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The Human Dimension of the Business Enterprise

R&L: Until the recent announcement of your retirement, you had worked at your family’s company for over fifty years. In light of this experience, how have you come to understand capitalism?

Michelin: Capitalism rests on an evaluation of the consequences of actions. One way or another, every action carries sanctions. For example, we are engaged in doing this interview together because we suppose—in all modesty—that we have a useful experience to communicate to people. The resulting work will be judged by the reader; its sanctions will come in the form of its success or failure.

The same principle is involved when we turn to the market. A business develops a product and makes an effort to find out whether this product has any bearing on the real needs of the customer. In effect, the ruling question is, “Does the shoe fit the customer’s foot?” The question is not, “Can we fit the customer’s foot to the shoe?”

If the shoe does, in fact, fit, the product enjoys good sales, and the business receives money in return. The instrument that measures customer satisfaction is money. The market is the place where the consequences of a capitalist action are borne out, whether they are positive or negative.

R&L: So the real character of capitalism is service.

Michelin: Yes. You need a tire. I need to pay both wages and my shareholders. The money I receive serves many purposes. If you look beyond the short term of human life, the act of exchange is a process that is fundamental for the producer and the buyer. The market economy is the only one that works, because it truly brings people into a relationship with one another.

Our factory does not make tires; it makes objects that can be of help in transporting people who need to travel as cheaply and safely as possible while taking into account the existing technological means. The day we forget that we are manufacturing things that are oriented toward service as their end is the day that we make a possibly fatal mistake.

And, personally, I prefer to speak of the “economy of responsible choice” rather than the market economy, for the market is simply the place where choices are made.

R&L: Could you expand on the phrase, “economy of responsible choice”?

Michelin: Human beings are the only self-teachable beings on the planet. In their hands they have the means to better themselves or to destroy themselves. In order to grow, they constantly have to weigh the consequences of their actions. Capitalism gives them this opportunity to be responsible.

The economic liberalism to which I subscribe establishes conditions of freedom that enable people to gather experience in circumstances that do not permit them to escape the resulting sanctions of their actions. It is the only system that leads to a betterment of the common good. “The common good is the set of means which are necessary to satisfy needs that are still unknown,” says Hayek, quite rightly. He adds that, at the heart of the market economy, every human being is in search of his happiness. This is the invisible hand. This vision of things is obviously diametrically opposed to the one espoused by the followers of philosophical liberalism, who reject any point of reference exterior to man.

R&L: How do you distinguish between economic and philosophical liberalism?

Michelin: A professor of history and geography once said to me, “Mr. Michelin, the terrible thing about capitalism is that it’s a natural phenomenon, not a creation of the spirit.” Note the logic of the phrase he uses: The terrible thing is that capitalism is a natural phenomenon! The rejection of any point of reference that is extrinsic to our own will, the rejection of any kind of judgment, a closing in on oneself and one’s own system of thought, a rejection of all transcendence—this is the very essence of philosophical liberalism. So one can do anything whatsoever without being subject to sanctions. And it degenerates rapidly with the usual results: dictatorship. Dictatorship consists of rejecting the rules of life in society in order to impose one’s own rules. It is a totally destructive system. In point of fact, however, the capacity for innovation and creation cannot find expression other than by reference to an objective “north star.”

When Pope John Paul II, for example, expresses his reservations about liberalism, he is attacking philosophical liberalism, not liberalism as the economists understand it. The two are utterly different. Philosophical liberalism rejects any kind of constraint and goes about refuting all notions of transcendence. The philosophical liberal thinks his navel is the center of the world. Instead of opening himself up to others, he closes in on himself like an oyster and considers himself God. Economic liberalism, on the other hand, is a system where people agree to live together in freedom and submit themselves to a common set of rules, which results in an economy based on the idea of contract—a social contract, as it were. In short, philosophical liberalism creates individuals who are closed in on themselves and contribute nothing to the community. Economic liberalism creates the conditions whereby individuals become persons who enter into relationships with others.

R&L: To your way of thinking, what is the relationship between Christianity and capitalism?

Michelin: To answer that question, we must first address the misunderstanding of capitalism propagated by Karl Marx. By artificially stressing the fundamental opposition between producers and consumers, between labor and capital, by arguing that one is stealing from the other, Marx completely overshadowed the human factor in the relationship, which binds men to one another by way of work and money. Thus he turned an act of service into grounds for conflict and stripped it of its meaning. This is what started state planning.

