Reinhard Mohn - Lectures and Essays II

Bibliographic information published by the Deutsche Nationalbibliothek

The Deutsche Nationalbibliothek lists this publication in the
Deutsche Nationalbibliografie; detailed bibliographic information is available
on the Internet at http://dnb.d-nb.de.

One-time posthumous special edition on Reinhard Mohn,
published by the Bertelsmann Stiftung.
This issue is based on the original German edition of
Reinhard Mohns lectures and essays as an unabridged, licensed edition
for the Reinhard Mohn Complete Works Edition,

2009 by Verlag Bertelsmann Stiftung, Gutersloh.

2010 E-Book-Ausgabe (EPUB)

ISBN : 978-3-86793-293-6

www.bertelsmann-stiftung.org/publications

www.bertelsmann-stiftung.de/verlag

Inhaltsverzeichnis

Reinhard Mohn was born in Gtersloh, Germany, on June 29, 1921. After his release in 1946 by the Americans as a prisoner of war, he returned home to take over management of the familyowned printing and publishing house. He led the business, one of the leading international media enterprises, for over 40 years. The business structure is characterized by the principles of fairness, partnership, and justice. These are expressions of his idea of business culture.

In 1977, Reinhard Mohn founded the Bertelsmann Stiftung, which carries on the tradition of cultural, social, and socio-political involvement while ensuring the enterprises continuity. Reinhard Mohn transferred the majority of Bertelsmann AGs share capital to the foundation in 1993. This act reflects his conviction that wealth and prosperity should also be coupled with a commitment to social engagement.

Reinhard Mohn died on October 3, 2009.

Are entrepreneurs still needed?1

Currently, there are varying opinions regarding the entrepreneurs importance to the economy. Most of our fellow citizens do not actively dislike businessmen, but they do feel queasy on learning of misconduct by certain individuals. Im thinking of issues like abuse of power, personality cult, or extravagant lifestyles. Objections fall even thicker when private decision-making rights over capital are bequeathed to heirs who lack the skills and character necessary to exercise such rights effectively. Such cases clearly demonstrate to all that the capitalist system suffers from considerable leadership risks in addition to its acknowledged inequity. In former times, such misgivings went unnoticed thanks to the spectacular successes that individual capitalists achieved during the industrialization boom of the period between 1840 and 1870. However, todays market conditions, as well as the constraints imposed by society as it is presently structured, seldom allow attainment of such universally recognizable success. Consequently, it is quite understandable that a corporations renown and prestige fade with time.

Another aspect that must be considered is that the democratic self-image that we have assumed over the last century or so demands a just and humane society in which the individual is capable of self-realization. New standards have evolved. Patterns of behavior that fail to match the new standards are duly disparaged. As a matter of fact, liberal capitalism was never considered to be humane. If the Western democracies nonetheless decided in favor of a competitive economy based on private property, it is because no other economic system has been able to rival it as a means to supply the market bountifully. This background is not always as well understood by the masses as it should be. Accordingly, we should react with tolerance when people criticize the system.

On the other hand, criticism from left-wing reformists should be regarded in a completely different light. Although such people claim to employ scientifically recognized methods, we must note that their advocacy of a state-planned economy has proved, in practice, to be a dismal failure, and even the theory of central planning has not been thought through. The decisive blunders of socialist economic doctrine consist, firstly, in underestimating the challenge faced by managers and, secondly, in its misconception of human nature. The attempt to repress the individuals natural drive to self-realization has not only impaired the populations willingness to work in those places but, first and foremost, has undermined their creative spirit. Not grasping and admitting this fact today takes the wind out of the left wings critique of entrepreneurs.

The people with the most favorable opinion of businessmen are those who know businessmen personally and have personal knowledge of the effects their efforts have on the community at large. As a rule, businessmens attitude and performance earn them an astonishing degree of respect from their employees. No wonder, since the latter are well able to assess how important a contribution their boss makes to their own well-being in the form of the leadership he provides.-A weighty argument indeed!

I would like to round off my assessment of the businessmans role in our day and age with a narrative of how entrepreneurial leadership in economic life arose and developed. I believe in the soundness of the distinction I draw between the labors of craftsmen, merchants, and peasants of yore, on the one hand, and the modern businessmans daily routine, on the other. The latter did not arise until the 19th century. Only the social and economic changes that took place after the French Revolution were capable of providing the conditions that eventually fostered the development of the present-day businessman. Developments in science and engineering laid the groundwork for the subsequent growth of massproduction manufactures. Improvements in communications took place at the same time as barriers to trade were removed. This enabled markets to grow to unprecedented size. At first competition was feeble and the tax burden negligible. Such conditions encouraged broad profit margins and thus encouraged the accumulation of equity capital. Even at that time, governments welcomed and fostered this economic surge. However, they were incapable of taking any action to mollify the social conflicts that promptly ensued. Few epochs have offered such fabulous opportunities for the growth of businesses and the enrichment of businessmen. This process began to falter when democratic ideology started hemming in the businessmans freedom of action by fashioning multifarious new social and economic constraints for him, notably, the rise of labor unions. Even today, transformation of economic life has not ceased. Seen from the standpoint of the individual, life has improved in many ways. The social market economy in its current dispensation can be regarded as a social contract. Nonetheless, the process of social development that brought us to this point will doubtless continue. Now that the social question has been satisfactorily resolved, we must-for the sake of both preserving humane values and safeguarding economic efficiency-ascertain how the conflicting goals of self-realization, distributive justice, and social responsibility, on the one hand, can be rendered compatible with the ability to evolve and efficiency that are required of us, on the other. I suspect that this is a task that requires the efforts of several generations.

The initial period of German industrialization saw the rise of energetic and resourceful men who were capable of exploiting the opportunities offered by the social circumstances of the time. They were the model on which our contemporary concept of businessman is based. Those men adroitly combined the surging demand in arising markets with recently developed manufacturing technologies and innovative products. Their shining achievement was to deploy the human and material resources available to the manufacturing and mercantile process in such proportions and in such a fashion as to optimize outcomes. Such a task demanded both sound judgment and an extraordinarily creative drive. Such attributes are in scarce supply and, moreover, difficult to learn. In proportion to the armies of wage earners, the elite of entrepreneurs whose creative talents set the course for future development comprised a mere handful of people. I find it truly remarkable how little acknowledgement is currently accorded to the crucial role that businessmen play, despite the multitude of reform proposals that gush forth. More than one theorist believes that any task, when accomplished with method and industry, is automatically destined for success. But do not be deceived: Without the crucial ingredient of entrepreneurial spirit, the German economy would be condemned to stagnation.