by John C. Bogle, Founder, The Vanguard Group;
Chairman of the Board of Trustees, Blair Academy
Before the Alumni Association of The Shipley
May 5, 2000
I chose my title—"A Businessman-Philosopher Considers the New
Millenium"—a few months ago. But when I saw it printed on the invitation,
I was, well, completely intimidated. For in the interim I had read
a wonderful book entitled The Year 1000, describing what
life was like in England at the turn of the first millennium.
It was a world so far removed from how we live our lives today as
to cow any mortal fool in 2000 from opining on what lies ahead for
us in the next millennium.
The centerpiece of The Year 1000
is a document known as the Julius Work Calendar, laboriously written,
colored, and sketched around 1020. It describes people very much
like most of us, ordinary human beings cheerfully doing their daily
work, but in an environment vastly different from ours. Life was
primitive and simple, clothing sack-like and without buttons, and
labor entirely manual, although the heavy plow was revolutionizing
agriculture. Life was short; expectancy then in the 40s, the venerable
over 50. The church and the throne were the most powerful instruments
of English society, and the saints were the heroes and heroines
of that ancient age. For nearly all citizens, the only world they
would ever know lay within a few score miles.
Life in America in 2000 would have been
unimaginable to them, just as life in the year 3000 is unimaginable
to us. In 1000, had they a moment for reflection after their day’s
labors were done, most thoughtful citizens surely assumed that their
world would little change. They could not possibly have dreamed
of the upsurge that was to come in material wealth; or the remarkable
advances in education, science, medicine, transportation, communications,
agriculture, and manufacturing; of the advances in, well, everything.
Today, we who live in the United States of America—and
above all, we in this auditorium who have enjoyed lives privileged
by dint of birth, or luck, or grit—live in an era of extraordinary
abundance. Food, clothing, and shelter of incredible substance and
variety; comfortable transportation at our fingertips to go to the
store, the city, across this great nation or around the globe, and
in a matter of hours at that. Conveniences from the magnificent
to the trivial, entertainment in abundance, unlimited information
at our fingertips simply by pressing a computer key or two, health
care that gives us life expectancies, not in the 40s as in the first
millennium, but in the 80s . . . and lengthening.
Unlike our millennial predecessors, however,
we have no reason to expect life to continue as it is. We are truly
in a new era of technology and communication—call it The Information
Age—that is changing almost everything we do and how we do it. An
economy that was once local, then regional, then national, is now
truly global. "Where it will all end," using the TIME magazine literary
style, "knows God." So rather than trying to forecast the future,
I’d like to focus on the sources of this progress, some of the challenges
our society faces today, and, tentatively, some ideas for meeting
Education, Enlightenment, Democracy, Capitalism
The most important forces leading to the remarkable
development of the world during the past millennium, it seems to
me, have resulted from a combination of man’s education, enlightenment,
and determination to seek new frontiers, the rise of democratic
government, and the power of capital—human, financial, and corporate.
As it was essentially described in The Wealth of Nations
by that remarkable 18th Century Scot Adam Smith, capitalism
was the linkage of the invisible hand of competition, individualism,
and capital to create economic value. But to me, his preceding book,
The Theory of Moral Sentiments, was at least equally important,
for it is there that Smith argued, It is reason, principle, conscience,
the inhabitant of the breast, the man within, the great judge and
arbitrator of our conduct. . .who shows us the propriety of reining
in the greatest interests of our own for the greater interest of
others, the love of what is honorable and noble, of the dignity
of our own characters. For Adam Smith, the worldly philosopher,
the creation of wealth depended on the goodness of man.
I imagine that few other businessmen share my
perspective on Adam Smith. Indeed, it was not so long ago, really,
that President Calvin Coolidge famously said: "The chief business
of America is business." When he expressed that thought in
1928, it was during an environment very much like that we’ve enjoyed
in recent years, with the economy vibrant, the stock market booming,
and confidence—even greed—in the driver’s seat. But the unreconstructed
idealist who stands before you today would transpose that sentiment:
"The chief business of business is America." For if business—our
remarkable system of entrepreneurship, innovation, capital formation,
and financial markets—can properly claim considerable credit for
the creation of America’s extraordinary abundance, surely
it is business that must stand up and be counted in the resolution
of the challenges our society faces today.
