The following is excerpted from a speech that former New York mayor Michael R. Bloomberg, the founder of Bloomberg LP, delivered Wednesday at the Harvard Business School graduation.
I’ve been very lucky in my career. But my luckiest break wasn’t getting fired in 1981 — although that was pretty lucky.
My luckiest break was taking a job out of college where I got to see the ethics I learned growing up put into practice in the workplace. But when we look at today’s world, it’s clear not everyone with a degree in business has those principles. And that’s one reason, I believe, that this great country of ours is suffering from an ethical crisis that is corroding our society.
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Today, Americans are questioning whether those in the private sector — and in Washington — can provide the moral leadership our country needs, both economically and politically.
They see the rewards of the economy increasingly concentrated at the top. They see wealthy parents scamming the college admissions process. They see families unable to afford health care and housing in the world’s richest country. They see decades of discrimination based on race and ethnicity trapping another generation into poverty. And they wonder: Is our economic system breaking down?
At the same time, if they are not blinded by partisanship, when they look at Washington, D.C: They see truth and science being trampled with reckless abandon. They see the rule of law being attacked and undermined. They see a chorus of enablers who defend every lie and abuse of power. And they wonder: Is our political system breaking down, too?
I’ve never been much for party politics. No party has a monopoly on good ideas or good people. But I believe all of us have an obligation to reject those who traffic in dishonesty and deceit. That is not a partisan position. That is a patriotic position. Unfortunately, when we elect people to public office who have no interest in ethics, that depravity trickles down, and it seeps into our culture.
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Thirty years ago, Senator Daniel Patrick Moynihan of New York described society’s growing tolerance for illicit behavior as “defining deviancy down.” Today, we face the same problem — except that the bad behavior is not on city streets, but in the halls of power in Washington. And as our political culture degenerates, so does our ability to address all the big challenges we face.
Now, the good news is: There is a solution. In fact, I believe that the solution to our political problems is also the solution to our economic problems. And I can sum it up in one word: integrity.
In Econ 101, you were probably taught that markets are based on supply and demand. But for capitalism to really function, people need to have faith that they will be entering into generally fair exchanges — that one side won’t cheat the other.
Of course, not every person can be trusted to act with integrity, so we do have laws and regulations that are intended to guarantee it. Those legal controls don’t always work, and periodically we do need to update them.
For example, a century ago, Teddy Roosevelt took on the largest corporations that were destroying competition. Twenty-five years later, Franklin D. Roosevelt’s New Deal provided relief from a Great Depression that some thought would lead to the downfall of capitalism.
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For their leadership, T.R. and F.D.R. were reviled by many in the business world — and considered traitors to their class. But their actions preserved the integrity of markets — by restoring people’s faith in them.
Now, I’m as much of a capitalist as you will ever find. But anyone who believes that unfettered capitalism works hasn’t read history.
Today, we hear echoes of the challenges the Roosevelts faced. Industry consolidation has reached record levels and is suppressing competition and choice. More and more Americans — especially in your generation — are questioning whether capitalism is capable of creating a just society. Their faith in America — and all that we represent — is being shaken.
If we do not act to restore it, the turmoil in our politics today will be only a prelude of what’s to come, and that could shake the very foundations of our society.
We cannot allow these issues to fester. We must address them now. We must find new ways to build a capitalist society that is more dynamic and more secure — more affluent and more equal — to restore faith in the promise of America and the future of the American dream.
There are no silver bullets, but let me offer a few ideas on how you graduates can help lead the way.
First: Be honest with your colleagues, clients, and contractors. Don’t ever try to take advantage of them. And don’t hesitate to speak up when someone else does. Public faith in private markets rests on individual actions. Seek out organizations that are led by people who understand it.
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Second: When applying for a job, align yourself with companies that are engaged in philanthropy. At Bloomberg, philanthropy gives us a competitive advantage in recruiting and retaining talent — and it’s as good for the bottom line as anything a company can do.
Third: Give back on your own — and don’t wait! I can just tell you after 50-plus years in business and government, people have a lot more respect for those who make a difference in society than they do for people who just make money. And the networks that you will make through philanthropy will open up new opportunities for your career.
Gordon Gekko was wrong: Greed ain’t good.
Fourth: If and when you end up in an executive position, don’t make one of the fundamental mistakes that I see businesses and boards make all the time: under-valuing their labor force — and overcompensating their CEOs. Management often treats workers like widgets — which they’re not. And boards treat CEOs like irreplaceable geniuses, which they rarely are.
At Bloomberg, we pay employees very well, we invest in their training and education, and we offer industry-leading benefits. In return: Our employees pay us back ten-fold with their dedication and loyalty.
And there is no better way to strengthen capitalism than to give people a greater stake in its success.
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Fifth and finally: Never self-deal. And avoid even the perception of a conflict of interest. Your reputation is everything. Don’t sell it or trade it for anything.
After following all of these principles, insist on no less from the people who ask for the most precious commodity you will ever own: your vote. Elect people who understand that it’s their obligation to make capitalism work for everyone, and not be so naive to think other systems will be better.
That means picking up where Teddy and Franklin Roosevelt left off and modernizing capitalism for our time. America must always be a place where it’s possible to get rich through perspiration and inspiration. But it must never be a place where the middle class steadily loses ground — and where many of those at the bottom feel trapped.
Unfortunately, that is the path we are on now.
And the farther down that path we go, the more likely that the most extreme voices on both the left and right will attract large followings, win power, and do real harm to our country.
I’m optimistic we will change direction — partly because of how business leaders are already taking action on one of the biggest challenges we face: climate change.
Today, I’m glad to announce that HBS will hold an alumni conference next year on investing in the age of climate change, which Bloomberg Philanthropies will support. It’s another example of where doing right and doing good are aligned.
Market forces are among the most powerful tools in the world. But whether it’s climate change — or income inequality, or gun violence, or any other issue — those forces must be guided by ethical leaders, or else the market’s invisible hand can turn into a clenched fist. And when society’s most defenseless take it on the chin, they will fight back with unpredictable consequences — and demand a better deal, as they should.
Restoring the faith that Americans have been losing in our economic and political systems is a big job. It will be up to you to help lead it — and it starts with renewing, in both business and government, our national sense of integrity.