Milton Friedman’s idea that owners of, and managers at, companies should only care about the owner’s wealth is pretty odd when you think about it. Owners have long cared about much more because they are human beings. A book on the Guinness family suggests owners often care about beer, housing, God, and national identity. What is more, the suggestion is that business was better because the owners cared about more than their money.
Just In It For The Money
There are many reasons for a firm to stand for more than just making money. Think about a firm that said it was only there to make money for its owners. Who would want to work for it absent a ridiculously large salary? Who would want to trade with a company that was trying to rip off their partners at every possibility? What government would encourage a firm to squeeze the consumer (voters) as much as they could?
Then think about the owners. They are human beings, they have human feelings. Things that matter to them aren’t just related to their money. The high-profile business leaders that we currently possess all have their own quirks. Some are vain and want to see themselves as prophets. Some want to promote space exploration. Some seem to want to usher in a new world of human-robot hybrids. The non-financial motives may not always be what you think of as “good” but they are non-financial. Bill Gates is working to make the world a better place, Elon Musk seems to be taking the opposite approach, but they both see their role as about more than just making money. Indeed, when you have more and more money it would be odd if you didn’t think there must be more to life than just having bigger and bigger bank account balances.
The Guinness Brewery
Stephen Mansfield is a Conservative historian, author, and theologian. He looks at the history of the Guinness beer and the family that for many generations supplied it. He is a generous writer; he is clearly actively looking for the best in his subjects and he finds it. He tells us how the owners of Guinness benefited their community. For instance, when Guinness sought outside investors its workers participated in the benefits.
…workers at St. James’ Gate received shared from Edward Cecil’s [Guinness, the owners’] portion and some employees even received cash bonuses.
Mansfield, 2009, page 106
The same Guinness family member created a trust to create housing for the “labouring poor” of Dublin and London. Indeed, in this concern for the worker’s housing he followed a family tradition. Quality housing also was a cause that motivated a number of company owners who performed variations on providing employee housing, e.g., Bourneville and Port Sunlight in the UK, and Pullman in Chicago.
Owners Often Care About Beer, Housing, God, And National Identity
A theme coming through the book is that the owners consistently cared about more than just their wealth, and, in many ways, commercially the business was much better for it. The Guinness brand was strong because the owners’ actions were respected.
Interestingly, beer was seen as morally better than spirits, e.g., whiskey, and Mansfield describes the sale of beer as a social mission. Guinness is good for society (at least compared to whiskey and gin). The family were religious and, as Irish protestants, they had relatively high status at the time (this was well before the Irish Republic). Mansfield is keen to note that they generally weren’t anti-catholic which helped given their Irish customer base was heavily catholic. The Guinness family’s religious motivation seemed to underpin many positive actions, although it also caused the family a real challenge. Family members were constantly going off to become clergymen and expecting Guinness family money to maintain them in the lifestyle they had become accustomed to but which the clergy salaries didn’t permit.
According to Mansfield, the Guinness family had a religious duty to provide beer. While not everyone would agree with that mission, I find it very plausible that Arthur Guinness (the founder) thought he was making a positive impact on the world. Feeling they are making a positive difference matters to many people, and these thoughts don’t just go away when people go into business.
Beer, well respected and rightly consumed, can be a gift of God.
Mansfield, 2009, page 20
Guinness And Ireland
Guinness chose as its symbol Brian Boru’s harp. The harp of this ancient king of Ireland appealed to Irish national identity. The business is so associated with Ireland that it is hard to imagine Guinness without a link to Ireland. The company was successful precisely because it stood for more than just itself. Guinness was embedded in its community — it gave to Ireland and got a lot back.
Interestingly, the company also created the Guinness Book Of Records as a minor giveaway, not really expecting it to be the massive hit that it became. It is clear that they really knew how to market their products, even if some of it was a bit lucky.
Helping Society
Mansfield has a lot of affection for the family, and while some readers might feel it is a bit too much I don’t think we can dismiss what he says out of hand.
They knew how to brew beer, yes, but they also knew how to care for their employees, how to invest wealth for social good, and how to create corporate cultures that would change the course of nations.
Mansfield, 2009, page 196
Maybe Mansfield is too generous but there are good reasons to support writers like Mansfield who note that to be successful in business you don’t need to be monomanically obsessed with accumulating more wealth at the expense of others.
For more on stakeholder thinking and Bill Gates see here, here, here, here, and here
Read: Stephen Mansfield (2009) The Search for God and Guinness: A Biography of the Beer That Changed the World, Thomas Nelson Inc
