The Atlantic

Business Leaders and the Mixed Feelings They Inspire

The combination of suspicion and reverence that people feel toward the financially successful isn’t unique to the modern era, but reflects a deep ambivalence that goes back to the Roman empire.
Source: Horace Taylor / NYPL

In the early 20th century, Dale Carnegie began to travel the United States delivering to audiences a potent message he would refine and eventually publish in his 1936 bestseller, How To Win Friends and Influence People: “About 15 percent of one’s financial success is due to one’s technical knowledge and about 85 percent is due to skill in human engineering—to personality and the ability to lead people.” Carnegie, who based his claim on research done at institutes founded by the industrialist Andrew Carnegie (unrelated), thus enshrined for Americans the notion that leadership was the key to success in business—that profit might be less about engineering things and more about engineering people. Over 30 million copies of Carnegie’s book have been sold since its publication.

Political and military leaders have long been a preoccupation of historians, philosophers, and poets, who have chronicled exemplary life stories to instruct the curious and ambitious. Consider, for example, Plutarch’s second-century lives of Greek and Roman generals and statesmen, which Ralph Waldo Emerson once called “a bible for heroes.” Later collections of biographies like Boccaccio’s On the Fall of Princes, written in the 1350s and widely translated, and the 16th-century English Mirror for Magistrates were predicated on the idea that princes could profit from reading about the successes and failures of their predecessors.

But the examination of leadership in the commercial sector is a comparatively recent development. (Indeed, the term “leadership” was itself a 19th-century coinage.) It took the revolutionary stimulants of 19th-century industry and 20th-century finance to turn leadership and management into discrete branches of academic study—inhabited largely by social scientists and those who popularize their work for general readers craving formulas for economic success. As Peter Drucker, the 20th-century theorist known as the “father of management,” observes, the “large enterprises” that gave rise to contemporary ideas about organizational culture date only to the 1870s; before that, “the only large permanent organization around was the army.”

The old manuals for leaders—even the most controversial of all, Machiavelli’s The Prince—define success as the effective stewardship of the common good. Modern advice books for aspiring business executives have a different focus: financial performance, not civic virtue. Drucker described a business enterprise as “an organ of society,” the health of which is tied to the health of society at large. “Free enterprise cannot be justified as being good for business,” he writes. “It can be justified only as being good for society.”

Nevertheless, as Drucker noted in 1974, a business’s “first social responsibility” is its own performance. He maintained that the leader of a business, like the head of any institution, who uses the authority of his or her position “to become a public figure and to take leadership with respect to social problems, while the company … erodes through neglect, is not a statesman, but is irresponsible and false to his trust.” Drucker also recognized another challenge: the ease with which many executives lose sight of social responsibilities because of an obsession with profit in the near term. Business schools attempt to combat the seduction of profit by reenergizing ethics instruction in periods dominated by corporate scandals.

History provides so many examples of the tension between amassing profit and cultivating a public conscience that not even someone as optimistic as Drucker could dissolve it. Even when benefits do accrue to the public, of course, that tends to be beside the point of those interested in profit: This is simply the work of Adam Smith’s invisible hand. And even Smith acknowledged the potentially competing interests of business and country when he cited the wisdom of the 1651 Navigation Act, which regulated foreign commerce and thus limited the potential profits of England’s merchants, because it rightly prioritized national “defence” over “opulence.”

Today, as the banking and corporate excesses of

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