Liberty and Its Shadow – Capitalism   1 comment

I came to Christ as an individual. Mom and Dad weren’t rooting for me. My best friend couldn’t drag me. I stood before Christ alone, having no antecedents and am now acutely aware that God has no grandchildren. I can share my faith with my children, but I can’t make them believe; even though both say they do, they have to decide for themselves what THEIR faith is going to look like.

Image result for image liberty with capitalism as a shadowLiberty and its shadow, capitalism, did not emerge in a vacuum. They developed from the religious revolution of the 16th century which led eventually to the separation of church and state, and freedom of worship. That singular concept that salvation is individual and that individuals can decide their religious affiliation for themselves led to the recognition of other liberties. Free speech and freedom of the press were examples of this liberat­ing movement. Seeing these successes, men like Adam Smith and Edmund Burke began to suggest that economic activity could also be free, guided by the individuals who engaged in it rather than strangled by political regulations and controls as mercantilism had done.

Consumers make a million of daily decisions in the market place, choosing to buy this or not buy something else and this projects a pattern that signals to entrepreneurs how they should direct production within their businesses. In the free economy the consumers is sovereign. An inventor can really be proud of his product, but if consumers aren’t interested, he won’t be able to sell it to us. Businesses have no power over consumer except the ability to persuade and the quality of their products. That’s how the free market economy works and, like it or not, it is an integral part of a free society.

Most Americans believe they embrace freedom. We’ll tell you we want the State and churches to be separate. The press should not be censored. We object when we’re told what we can and cannot say, on the street, in our homes, or on social media. We’re in favor of freedom … except …

Except, business people are evil, so we want the government to control and regulate business, to protect the consumer from the wolves in trade and industry. Sometimes that ire is directed at big corporations and sometimes it is more generally spread to include anyone who thinks making a profit is a good idea.

To quote President Barack Obama, “Sometimes you’ve made enough profit.”

 

There’s a truth hidden here. Human beings are flawed. The sins we accuse business people of are the same sins you find in every walk of life. There are wicked businesspeople, but there are also wicked ministers, professors, publishers, and entertainers. Sometimes that television commentator is lying to you for his or her own benefit, to promote her preferred agenda. Yet, we still object to the censoring of the press, government interference in the churches, things like the Hayes Commission to control the movie industry. Why do we single out business people for special sanction to “protect the consumer”? You might ask – Why not? Because as we saddle them with ever more bureaucratic regulations and controls, this creates adverse economic consequences, adding to the cost of doing business, which makes all of us poorer. Worse, when economic activity is not free, every other freedom is jeopardized.

 

Human liberty is more fragile than we suppose. Economics won’t win or even sustain liberty, but when you control the economic life of a people, you control every other aspect of their lives as well.

Thirty years ago, we knew this because we could peek behind the Iron Curtain and see the condition of people who had no economic freedom, but we’ve lost that cautionary example and so it’s easy for groups like Occupy Wallstreet or both major-party candidates for President to demand income redistribution. The economy isn’t the only sector under stress in our society. Really, all of western civilization has been under attack for several generations. Just because the Iron Curtain fell doesn’t mean the attack against business is over. There’s a reason the American middle-class, the epitome of the bourgeoisie, has been shrinking for 30 years and we can look no further than the economic regulations that strangle our economy.

 

For those who failed to take European history … brief lesson here. The bourgeoisie were and are the middle class—townspeople engaged in indus­try and trade. They arose from the peasant class, but were not the nobility, whose values were quite different. While we don’t often live next door to the “nobility” these days, especially in American, it’s important to understand their values because they still exist today. Those nobody hereabouts holds title these days, the values of the nobility have been glowingly enshrined in romance and myth.

