The Moral Basis of Capitalism - Dr Paul Prentice

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The Moral Basis ofCapitalism

The Centennial Institute

Colorado Christian UniversityLakewood, COJuly 17, 2009

(First presented at Summit Ministries

Worldview ConferenceColorado Springs, CO

March 4, 2009)

Paul T. Prentice, [email protected]

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Basic References

The content presented here represents thereading and study of hundreds of books,over the course of thousands of hours.There is nothing original. These four booksmake a good start:

1) Michael Novak, On Two Wings: HumbleFaith and Common Sense at America’s

Founding.

2) W. Cleon Skousen, The Five-Thousand YearLeap.

3) F.A. Hayek, The Road to Serfdom.

4) Ayn Rand, Capitalism: The Unknown Ideal.

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Capitalism is the EconomicDimension of Liberty

Economics: The use of scarceresources, that have alternativeuses, to achieve goals.

Liberty: Freedom tempered byresponsibility to a moral code.

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Capitalism is a Philosophy

(must have three distinct

components)

Philosophy(love of truth

or knowledge)

Ethics(moral code)

Metaphysics(nature of reality)

Epistemology(method for

discovering truth)

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Capitalist Ethics

"Every man, as long as he does notviolate the laws of justice, is leftperfectly free to pursue his own

interest his own way, and to bringboth his industry and capital intocompetition with those of any otherman or order of men." - Adam

Smith

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The Capitalist “Golden Rule”

"The only freedom deserving the name, isthat of pursuing our own good in our ownway, so long as we do not attempt todeprive others of theirs, or impede theirefforts to obtain it. – John Stuart Mill

Grounded in Judeo-Christian ethics, “Youshall love your neighbor as yourself”.(Gal 5:14; Lev 19:18)

Golden Rule: “Do unto others …” Ethics of Reciprocity found in 21 of 23 worldphilosophies. (Matt 7:12; Luke 6:31)

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Contrast with Socialist Ethics

“From each according to his ability;to each according to his need.” -Karl Marx

" Society's needs come before theindividual's needs." - Adolf Hitler

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Capitalist Metaphysics

Reality is objective, not subjective.

There exists absolute truth.

Man‟s nature is fixed, rooted inenlightened self-interest.

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Socialist Metaphysics

Reality is subjective.

It is what the State says it is.

Ex: Stalin‟s first census.Man‟s nature is fungible – we can

create “New Soviet Man” free of 

self-interest.

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Capitalist Epistemology

The rational mind.

Logic

DataScience.

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Socialist Epistemology

Reality is perceived not throughlogic, but through emotion.

Determined by feelings.

Ask a leftist what they think aboutsomething and they will inevitablyreply, “I feel that …” 

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America’s Founders Intended a

Free Market Economy

“I think all the world would gain bysetting commerce at perfect liberty.” 

- Thomas Jefferson

“I own myself the friend to a veryfree system of commerce, and hold it

as a truth, that commercial shacklesare generally unjust, oppressive and

impolitic…

”  - James Madison

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Jefferson’s Declaration of 

Independence

“We hold these truths to be self-evident, that all men are createdequal, that they are endowed by

their Creator with certain unalienableRights, that among these are Life,Liberty, and Property.” (early draft;

based on John Locke‟s writings 100years earlier)

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What is “Property”?

Our stuff (homes, cars, land, jewelry…).

Our financials (savings, stocks, bonds, …).

The fruits of our labors (income).

Intellectual property (ideas, hopes,dreams, …).

Property is our very humanity itself.

Every man has a property in his ownperson.” – John Locke

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“I Produce, Therefore I Am”

 “… in her natural right to eat the bread she earnswith her own hands without taking leave of anyone else, she is my equal, and the equal of allothers.” - Abraham Lincoln

" Property is surely a right of mankind as real asliberty … Property must be secured, or libertycannot exist." - John Adams

Contrast to: “The theory of the Communists maybe summed up in the single sentence: Abolition

of private property.”: - Karl Marx (TheCommunist Manifesto)

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The Two Wings of Liberty

Faith and ReasonAbout 3,000 years ago the threads of 

two distinct civilizations met, clashedand began to intertwine.

Classical Greco-Roman (law, logic,science).

Biblical Judeo-Christian (faith, ethics,morality)

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“Liberty” and “Property”

“… proclaim liberty throughout theland to all its inhabitants; it shall bea jubilee for you, when each of you

shall return to his property and eachof you shall return to his family.” -Leviticus, 25:10

The phrase from Leviticus, “Proclaimliberty throughout the land.” isinscribed on America‟s Liberty Bell.

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The Individual

The idea that a created individual has freewill is a distinctly Judeo-Christian concept.

The concept of individual liberty beginswith free will in the Garden of Eden, where

Adam and Ever were “free to choose”. “No man is free who cannot command

himself.” – Pythagoras (550 BC) “Freedom is the right to live as we wish …

God has entrusted me with myself.” –Epictetus, Roman slave and Greek Stoicphilosopher (100 AD)

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The Long Road to WesternCivilization

As these two paths intertwined, the intersectionof law and logic with Biblical morality graduallyled to a deeper concept of the sanctity of thecreated individual.

Aristotle (350 BC) Cicero (50 BC)

Jesus of Nazareth (0 BC)

St. Augustine (400 AD).

