Where personal freedom exists, the ingenuity and creativity of people spawns great prosperity. This is the foundation of the natural advancement of the human condition.
There seems to be an infinite number of ways in which we humans measure the condition of our existence and the construct of these measurements or the manner in which they are employed depends upon the lens in which the observer chooses to see their world or the world of the person or people they are observing. I believe it to be a natural tendency for our cultural paradigm, our experiences and our internal biases to impair our vision with a sort of ethnocentric fog that prevents us from truly understanding or empathizing with the plight of others because we are viewing their world from within our own world. At an intellectual level I generally believe we can sense or perceive the struggles or predicaments of others, but we do not truly feel their joy or their anguish with the same level of consciousness. As an example, I would suggest that it impossible for someone from the middle class in the United States to feel or suffer the level of despair that accompanies the deprivation that we see experienced by people in the Sudan or Haiti any more than Sudanese or Haitian person would know how it feels to have all the food, clothing and security that a life in Middle America affords to its inhabitants.
It is within this context that I want to explore the connection between freedom and properity.
To those of us who were born in the United States, our concept of freedom is mostly encapsulated in the history and the mythology of the birth of our country. I use the term mythology not to suggest that the birthing story of our nation was or is completely myth, but simply to indicate that there are many narratives and stories about our nation’s birth, many of which are not born in fact, but were created or embellished (Paul Revere’s Ride comes to mind) to convey the essence or the spirit of the movement that led to the creation of a nation from a collection of loosely affiliated colonies of Peoples who, for the most part, immigrated to this land in search of some form of freedom be it economic, religious, personal (fleeing incarceration), or simply the freedom to explore. For most of the people in this country, freedom and liberty are intricately woven into the tapestry of our national identity.
Of the many defining attributes of this sense of freedom one of the more important is economic freedom. There is no generally accepted definition of economic freedom, but I believe the essence of this freedom is the conditions where people are free to produce, trade and consume any goods and service without the use of force, fraud or theft and to do so under the rule of law and where law exists, where private property rights are honored and practiced, and where there is freedom of contract. These are essential parts of economic freedom and, while there are no entirely free markets our planet, the market that exists in the U.S. is considered by most to be one of the more free and open; and therefore, the most prosperous (despite a great deal of hand wringing and fear mongering by politicians, the U.S. remains the largest manufacturer in the World and the largest consumer, even though our population is 300 million compared to 1.3 billion in China).
Freer markets are the best way to promote economic growth and create opportunity for all. Property rights, rule of law and sound money are necessary core conditions for prosperity. As a result, nations with freer markets have stronger economies and with stronger economies come higher per capita GDPs, better standards of living, infrastructure, employment, and political stability. In fact, close study of prosperous countries reveals that political and civil liberties are simultaneously expanded when economies are largely market-based and substantially free. When graft, corruption and fraud are the predominate attributes of a country’s, region’s or city’s economic apparatus, prosperity cannot infuse the lives of the residents and only those people willing to exploit others thrive economically.
It would be a satisfying experience to sit here and write that there exists a market that is totally free and devoid of corruption or exploitation and functioning at such a high degree of fairness and balance that all participants are feasting on the fruit of prosperity. As with all things human, we come up short more often than not and empathy cedes to fear of loss and greed leads to exploitation and manipulation. Ironically, do to others as you would want others to do to you is a commonly recognized principle that is a highly desired human trait and a core tenet of every major world religion, yet not a universally practiced maxim even by those who would otherwise consider themselves highly honorable. The evidence of this can be seen throughout the World as individuals, possessing innately virtuous personal moral and ethical behaviors, allow their moral compass to dither and to sit quietly while their government exercises some form of Machiavellian prerogative and exploits a group of people or another country for the supposed greater good. Or worse, they knowingly participate in Orwellian Groupthink aware that the end does not justify the means, but going along to get along or looking the other way to avoid responsibility or guilt.
We are, after all, human, which is to say flawed, and yet, when people realize that by helping others we are helping ourselves there can be a synergistic balance where everyone can join in the prosperity that a free market provides consistent with their gifts and their willingness to contribute their efforts. In 1776, Adam Smith, in his work, ” An Inquiry into the Nature and Causes of the Wealth of Nations”, recognized that most of us want the best for ourselves and within a system of just laws, we will cooperate with others to help ourselves and this cooperation helps others as well. He understood that the natural forces of self-interest and freedom combine to “create a tide that will lift all boats”. Freedom unleashes individual effort and creativity because free individuals protected by just laws create prosperous and inventive societies. Free individuals and free markets create the wealth of individuals and nations, while simultaneously raising the standard of living of poor citizens.
