– by Murray Sawyer, J.D., President and CEO
I need to share a little ‘60s and ‘70s autobiographical background to give my subsequent story context. In this recounting there is nothing I mean to imply about my experiences or events that are either good or bad. They are simply mine, and thus became the lenses through which I have subsequently experienced, seen and interpreted the world.
We All Start Somewhere
Randy and I were married while I was a junior in college. With that event we were pushed from the shores of familial financial support into a lifeboat kept afloat solely through our use of the oars we found on the boat. Our initial honeymoon abode was a modest, furnished trailer on Airport Road in Chapel Hill, NC. In order to support us and our daughter and while also taking a full course load at UNC, I worked early mornings and late evenings as a janitor for Saffelle Cleaning Service, starting most days at 5AM and ending around 11PM.
Upon graduation I went directly to law school at Vanderbilt in Nashville where another daughter promptly arrived. Scholarship assistance and government loans covered tuition obligations. To support my ever-growing family, and carrying a full course load, I also worked thirty hours per week for the state government in their planning and budget office. On weekends I took pictures of houses insured by a local insurance company. All the while Randy dutifully took in a handful of my fellow law school students’ infants at “Sawyer’s Day Care Service.”
Returning to my hometown Wilmington in 1971, I soon left a large corporate law firm, Richards Layton & Finger, for the Delaware Attorney General’s office. Then at the age of thirty-one on January 1, 1978 I opened shop as a solo practitioner. My law “office” consisted of two window-less rooms totaling 300 square feet.
I had a mortgage, car and law school loans to repay, family mouths to feed. By then our third child was almost three. Our safety net was the $1,250 that was squirreled away in our savings account. We were about to embark on another life adventure.
Six months later Randy announced that she wanted our children to attend a private day school rather than the public one. The educational opportunities and intellectual challenges would be far greater for them, she argued. Intuitively I knew I needed to find another income stream and fast.
Thinking about my legal background, I decided that Delaware’s reputation as the “Corporate Capital of the World” offered a potential avenue for that second revenue stream. Accordingly, I started American Incorporators, Ltd., (AIL for short), a corporate filing and incorporation service. It’s initial office: My legal assistant’s second right hand desk drawer. And yes, over the years the profits from AIL did cover tuition costs for all three children and all the way through college! That company now provides corporate filing services in all 50 states for clients who live in every state in the U.S. as well as all over the world.
Although I had left the Attorney General’s office I still had many friends who were police officers. So, in response to Randy’s we-need-tuition-money plea, and as a hedge against the possible failure of AIL, I also started a civil investigation business at the same time. I called it Professional Investigators, Ltd. (PIL for short). Its business purpose was to provide professional, trained investigators — my police officer friends who would work on their own time– to my fellow lawyers who were in the need of witness interrogations, or needed car crash measurements, or required fact or forensic investigations done for their trial cases.
The main difference between the two businesses was that when not practicing law I focused just about all my time and energy on AIL while PIL withered on the vine. Sure enough, it soon died a quiet death. The point is this: both the success of AIL as well as the failure of PIL can be laid at my feet. That wasn’t my only whiff.
Tom, my best friend from North Carolina, called me about this same time. He lived in New Jersey and wanted to exit the corporate world to buy and run a bar. Neither one of us knew the first thing about the bar business, and the TV reality show, Bar Rescue, had not yet been created. In retrospect, we were enthralled with a quixotic, romantic and naïve idea, but at the time I was sure of its success. Would I try to raise the funds necessary to buy one in return for a fifty percent ownership stake in that venture? Absolutely, I said.
Jumping onboard, I soon had raised enough capital from my lawyer-friends that Tom and I were able to buy a bar we christened Nicky’s Pub. It sat on the White Horse Pike in Cherry Hill, New Jersey, about 90 minutes from Wilmington. Tom quit his corporate job. Most weekends I would drive to Nicky’s to help Tom run our place — man the cash register, draw a beer, flip a burger, clean out the men’s room. There remained however this one issue: we could do the menial stuff, but neither of us knew a damn thing about nuts and bolts of really running a bar.
Failure taught me a valuable life lesson: Stick to what you know.
Sure, enough we ran it into the ground in 18 short months. Turns out it was seriously undercapitalized and embarrassingly mismanaged by us. We were two plumbers who didn’t know a hose cutter from a pipe wrench. While I was ultimately able to pay back my investors that failure taught me a valuable life lesson: Stick to what you know.
The Right to Have a Go
This brings me to the present.
Two weeks ago, we hosted Westover’s Eighth Annual Investors’ Summit. James Pethokoukis, the DeWitt Wallace Fellow of the American Enterprise Institute, was our featured speaker. He addressed the importance of GDP growth. Specifically, he queried whether our current economy can grow at the 3 percent rate which had been the “old historic norm” going back to the 1950s up until 2008, or whether we are constrained to grow at the “new normal” of 2 percent, which has been the average from 2008 through 2016.
If we grow at 3 percent, then living standards for our citizens double in just 20 years, but if our economy grows only at 2 percent, we will see those same standards double only once every 35 years.
Pethokoukis noted that our free enterprise system has generated more wealth than that realized from any other civilization or government system. He made the point that this has been done in the U.S. without relying on “State-sponsored 5-year plans, government-planned industrial policy, or other onerous top-down directives.” Think Russia, China and the EU respectively.
He said the key to our success was bound up in what he called our “culture of economic freedom.” It’s what one economist-philosopher, Deirdre McCloskey, called quite simply, “the right to have a go.”
Pethokoukis cited America’s “ethic of entrepreneurialism.” He traced its lineage from the great companies of our past to the giant firms of the present. From Carnegie’s steel and Rockefeller’s oil to Bill Gates’ Microsoft, Steve Job’s Apple and Jeff Bezos’s Amazon.