For all of our nation’s success, we face
a litany of monumental problems that, left unattended, will sully
our role as the hope of the world. Consider the huge gap between
the rich—and compared to the median per capita income of $1,400
per year in the rest of the world, that’s us and just about every
one we know—and the poor, 34 million U.S. citizens living below
the poverty line. Consider crime. Yes, we read it’s way down, but
even with nearly two million citizens already in jail, we are building
137 new prison cells every day. Our imprisonment ratio—one in every
100 adults—ties us with Russia as the world’s highest. Hardly unrelated
to poverty and crime is the rampant use of drugs in our society,
a business approaching $100 billion in annual volume. Its most baneful
effects are not limited to the underprivileged. Drug abuse has probably
already touched—or one day will touch—every family in this room.
While these problems transcend race, we live
in a society in which our nation’s minorities are most heavily affected
by poverty, prison, and drugs. Racial inequality is America’s most
serious problem, and we have miles to go before we will have created
equal opportunity for all. Far too little effort is given to how
we will deal with these inter-related challenges. To begin the journey
we must reaffirm in practice the powerful words of Abraham Lincoln:
With malice toward none, with charity for all, with fairness
in the right as God gives us to see the right, let us strive to
finish the work we are in (and) bind up the nation’s wounds. . .
Our endangered environment—the food we eat,
the water we drink, the very air we breathe—is yet another challenge.
We in America are surely doing our share to cause the problem. With
4% of the earth’s population, we consume 26% of the world’s oil,
and send its residues spewing out into our air. While the case for
the existence of global warming may not quite be proven,
our creation of ever-less-efficient automobiles (technically, to
avoid the anti-pollution laws, light trucks) and the political outcry
for lower gas taxes simply fly in the face of common sense.
"Earth Day" is wonderful. But it is hardly enough. For in Theodore
Roosevelt’s timeless words: We must treat our natural resources
as assets which we must turn over to the next generation, increased
and not impaired in value.
One more challenge comes from America’s
global role. While America has become the policeman to the world,
I wonder whether a Pax Americana—any more than an earlier
Pax Brittania or an ancient Pax Romana—can long endure
in this era of rapid change. We also now confront new forces of
evil, terrorists with growing access to nuclear bombs and the dangerous
weapons of biological warfare who lurk around the globe and would
happily destroy everything we stand for. Our self-defense is essential,
but we cannot stint on the resources we must dedicate to mitigating
the obvious imperfections in our society. Our endurance as a nation
depends not only on our military strength, but on our living up
to our ideals of democratic freedom, individual liberty, and the
right of each one of us to "life, liberty and the pursuit of happiness."
We must be seen, not as a greedy global bully, but as a magnificent
city on a hill toward which the world looks, not merely for economic
strength, but for moral leadership.
Business: Bread and Circuses
In the face of all of these challenges,
however, the business of America today seems far too focused on
business—greed and the accumulation of personal wealth. Indeed,
our considerable excesses are all too reminiscent of the bread and
circuses that presaged the decline and fall of the Roman Empire
17 centuries ago. Here’s the way the head of one of America’s largest
entertainment and media companies looks at the corporation he leads:
We have no obligation to make history. We have no obligation
to make art. We have no obligation to make a statement. To make
money is our only objective. While his company’s stock hasn’t
done so well of late, he, of course, is doing fine, having banked
a total compensation of $673,645,000 during the past five years.
So much for bread, as it were. As for circuses, one need only observe
the stock market tumult on CNBC, or the garish eight-story NASDAQ
MarketSite Tower displaying stock prices in Times Square on the
world’s largest video screen, and wonder whether it isn’t casino
capitalism that is now astride the saddle and riding mankind.
Wouldn’t our nation be far better served if
American business turned its focus from bread and circuses toward
a broader view of its responsibilities? Yes, of course the issues
I’ve discussed seem intractable. Yes, we’re all too focused on doing
whatever we must do in our own daily busyness. But if business has
been the engine, and businessmen the beneficiaries of America’s
incredible worldly success, surely business and businessmen have
the duty to use some of their resources and their extraordinary
ability for innovation, organization, and reaching new frontiers
to help to build a better world. Such a commitment requires little
more than an enlightened sense of self-interest, a combination of
Adam Smith’s economic philosophy that fosters the wealth of nations
with his moral philosophy based on honor, dignity, and nobility.
American business must make America its business. What
profiteth a business if it gain the whole world yet lose its own
The Role of Education
If there is a single force that can build
a better America and, correlatively, a better world, we all know
what it is: Education. Education is the foundation of knowledge
and discovery, of morality and motivation. Yet American education
is far behind where it ought to be. Relative to other developed
nations, our ranking in mathematics and science and language is
no better than mediocre. Worse, we have an underclass of young American
citizens who, at tender age, are almost estopped from ever fulfilling
a productive role in society. Nearly 40% of fourth graders cannot
pass basic tests of reading ability. One of nine high school students
fails to graduate. One-third of our teenagers never enter college.
