From the Founder & Executive Director: “The Business of America is Business!”
As We Kick-Off a New “Pro-Business” Presidency
By Professor Dennis R. Shaughnessy
“The business of America is business!”
This often repeated phrase was reported to be first said by President Calvin Coolidge, in a January 1925 speech to newspaper editors. Coolidge or “Silent Cal” was president during a rapid expansion of the US economy known as the “Roaring Twenties,” just before the Great Depression and the hardship and suffering associated with our economy’s greatest collapse.
This quote was later attributed to President Ronald Reagan as part of his 1980 campaign for President, and several times thereafter. More recently, President Donald Trump has reportedly used the phrase during campaign rallies and other events. Presidents Coolidge and Reagan are often cited by historians as the most “pro-business” presidents, and many see newly elected President Trump as the latest addition to the pro-business club.
Many social and political commentators have used the Coolidge-Reagan quote to suggest that our society has strayed from its original mission, or purpose, by investing in social programs when our resources should instead be invested in furthering the interests of business. A zero sum outlook would suggest that a dollar invested in Head Start is a dollar that could have been used to incentivize or support business through tax credits, subsidies or other support. If we focus our attention, efforts and resources on business, goes one argument, then everything else will take care of itself, as elevated economic growth cures the ills of society, from poverty to access to health care to adequate housing.
But, what did President Coolidge actually say and mean when he said that “the business of America is business?”
First, he didn’t actually say that “the business of America is business.” Rather, he said that the “chief business of the American people is business.” One can see a narrower meaning in his actual words, suggesting our work is the work of business. In other words, Coolidge was likely not suggesting the broader view that the interests of business should take precedence over the interests of other sectors of our society, including support for things like high quality public education and affordable access to advanced education and health care, regardless of one’s economic circumstances.
Here’s a portion of the speech President Coolidge made that day that followed his now famous words:
“Americans make no concealment of the fact that we want wealth, but there are many other things we want much more. We want peace and honor, and charity which is so strong an element of all civilization. The chief ideal of the American people is idealism. I cannot repeat too often that America is a nation of idealists. That is the only motive to which they ever give any strong and lasting reaction.”
Coolidge went on to say:
“Of course, the accumulation of wealth cannot be justified as the chief end of existence. But we are compelled to recognize it as a means to well-nigh every desirable achievement. So long as wealth is made the means and not the end, we need not greatly fear it…But it calls for additional effort to avoid even the appearance of the evil of selfishness.”
It appears then that the original idea behind Coolidge’s idea was indeed to praise business leaders and the business community for driving the economic prosperity of America and its people. But it also appears that he did not believe that business alone, or self-interest and wealth accumulation, are what drives Americans and our society forward. Rather, it is the higher ideals such as peace, honor and charity that make up the core of American values.
From my three decades in the business community, I’ve learned that business really is the best path to advancing the interests of everyone in our society, and around the world. That includes advancing the interests of people outside of the business ecosystem, like the poor, underserved and marginalized, as we collectively contribute a piece of our individual success to advance the greater good. More people have risen out of extreme poverty, for example, as a result of business expansion and globalization than most ever imagined, with an estimated 250,000 people each day leaving extreme poverty behind for a more dignified life. An enormous achievement, with the hardest work left to be done.
But at the enterprise level, the virtues and impact of business arises only when each enterprise is built on a foundation of shared values, like integrity, fairness and decency. The question for us as we begin 2017 is whether our leaders will drift away from the values that lead to truly great companies in a frenzy to capitalize on the financial opportunities presented by a “pro-business” administration.
As I reflect back on the words of President Coolidge, President Reagan and our new President, I hope that the idea of being “pro-business” is not interpreted narrowly to require a diminishment of social commitments. To the contrary, we need more business leaders who see the definition of success including both the generation of profits and a meaningful contribution to the “higher ideals” of the 21st century. In addition to the early 20th century ideals of “peace, honor and charity” referenced by Coolidge, we can add inclusion, fairness and tolerance. As well as shared prosperity for all those around the world who wish to join our communities in search of an opportunity to lead a better life.
There have been some hopeful signs in the last few days, in the context of the President’s executive order limiting travel to the United States by refugees and citizens of certain Middle Eastern countries. The CEOs of Starbucks, Amazon, Google, Microsoft, Facebook, Goldman Sachs, Apple and many other companies have publicly expressed their opposition to any government policy that bans immigrants solely on the basis of religion or ethnicity. We will have to see, however, if this new CEO “activism” arises out of values and ideals, or out of fear of damage to the bottom line that may result from restrictions on the movement of talent across borders. Let’s hope that it’s both.