Michael McCain is wrong about capitalism

Reading the recent article by Michael H. McCain, CEO of Maple Leaf Foods, (Jan. 14: ‘We need a new charter for capitalism, and here’s what it should include’), reminded us of something the late Financial Times columnist Samuel Brittan once wrote. In his 1973 book, Capitalism and the Permissive Society, Brittan observed that “businessmen can usually be relied upon to defend the indefensible aspects of their activities while giving in to their collectivist opponents on all essentials.”

With all due respect to Mr. McCain, his piece provides a terrific illustration of that. His proposed “new Charter for Capitalism” would, among other things:

• reject the primacy of shareholders for the benefits of other “stakeholders,” including “natural life” (trees, we suppose);
• “disadvantage short-termism” — in favour of politicians’ well-known long-term view and bureaucrats’ far-seeing wisdom?;
• “welcome government regulation” against what he calls a “race to the bottom,” which we presume his company does not participate in, even if it is not yet sufficiently regulated;
• redefine individual rights “from” persecution and so on in favor of rights “to” nearly everything, including “a secure basic income,” “secure health care” (which is already free in Canada, but not secure?), and “secure food” (though not secure clothing); and
• increase taxes on the rich while at the same time (in fluent Newspeak) “rejecting the notion that it is a mere transfer of wealth.”

When many people are guaranteed secure entitlement rights to goods and services, the people who have to pay for that clearly are no longer secure in their own property. And the payers are not all billionaires like Mr. McCain: there are too few billionaires in Canada — or anywhere, for that matter — to finance an expansive welfare state.

Mr. McCain, who seems to favor everything “sustainable and equitable,” worries that his generation is not leaving a socialist enough society to future generations. Does he regularly consult with them? Shouldn’t he worry instead about the economic ignorance, moral emptiness, and political-jungle mentality that his generation (if we can talk in such collectivist terms) has left behind? For those unfamiliar with the term: in the political jungle politically powerful groups fight to obtain subsidies or other privileges and to exploit other individuals with discriminatory taxes or by imposing their personal preferences or values.

These criticisms are not an attack on Mr. McCain personally. He is only surfing a politically correct, if not woke, tidal wave that seems to have taken hold among virtually all high-level business executives. We can certainly understand why they would feel lost in the current ideological theatre. What, they must wonder, has become of the world in which businesses merely produced the goods or services demanded by individual consumers, in all their diversified preferences? Where business executives did not have to shout opinions disparaging, if not hateful, to 50 per cent, 25 per cent, or even just one per cent of their customers?

The wind of panic seems to be blowing through today’s corporate boardrooms. It is as if executives and directors had just read for the first time the famous introduction to Karl Marx’s and Frederich Engels’s 1848 Communist Manifesto: “A spectre is haunting Europe — the spectre of communism.” As today’s readers have the advantage of knowing, however, the handiwork of Marx’s disciples did not turn out well. In terms of delivering both freedom and material goods, the capitalism that Mr. McCain would now turn upside down defeated socialism. Yet somehow today’s corporate executives and owners seem willing to forsake history’s most successful social system for fear of the environmentalists, social justice warriors, and woke activists, greedy stakeholders all, now encircling them. And, tragically, though presumably shrewd in their own business dealings they seem to believe that making ideological and financial concessions will appease the extortion.

It almost goes without saying that the issues underlying Mr. McCain’s manifesto are serious and complex. Indeed, they have occupied some of the finest minds and greatest thinkers in our species’ history. Philosophers have been reflecting on them for two millennia, economists and political scientists for a few centuries.

But instead of engaging in such quiet studies or in the humble and rewarding task of providing individual consumers with what they want, 21st-century business executives seem more interested in pursuing the mirage of social-engineering a new society — something many others tried in the last century, usually with calamitous results. We note that the word “revolution” (or its derivatives) appears four times in Mr. McCain’s article.

The beauty of a capitalist system, by which we mean the free market, not business/government cronyism, is that it separates economic “power” from political power. If shareholders and board agree, a corporate executive may bow to whatever “stakeholders” he or she likes and even run the company into the ground for them. Similarly, like MacKenzie Scott of Amazon, a wealthy individual can spend part or even all of her personal fortune on curing any social problem she perceives.

In a free society, however, nobody will be forced to patronize her business or that of Mr. McCain, obey the dictates the latter concocts with the government, bail him out, or agree with his musings on the nature of capitalism.

Pierre Lemieux est senior fellow à l’IEDM et Michel Kelly-Gagnon est président et directeur général de l’IEDM. Ils signent ce texte à titre personnel.