John Allison isn’t your typical bank executive. For one thing, when he retired at the end of last year as CEO of BB&T — a North Carolina–based bank with more than 1,500 branches managing $143 billion in assets — he had recently shepherded it through the worst banking crisis since the Great Depression, leaving it in fairly good shape. He’s certainly seen as a success where many others in his field have failed miserably as of late. But there’s another thing that makes Allison far from typical. When he discusses his profession, he doesn’t talk about numbers; he talks about values and principles. In fact, when you go on BB&T’s website, you will find a section entitled “Our Philosophy”:

In a rapidly changing and unpredictable world, individuals and organizations need a clear set of fundamental principles to guide their actions. At BB&T we know the content of our business will, and should, experience constant change. Change is necessary for progress. However, the context, our vision, mission and values, are unchanging because these principles are based on basic truths.

While a lot of financial companies indulge in such boilerplate because it sounds good in annual reports, Allison can credibly assert that living up to that philosophy is one reason BB&T has been able to ride out the current economic crisis. The company made tough decisions consistent with its philosophy, rather than chasing after the latest — and, it turned out, ephemeral — sources of financial innovation. “We didn’t do negative-amortization mortgages,” Allison told NRO, “and to the degree we’ve had more successes, I believe it’s because we’ve had a long-term integrated philosophy. We’re very much a principle-driven organization, and those principles we adhered to in the good times and the tough times are an example of the reason we didn’t do the negative-amortization mortgages.” Further, it’s worth noting that while troubled banks went looking for handouts, Allison slammed the government bank-bailout program. The fact that BB&T didn’t dive head-first into the shallow pool of subprime mortgages certainly goes a long way toward explaining the relative health of BB&T as an institution. But how was BB&T able to resist chasing after all that new mortgage money? The answer is simple: Subprime mortgages were bad for the people who took them out. That went against BB&T’s philosophy — not for reasons of altruism but because it would have been poor strategy. “We’re obviously a for-profit company, but we don’t think that it’s good business in the long term to do bad things to your clients, even if you make a profit doing it,” Allison said. “So we chose not to do negative-amortization mortgages because we knew it was going to get a lot of people in financial trouble.” In retrospect, the wisdom of this approach might seem obvious. However, Allison navigated through the overheated mortgage market and the ensuing banking crisis by relying, in large part, on a philosophy that many others are now turning to: “I got interested in [Ayn] Rand in the late 1960s. I read Capitalism: The Unknown Ideal. I had already been interested in economics, and as I finished college, I got interested in finance. I saw the banking system as central to a capitalist economy.” Rand’s seminal work, Atlas Shrugged, is currently #42 on the Amazon bestseller list in paperback and #135 in hardcover. That’s pretty remarkable for a novel that was first published 52 years ago. Allison calls it “the best defense of capitalism ever written” and made it required reading at BB&T. Since 2005 the BB&T charitable foundation has given millions of dollars to dozens of universities to establish academic programs devoted to Rand’s philosophy. These grants have not always been well received by the faculty. Last year a sociology professor at Marshall University objected to BB&T’s gift to the school. Rand’s Objectivist philosophy, the professor told NPR, “goes against the collective wisdom of the human race, I think, pretty much everywhere. I think it’s a curious interpretation of philanthropy to use corporate money to promote, really, an extreme philosophy.” Allison holds the exact opposite view. While aspects of Rand’s philosophy might legitimately be called controversial, Allison points out that she is misunderstood more often than not. Rand is often viewed as “extreme” because her defenses of capitalism and “rational self-interest” are seen as promoting greed and selfishness. Yet Allison is quick to note that the strong values and ethics that Rand’s philosophy promotes allowed BB&T to steer clear of shortsighted and greed-driven decisions. “A lot of people miss the fact that Rand has a very strong ethical system,” he observes. “Rand says you can derive ethics from reality. If anything, Rand is more rigorous in her ethical system than most codes are. If you’re dishonest, you are disconnected from reality, and that has consequences.”

However, simply because Rand doesn’t endorse altruism for altruism’s sake, many people misconstrue her to be amorally selfish. Rand “doesn’t view ethics as self-sacrificial,” Allison says, “she views ethics as a rational means to success and happiness. If you described her in principle, she would say that you shouldn’t take advantage of other people because that is unethical behavior and self-defeating. But you also shouldn’t self-sacrifice. What you really need to do is run your life in relationship to other people in context to what she calls the trader principle. The trader principle is about what I call creating win-win relationships. We trade value for value and we get better together, and we find these common grounds where we can get better together.” If that can be said to be BB&T’s guiding principle, the empirical evidence would suggest that the bank’s customers and shareholders are better off for it. In fact, it was misguided altruism that got us into the current financial crisis, and Allison has no problem identifying whose economic philosophy was flawed. “I think that government policy is the primary cause” of the financial crisis, he says. “Government policy set up the problems we have in the real-estate market, and it is the Big Kahuna in the room.” In fact, Allison has been traveling around the country giving an hour-long PowerPoint lecture to that effect. National Review Online interviewed him at George Mason University before one such presentation. In summoning evidence for his thesis, he speeds through a long list of economic-policy problems — everything from FDIC insurance to fair-value accounting standards to foreclosure laws and beyond. But he singles out the philosophy of government policymakers for special consideration. In particular, he relates the following anecdote about Rep. Barney Frank, chairman of the House Financial Services Committee, who had portrayed a lack of housing as the source of all evil: “I had an interesting conversation with Barney Frank — he’s the bad guy in my opinion because he’s a very smart guy. I said to Mr. Frank, ‘Housing’s a good thing, but if it’s so good as you describe without any kind of constraints, the next time someone commits a crime instead of putting them in jail, why don’t we give them a house?’” The crowd of college students erupted in laughter, and Allison went on: “You laugh, but he thought I was serious. It was scary.” Since Allison’s presentation at George Mason, Frank has been quoted suggesting that he wants to curtail economic freedom considerably and entrust more decisions to the government. “I would let adults smoke marijuana; I would let adults do a lot of things, if they choose,” Frank said. “But allowing them total freedom to take on economic obligations that spill over into the broader society? The individual is not the only one impacted here; when bad decisions get made in the economic sphere, it causes problems.” In view of statements like that from powerful politicians, it’s clear that capitalism really does need defending, and that’s why Rand’s perspective is suddenly so valuable. If you doubt that, just ask yourself one question: Who has emerged from the current crisis with a better economic track record — John Allison or Barney Frank?

– Mark Hemingway is an NRO staff reporter.