Last week we discussed the physical and spiritual needs of man. We saw that with God as the primary inspiration needed to achieve these needs, we can exercise the ‘mainspring of action’ which is the driving force to attain these needs. Many economic systems which men have invented tend to smother or ignore these needs. To that same extent these systems are bound to smother man’s greatest source of motivating power…the anxiety to satisfy these deep, throbbing human goals God established for man.
The Communist leaders have suppressed the natural desires of their people and have tried to motivate them into action through fear. This has not worked primarily because fear is a depressant instead of a stimulant. ‘Work through fear’ can never compete successfully with the tantalizing opportunity provided by capitalism to constantly satisfy natural human needs. Therefore, providence has endowed each human being with a built-in reactor against speed which serves to prevent or discourage over-indulgence. It is called ‘inertia’. As each person feels an inward desire to satisfy some physical need, he/she feels the strong gravitational pull of laziness or inertia. Thereby we find an important principle of economics: ‘Man ever tends to satisfy his wants with the least possible exertion.’ Capitalism gives full vent to this principle by encouraging men to continually seek cheaper sources of power and to try to develop more efficient machines to do the world’s work instead of using human and animal muscle. Even as late as 1900 over 50 percent of US power was provided by animals and men. A half century later under capitalism this same man/animal combination supplies only 2 percent of the power. No other system has been able to compete with capitalism to promote this technological development as rapidly. Mechanization on American farms came about through economic necessity while mechanization on socialized farms is looked upon as desirable, but not particularly necessary.
The genius of capitalism is not merely that it satisfies the desires and needs of mankind generally, but it responds to the factor of variation as between individuals. It allows each man to do anything he wishes so long as he/she can survive at it. Laborers are not conscripted nor told they cannot strike; nor are they ordered to remain in certain occupations as tends to be the case in socialized and communized countries. A study of human nature reveals that ‘value’ is psychological rather than real. Whether a thing is ‘worth’ a certain amount depends entirely on the mental value attached to it…’One man’s trash is another man’s treasure’. This is a strong contributing factor to the success of capitalistic free enterprise. It allows everyone to win, either by making a profit or by improving his/her position as the result of an honest transaction.
Capitalism thrives best in a free economy, but freedom is a much-misunderstood subject. For example, there is no such thing as total, unrestricted freedom. Freedom means simply a chance to choose. Once a choice is made, a person is not free to avoid the consequences of that choice. Freedom is always restricted to some specific choice and freedom is always restricted to choosing one direction at a time. A free economy requires a continuous education of its people so that they will exercise their ‘freedom to choose’ in such a way that it will sustain sound moral principles and build a dynamic economy with a strong social structure to preserve it. The people must sense what is best for both the individual and the community. They must be well informed. They must know enough about each problem so they can anticipate what the result will be when they have made their choice. There are many notable examples in both modern and ancient history to illustrate what happens when people are only casually concerned with their right to make a choice or exercise their freedom. Free peoples require alert, aggressive leadership and a socially and politically conscious citizenry. Sometimes the streak of natural laziness in people makes them wish that a commission, a dictator, or a king would make all the decisions and force the people to do what is good for them. This is the road to ruin for a free economy. The people must retain the sovereign right to choose, for that is all freedom is.
So now let us look at the four great freedoms which must always exist in a truly free economy:
> Freedom to try. One of the most essential ingredients in a healthy economy is the freedom to try. In a free country a man/woman can develop a new kind of shorthand, a different kind of screwdriver, a new breed of cattle, or an improved type of mousetrap. When he/she is through, no one may wish to buy the new product or service, but at least he/she is free to invent it and try to sell it if he/she can. This is an indispensable characteristic of capitalism…the freedom to try.
> Freedom to sell. If men/women are to be left free to try their skill and inventive genius, they must also be protected in their freedom to sell their product for a profit. This is one of the keys to success in a free enterprise economy. It must not be curbed except in the case of products or procedures which involve an immoral or criminal aspect, such as narcotics, pornographic literature, quack medicines, fake stocks, and so forth. This means also that a competitor must exert his/her faculties to produce more efficiently to reduce his/her price, or improve the quality of his/her product, so the public will pay the difference to get it. In either case, the public benefits, and newly improved forms of material wealth are created for the use of the public simply because two or more companies are competing briskly in order to survive.
> Freedom to buy. The public must certainly enjoy the freedom to buy. One of the most fatal restrictions on a dynamic capitalistic economy is rationing or governmental control of commerce so that people are told what they can buy, in what quantity, where, and at what price. These artificial devices so completely sabotage capitalism that prices get out of phase, black markets develop, and many human needs are neglected. However, there is a consideration to be made in a free market economy. Drugs have come on the market that are dangerous, even deadly. There must be some control to protect the public, especially youth who unknowingly experiment sometimes with deadly results. Then we have a relatively new form of market that must be controlled…pornography. Many a life has been destroyed by this industry so an authority must intervene to protect innocent victims. The freedom to buy has become a very difficult freedom to exercise while trying to maintain the welfare of the nation.
> Freedom to fail. Here we come to the freedom which harbors in its bosom the golden secret of all successful capitalist economies. This is the freedom to fail. Every businessman who wishes to survive must do a lot of long-term research as well as make continuous study of his current operation. Services must be continually improved, waste must be eliminated, and efficiency in operations must be constantly pushed. All this is simply to keep the individual or company from failing. In a dynamic capitalist economy, the very fact that a person or company will be allowed to fail is the very thing which spurs the individual or company to succeed.
So how is it that some have tried to place a bad reputation on the system called ‘capitalism’? It was Marx’s dream to produce everything in such overwhelming abundance and distribute goods so freely that no one would need to buy and therefore no one would be able to sell. It was found, however, that socialism and Communism stymied production and smothered invention.
The freedoms we have today are the result of the founding principles on which the colonies became the United States. These principles were derived from the Ten Commandments. How so, you might ask? Next week we will take a look at that process in the founding of our civil laws. The Church played an important part in providing the conscience our founders needed to develop a constitution that would establish a lifestyle so different from that of previous centuries and civilizations. Unfortunately, today we have some in authority who would like to turn back the ‘clock’.
“God never destroys simply to be destructive. He never tears down merely to be mean or cruel. He destroys to build up again. He allows hurt only to heal again.” A Nation in Crisis, Ray C. Stedman