can see Mr Ha and the Rich List's editor being interviewed this morning on the ASB Business News at this TVNZ link.

"Let us alone!"

Apropos of my earlier post on the Regulatory Responsibility Bill, here's a great story that would be worth retelling to someone on the Select Committee considering the bill. The story of a king and that king's adviser who asked industrialists what the king could do to make the kingdom wealthier: one legendary industrialist gave the only viable answer: "Let us alone!" Since the king's adviser only wanted to fatten them up before scalping them (he's famous for explaining that, “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing”) that wasn't what he wanted to hear. But it was true.

It is a true story, and it's the origin of the term "laissez faire"--and it's a story these parliamentarians should be told loud and clear.

Libertarian-lite?

If John Key's core philosophy is Labour-Lite (if indeed he can be said to have anything resembling a "core philosophy"), then as NBR suggests "core Act ... philosophy" is "libertarian-lite." Or should be.

Interesting analogy, no? National's recent strategy is to outflank Labour on the left. Meanwhile NBR suggests ACT's latest policy (Hide's Regulatory Responsibility Bill) is at least heading north.

Progress? Perhaps. At best the Bill will remove some of Nanny's constraints on liberty and prosperity and just getting your day's work done. And if nothing else, the Select Committee hearing on the Bill offers you the opportunity to front up to parliamentarians and explain to them why everything is their fault. But be quick. As Lindsay Mitchell explains,

"Unfortunately submissions close [today], BUT your written submission needn't be lengthy. Make sure you indicate you want to speak directly to the committee and save the bulk of your story for that occasion. The members will all say they have read your submission and expect to hear something different or additional anyway (my experience) plus it is a chance for them to ask you questions.

Again, I cannot stress what a rare opportunity to do something about unwelcome and unwieldy government intervention this is. Don't waste it. A little bit of time spent now could save you bucketloads in the future.

The Cut Red Tape website has details on how to make a quick submission.

Management fads and business books

Nothing is so banal or so stupid that it can't be picked up and used as the basis for a 'management textbook.' The Economist blog thinks they know why:

How can we tell which CEO's are stars, and how much they really bring to the bottom line? In part it's so difficult to determine because management theory is so awful... no one has any coherent idea of how one identifies a good CEO, or what good management practices are, which is why the business bookshelves are crowded with banalities set in big type for the casual airplane reader.

(Nothing is so stupid that it cannot be made into a framework for analysing your business; when I tried to freelance a parody piece on business book titles, I was stymied by the fact that the most outlandish ideas I could come up with—"Management secrets of the Carmelite Nuns"—had already actually been made into books by some optimistic editor. The only idea which had not already made it into print in some very similar form was "How to make a killing in business: Strategic secrets of America's greatest serial killers". No doubt it is forthcoming from Harcourt Brace this year.)

This got local blogger Jim Donovan thinking about some Kiwi variants [hat tip DPF]:

• The Jerry Collins Guide to Ambush Marketing
• Building a Global Brand on a Limited Budget, by Nicole Begg (Hang on, she’s just done that)

And he's offered a prize for "the best Kiwi business book title in the genre of Management secrets of the Carmelite Nuns and How to make a killing in business: Strategic secrets of America’s greatest serial killers" -- well, a small prize. Some of the best so far, from both Jim's and DPF's:

• Economics for Dummies, by Michael Cullen
• The Buyers Guide to Elections (2007 Revevised Version), by Helen Clark
  
• Bran Flake, by Dick Hubbard
• Downsizing your Business, and Yourself, By Rodney Hide
• Corporate Uniformity: Brand Enforcement, by the Mongrel Mob
• The Rickards Way: Secrets of Team Building from the Team Policing Specialists, by Clint Rickards and Brad Shipton
• Being a Team Player, by Ali Williams (as told to Bill Ralston)
• Discipline in the Workplace, S. Bradford
• Ganging Up On Your Competitors, T. Turia
• Guaranteed Returns: A Guide to Property and Foreign Exchange Investment, by Dr A. Bollard
• Kyoto…A beginners guide, by P. Hodgson
• Negotiation: How to Give it All Away, by John Key

Any others?

UPDATE: All joking aside, and far be it for me to disagree with such an august periodical as The Economist, but while it's true that most management theory is awful, it's not true to say that it's impossible to identify a good CEO.

In fact, psychologist Edwin Locke -- internationally known for his research on goal setting (a recent survey found that Locke's goal setting theory was ranked #1 in importance among 73 management theories, none of them awful) -- has made a study of that very thing. His book, The Prime Movers: Traits of the Great Wealth Creators does exactly what it says: it studies the great wealth creators to understand the traits needed to be a walking, talking, thinking engine of production. Introducing the book, banker John Allison says,

Dr. Locke is unequivocally clear that productive geniuses from Thomas Edison to Bill Gates are the Prime Movers of human progress. While these men amassed great fortunes, they raised the standard of living for all of us...

What characteristics enabled these men to make such a significant contribution? These great creators have the capacity to see the big picture trends others cannot foresee -- vision. They have active and independent minds with an undying commitment to action, the capacity to make rational decisions based on the facts, the ability to judge ability in others, and the willingness to reward superior contributions by others. These attributes produce a level of confidence and competence that leads to success.

Dr. Locke's view is radically different from the common belief that progress more or less happens automatically or is the result of some undefined collective effort. Dr. Locke sees a relatively small number of outstanding individuals who make a disproportionate contribution to human well-being...

If the characteristics that Dr. Locke discusses have contributed to these individuals' success, we should teach these attributes to our children. Clearly, the foundation attribute is an unwavering commitment to make independent, rational decisions based on the facts-which is the ultimate form of honesty.

For the full menu of traits Locke identifies, you'll need to read his book for yourself. Unlike most of the titles above, it really is worth it.