C&B Notes

“I Love Capitalism”

Ken Langone, who pulled together funding for a 1979 startup called Home Depot, shares his thoughts on the importance of capitalism in his aptly titled autobiography, “I Love Capitalism.”  In other news, here is what socialism currently looks like in Venezuela:

Ken Langone, 82, investor, philanthropist and founder of Home Depot, has written an autobiography that actually conveys the excitement of business — of starting an enterprise that creates a job that creates a family, of the joy of the deal and the place of imagination in the making of a career. Its hokey and ebullient name is “I Love Capitalism” which I think makes his stand clear.

Why did he write it? I asked him by phone. He wanted to show gratitude, to inspire the young — “If I can make it, everyone can!” — and he wanted young voters to understand socialism is not the way. “In 2016 I saw Bernie Sanders and the kids around him.  I thought: This is the antichrist!  We have the greatest engine in the world.”  The wealthy have an absolute obligation to help others: “Where would we be if people didn’t share their wealth?  I got 38 kids on Bucknell scholarships.  They’re all colors of the rainbow; some are poor kids, rough around the edges.  It’s capitalism!”  He famously funds NYU/Langone Medical Center.  He worries about the future of economic freedom and sees the selfishness of some of the successful as an impediment.  “Are there people who are greedy, who do nothing for anyone?  Yes.”  They should feel shame.  If the system goes down they’ll be part of the reason.  “But don’t throw the baby out with the bath water!”  Can capitalism win the future?  “Yes, but we have to be more emphatic and forthright about what it is and its benefits.  A rising tide does lift boats.”  Home Depot has changed lives.  “We have 400,000 people who work there, and we’ve never once paid anybody minimum wage.”  Three thousand employees “came to work for us fresh out of high school, didn’t go to college, pushing carts in the parking lot.  All 3,000 are multimillionaires.  Salary, stock, a stock savings plan.”

Mr. Langone came up in the middle of the 20th century — the golden age of American capitalism.  Does his example still pertain to the 21st?  Yes, he says emphatically: “The future is rich in opportunity.”  To see it, look for it.  For instance: “Look, people are living longer.  They’re living more vibrant lives, more productive.  This is an opportunity to accommodate the needs of older people.  Better products, cheaper prices — help them get what they need!”  Mr. Langone grew up in blue-collar Long Island, N.Y.  Neither parent finished high school.  His father was a plumber who was poor at business; his mother worked in the school cafeteria.  They lived paycheck to paycheck.  He was a lousy student but he had one big thing going for him: “I loved making money.”  He got his first job at 11 and often worked two at a time — paperboy, butcher-shop boy, caddie, lawn work, Bohack grocery clerk.  He didn’t mind: “I wanted to be rich.”  He got into Bucknell University when the registrar saw something in him despite his grades.  He scraped through, enjoyed economics class.  His mother prayed every day to St. Anthony, patron saint of lost things, that he’d find good sense and self-discipline.  He met a beautiful Long Island girl named Elaine, they married; he looked for work on Wall Street, found some after struggling, and went to New York University at night for a business degree from what’s now called the Langone Program.

By the spring of 1965 he was not yet 30 and earning $100,000 a year in commissions alone.  He loved mergers and acquisitions.  For his first initial public offering, he nailed down Ross Perot and EDS.  By his mid-30s he was Mr. Perot’s banker and quite full of himself.  Naturally his business soon wobbled, almost cratered, and righting the ship took years.  Then came Home Depot.  You’ll have to read the book to hear the story. Ross Perot decided not to invest.

 

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