Adam Smith believed that a “system of natural liberty and justice” combined with free trade would make almost every member of society prosperous if they were interested in doing their part consistent with their abilities. Adam Smith believed that liberty meant not only freedom of speech and religion, but freedom to earn a living, freedom from burdensome taxes and trade restrictions, freedom from excessive government regulations, and the freedom to own and use property to create a new business or own an existing business. He believed in the creative power of hundreds of millions of individual decisions under the rule of just law creating the power and prosperity of free markets.
These are the bedrock principles that have led to the best economic system humans have yet devised labeled capitalism. Adam Smith did not write about capitalism or capitalists, but about free economies (capitalism was identified as an economic system in 1792, fifteen or so years after Adam Smith wrote his famous treatise) and the “invisible hand” to describe how effective economies worked and how the efforts of millions of hands and the wisdom of many free minds, not utopias or centrally run economies by governments, lead to prosperous economies.
We can look around the World and see where economic freedom exists and where it does not – the markers are clear and unambiguous. The test before us is how to bring all of the freedoms enjoyed by the most prosperous Peoples of the World to those who are oppressed, marginalized and exploited. This is a difficult challenge that will require a willingness to think about the World in new and different ways. We have new technologies that are being deployed on a global scale, there are fresh and innovative forms of commerce, new geo-political realities and a human-to-human connectedness that has never been possible before. We are renewing our covenant with Mother Earth and Father Sky and are seeking to heal the damage we have done and are doing to our home planet. Humankind exudes all of this creativity and energy, yet poverty, oppression, corruption, and apathy still can be found in all societies. When these shackles are removed, people flourish and prosperity follows.
In the past decade or so, the World has become connected in ways that still marvel most today. Telecommunications and air travel are making it possible to communicate, both electronically and in person, like never before and this connectivity is changing the world in ways that we are just now starting to grasp and to understand. It almost seems a cliché or glib to say the World is getting smaller, but it is. We can now, in real-time, watch civil unrest unfold on CNN or the BBC on our smart phones, reading Facebook or Twitter feeds from people engaged in the unrest and we can watch dictators and oppressors be brought down in days after their regimes have been in power for decades. Social media are bringing transparency and lucidity to the plight of the disenfranchised and discriminated of the World. No longer do we have to rely solely on the news media or governments to inform of us the happenings in the World. We can hear and see for ourselves, unfiltered, and we get this access from the very people who are living the experiences through their courage and aspiration to tell their stories, for themselves.
The World is growing smaller every day and commerce permeates nearly every part of the globe, but for most people on this planet, freedom and prosperity are but conceptual mirages that cannot be reached as the path to these human rights is blocked by exploitation, corruption, and oppression created by governments, multi-national corporations, cartels, syndicates, juntas and other groups of individuals that use various forms of power to take advantage of and exploit the resources (all forms of capital including human) needed to feed the appetite of the world economic engine. We cannot simply impose our notion of freedom on other Peoples, especially by coercion and force. The best way to help the less fortunate among us in the world is to practice Compassionate Capitalism. In future posts, I will explore the nature of this form of capitalism and show how it is possible for all Peoples to be given an equal chance to enjoy prosperity without eliminating the essential elements of capitalism: competition, innovation, intellectual property rights, freer markets, and the rule of law.
In the 1987 movie, Wall Street, the antagonist, Gordan Gekko, a corporate raider, during a stock holder meeting for the fictitious company Teldar Paper, utters a phrase that has come to symbolize many of the excesses in the 1980s, ” Greed, for lack of a better word, is good.” For many people, greed is a fundamental element of capitalism and carries a very negative conotation. This has been earned and deserved. For a Compassionate Capitalist, however, the only type of greed that is good is the desire for all Peoples of this World to have freedom of speech, freedom of worship, freedom from want and the freedom from fear.
© 2012 Michael L. Henderson. All rights reserved.
Do not go where the path may lead. Go instead where there is no path and leave a trail. – Ralph Waldo Emerson