Posts tagged with: walker percy

We welcome guest writer Stephen Schmalhofer to the PowerBlog with this review of Good Profit: How Creating Value for Others Built One of the World’s Most Successful Companies by Charles Koch (Crown Business, 2015). Schmalhofer writes from New York City, where he works in technology and venture capital. He is a graduate of Yale University.

Charles Koch’s Metaphysics of Business

By Stephen Schmalhofer

Adam Smith, that venerable a supporter of free enterprise, held businessmen in low regard, alleging that their every meeting “ends in a conspiracy against the public, or in some contrivance to raise prices.” While deference is due to the Scottish master’s lasting insights into the sources of the values of men in The Theory of Moral Sentiments and their success in The Wealth of Nations, I observe that many executives tout their “core values” but not all of these companies are successful. Businessman and philanthropist Charles Koch is successful by any financial measure and his unique approach to the creation of value and values at Koch Industries in Wichita, Kansas, where he is chief executive officer, positions him against Smith’s caricature of scheming backroom businessmen.

Charles Koch

Charles Koch

Since 1967, Koch has overseen operations at Koch Industries where he developed and implemented “Market-Based Management.” Following a large acquisition by Koch Industries in 2004, he urgently systematized the method and continues to share it with the fervor of an evangelist. Koch’s first book on the method was grandiosely titled The Science of Success: How Market Based Management Built the World’s Largest Private Company but in 2015 he re-entered the marketplace of ideas with a more accessible version — Good Profit: How Creating Value for Others Built One of the World’s Most Successful Companies.

Removing the pretense of science from the title better reflects the method’s foundation in the ideas of spontaneous order and the price system articulated by Austrian economist F.A. Hayek rather than in the pseudo-scientific central planning opposed by the Nobel laureate. Koch Industries’ business model is based on acquiring complementary companies that either enhance, or can be improved by, the performance of existing Koch business units. Koch managers seek to integrate these new acquisitions into the company’s operations to realize the expected gains from economies of scale and knowledge sharing. But this integration can blunt the information signals provided by external networks as well as create wasteful internal political battles, especially over budgets and other signs of corporate status unrelated to “good profit.” (more…)

I visited Notre Dame last year at this time to meet with a few professors for the purpose of academic networking. My university was hiring and I hoped to hear about Christian doctoral students ready for their first job. As I walked across the snow-covered campus, I was a little in awe of how wonderfully the sacred space had been planned and laid out.

But when I met with one older professor who had been with the university for quite some time, he expressed a great deal of regret for how his student (the current president) was making decisions. Looking around his office, I noticed photographs of Martin Luther King, Jr. holding hands with priests protesting the injustice of segregation. I thought to myself, if this man feels something good has been lost at Notre Dame, it must truly be so.

When I heard about Notre Dame’s decision to invite President Obama to speak and receive an honorary doctorate, I could not believe it. I knew the university had liberalized. I knew many faithful Catholics felt ND had lost its way, but I also knew many fine, Christian scholars populated its offices and classrooms. How could it be that the university many of us point to when we aspire to building a great Christian academic institution would invite a president to speak and receive and honorary doctorate when he could not liberalize abortion laws quickly enough upon taking office?

Has the protection of unborn and newly born life not been a distinctive of the Christian church from the beginning? Did not the Catholic church act convincingly to remind evangelicals and others of their duties to protect life?

All I can think about as I watch this great university rushing to honor a president who considers the question of when life begins to be above his pay grade and yet who acts to liberalize the capacity to extinguish it is that Notre Dame is trading its heritage for the applause of the culture. Friend, Father Jenkins, I pray that you would consider the quality of the culture whose applause you seek.

As Walker Percy, a self-proclaimed bad Catholic who was actually a great one said, there is decline and fall and then there are the options. Choose life instead, sir. I say that to both of these presidents. One, the president of a university, and the other, a president of a nation.