The president is no fan of “going Galt.” Barack Obama took a shot at libertarian novelist and thinker Ayn Rand on Tuesday, saying she was part of a body of literature that had changed American business values for the worse.
Speaking during a panel discussion on poverty at Georgetown University, the president remarked that not all companies saw the value in bettering their communities.
“First of all, just going back to something Arthur said earlier about how we characterize the wealthy, and do they take this extra wealth from the poor, the middle class — these are broad economic trends turbocharged by technology and globalization, a winner-take-all economy that allows those with even slightly better skills to massively expand their reach and their markets, and they make more money and it gets more concentrated, and that then reinforces itself. But there are values and decisions that have aided and abetted that process,” Obama said.
The president said earlier in U.S. history companies had faced more social pressure to give back than they do today.
“The CEO felt it was a member of that community and the sense of obligation about paying a certain wage or contributing to the local high school or what have you was real,” he said. “And today the average Fortune 500 company — some are great corporate citizens, some are great employers — but they don’t have to be, and that’s certainly not how they’re judged.”
“And that may account for the fact that where a previous CEO of a company might have made 50 times the average wage of the worker, they might now make a thousand times or two thousand times. And that’s now accepted practice inside the corporate boardroom. Now, that’s not because they’re bad people. It’s just that they have been freed from a certain set of social constraints.”
American values had changed, according to Obama, thanks in part to government policy and libertarian thinkers like Ayn Rand.
“There’s a whole literature that justifies that as well, that’s what you’d need to get the best CEO and they’re bringing the most value, and then you do tip into a little bit of Ayn Rand.”
“Which, Arthur, I think you’d be the first to acknowledge because I’m in dinners with some of your buddies and I have conversations with them,” he said to American Enterprise Institute president Arthur C. Brooks, a member of the discussion. “And if they’re not on a panel, they’ll say, you know what, we created all this stuff and we made it, and we’re creating value and we should be able to make decisions about where it goes.”
“So there’s less commitment to those public goods — even though a good economist who’s read Adam Smith’s Moral Sentiments would acknowledge that actually we’re under-investing, or at least we have to have a certain investment.”
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