I am reading a freshly published book, Defending Free Speech, a collection of essays edited by Steve Simpson and published by the Ayn Rand Institute Press. It couldn’t be more timely. Free speech is increasingly under attack, not just on university campuses where students demand “safe spaces” where they are protected from hearing ideas they disagree with, but also by State governments who are attempting to silence—and sue—those who disagree with government policies on issues such as combating climate change.
But why should businesses (their owners and managers) care about a political issue such as freedom of speech? Obviously, if you are Exxon and the Attorney General of Massachusetts is trying to sue you, in essence, for disagreeing with her government’s view of catastrophic man-made climate change, freedom of speech is very important to you. Having to spend resources to fight (and to counter) a legal case is a significant diversion from Exxon’s primary function of producing and trading material values (oil and gas) and can erode its profitability, as I wrote in a recent column.
Similarly, if you are in the publishing business, such as Charlie Hebdo, the French satirical magazine whose cartoonists were killed in an Islamist terrorist attack at its offices, Jyllands Posten that published the Danish Mohammad cartoons, or any book publisher or store that publishes or sells controversial titles, you care about freedom of speech—because your entire business model rests on it. If free speech is not protected (and is even attacked, as in the case of Exxon) by government, your ability to do business, to create material values, is eroded.
But freedom of speech is crucially important, not just to oil firms targeted by government or media and publishing companies, but to all businesses—because all of their success is based on the same fundamental principle: rationality. For any company to succeed at maximizing long-term profits through producing and trading material values, those owning and operating it must adhere to reality by the means of reason. (They must observe whether there is actual or potential demand for the products or services they intend to produce, and then act accordingly, to produce and sell them, profitably—all of which requires adherence to facts).
The ability to adhere to reality, to apply the principle of rationality, has one crucial social condition: freedom. If companies cannot freely implement the business ideas they have, by choosing what to produce, who to employ, how to finance the operation, to whom to advertise, they are reduced to mere tools of the state in a centrally-planned economy. Such state-controlled businesses cannot flourish, nor can the rest of us who depend on the material values that can only be created by adhering to reality (as opposed to by government bureaucrat’s arbitrary decree that ignores facts, such as market demand, costs, innovation, etc.).
An important aspect of the freedom to exercise reason is the freedom of speech: the liberty to express opinions and to persuade others, whether to advertise one’s products, to raise capital, to contract suppliers, or to recruit employees. Taking this freedom away also severely undermines companies’ ability to create material values.
The diminishing freedom of speech is not inevitable. As Steve Simpson and other contributors to Defending Free Speech point out, it is the government’s role—it’s only proper role—to protect the individual rights of its citizens (including of businesses) against the initiation of physical force by others, such as Islamist terrorists who attacked Charlie Hebdo offices and threatened the Jyllands Posten’s publisher. It is a travesty that governments are not performing their role, and many of the companies under the threat of brute force are forced to bear the crippling security costs of protecting their employees and customers themselves when governments fail to do it.
The fact that governments are not just failing to protect their citizens’ rights but are actually violating their rights is even a greater travesty, such as in the case of Massachusetts threatening to violate Exxon’s right to free expression of its view on climate change. Once the government reverts its role from the protector to the violator of rights, our ability survive and flourish, to produce and profit, is thrown out.
It is for that reason that all businesses should care about freedom of speech. Fortunately, in Defending Free Speech, they—and we—can find the intellectual ammunition to do so.
First published at How to be Profitable and Moral: A Rational Egoist Approach to Business and posted here with the kind permission of the author.
Jaana Woiceshyn teaches business ethics and competitive strategy at the Haskayne School of Business, University of Calgary, Canada. She has lectured and conducted seminars on business ethics to undergraduate, MBA and Executive MBA students, and to various corporate audiences for over 20 years both in Canada and abroad. Before earning her Ph.D. from the Wharton School of Business, University of Pennsylvania, she helped turn around a small business in Finland and worked for a consulting firm in Canada. Jaana’s research on technological change and innovation, value creation by business, executive decision-making, and business ethics has been published in various academic and professional journals and books. “How to Be Profitable and Moral” is her first solo-authored book.