It may seem odd to suggest that philosophy has anything to do with entrepreneurship. It is no surprise, like most people, an entrepreneur might find little value in studying philosophical ideas based on their limited exposure to philosophy. To many, philosophy conjures up images of Greek scholars in long robes proclaiming, as Plato did, that only they the philosopher kings are capable of interpreting the true nature of the world. One also hears of more contemporary philosophers debating ideas such as whether a tree falling in the woods makes a sound if there is no one there to hear it. If this is all philosophy was about most would rightly proclaim it has little value to anyone, let alone an entrepreneur. However, it does have value. Philosophy is not only of value to an entrepreneur but it is unavoidable. Understanding it is essential to success.
The two most important philosophical questions for an entrepreneur, or anyone, to ask themselves is, how do I know what you know and how do I know that it is true? How you answer those questions will determine how successfully you will make every decision, not only as an entrepreneur but in your life. Do you claim you know because someone in authority told you (Authoritarianism), because it just feels right (Emotionalism), because it worked the last time (Pragmatism)? Or do you claim nothing can be known for sure (Skepticism)? These are a few schools of philosophy which attempt to answer the questions how you know what you know, and how you know that it’s true. While commonplace in society today none of them are rational.
If these philosophies are not rational, one might well ask what value any philosophy could possibly offer to an entrepreneur. The simple answer is everything; because for man a philosophy is inescapable. Man’s primary means for survival, an entrepreneur’s primary means for achieving success, is the entrepreneur’s mind. Every human that has ever lived, every entrepreneur that has ever produced something of value did so by exercising their rational faculties to decide what actions are required in pursuit of what they value. All decisions are based on the underlying philosophical principles one holds and practices. For humans that is an inescapable reality.
“As a human being, you have no choice about the fact that you need a philosophy. Your only choice is whether you define your philosophy by a conscious, rational, disciplined process of thought and scrupulously logical deliberation….”
Ayn Rand
So the question isn’t whether an entrepreneur has a philosophy that guides their decisions and actions, it is whether that philosophy is a clear, concise, consistent, rational one, or whether it is a collection of ideas and notions gathered from public opinions and cultural norms. In short, is your philosophy one you inherited, or one you consciously chose? Possessing a philosophy you chose requires a lifetime of challenging all assertions and opinions you encounter based on reason to formulate that philosophy. It is the entrepreneur’s most powerful tool for achieving success. It does not come free or easy. Like anything of value it requires a lifetime of effort and diligence.
A secondary benefit to an entrepreneur of the study of philosophy in general is the ability to recognize the philosophical principles others possess. All people decide and act on their philosophical principles, whether they are aware of them or not. Assessing what those principles are provides an enormously powerful tool for predicting their actions in all the entrepreneur’s interactions with them. You will not need to ask why someone acts the way they do, but rather you will know they could not behave otherwise because of the principles they hold. This is a very powerful tool when dealing with others, whether they are customers, suppliers or employees. Is their thinking based on fact or feelings? Are they rational or irrational? Are their values aligned with yours or not? Do they operate by persuasion or coercion?
“If you know a man’s convictions, you can predict his actions. If you understand the dominant philosophy of a society, you can predict its course.”
Ayn Rand
While no one statement determines an individual’s philosophy, and while people hold mixed philosophies as well, the statements people make are often indicative of the philosophical principles they hold. Here are just a few examples indicative of alternative philosophies from statements you commonly hear people make.
“Worry about today. Tomorrow will take care of itself.” Pragmatism
“Nothing can be known for certain.” Skepticism
“We think of our employees as family.” Paternalism
“The purpose of business is to serve others.” Altruism
“We must all work to serve the common good.” Socialism
“From those according to their ability, to those according to their need.” Marxism
““We must strive for equality in all things.” Egalitarianism
“The needs of the many outweigh the needs of the few.” Collectivism
“Only government can solve big problems. “ Statism
“The best outcome for the most people is the best choice.” Utilitarianism
“We have hired a lobbyist to push through a subsidy for our industry.” Cronyism
“Everything is a matter of opinion.” Subjectivism
“Faith is a higher faculty than reason.” Postmodernism
“There is no free will.” Determinism
“All living things in nature are equal.” Biocentrism
“We must protect the planet from people.” Environmentalism
“Happiness is only possible in the afterlife.” Religion
“We are all bound by forces beyond our ability to measure.” Mysticism
“Life is a hopeless contradiction.” Nihilism
Most individuals possess one or more of these philosophies even if they are irrational and contradictory in themselves. Some of the fallacies of these philosophies and how they undermine an entrepreneur’s success will be discussed in other essays and lectures on this website. It will not be exhaustive. It takes a lifetime of study to recognize and understand them all. The point of this essay is demonstrating the value of recognizing them in others to guide your interactions with them.
But if a philosophy is essential and inescapable why is an Objectivism any better? Here, in contrast to the statements above, are one’s associated with Objectivism:
“Just the facts ma’am.” Metaphysics – Objective Reality
“Reason is man’s only absolute.” Epistemology – Reason
“I am responsible for my life.” Ethics – Individualism
“Government’s role is to protect the rights of individuals.” Capitalism
This is the essence of Objectivism, objective reality, reason, Individualism and Capitalism. The Objectivist answer to the two most important questions one can ask of them self, “how we know and how we know it’s true?”, as presented at the beginning of this essay can be briefly answered as follows. Because we exist in an objective reality, with reason our only absolute, we are able to know what we know and know it is true. Ayn Rand elaborated on why answering these questions is essential for success as follows:
“Since man is not omniscient or infallible, you have to discover what you can claim as knowledge and how to prove the validity of your conclusions. Does man acquire knowledge by a process of reason—or by sudden revelation from a supernatural power? Is reason a faculty that identifies and integrates the material provided by man’s senses—or is it fed by innate ideas, implanted in man’s mind before he was born? Is reason competent to perceive reality—or does man possess some other cognitive faculty which is superior to reason? Can man achieve certainty—or is he doomed to perpetual doubt? The extent of your self-confidence—and of your success—will be different, according to which set of answers you accept.”
Ayn Rand
The real power of an Objectivist philosophy when applied to a business situation is the ability to see through the clutter to the very heart of an issue and the principles at play, both within oneself and within others. With a clear understanding of their own rational principles the entrepreneur can guide their own decisions and actions as well as recognize the irrational principles that often guide other people they engage in business. Guided by a clear, concise, rational, consistent philosophy to aide their decisions and direct their actions an entrepreneur can avoid intellectual pitfalls, while rejecting those that would undermine their success.