Yet we all know, more than ever in this new age of information,
that a well-educated populace is the very foundation of democracy.
And I speak not only of the universal education
sought by Adam Smith in The Wealth of Nations, education
in the applied mechanics of modern life, reading, writing, and arithmetic,
craftsmanship, and now computer literacy. Important, indeed essential
as they are, we need more than that. We need a populace with at
least a passing familiarity with history, philosophy, literature,
science, art; the entire panoply of the liberal arts. And citizenship,
values, and ethics too. For lacking moral purpose, even a liberal
education will fail to perpetuate the great values of our Founding
Fathers that led to the Declaration of Independence and the Constitution,
those instruments of scholarship, creative imagination, and moral
genius that have served our nation so well for more than two centuries.
How, you ask, are we to respond to this
huge challenge? There is only one truly American answer: Together.
Together, business, academia, the professions, government—we the
people—must work to build a more perfect Union, beginning with our
public school system. It will require more of our national treasure,
and business must do its share, committing its energy, its people,
and its capital. It is a wise investment, for given the linkage
between education, employment, drugs, and crime, the long-run cost
of not investing—the cost in lost productivity and in dealing
with social upheaval—will far exceed the cost of the commitment
to public education our nation clearly requires.
But we can’t leave all the problems to others,
so I remind you that "we the people" includes "we." Everything in
life begins with an individual action, and I will go to my reward
unshaken in my belief that even one person can make a difference.
We can begin by supporting the splendid private education that is
so close to us—here at Shipley and, if I may, at Blair Academy as
well—not only the best that money can buy, but, even more, an education
that communicates and reinforces a sense of moral commitment, social
virtue, and community responsibility—a compassionate participation
in the world. It is these ideals that will truly enable America
to live up to her heritage and remain the light of the world.
We must all do our part, not the least of
which is striving to develop in our youth the great values of America.
Today America cries out for enlightened moral leadership at all
levels, from the Presidency on down. Our greatest Presidents have
illuminated our values, strengthened our determination, and reinforced
our national character. The spirit of spirited Americans—Abraham
Lincoln, Woodrow Wilson, Theodore Roosevelt, Thomas Jefferson, Thomas
Paine—must continue to set our standard.
Back to Basics
While the world has changed radically in
1000 years, however, what we as parents and grandparents want from
our time on this earth has changed very little. Even as we want
our posterity—our children and our children’s children—to have healthy,
productive, fulfilling lives as good citizens of a great nation,
so too did a parent-poet-philosopher whose ancient words are quoted
at the end of The Year 1000. Entitled "The Fortunes of Men,"
his poem—a meditation on fate—first dealt with the beginning of
Often as again, through God’s grace,
Man and woman usher a child
Into the world and clothe him in
They cherish him, teach him as the
Until his young bones strengthen
and his legs lengthen.
Then the poet dealt with the hazards of life
that follow, as abundant then as now, if very different:
Hunger will devour one, storm dismast
The sword’s edge will shear the life
One will drop, lifeless from the
And he also dealt with the rewards of life,
stated in the terms of those now-forgotten days.
A young man’s ecstasy, strength in
Good fortune at dice, a devious mind
One will delight a gathering; one
settle beside a harp.
One will tame the arrogant wild bird,
The hawk on the fist, until the falcon
At the Lord’s feet, he hands his treasures.
Surely at this millennium, we have the same
sense of the world—an inner questioning along with the stoic spirit
of destiny that inspired men and women to keep on battling with
the realities of life—expressed in that poem from The Year 1000.
Hope, as Alexander Pope assured us, springs eternal.
Of course we have more today, more
information, more health, more wealth, more convenience. God knows
we have more things. But what we really need is the reinforcement
of our spirit and our moral values, more wisdom, more fortitude,
more good humor, grit, and philosophy, more common humanity toward
our fellow man. If I’m right about the challenges we face in America
and the world, we shall need this reinforcement. One hundred years
ago, Woodrow Wilson said, "a new age is before us, in which we must
lead the world . . . the spirit of the age will lift us to every
great enterprise, but the ancient spirit of sound learning must
also rule." And so it is this evening, as we enter this new millennium.
Note: The opinions expressed in this article do not necessarily represent the views of Vanguard's present management.
Return to Speeches in the Bogle
©2010 Bogle Financial Center. All Rights Reserved.