Ask Madame Alexandra


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Some of our readers have wondered what Madame Alexandra would have to say about today's world of business.........

Q. You suggest that business is no more than the application of a few simple principles. Do you really believe that, especially in an increasingly complex world?

A. The tersest reply is yes. In any generation, and that includes the twenty-first century, the greatest leaders find themselves naturally able. There is no difference in this between an Andrew Carnegie and a Bill Gates. What is at the heart of their success? Intelligence, vision, decency of purpose, and good judgment. Anything there beyond is a matter of technical skills. These can be bought. The successful wine merchant who sold to Caesar's quartermaster applied principles no different than those of Samsung or Dyson. Do I believe that one can establish a sound enterprise upon principles alone? No. As in painting there must be art and craft. The one without the other does not exist. Yet, without art the craft is purposeless.

Q. Is it not inherent in business that there will be fraud? Was this not as much so in your time as now? 

A. No more than it is inherent in human nature in every field, and no less. Money is not the devil, but ambition is, and ambition is pervasive, across time and across all human activity. No law will constrain dishonesty, else our politicians would be honest, yet they are not. Only self-interest will guide a man to be honest, which means that reputation must matter. When our institutions safeguard buyers from fraud, they safeguard the seller from the accusation of fraud: there is the mischief! The rule of caveat emptor better encourages honorable conduct in the buyer and the seller than a thousand ill-considered laws, that often only provide a holed cheese for the play of scoundrels. Ultimately the rule of nature serves us best: those who know the rule and observe it survive, and the others do not. This is by far the best security for society.

Q. Much has changed since the last part of the nineteenth century. Communication is universal and instantaneous, and computers have made the processing of large quantities of data--quantities that could not be processed at all one hundred years ago--available to anyone with a laptop or a pad. How can you pretend that this is the same world as yours?

A. If you tell me that the human mind is no longer what it was, that it is somehow greater or more powerful an instrument than it was, I shall consider your argument. Do you suggest that Bacon was not the equal of Hawking, or Cicero the equal of Pompidou? Do you understand what it was for Caesar to conquer his known world in only a few years, knowing that he did not have these communications of which you speak? It was intellect and strategic vision, then as now. We must be careful that technology serves us, and not that we become its servant.  And you speak of the processing of large quantities of data now, and I grant you that. Now tell me this: are economic soothsayers more often right today than a century ago? Than two centuries ago? 

Q. A current that somehow runs through your thoughts is a certain hostility to government.

A. Forgive me: I shall stop you right there. It is not, as you say, a certain hostility. It is an obdurate hostility. As Edmund Burke justly wrote, all government tends to despotism. This is the reality. I conducted my business under the aegis of a republic, the pretense of a time more enlightened than what had preceded it. Yet I could not have done so without the providing of favors to high government ministers and their minions. It is only laughable when these same speak of acting against corruption. They are the corruption! What is not earned by one's own labor corrupts, and no government minister has earned his lofty post; it is gained by an exchange of favors between artful gamesters and demagogues. We must have government, no doubt, but the less the better, that government should be a servant, not a master. Who today thinks his government a servant?

Q.  Is the management of an enterprise today not more difficult than it was, what with labor laws, myriad regulations, and a different, more equitable balance between employer and employed?

A. Yes. That is the self-evident reply. But it is a more subtle thing than that. The qualities of leadership are unchanged, and the most effective leaders always found ways to be one with their troops, to forge a bond themselves and their subordinates. The Chinese general Sun Tzu knew, already more than two thousand years ago, that the commander must share hardship with his men. This is unchanged. What has changed is that it is greatly more difficult to act in a frank and honest manner for the good of the organization, due to the many constraints imposed by regulation gone mad. It is not an easy balance to strike. I do not deny--in fact desire--that employer and employee should represent countervailing forces, to their mutual advantage. The hand of the law should be as light as possible within this, and not occupy itself with such things as are better left to private agreement. Where is equality when one man is imagined by the law almighty and the other an infant? Nothing will compensate that. A just balance is attained by the absence of the law's favor towards the one or the other.

Q. Surely you cannot represent that the management of business is honestly conducted.

A. Mostly it is, and exceptionally, egregiously, it is not. This is a matter of self interest, in both cases. The greatest corruption is wrought today by what are called public or listed companies, where there is no owner present to oversee the enterprise. Public companies are the unnatural creations of a tax code that denies an owner the right to his own property by its confiscation at the time of his death. What private owner willingly sells his own enterprise? It is not natural to do so. On the contrary, the private owner cares for it as his own, and desires its good reputation for the sake of his children and grandchildren. But let the connection be broken between an enterprise and its owner and one reaps the predictable result: the enterprise falls victim to plunder, and artful schemers set to work seeing how they may best steal from it. Generally the managers--have you not noticed it?--of private companies are very different from those in public companies. Why? In a private company the owner would have a scoundrel out in a trice. But in the public company the ownership is so diffuse that it fails in its function, the oversight of the enterprise. Yes, the scoundrels are scoundrels! But look rather to what put them in their posts. Would a private owner have done that?