The nobleman has cour­age, spends without counting, de­spises petty detail. There is a great air of freedom and unselfishness about the nobleman. He will throw his life away for a cause, not calcu­late the returns. That is the noble idea. In reality, he lives by the serf­dom of others, and he broadens his acres by killing, and taking other people’s land-’the good old rule, the simple plan. That they should take who have the power, and they should keep who can.    … The bourgeoisie opposed such noble free-handedness and supported a king who would replace ‘the good old rule’ by one less damaging to trade and manufacture—and to the peas­ants’ crops. But the regrettable truth is that there is no glamour about trade. Trade requires regular­ity, security, efficiency, an exact quid pro quo, and an exasperating attention to detail … There is nothing spontaneous, generous or large-minded about it. Man’s native love of drama rebels against a scheme of life so plodding and re­sents the rewards of qualities so niggling. …

What a convenient word is bourgeois! How expressive and well-shaped for the mouth to utter scorn. And how flexi­ble in its application—it is another wonderful French invention!        Jacques Barzun

 

The free enterprise system (capitalism) works for the middle class (bourgeois). The nobility has no use for industry and trade. It’s too much hard work and it tends to dirty the hands without providing any glamour. Most of the world’s work today is done by those who have risen from the ranks, largely by their own efforts, in societies which have no rigid caste barriers to prevent upward mobility.

 

We’re told that freedom is something we should all care about, but when we see any particular freedom threatened, everyone does not take an interest. Christians defend freedom of worship. Journalists band together when the freedom of the press is threatened. Watch what teachers do when academic freedom is challenged. When government controls threaten freedom of economic enterprise, busi­ness people and business organizations mobilize to resist the attack.

Uh, not really.

Perhaps the most striking feature of the picture is the extent to which the bourgeoisie, besides educating its own enemies, allows itself in turn to be educated by them. It absorbs the slogans of current radicalism and seems quite willing to undergo a process of conversion to a creed hos­tile to its very existence … This is verified by the very characteristic manner in which particular capital­ist interests and the bourgeoisie as a whole behave when facing direct at­tack. They talk and plead—or hire people to do it for them; they snatch at every chance of compromise; they are ever ready to give in; they never put up a fight under the flag of their own ideals and interests—in this country there was no real resistance anywhere against the imposition of crushing financial burdens during the last decade or against labor legislation incompatible with the ef­fective management of industry.  Joseph Schumpeter

In a perfect world, we’d all defend liberty even when our own isn’t treatened, but in real life, that’s not how things are done.  It’s partly the fault of myriad business people of the past that freedom of the economy is gravely threatened today. When threatened with government regulation, many larger companies compromised with the regulators to create regulations that would favor them rather than their smaller, more efficient competitors. You can’t really blame them. They worried about the short-term consequences of falling sales and how to meet the next payroll and failed to see the long-term consequences of what they were entangling not just themselves, but everyone else in.

The American econ­omy has never been wholly free, instead operating under various political restraints pretty much since Alexander Hamilton got his greedy, manipulative hands on it. Compared to the politically planned economies of other nations ours was relatively free economy until the 1930s and has maintained quite a lot of freedom until relatively recently.

The prosperity US citizens have gained through producing and exchanging in a largely free country has been the envy of the world. Remember, we started out poor. There was little per capita wealth 240 years ago; but our forebears had an abundant faith in the nation’s future under God, a strong belief in themselves, and they practiced the Puritan work ethic. The United States became the land of opportu­nity. Millions of the poor and oppressed of other nations migrated here to make their own way in this “land of the free.” Mostly, they succeeded. Never have so many ad­vanced so far out of poverty in so short a time, as in the last 240 years in the United States.

The relatively free economy we have enjoyed in America has given us unparalleled prosperity, but an affluent society is not neces­sarily a just society, which brings us to the second test of evaluating a free enterprise system: Does it allocate the rewards fairly and equitably?

In a free society every one of us is rewarded according to the value willing buyers attach to the goods and services he offers in exchange. This market place assessment is made by consumers … uh, people, and people are self-centered, biased and ignorant. So, allowing consumers to set the value of people’s contribution to society might not seem like a good idea.

What’s your alternative? Well, before there was capitalism and the free market economy, there was the nobility who acted as the wise and good, judging and awarding on their estimation of personal merit. They assured us that the wealthy deserved their wealth and that the paupers deserved their starvation. They insisted we should all be contented and happy and pay our taxes to them so they could go on judging and rewarding by their own value system. We rejected that system for a better one.