But, like a number of philosophers of his time, Marx mistook consequences for causes. He relates, for example, how struck he was when he noticed that financiers and industrialists always had the word capital on their lips. But what did he expect? The main concern of the captain of a ship is the hull of his boat, and that is what he talks about before he gets around to talking about the rest of the boat. If there is a hole in the hull, the boat sinks. Capital is, for business, what the hull of a ship is for the sailor. The essential role of the capitalist consists of constantly seeing to it that the hull of the ship allows business to sail as far as possible without ever taking on water.

R&L: You mention that the human factor of capitalism transcends the Marxist dialectic of producer and consumer and of labor and capital. How so?

Michelin: Why should there be a fight to the death between capital and labor? The two of them are as inseparable as the hand and the brain. Dialecticians are a pain, always on the lookout for division everywhere. Too much analysis kills life.

For example, one day, at the gate of the plant, I had the opportunity to enter into a discussion with a union representative who was handing out pamphlets. I have forgotten his name, but I do remember that he had very blue eyes.

After an exchange of views that lasted at least twenty minutes, I asked him, “As far as you’re concerned, is an employer a worker?”

He replied immediately, “No, because an employer doesn’t have worker’s status!”

To define a man according to whether he has a certain status—what a strange way to look at life! He justified his answer to me by maintaining that a worker takes orders, something that is obviously not the case when it comes to an employer.

At that point I explained, “When automobile manufacturers, for example, refuse to buy our tires, aren’t they in effect ordering me to make products that are less expensive and of a higher quality? When my quality-control department rejects a certain raw material as inadequate, isn’t this also the same as my being ordered to go out and buy a better quality product that is easier to work with?”

In the end, when all was said and done, it turned out I was a worker too.

R&L: What is your understanding of work?

Michelin: This question was once put to a little girl. She answered, “To work is to build.” What does it mean to build? To give yourself a target that you want to reach. It is finding materials to build a house—or producing tires. You think that you are building a family or a company. But, in the final analysis, it is yourself that you are building. In my own personal case, I believe I am working all the time. To work for a business is to always keep its objectives in mind, to assimilate anything that can help you clarify them, and to find the means to achieve them. It is also to ask yourself why things are the way they are. When you have properly understood the reason that things are what they are, you know how to make use of them. Reasoning by analogy is a marvelous tool. Quite often, different phenomena have something in common that connects them—an underlying, primary cause that allows you to understand a lot of things. You may merely be watching someone sweep the street, and you can be struck suddenly by an idea that will allow you to improve the machines that you use to make tires.

You know, the Bible says that it is the mission of craftsmen to complete creation. Isn’t this marvelous?

R&L: Do you think capitalism brings with it the threat of materialism?

Michelin: The industrial, scientific world has put us in a position where we realize that comfort, good tires, and a nice car are not enough to nurture our souls. There you have it! The ultimate goal of economic and scientific development is to show us that there is something that transcends us. Bluntly put, we have come to realize that we have everything and that we are nothing, because we lack what is essential. “Let the splendor of the world teach you that you have been created for much more than this,” I remember reading somewhere. As Saint Augustine says, “Our hearts are made for You, O Lord, and they are restless until they rest in thee.”

But there is something else behind the word capitalism. You have men and women, and they have their own responsibilities and autonomy, which need to be defended constantly against the invasion of the state and society. When certain financial aspects of capitalism are criticized, what is being attacked, in fact, are the means necessary for the freedom of persons. Once again, the fundamental question is whether man is a subject or an object, whether society is for man or man for society, and whether we should opt for liberal capitalism or collectivism.

R&L: You mention the crucial importance of freedom. To your way of thinking, what is the relationship between freedom and morality?

Michelin: To live together, people need to respect each other. Freedom presupposes ethics, a morality—that is to say, a set of instructions that allows a definition of the code of behavior that should be adopted toward other people and with regard to oneself. You should not do to others what you would not want done to yourself. For this, you have to begin by arriving at an understanding of who you are. What is man? John Paul II says that man is the only being in creation whom God wanted for himself. The human being is unique. This is a marvelous thing, when you think of it.