All Commentary
Saturday, February 1, 1997

Book Review: The Heroic Enterprise: Business and the Common Good by John M. Hood

Market Solutions Are Superior to Government Solutions

Free Press • 1996 • 266 pages • $25.00

Dr. Peterson is an adjunct scholar at the Heritage Foundation and distinguished Lundy professor emeritus of business philosophy at Campbell University, Buies Creek, North Carolina.

In his introduction John Hood, president of the John Locke Foundation in Raleigh, North Carolina, and a former Bradley fellow at the Heritage Foundation, notes that among free-market thinkers from Adam Smith to Milton Friedman, he has been especially inspired by Henry Grady Weaver. A devotee of Rose Wilder Lane and her The Discovery of Freedom, Weaver published his own interpretation and amplification of her work as The Mainspring of Human Progress.

Weaver, a General Motors corporate manager and number-cruncher, observed man’s long, arduous, and often bitter struggle to overcome scarcity. Famine struck Ireland in the 1840s, for example, and has ravaged Africa and Asia in this century. Weaver’s sharp eye saw scarcity as exacerbated by government intervention and overcome by private property rights.

Yet private property and American business continue to be savaged by the intelligentsia and the mainline media. Why this downgrading of American business? Hood suggests as one reason the dominance of negative business characters in Hollywood movies like Norma Rae and Wall Street. He cites analogous TV-series research by the team of Linda Lichter, Robert Lichter, and Stanley Rothman in which they find 58 percent of big-business characters since 1965 portrayed as villains.

In like manner, liberal politicians and media mavens fume as AT&T and other big businesses resort to downsizing, re-engineering, outsourcing, cost-cutting, consolidating, merging, and other vicious commercial practices. Critics too quickly forget their own innate cost-cutting and outsourcing in their own housekeeping and personal business. They still manage to wax indignant and rant: Is there no sense of business decency left? Is not American business guilty of putting property rights over human rights? Where, o where, has fled the social responsibility of American business?

Hood answers by discussing Milton Friedman’s provocative view that only people have responsibilities; businesses have no responsibilities as such. As Friedman explains, There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits, so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

So three cheers for The Heroic Enterprise. It makes waves and should be read by all those in high places who view market solutions as inferior to government solutions.

Modern liberals should see that capitalism and private property, not social responsibility, release the energies of inventors and entrepreneurs. Enterprise induces savers and investors to serve and be served; it brings income and jobs into being, simultaneously conserves and expands natural resources, advances occupational health and safety, and improves wages and hours. Most importantly, under the sovereign direction of the consumers equipped with their life-and-death power of the purse, enterprise democratically causes producers to run scared and ever try to put out more for less. And it does all this on a strictly voluntary basis as opposed to the baldly coercive power of the state.

So who is the more apt to serve the public and serve it well—the businessman or the politician? Taking a page from philosophers George Santayana and Michael Novak, John Hood pleads with businessmen to think highly of their calling—capitalism. What a remarkable system, what a godsend to man! Yet so unappreciated and ill-understood, so hated and despised. Shakespeare’s Puck had it right: Lord, what fools these mortals be!

  • William H. Peterson (1921-2012) was an economist, businessman and author who wrote extensively on Austrian Economics. He completed his PhD at New York University in 1952 under the supervision of Ludwig von Mises.