Teaching Millennials Free Enterprise Is This Texas Billionaire’s Next Big Challenge

Photo courtesy of the McNair Group.

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Mark Tapscott Executive Editor, Chief of Investigative Group
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Houston billionaire Robert McNair is focusing on two daunting challenges these days, one that could be achieved within the next few weeks and another that may require a generation or more of sustained, concentrated effort.

McNair’s Houston Texans National Football League team heads into the playoffs this week after winning its second consecutive American Football Conference championship while compiling a 9-7 record for the regular season.

McNair is also hosting the NFL’s Super Bowl Feb. 5, at Houston’s NRG stadium, and his Texans have a solid shot at being one of the two teams taking the field that day for the ultimate football championship event’s 51st kickoff.

If the Dallas Cowboys of the NFL’s National Football Conference are the other team, the world could witness one of the greatest battles of football titans of all time. With or without the Cowboys, however, a Texans Super Bowl championship won on the McNair team’s home field would be a dream come true.

The ultimate outcome of McNair’s other challenge — creating among millennials a “new generation of entrepreneurial leaders” who understand the nation’s prosperity depends on individual free enterprise — is just getting off the launching pad, starting on a half dozen college campuses

The Robert and Janice McNair Foundation has launched Centers for Entrepreneurism and Free Enterprise at the University of South Carolina, Rice University, Columbia College, Northwood University, Houston Baptist University and the University of St. Thomas in Houston.

The goal is to educate legions of college students who, as things now stand on most campuses, aren’t getting the whole story about entrepreneurs and free enterprise.

“We don’t educate our students on finances and economics, and as a result they get most of their information from media in 20-second soundbites,” McNair told The Daily Caller News Foundation in a recent interview. “That leaves them with the impression that the government controls the economy and is the source of jobs.”

As a further consequence, McNair believes young people think that “if there is an issue that needs to be dealt with, it’s the government that should deal with it. I want them to understand that it is the private market that controls the economy and generates the value.”

Value is one of the words heard often in any conversation with McNair, whose net worth is estimated by Forbes at $3.5 billion, based on properties and investments in energy production, real estate, biotechnology and professional football. Adding value is always essential to an individual’s success, according to McNair.

“If you think about it, ask yourself the question ‘what added value does the government provide?’ There are a few areas that you could look around and say, like national security, because if each of us tried to do that ourselves, we couldn’t do it, so it adds value there,” McNair said.

“There are a few areas where government can add value, but in terms of prosperity, it doesn’t generate profits. Profit is the source of capital and capital is the seed for business,” he said. “If you want business to grow, you have to have more capital. The more profit a business is earning, the more capital it has to reinvest to expand the business.”

Enabling profit to spark capital formation and expand economic investment is one of two keys to fueling broadly-based prosperity, McNair believes. Most colleges and universities do too little to advance their students’ understanding of the process. Too often, they actively undermine such learning.

The second key is understanding the process of “risk and reward,” which “every investment boils down to,” according to McNair. “What’s the risk you’re taking and what’s the reward? Is the reward adequate to justify taking that level of risk?”

The illustration that came immediately to mind for McNair was employment.

“If you want businesses to hire more people, you do it either by reducing the risks when you hire someone while the reward remains the same, or you have to increase the reward to justify taking on the risks,” McNair explained.

He worries too many American millennials are taught that the European economic model is superior to the opportunity economics or entrepreneurial free enterprise of the U.S. He notes that job creation has been slow or stagnant in Europe for decades in great part because policies like lifetime employment guarantees prevent the risk and reward and profit and capital processes from functioning properly.

Growing U.S. employment requires “eliminating a lot of the regulations on businesses so they’re encouraged to go ahead and expand, instead of having 20 regulatory agencies they have to go to for approval to add to, say, a manufacturing facility,” McNair said.

Pro-football and teaching entrepreneurial success are very much linked in McNair’s view.

“When people ask what’s the importance of this, I say well, you know I have a football team. If my team doesn’t know the rules of the game, what chance of success would they have playing the game? It’s the same with the students,” he said.

“They’re going into the private sector and they need to know what the rules are. Some of them are very basic, like risks-and-rewards and profit and capital. Being competitive, providing the most value at the lowest cost you can.”

An April 2016 Harvard University survey of millennials shows what McNair is up against. Only 42 percent of the respondents support “capitalism,” while 51 percent oppose it. A third, 33 percent, support “socialism.”

But other surveys suggest American campuses may yet be fertile ground for the McNair centers. A 2014 Reason-Rupe Survey of millennials, for example, found 64 percent saying they prefer a free market over a government-run economy. The same percentage has a positive view of profit, 55 percent want to start their own business, 61 percent view hard work as a key to success and 70 percent approve of competition.

McNair said centers at two more schools, including a predominantly black campus, will be launched shortly.

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