From where I sit, it’s the spirit of entrepreneurialism that fuels our economic engine. I believe this is true not only thanks to the genius of the brilliant founders of those few large companies, but also because of the hearts, minds and sweat of millions of small business owner Americans. They diligently work, invent and produce goods and services in every corner of our nation every day of the year. In America we have that entrepreneurial energy thanks to our free enterprise system and our system of democracy.
From where I sit, it’s the spirit of entrepreneurialism that fuels our economic engine. I believe this is true not only thanks to the genius of the brilliant founders of those few large companies, but also because of the hearts, minds and sweat of millions of small business owner Americans.
Sadly, and much to my surprise, Pethokoukis also warned of a worrisome demographic shift in attitudes by our young people. He said that “more than 30 percent of the millennial generation — those roughly 35 and younger today — say that democracy is not essential in our society.” He also noted “some 42 percent of the millennials say capitalism is not essential.” My own research led me to a Harvard University poll with similar results. Conducted in 2016, it found that 51 percent of 18-29-year-olds in the U.S. said they oppose capitalism while only 42 percent express support.
Bhutan or Boston
To my surprise, I experienced what I took to be a misunderstanding of entrepreneurial capitalism in the observations of a fellow Baby Boomer two days later.
It happened when I was working out on a stationary bike, exercising my brand-new titanium left knee. A longtime friend came up behind me and tapped me on the shoulder. We go way, way back . . . more than fifty years . . . back to our days together in high school. His business life was experienced as a manager of a very large company headquartered in Wilmington.
“Bill’s” shoulder tap led to a philosophical discussion. My buddy advised that in a happiness survey measuring one country against another that the U.S. was somewhere in the middle of the pack on something he called the “Nations’ Happiness Scale.” Smiling somewhat smugly, he told me Bhutan was at the top of the list.
I subsequently did a little research on Bhutan and Bhutan has some good things going for it.
In case you’re not up on your geography, it is a small, landlocked country in South Asia in the Eastern Himalayas, bordered by China, India and Tibet. It’s slightly larger than Maryland. It has a population of approximately 750,000, making it smaller when measured by that metric than Delaware.
Its government is a constitutional monarchy. Buddhism is the predominant religion.
Per capita income is $8,100, which is very good for that region. Twelve percent live below their poverty line compared to 15 percent here. That’s also good. On the not-so-good side we find these statistics: Life expectancy is 9.7 years less than that of United States citizens. The Bhutanese average 5 more children per 1,000 people than we. Thirty-four children per 1,000 are likely to die in infancy compared to six in the U.S.
Compared to its South Asia neighbors, Bhutan ranks first in economic freedom, ease of doing business and peace; second in per capita income; and is judged the least corrupt country in the region as of 2016 according to Wikipedia.
Bill reminded me of the “the pursuit of happiness” phrase in the Declaration of Independence, suggesting that in the 21st century we had failed our forefathers’ test. He listed a litany of problems we have in the United States and in Wilmington: excessive shootings and murders in Wilmington; poor national and local educational outcomes; middling health care; seemingly, intractable political views in Washington, both from the left and right.
I thought about his thesis for a few seconds as I continued to pedal.
With the thought of those millennials who don’t believe in capitalism, free markets or democracy ringing in my ears, I asked “Would you like to move to Bhutan?” He stared blankly ahead and after a few seconds gave me a non-answer.
I continued to pedal.
Bhutan is one of the “happiest” nations in the world. But would you move there?
One exchange led to another and then he said, “Remember President Obama said ‘If you’ve got a business, you didn’t build that. Somebody else made that happen.’”
That was my hot button. I was racing so fast Dale Earnhardt would have needed a lead foot just to try to keep up.
“Bill, I acknowledge all of us stand on the shoulders of those who came before; you and I had the good fortune to be born in the United States; we are the sum total of our heritage, experiences and the opportunities we have been afforded and taken. I could never have achieved what little I have without the assistance I was given by my parents, the education I was afforded, the financial assistance I received from Vanderbilt and Uncle Sam. But I, and I alone, took the risk to build my law office from those tiny two rooms. I was the one who took the risk to start AIL. Nobody else made those things happen. To coin a phrase, I was the one who ‘built that.’”
I reminded him of the Pethokoukis view of the American ethic and belief in the importance of entrepreneurial exceptionalism.
Offering a disapproving smile, he suggested that my entrepreneurial spirit wasn’t the reason for my success, but rather our society’s and government’s “collective benefits” were, coupled with my good fortune in being born here. They had been what he called the senior partners in each and every one of my successes, while I was merely their junior associate.
That was my Lexington-Concord moment.
“Were they also my partners when I failed?” I knew I’d brought him up short. He looked shocked. Then I told him the story of PIL, one he didn’t previously know. I spared him the story of Nicky’s Pub. “Free market capitalism gives all of us the right to succeed and also to fail. Can I recover the loss of money and time I invested in PIL from society or the government, my so-called senior partners?” He hesitated. Didn’t give me an answer.
And in that instant, I understood our difference. He’d focused on the end result while ignoring the risks which attend any undertaking in the competitive, free market world in which we find ourselves. Success might arise from the initiation of an enterprise, but so might failure.
Some believe in the power of the collective and ascribe to it the eternal flame of success and happiness. Others believe in the primacy of the individual, his or her spirit, and willingness to undertake new ventures. Me? I’ll take the system we have here in the U.S. For better, for worse. For richer, for poorer. For success, for failure. And on a Happiness Scale of 1 to 10, put me down as an 11 for what we have here.
I’ll end with this: Call me an optimist. I think those millennials will come around eventually.
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