Andrew Grove (former Intel CEO and current chairman) wrote a Washington Post column last week urging people not to stigmatize executives for the current crappy economy. His main point is that we’ve seen an entire systems failure, involving regulators, auditors, shareholders, board members, and investment banks, and he’s 100% right. It’s just too bad that he spends the rest of the words in his column whining about how people are coming down on businessmen for being unethical, even though most of them are. All I can say is that I’ve done a number of years in the corporate trenches and my personal experience tells me that the ranks of upper management are filled with venal, dishonest people who do what they must in order to feather their nests and bolster their reputations. Maybe it’s a product of being in the tech industry, but what I see is a world full of filthy liars and the pathologically incompetent. I’ve run into a number of notable exceptions as well, but that doesn’t change the fact that the whole “the vast majority are ethical, upstanding people” trope is a myth.
Capitalism is based on maximizing the utility of man’s greed. I agree with Grove that it takes a system to keep things working properly, but the bottom line is that for the system to work properly, we cannot blindly place our faith in the people who runs these companies. The system requires vigilance from analysts, and shareholders, and especially outside directors to make sure that executives don’t cheat and that they don’t incompetently run companies into the ground. It requires government agencies and unions to make sure that companies don’t exploit workers, the environment, and the business climate.
And as for Grove’s complaining about business executives being treated as second class citizens, I say, what a joke. We’re talking about the best paid and most privileged people in America. They make most of the money, wield most of the power, and fill the halls of government along with America’s boardrooms. I’ll save my pity for the people who have had their planned retirement pushed back by 5 or 10 years thanks to the criminal greed of the poor, put upon executive class, thank you very much.