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This Motley Fool series examines things that just aren't right in the world of finance and investing. Here's what's got us riled today. If something's bugging you, too -- and we suspect it is -- go ahead and unload in the comments section below.
Today's subject: Economic philosopher Ayn Rand died in 1982, but her legacy remains very much alive. Unfortunately, some people in positions of power have used parts of her Objectivist teachings to rationalize their own dysfunctional, damaging behavior.
I definitely agree with the benefits of the "rational self-interest" Rand advocated. As a society, the individual drive for achievement inspires us onward and upward. However, some of her adherents seem more keen on the "self-interest" part than the "rational" part. Their ruthless selfishness and soulless narcissism have torpedoed our economic well-being and polluted our culture. Time to face the music, Ayn.
Why you should be indignant: Ayn Rand defended selfishness as a virtue, and rejected the concept of altruism altogether. In other words: Every man (and woman) for him- or herself! Don't feel bad about trampling others to get what you want! It's all about you!
Um, no thank you. Needless to say, the prevalence of that mind-set has screwed us all over, big time. Here are just a few examples of the rampant self-absorption Rand's teachings may have inspired:
- Remember the revelations from last year's Congressional hearings regarding Lehman Brothers CEO Dick Fuld? Apparently, when approached about conciliatory pay cuts to make up for poor performance, Fuld dismissed advocates of the idea by writing: "Don't worry -- they are only people who think about their own pockets." Pot, meet kettle.
- Chesapeake Energy's (NYSE: CHK ) Chairman and CEO Aubrey McClendon faced heat for his 2008 $112.5 million compensation package. That hefty paycheck made him the highest-paid CEO in the U.S., even though the stock fell 59%. Even worse, the company's board approved paying McClendon a huge bonus designed to help him buy back Chesapeake shares he lost in a margin call. It also OK'd paying McClendon $12.1 million for maps and artwork from his personal collection. Somewhere, Rand must be giving him a great big thumbs-up.
- Many bailed-out bankers are doing pretty darn well, despite their companies' reliance on public funds to survive. Word of bonuses for AIG (NYSE: AIG ) , one of the poster children for the parade of companies that committed EPIC FAILS, stirred up outrage among many taxpayers. But hey, those executives worked hard at failing! No one could have failed quite like they did! They deserve that money!
Unfortunately, the business world's current cowardly self-involvement far overshadows the executive heroes who responsibly realize that their interests extend beyond the contents of their own pockets. It's truly sad that ethical CEOs who espouse common sense and modest compensation, like Costco's (Nasdaq: COST ) Jim Sinegal, could almost be considered eccentric mavericks in corporate America.
What now: I avidly defend individual achievement and the free market. But unless they're shaped by personal responsibility and rock-solid ethics, those ideals can't work. Unlike Rand, I believe some forms of altruism are commendable, as long as no coercion is involved. We should all be free to make our own choices, including the strong, courageous decision not to be completely self-centered. It's not healthy to shut down our capacity for compassion, or to ignore how our actions affect other people in business or our everyday lives.
When Whole Foods Market's (Nasdaq: WFMI ) John Mackey gave the Fool his presentation on conscious capitalism, he expressed similar philosophical differences with Rand. He also pointed out that Rand's brand of narcissism generally doesn't make people happy at all.
Despite my differences with Rand, I do respect much of her philosophy. "Throughout the centuries," she once wrote, "there were men who took first steps down new roads armed with nothing but their own vision." Within that spirit lies the beauty of the marketplace, where great companies like Google (Nasdaq: GOOG ) and Apple (Nasdaq: AAPL ) can create world-changing products.
Ruthless selfishness, on the other hand, is a path to destruction -- parasitic, maybe even sociopathic, behavior. We've seen far too much of it. Shame on Ayn Rand, and on those so enamored of her philosophy that they can't reject its weaker, less practical aspects. It shouldn't be hard to jettison the more dangerous, ill-conceived elements of a philosophy, especially when they threaten all that's good about capitalism, freedom, and our economy.
Out-of-control selfishness doesn't build; it destroys.