Is it fair that some people make 25,000, while others make only 15,000 and then you have folks who make millions? Don’t we have a lopsided society in which a handful of people have accumulated the bulk of wealth? Shouldn’t be people be able to vote on politicians, who can appoint bureaucrats, who can redistribute the wealth equitably? What makes you think that someone who used to be your neighbor just became Solomon when elected to public office? You would prefer to elect imperfect people to decide how much you earn rather than let imperfect people earn that position by being successful in business?

We do live in an affluent society, and the fact is that the prosperity generated by our relatively free in­stitutions has been widely shared by the American people. Yes, there are rich people and there are middle class people and there are some who remain poor … although even the poor in our country live far more affluent lives than anything my great-grandfather Elmer (a rich man in 1900) could have imagined. The allocation of rewards represents the choices people make … the education they sought, jobs they took, the money they spent, and the investments they made. It’s said that 1% of the population owns 80% of the wealthy, that 10% owns 90%, etc. We could argue about that statistics. But take a look at reality.

Sixty percent of Americans own their own home and 95 percent own a car. I know a few dozen people who don’t have running water, but I live in Alaska and that’s actually a lifestyle CHOICE. Even people out in the Alaska village have electric refrigerators. Eighty-four percent of American homes have a washer and dryer. Eight-four percent of American homes have a computer, and 73 percent have broadband connection.

Capitalism (the free economy) has produced material abundance, and the benefits of our prosperity are enjoyed by almost every American and we’ve exported a great deal of it to millions of people around the globe.

There is no concentration of ownership of everyday things like houses, automobiles and food. It’s when we look at all the money the “rich” have that we allow ourselves to believe that the industry of this country is owned by a handful of stockholders.

Pick any one of the giant corpora­tions and examine its annual report. You’ll find thousands or even millions of people own stock shares, usually exponentially more than the employees of that corporation. Note the large number of stock­holders who are not individuals but institutions. Those fund churches, banks, pension funds. Nearly every American owns a chunk of the corporate wealth of America!

Yes, there are some phenomenally wealth people in this country. Some of them are foolish with their money, but so are a lot of poor people. Others invest their wealth, which helps to produce the incredible variety of goods America enjoys. Others, and sometimes the same individuals, give generously to charity. Americans lead the world in their charitable giving. No other soci­ety has ever allocated its rewards as generously or as equitably.

Our present economic system of free enterprise has made us an affluent society produc­ing over and above our own needs, which we have gener­ously shared with the world. Every person who has participated in the production of goods and ser­vices shares equitably in the fruits of his production. Even those who do not participate live pretty decent lives … far better than what people a century ago lived.

Ultimately, liberty is based on an aspiration deeply rooted in human nature. We all want the freedom to choose. We want to be free to worship in the church of our choice, to choose our own schools, to read freely and speak our minds. We want to be free to be ourselves, even if others don’t agree, so long as we are not harming others. We want to be free to choose our profession or place of employment. We want solitude when we choose to be alone, and we want the freedom to choose our associates—which includes the right to dissociate. These are some of the demands of human nature itself. God made us this way or it’s in our DNA.

“The God who gave us life gave us liberty at the same time.” Thomas Jefferson

 

The free society is our natural habitat. It aligns with human nature. Freedom also works in our economic sector, which is why the market economy (capitalism) works so well. The economy is free when the productive activities of people re­spond to the needs of consumers, discovered through people’s buying habits. Yes, when people are free to spend their money as they please, they may spend it foolishly. They’ll make mistakes. Most of us learn from those errors and succeed in not repeating them.

The biggest mistake of all is to persuade ourselves that we can avoid the little mistakes people make in a free society by adopting a planned economy. A centrally planned nation is necessarily a command society. Individual per­sons are no longer free to make their own decisions. Our private plans must be cancelled whenever they conflict with the overall political plan.We become nothing more than serfs, doing as the landlord dictates.

Economic freedom does not assure you’ll get the income you think you deserve, or the job you believe you’re entitled to. Economic freedom does not dispense with the necessity for work. It only promises that you may choose from among many employment oppor­tunities, or go into business for yourself. And that it outperforms all other economic systems is a bonus point in its favor.

 

 

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