The True Role of a Business Leader
Reclaiming Business, Pt. I
The business leader sits in a complicated position in contemporary American society. On one hand, running a successful business is seen as one of the most prestigious and valuable things an American can do. The leaders of small businesses are often praised for their industriousness and entrepreneurial spirit, and the leaders of our largest businesses have long been idolized by many as the modern heroes of society.
But on the other hand, to many of those within the growing share of our society that is critical of capitalism, business leaders are seen as the embodiment of its anti-social impact (in fact, the term “capitalists” is often used colloquially to refer to business leaders) and therefore as the ultimate enemies of societal good.
Which side is right? Well, in a way, both are. As is almost always the case in disagreement, each side recognizes a core truth, but they diverge in their conclusions because of differences in information and perspective.
The reality is that business leaders are best understood as social organizers who play a critical and necessary role in stewarding the spaces, resources, and efforts of our society. But the prevailing guidance of modern capitalism has taught many of them to perform that role badly. By taking on a contributist lens, we can understand what business leadership should look like, what has gone wrong, and exactly how we can do better.
The True Role of a Business Leader
Businesses are at the core of a community’s ability to meet the needs (physical, social, emotional, spiritual, etc.) of its members. I use the term business expansively here — roughly, I am referring to an organization made up of a group of people who spend the majority of their time working towards some productive action. Commonly, people use the term business to refer specifically to for-profit organizations, while excluding non-profit and public (state-run) organizations. That distinction is helpful in some contexts, but is not so helpful when we are taking a contributist view from above, making an attempt to consider the ultimate value and purpose of things, rather than thinking from a capital-first lens. Whether a business’s owners keep most of its profits or reinvest them in the business, or whether a business is affiliated with the government — these are important considerations, but they are secondary to the core idea of business: a group of people organized towards productive action. This is why individuals can move between the public, private, and non-profit sectors, and although the cultures may differ, the basic sense of their role remains the same — they “go to work” every day; they have an “employer”; their organization has a mission, values, and objectives; they get paid at regular intervals for their labor; and so on.
Businesses are the means through which we collectively create much of what is good in society. They create and maintain the shared spaces where we come together and fill our lives with meaning — our coffee shops, our restaurants, our dance studios, our wedding venues, our places of worship. They develop and manage the infrastructure that allows us to function and connect — our water and sewage systems, our roads and airports, our electricity, our internet. They even enable many parts of our lives that we consider deeply personal — they provide the materials for our artistic pursuits; they print the books we love to read and they distribute the music we love to listen to; they build our homes; they provide us with medicines when we are ill and the personal care products that keep us well. Through the effective organization and division of labor, businesses enable us to thrive in ways that we as individuals would never be able to on our own.
The role of a business leader is to organize and direct a group of people to work together to provide one of these societal contributions. This is why business leaders are at the core of society, and why they are best understood as social organizers. If we take a bird's eye view — setting aside, for a moment, the complex details of contracts, capital, wages, etc. — what a business leader does is provide direction for the day-to-day lives of some of the humans in their community, giving them the resources they need to participate in the business’s contribution to society. A good business leader is one who performs this role exceptionally — who enables the humans under their direction to spend their days participating in joyful, dignifying, meaningful, and productive work, and whose business’s output meaningfully improves society beyond what those individuals could have done on their own.
This is all very simple — you might even call it common sense. Unfortunately, one of the most consequential problems with our capitalist lens is that it tends to lead us away from our common sense, driving us to forget simple realities in favor of distortions that come in the guise of rational economics. This is perhaps nowhere more true than it is in the case of the business leader. Rather than encouraging them to take seriously their position as social organizers — and its potential to help improve all of society — our capitalist milieu tends to encourage our business leaders to abdicate this responsibility, and to believe that the primary purpose of their position is instead to extract wealth for themselves and their investors.
This self-centered belief is not inherent to the business leader; it is taught to them. Consider that many, perhaps most, effective business leaders initially go into business or entrepreneurship not because they are selfish, but because they are enterprising and ambitious. They have a knack for directing labor to productive use — whether their own or that of others — and they are uniquely passionate about it. Often, so passionate that they are willing to pursue entrepreneurship at some personal risk, rejecting stable employment to devote themselves wholly to their ambitious vision. This makes them unlike most of us, who are more comfortable participating in good work that comes with some structure and direction than we are initiating and leading new ventures on our own.
In contributist terms, these passionate leaders, when successful, have found a way of giving to society that is, for them, free, active, valued, and effective. Because of this, their labor is accompanied by a natural reward: it provides them with dignity, meaning, and a place within their community. It is also generative (as all true acts of giving are): by effectively providing a service that meets a demand, they naturally improve the overall quality of their community.
In this way, the business leader’s natural orientation is towards contributism — the desire to provide value to their community through their unique and critical contribution (to give) — and this has positive externalities for the whole community.
But instead of appealing to this natural, sensible orientation, our society’s dominant capitalist lens counterproductively appeals instead to the business leader’s selfishness. It points them to the wealthiest business leaders (rather than the most fulfilled) as its exemplars of success. It encourages them towards decision-making frameworks that are aimed at multiplying numbers in their bank accounts, rather than ones that are aimed at allowing them to live the best lives and inhabit the best society. It warps their mindset, leading them to maximize capital returns to themselves and their fellow shareholders (read: gluttony and greed) rather than maximize their contribution to society (sustainability and health). In sum, it makes them short-sighted, leading them to forget both their responsibility to society, and their own dependence on it. This comes at the detriment of their own dignity and well-being, the dignity and well-being of their employees, and the positive impact they might have had on all of society.
The Problem Lies in the Orientation
What is important to understand is that the problem identified here is not the concept of business itself or even business leaders — both are critical to society. Business leaders are not the “enemies of societal good” naturally; they only become so if they choose to abdicate the core responsibilities of their role as business leaders — organizing people towards providing societal value — in order to instead focus on extracting capital from their communities.
But the problem is also not profitability in itself. Good labor is nearly always generative in some way, and when labor produces surplus resources, it is important that the laborer benefits along with the rest of society. Every laborer — even business leaders, whose labor is leadership, strategy, and organization — requires capital resources to live a good life, and it is only reasonable that they are allowed to source these resources from the fruits of their labor — otherwise their work would not be sustainable.
The problem is also not the for-profit sector. For-profit businesses can be good, non-profit organizations can be bad, and government organizations can be just as self-serving and detrimental to society as the worst for-profit businesses (as we in Trump’s America are currently finding out).
The true heart of the problem that so often makes capitalist business detrimental to society is motivational. The issue posed by capitalism has very little to do with what sort of work a capitalist business leader does — in fact, capitalism has generated an enormous amount of practical value to society in this regard, by helping us to better understand markets and better organize our labor. Instead, it has everything to do with why he or she does the work.
Is the business leader oriented towards organizing people to effectively provide value to their community, or are they oriented towards effectively extracting value from that community to enlarge their personal stockpile? Is the business leader oriented towards giving to society, or towards taking from it? This difference in orientation is the whole sum of the difference between contributism and capitalism. From this orientation flows everything else: business practices, ownership models, leadership styles, contracts and wages, etc. And because business leaders are the core social organizers of society, the overall orientation that a society’s business leaders take largely determines whether the society bends over time towards increasing the prosperity of its people, or towards ultimately dismantling itself.
Read next: Part 2: The Contributist Business Model