St. Thomas Aquinas (1250 AD). Magna Carta (1200 AD; rights of Englishmen)

Lutheran Reformation (1500 AD).

John Locke‟s “Life, Liberty, Property” (1650 AD)

Thomas Jefferson‟s “Declaration” (1776 AD)

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God is the Sourceof Our Natural Rights

"A free people claim their rights as derived fromthe laws of nature, and not as the gift of theirchief magistrate.“ - Thomas Jefferson

“You have rights antecedent to all earthlygovernments…rights derived from the GreatLegislator of the universe.” – John Adams

“The sacred rights of mankind … are written, aswith a sun beam, in the whole volume of humannature, by the hand of the divinity itself .” – Alexander Hamilton

"The rights of man come not from the generosityof the state but from the hand of God.” - John F.Kennedy

Ad S ith

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Adam Smith

“Wealth of Nations” (1776)

Specialization, Production, and Trade “It is a maxim of every prudent master of 

a family, never to attempt to make athome what it will cost him more to makethan to buy... All of them find it for theirinterest to employ their whole industry ina way in which they have some advantage

over their neighbors, and to purchase witha part of its produce, or what is the samething, with the price of part of it, whateverelse they have occasion for.” – Adam

Smith

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Capitalism is based on voluntary(non-coerced) trade

“Man has almost constant occasion for thehelp of his brethren, and it is vain for himto expect it from their benevolence only.He will be more likely to prevail if he can

interest their self-love in his favor, andshow them that it is for their ownadvantage to do for him what he requiresof them … It is not from the benevolenceof the butcher, the brewer, or the baker

that we expect our dinner, but from theirregard to their own interest.” – AdamSmith

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“Enlightened” Self -Interest

“Every individual … neither intends topromote the public interest, norknows how much he is promoting it

… He intends only his own gain, andhe is in this, as in many other cases,led by an invisible hand to promote

an end which was no part of hisintention.” – Adam Smith

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Capitalist Public Policy“Take your hand out of my pocket

and leave me alone.” “Little else is requisite to carry a state to

the highest degrees of opulence from thelowest barbarism, but peace, easytaxes, and tolerable administration of  justice. … The natural effort of everyindividual to better his own condition,when suffered to exert itself with freedom

and security is so powerful a principle thatit is alone, and without any assistance …capable of carrying on the society towealth and prosperity…” - Adam Smith

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John Adams’ Ten Commandments

Argument for Property Rights

 “The moment the idea is admittedinto society that property is not as

sacred as the laws of God … anarchyand tyranny commence. If „Thoushalt not covet‟ and „Thou shaltnot steal‟ were not commandments

of Heaven, they must be madeinviolable precepts in every societybefore it can be civilized or madefree.” - John Adams

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President ReaganConnected to America’s Founding

Principle: Limited Government

"Man is not free unless government

is limited ... As government expands,liberty contracts." - Ronald Reagan

"Remember that every government

service, every offer of governmentfinanced security, is paid for in theloss of personal freedom."- Ronald Reagan

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Economic Liberty and PoliticalLiberty Cannot be Separated

"In the general course of human nature, Apower over a man's subsistence amounts

to a power over his will.“ - AlexanderHamilton

"To be controlled in our economic pursuitsmeans to be controlled in everything." –

F.A. von Hayek

 “To control the economy, you must controlthe people.” – Ronald Reagan

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Where Goes America?

"The American people will never knowingly adoptSocialism. But under the name of 'liberalism' theywill adopt every fragment of the Socialistprogram, until one day America will be a Socialist

nation, without knowing how it happened." --Norman Thomas (six-time U.S. Presidentialcandidate for the Socialist Party of America)

 “We cannot expect the Americans to jump fromcapitalism to Communism, but we can assist their

elected leaders in giving Americans small dosesof socialism until they suddenly awake to findthey have Communism.” - Nikita Khrushchev(1959)

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Even Atheists Can Be Prophets

"When you see that trading is done, not byconsent, but by compulsion - when you see thatin order to produce, you need to obtainpermission from men who produce nothing -when you see that money is flowing to those who

deal, not in goods, but in favors - when you seethat men get richer by graft and by pull than bywork, and your laws don't protect you againstthem, but protect them against you - when yousee corruption being rewarded and honestybecoming a self-sacrifice - you may know thatyour society is doomed." - Ayn Rand (1905-1982) Source: Atlas Shrugged, Francisco's"Money Speech"

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“Nothing New Under the Sun”

(Ecc 1:19)

" The budget should be balanced, theTreasury should be refilled, publicdebt should be reduced, the

arrogance of officialdom should betempered and controlled, and theassistance to foreign lands should becurtailed, lest Rome become

bankrupt. People must again learn towork, instead of living on publicassistance." - Cicero

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Back to the Future?

“If ye love wealth greater than liberty, thetranquility of servitude greater than theanimating contest for freedom … Crouchdown and lick the hand that feeds you;

and may posterity forget that ye were ourcountrymen.” – Samuel Adams “Is life so dear, or peace so sweet, as to

be purchased at the price of chains andslavery? Forbid it, Almighty God! I knownot what course others may take; but asfor me, give me liberty or give me death!” – Patrick Henry

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Final Thought

"The duel between Christianity andatheism is the most important in theworld...(and) the struggle between

individualism and collectivism is thesame struggle reproduced onanother level.“ - William F.

Buckley, Jr. (God and Man at Yale,1951)