Not according to Joseph Schumpeter. In order to defend freedom, one must be able to lead men in battle. But this is precisely where the typical entrepreneur-businessman, dominated, as he is, by Pareto’s combination instinct, tends to fall short.
There is surely no trace of any mystic glamour about [the industrialist and the merchant] which is what counts in ruling men, [wrote Schumpeter in Capitalism, Socialism, and Democracy.] The stock exchange is a poor substitute for the Holy Grail. We have seen that the industrialist and merchant, as far as they are entrepreneurs, also fill a function of leadership. But economic leadership of this type does not readily expand, like the medieval lord’s military leadership, into the leadership of nations. On the contrary, the ledger and the cost calculation absorb and confine.
I have called the bourgeois [i.e, the businessman] rationalist and unheroic. He can only use rationalist and unheroic means to defend his position or to bend a nation to his will. [In other words, the businessman is not good at using or applying force, so he must use his wits, just as Pareto warned.] He can impress by what people may expect from his economic performance, he can argue his case, he can promise to pay out money or threaten to withhold it, he can hire the treacherous services of a condottiere or politician or journalist. But that is all and all of it is greatly overrated as to its political value. Nor are his experiences and habits of life of the kind that develop personal fascination. A genius in the business office may be, and often is, utterly unable outside of it to say boo to a goose—both in the drawing room and on the platform. Knowing this he wants to be left alone and leave politics alone.
Again exceptions will occur to the reader. But again they do not amount to much…. The inference is obvious: ...the bourgeois class is ill equipped to face the problems, both domestic and international, that have normally to be faced by a country of any importance…. [W]ithout protection by some non-bourgeois group, the bourgeoisie is politically helpless and unable not only to lead its nation but even to take care of its particular class interest. Which amounts to saying that it needs a master. [137-138]
Now Schumpeter wrote these words in the late thirties, when capitalism was clearly on the defensive. Many defenders of capitalism were frustrated with the inability (or unwillingness) of businessmen to defend capitalism against attacks from both the fascist right and the socialist/communist left. Rand herself seems to have at least had an inkling of some of the issues raised by Schumpeter; for we find her, in Atlas Shrugged, going out of her way to cast the businessmen in the role of a quasi-Nietzschean superhero, with the dollar sign replacing the Holy Grail; and we also find her formulating a theory to explain why businessmen failed to adequately defend themselves: the “sanction of the victim,” wherein the victim (i.e., the businessman) accepts the morality of his enemies (i.e., altruism) and hence deprives himself of the moral high ground.
Is Rand’s explanation plausible? Not really. There are, it should be clear, far more plausible explanations for why businessmen fail to defend themselves. In the first place, where individuals have some choice in their vocation, this very choice serves as a selective or screening process, since individuals tend to choose vocations that best fit their innate talents. So those who combine intelligence with the ability to delay gratification and the willingness to put in long hours of work will not only feel themselves drawn to a career business, but, even more importantly, such individuals will be more likely to succeed in such an endeavor. And given the extensive division of labor in an advanced industrial society, the tendency is toward specialization in the development of one’s abilities and talents, so that individuals who devote most of their time to business activity (as they often must to succeed), end up developing only those skills useful in business at the expense of skills that might be useful in other endeavors, such as skills of political or military leadership. Hence the processes of societal selection under capitalism produce a class that is not particularly adept at defending its own interests.
Nor is it merely the man of force and violence, the marauder and plunderer, that poses a threat to the productive classes. There is another type of individual who arises in advanced civilizations who also can cause serious problems to a free, market-orientated social order. This individual goes by a number of names: socialist, humanitarian, progressive, idealist, social democrat, altruist. Rand was particularly concerned with defending the businessmen from this specific social type. In the next series of posts, I will examine the extent Rand’s analysis of the humanitarian syndrome accords with the facts.