I remember a few years ago, when I was Department Chair of the Business Department, I asked an adjunct professor to teach a marketing class for traditionally aged college students. He taught in our adult program. Our traditional classes were sixteen weeks long, and our adult classes were five weeks long. Both paid the same amount. Some of my younger adjuncts taught at several institutions, so the opportunity to teach on a traditional campus was very attractive. Their willingness to take a risk paid off and several are now teaching full time. However, back to the gentlemen I mentioned earlier, he was a little older and told me he was an unabashed capitalist. He said “Roger, why would I teach a sixteen-week class for the same amount as a five-week class?” Made sense to me. Even a colleague of mine from the humanities discipline told me he can teach three classes in the same time as a sixteen-week class and make three times as much money. Even though he would not claim to be capitalist, he behaved like one.
To get to my point, I am an unabashed Democratic-Capitalist. I like the free market and the potential of it to bring financial benefits to all who work hard, but I also like the Democratic portion, because we-the-people can make sure that all have the same opportunities, and those who are hurt by the system can receive help. In my last blog I referred to the invisible hand of the free market. In this offering I want to warn of what is the equivalent of crony capitalism, or in the words of Phil Gramm and Michael Solon, medieval royal charters.
In the early years of this country we were influenced by both Puritanism and the Enlightenment. “18th-century Enlightenment liberated mind, soul and property, empowering people to think their own thoughts, worship their own gods, and benefit from the fruits of their own labor and thrift” (Gramm and Solon, WSJ, April 16, 2019). The Puritans of the same time, as Max Weber accurately described as the Puritan Work Ethic, believed in industriousness and thrift. As Benjamin Franklin, not a Puritan in any respect, reflects “early to bed and early to rise, makes a man healthy wealthy and wise.” As an old curmudgeon I worry that the younger generation has lost that work ethic. In fact, yesterday, Richard, the guy working on my gutters, asked me if I had observed a change in young people over the two decades that I had been teaching. I told him that I don’t want to generalize. Some seem lazier and entitled and some still work hard.
However, I do think there is an unseen force trying to drive us into more dependence on a centralized government, and one that is attempting to undermine our strong work ethic. An example of this unseen force is found in Elizabeth Warren. As Gramm and Solon rightly point out, “Sen. Elizabeth Warren’s Accountable Capitalism Act would harness large American corporations by imposing new federal charters under which businesses would swear fealty to stakeholders: the general public; the workforce; the community; the environment; and societal factors.” This is just like the devil, give 90% truth and 10% error, but that 10% is a killer. It is one thing for a corporation to choose to give credence to stakeholder theory, but it is a total different thing for government to mandate it. Those that argue for this see it as giving the fruit of labor back to employees, I see it as government intrusion into the free-market.
As a Democratic-Capitalist I agree with Gramm and Solon, “History teaches that if we want to be prosperous and free, within the rule of law, we must let private-enterprise create wealth and reap the rewards. Only after wealth has been created should we debate the costs and benefits of redistributing it to our desired social ends.” You might ask, Roger what does this look like?
Typically, redistribution involves taxes, charitable giving, and education. Let’s start with taxes. I think the current tax rate for corporations is fine. It is in line with the rest of the world, and it does not encourage corporations to redistribute earnings to tax havens. However, I do think the wealthy can pay more taxes than they are. Even Buffet, Gates, and others say they can pay more. It is the middle person that I am worried about. I have a friend in Sedro-Woolley who has his own business and is constantly concerned about increased regulations and taxes. Often our politicians think they are impacting the big company but end up hurting the small and middle size companies. Ultimately, I think we can raise a bit more revenue with higher taxes for the wealthy.
However, I agree with Bobby Jindal when he stated in his WSJ article on April 9th, “Modern liberalism has broken from its roots by focusing on groups rather than individuals, reimagining Western history as irredeemably corrupt, and celebrating victimhood.” Leviathan wants us to become completely controlled by government, instead of being personally responsible for our actions. The United States is the most generous country in the world. As I stated in a previous blog we give over $400 Billion to charity each year. This provides churches and non-profits with the funds needed to help those who have been less fortunate or struggle with various issues in their lives. I do think we should look at those charities that give people the skills needed to thrive in our new economy. Millions of jobs are not being filled due to the lack of needed skills.
Once again Leviathan, that daemon in our society that wants to destroy humanity, wants to take away from the poor those things that will help them advance themselves in our society. A free-market holds companies accountable for their actions. But, our education systems in this country do not want to be help accountable. Inner city schools suffer from the lack of funds and unions that want more money and less accountability. Don’t get me wrong teachers work hard and inner-city schools don’t have the teachers or enough resources, but to eliminate those competing opportunities like charter schools is a travesty. I think competition in our educational system is a good thing. I also think that inner-city children should have the same educational choices that wealthy children have. Charter schools are the current tool to provide that opportunity.
Democratic-Capitalism gives us the financial resources and collective will to provide opportunities for all. The only thing that is holding us back is a political climate that does not have the ability to legislate. I hope we-the-people have the will to keep our republic strong, and not give in to Leviathan. There is a story about Benjamin Franklin that I think is appropriate here. He was approached by some folks who wanted to know what kind of government the leaders had just created. He responded, “a republic, if you can keep it.” When I hear words like make America Great, or we are fighting for America’s soul, I worry. I know what we are capable of doing, both good and bad, history is filled with it.
And that is my thought for the day!