Monday, December 14, 2009

Devolution of the U.S. Businessman?

While reading a most interesting piece in the Financial Times called "Who won the revolution?" I was struck by a paradox of human economic behavior.

The article's author, Alec Russell, just revisited Romania twenty years after having first reported on the situation during the ousting of Ceausescu. The revolution was an apparent success; but according to Russell, the same power structure that existed back then remains in place today.

[Thanks to for the image.]

Instead of welcoming capitalism with open arms and starting afresh, the people somehow allowed the same corrupt elite to stay in power. During the transition these individuals were astute enough to keep their government connections alive and profit from them when the time was ripe.

Today, according to Romanian writer Stelian Tanase, who had dared to challenge the communist system under Ceausescu:

"'The best question to ask is who won the revolution: for Romania, the winner is the former nomenclatura [the high officials in Ceausescu's government]. They lost the revolution but won the power. The former promoters of communism simply became the promoters of capitalism.' He reaches for a copy of the Romanian edition of Forbes' Rich List, which details the country's richest people. 'Eighty-five per cent of the first 100 are former nomenclatura.'"

But how can that be, you ask. Very simple. It takes a Mafia mentality to run a communist government with any success, and for a wily Mafiosi, the transition from gangster communism to gangster capitalism is simply a change of name and of game plan. The underlying tactics and maneuvers are the same.

Russell also interviewed Mircea Chirila, a former security intelligence officer under Ceausescu:

"Is it fair that former Securitate officers are becoming big businessmen? It is, he contends, a natural trend. 'It is a biological evolution.'"

Ah yes. A Darwinian evolution. Survival of the fittest. This makes perfect sense.

My immediate next thought turned to Jeffrey Immelt's embarrassing mea culpa last Thursday in the Financial Times. Immelt seems to have been born again, preaching socialist-style "morality" from the bastion of capitalism on the other side of the globe.

No doubt, he is faced with pressures from shareholders and from factors within the current nationalization-inclined political majority. So instead of looking at history like a good Ayn-Rand capitalist and calling calmly and rationally for the preservation of free markets with stricter rules for fiscal and monetary policy, he flails himself in public and confesses to having succumbed to capitalism's supposed Original Sins--"meanness and greed."

But it's not that he has lost his mind. Just as the Romanian nomenclatura are evolving by adapting to the circumstances, he's simply evolving--or devolving as the case may be, in the Darwinian sense--to the new political culture.

The difference is that he's letting himself be drawn backwards towards centralized, socialized government. At least the Romanians have taken a step forward away from it. They have an excuse.

So what is Immelt's? Is he so vile as to have an ulterior motive? And if so, what does he hope to gain? And at whose expense? Why is he willing to sell America's freedoms down the river?

Francesco Guerrera's Financial Times article makes the answer to this question quite clear: "GE wants to win a large slice of the infrastructure projects funded by governments around the world in an effort to kick-start their economies." Oh, I see. So now we prostitute ourselves? Who is worse, the Romanians, or the American businessmen like Immelt who have sold their soul?

Ayn Rand's innocent, amoral businessmen must get a moral backbone. Mr. Immelt, Lloyd Blankfein, all you CEOs who are being attacked by socialist idealism through the lure of government assistance and political and financial pressure, don't let yourselves devolve into a new American nomenclatura. If you go down that road, you may live to regret it. (Just ask Ken Lewis.)

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