Rational Selfishness and the Great Wealth Creator

by | Jun 16, 2019 | Business

People are most often confused by executives who seem to share attributes of both the inflated and the genuine egoist

True egoists are not narcissists; they are not preoccupied with grandiose fantasies or obsessed with being the center of attention and getting constant approval. They are not concerned with self-inflation because they are secure within themselves and confident of their own value. They do not feel they have to disprove an inner sense of worthlessness. Their primary focus is not inward on their inner feelings, but outward on reality.

True egoists take the actions needed to succeed on the job. They look at the facts and use reason, not whim, to make decisions. They think and plan long-range. They learn what is going on and persuade others through two-way communication.

Egoists spend their time learning about the business and about competitors; they learn from others but always use their independent judgment. They crave people of ability and strive to give them as much responsibility as they can handle. They reward people fairly and do not take more–or less-than they deserve.

Egoists practice the virtues of honesty and integrity because they know that trust is critical for business success. True egoists possess what Geneen calls normal or healthy self-esteem and self-confidence that are based on making decisions in accordance with the facts and the knowledge that they are continually learning and improving their knowledge and skills. Mark Fraga of the Wharton School puts the issue as follows:

”The person with the genuinely big ego is committed to the venture and will do whatever it takes to succeed. His attitude is, I’m here world. I’m going to (turn air into gold metaphor,) I am going to make the impossible mundane ”

Ego is essential to commitment. Venture capitalist Audrey MacLean explains:

”Starting a company is like going to war. You can’t do anything else but be fully engaged. You have to be insanely, passionately, nothing-can-stop-me committed.”

People are most often confused by executives who seem to share attributes of both the inflated and the genuine egoist. These are usually people of genuine ability who are independent in their work but who are dependent outside it, as shown by their cravings for attention and publicity. For example, in reviewing a book about Oracle Corp. CEO Larry Ellison, reporter Steve Hamm writes, ”Ellison is a larger-than-life personality who wants desperately to be admired-and believes in nothing but himself.” Observe the contradiction here: If Ellison really believed fully in himself, he would not be desperate for the attention of others. There are a number of great wealth producers who are independent in their work and dependent outside of work, but allowing themselves to hold such contradictory premises is a dangerous indulgence. It is easy (and not uncommon) for such people to begin to neglect their work in favor of the limelight and also to let the secondhander attitude begin to affect the way they make work decisions. Many such people lose their effectiveness over time.

The alleged alternative or antidote to an inflated ego is no ego. Management gurus urge leaders to take the ego out of leadership. The new catchword in leadership today is “servant leadership.” “Servant leaders,” it is claimed, want nothing for themselves and only work altruistically for their employees, their customers, and the Public. This, of course, is utter nonsense. I am not being cynical here; I am not saying that wealth creators are not morally good enough to practice such an (allegedly) noble moral code. I am saying that they are too good to practice such an ignoble moral code (i.e., self-immolation). No self-respecting person would want to be a leader if all it meant was being a slave to the wants of others. No one could endure the stress, the long hours, the worry the exhaustion, the risk and uncertainty, the endless problem solving, the frustrations and failures, the relentless pressures and demands that are the price of success in business-motivated by a selfless concern for the welfare of everyone but oneself. I do not know of a single wealth creator in history who was so motivated. A selfless person like Mother Teresa might have been able to minister to the sick and dying, using money donated by people who have earned it, but she would have been unable to create the wealth that made her work possible or to move an industrial civilization forward.

True egoists have strong passions based on their personal values but operate on the premise of reality and reason first. They do not sacrifice their own long-term interests to spur-of-the-moment whims. Nor do they sacrifice others by deceiving or defrauding them. True egoists treat other people with respect and trade with them honestly. They decide what they want to achieve, decide objectively on the proper means to achieve it, and ad accordingly. The proper antidote to counterfeit egoism is not altruism but genuine-rational-egoism.

Management guru Lanny Goodman has this to say about the proper motivation of owner-entrepreneurs:

Conventional wisdom would have us believe that a Company has a life of its own and we’re all there to serve it. . . . We’re taught to be good soldiers, to serve others and sacrifice ourselves. I say, poppycock. . . . The founder’s first obligation is to himself. If that obligation isn’t satisfied, none of the others (to employees, customers, etc.) can be satisfied, either.

Goodman advocates creative selfishness, by which he means the owner should pursue his or her legitimate interests and figure out how to make these interests converge with those of his or her employees and customers. Business, he says, is a bilateral process (i.e., a process of trade).

Focusing now on the motivational aspect of egoism, I believe the real key to the wealth creator’s motivation is, surprisingly, love–not “selfless love” for others, but a profoundly personal, selfish love of the work, the product, the process of creation, growth, success, and the rewards earned through success. The old songwriters were right-in the wrong way: Love does make the world go ’round, but it is not romantic love (as wonderful and precious as that is) that produces the world’s goods. It is love of achievement. Chrysler’s Bob Lutz agrees with Tom Peters that the greatest breakthrough products are made by people who do it for “the sheer joy of creating for themselves.”

It is worth asking whether Prime Movers value the work more than the money or the money more than the work. My research indicates that they love both, but the work is more fundamental. A true egoist will not want to spend time and effort doing something he or she does not enjoy just for an extrinsic reward. Prime Movers love the process of making money as well as the money. Some consider it chic to say, “I really did not do it for the money,” but somehow one never observes these people working for free. What they really mean by such a statement is that the work was their primary focus. Prime Movers, however, understand the causal relationship between work and money. If businessmen are good at their work, the money follows. Under capitalism, the two are inseparable. Unless the producer does good work and makes money, he or she will not be able to continue working; the money he or she makes is not only a way to keep score and a source of pleasure but also fuel to expand the business.

In view of this, it may seem puzzling that biographer Matthew Josephson seemed to worship Thomas Edison, a very successful businessman as well as inventor, at the same time that he disparaged other nineteenth-century capitalists, whom he called “robber barrons.” I believe the reason for this is that Edison claimed that he made money in order to invent (create), while the so-called robber barons created so that they could make money. To Josephson, Edison’s motivation must have seemed more intellectual and pure and the robber barons’ motivation more earthly and materialistic. But this Platonic splitting off of man’s faculties into higher and lower types is fallacious. Creation and moneymaking are reciprocally related: Each makes the other possible. The creation of wealth is a result of the creative use of one’s mind; wealth, in turn, makes further creative efforts possible.

Adapted by Capitalism Magazine from Dr. Locke’s The Prime Movers: Traits of the Great Wealth Creators.

Edwin A. Locke is Dean's Professor of Leadership and Motivation Emeritus at the R.H. Smith School of Business, University of Maryland. He is a Fellow of the Association for Psychological Science (APS), the American Psychological Association, the Society for Industrial & Organizational Behavior, and the Academy of Management. He is the recipient of the Distinguished Scientific Contribution Award (Society for I/O Psychology), the Lifetime Achievement Award from the Academy of Management (OB Division), the J. M. Cattell Award (APS) and the Distinguished Scientific Contribution Award from the Academy of Management. He, with Gary Latham, has spent over 50 years developing Goal Setting Theory, ranked No. 1 in importance among 73 management theories. He has published over 320 chapters, articles, reviews and notes, and has authored or edited 13 books including (w. Kenner) The Selfish Path to Romance, (w. Latham) New Directions in Goal Setting and Task Performance, and The Prime Movers: Traits of the Great Wealth Creators. He is internationally known for his research on motivation, job satisfaction, leadership, and other topics. His website is: EdwinLocke.com

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