Essays Toward A Principled Economics

Mose Durst Ph.D.

9. Editorials

Adding Values to the Economic Mix (published in the Chicago Tribune - 4/1/93)

As the nation's business persons, pundits, economists and assorted armchair experts debate the merits and shortcomings of President Clinton's economic plan, absent (until now) form the discussion is an essential element for solving our economic problems: the values - ethics and morals - that must guide all decisions made in the process of wealth creation.

Every day, from the captains of industry to the blue-collar line worker, choices are made regarding spending, restructuring, downsizing, saving, investing, and borrowing. What is the philosophical or spiritual basis upon which these decisions are made? Is it merely old Adam Smith's invisible hand guiding all?

Though capitalism is without question the best system to make money for the company and the stockholders, to provide employment and to raise the standard of living for all involved, it is still not operating at its full potential. To create the greatest amount of the wealth for the greatest number of people, decisions must be guided by what we believe will make us virtuous human beings and create, for all, a virtuous society.

The Judeo-Christian heritage, as well as almost every other major religion, teaches us that we are first spiritual beings, created in the image of God, and charged with the responsibility of perfecting our divine nature and building a society of loving friendship. Unfortunately, our commitments to greater productivity, more competitiveness, full employment and a cleaner environment are often made without reference to the ethical ideals that direct us to the ordering of our souls, the well-being of our families, the moral health of our communities and a sustainable environment. Do we regularly ask what impact an economic expansion in a given area will have on the quality of community life, or what kind of job training will create a more meaningful, humane work environment, or how the last song promoting hatred and mayhem will affect our youth? The answers to these and a thousand other such questions lie in the realm of our deepest values.

We need not only technocrats who address themselves to the technical solutions to our problems, but the religious and ethical teachers who can make ones' spiritual heritage relevant to economic decision-making.

Numerous critics of the American economy, from Lester Thurow to Ross Perot (and now, it seems, Bill Clinton), emphasize the need for a highly skilled, educated, and flexible work force if the United States is to be competitive in the 21 st century. The quality of its workers, they point out, will make for the competitive edge our nation has over another. Very few of these critics, however, acknowledge the fundamentally more important needs: the ethical, cultural and character component of this trained work force. It is almost as if the economic gurus of our time want our workers to be the best machines for the future. Little vision is offered for the quality of life generated within the work environment. Even less vision is offered for how a business, or the larger economic system, can provide a model of a humane way of life for employees or the larger culture.

Can the realm of economic activity be a breeding ground for the virtuous person? It can and, more importantly, it must.

The Jewish heritage teaches that material development, the management of our earth-household, must be subjected to the demands of the Torah. The Christian heritage teaches, in the words of Pope John Paul II, "A great deal of educational and cultural work is urgently needed so that the market's remarkable capacity to generate wealth is bent towards ends congruent with 'the truth about man,' which is not an economic truth only."

Communism failed not only as an economic system, but primarily as a false spiritual, cultural and moral system. As individuals were stripped of their creativity, individual initiative, responsibility, and value, they were robbed of their humanity.

Since our economic activity ultimately becomes legitimate only in the context of our deepest cultural values, we must look to the best of our spiritual and religious heritage to shape our individual and social lives, and to solve our most pressing economic problems. A healthy free market economic system, designed to create the greatest amount of wealth for the greatest number of people, can only achieve that while in the pursuit of sound religious, ethical, and cultural ideals.

What Price Wealth? (published in The Korea Herald - 6/17/93)

Several articles in the last few weeks about Taiwan, China, and Japan, and my recent trip to Tokyo and Seoul, reveal a problem faced by all nations: how to balance economic growth with the ideals of a humane, virtuous culture.

"Taiwan Pays Dearly for the Good Life," reads the headline of a story by Robert Benjamin of the Baltimore Sun. Although Taiwan's economic growth has been one of the miracles of the last fifty years, "Rates of asthma, cancer, alcoholism, and amphetamine use have risen rapidly. The divorce rate has doubled since 1980, becoming Asia's highest. Taipei's congestion, noise, and stress provoke hundreds each year to seek psychiatric help for recurring bouts of panic."

Mainland China, now sporting the highest annual rate of economic growth, seems to be emulating the pattern of Taiwan. Edward Epstein of the San Francisco Chronicle reports how business activity in the special economic zones resembles the wild west, and that there seems to be an "ideological vacuum" in China that fails to guide economic growth.

Reuters reports of how "a scholarly book attacking Japan's money-oriented, consumer society and extolling the virtues of an ascetic life has become a runaway best-seller." The Concept of Honest Poverty by Koji Nakano celebrates "plain living, honesty, simplicity and richness of spirit."

In a recent trip to Tokyo I was overwhelmed at the dazzling number of physical objects in every store on every street. Although Macy's would drool at the crowds in Tokyo's department stores, the disoriented feeling from noise, movement, and shiny gadgets was as close to hallucination as I hope to get. I visited a friend's office late one Saturday afternoon and saw dozens of employees busily working at their desks.

I thought of my attraction to Japanese culture when I was in college, to the exquisite simplicity of haiku poetry, the sensuousness of the tea ceremony, and the subtlety of flower arrangement, and I asked myself what kind of Faustian bargain Japan had made with its soul for the blessing of wealth. From Tokyo I traveled to Korea, the "Land of the Morning Calm" and the afternoon traffic. Although Korea, like Taiwan and Japan, has experienced spectacular economic growth since I first visited it in the early 1970s, the cost to the culture has been great. Traffic, noise, pollution, and the endless spread of things for sale, with the attendant aggressive sellers, assaults even the most hardened New Yorker.

As with Japanese culture, I was originally attracted to the modesty, dignity, and courtesy of the Korean people. Unfortunately, Seoul - like most major capitals of the world - confronts the visitor with mini-skirts, maximum cigarette smoke, and a good share of street hustlers.

I was struck how America has been struggling for several decades with the same problems confronting the nouveau riche countries of Asia: to what end do we create wealth? Economic growth and wealth creation are blessings or curses depending upon the end purpose to which they are directed. Much of the world is scrambling to embrace the principles of a free-market economy and political democracy, but they have not yet connected politics and economics to the more profound cultural ideals found in the great religious traditions.

Judaism and Christianity in the West, for example, offer us the most profound understanding of the nature, purpose, and value of the person and of the society. Buddhism, Confucianism, and Hinduism in the East offer similar images of the mature person and the healthy society.

Unless nations guide their economic growth by the most profound moral, ethical and religious ideals, they will find themselves impoverished by their prosperity. Hard work, dedication, and diligence are cultural values that are tapped for nations to prosper, however the values of compassion, service, and love are also to be found in the great cultural and religious traditions. It is these latter cultural values that will allow countries to do not only well, but to do good.

The Future Of Asia-Pacific Economic Development (published in The Asia Pacific Economic Review - Winter, 1994)

The heads of state meeting in Seattle for the Asia-Pacific Economic Cooperation (APEC) forum addressed issues of economic development and political liberalization. President Clinton and his team of advisors, such as Winston Lord, expressed their hopes for our Asia-Pacific community where "prosperity, democracy, and security will be mutually reinforcing." But as with most discussions of economic development, little time was spent in considering the cultural and, more important, ethical (religious) framework from which economics draws its purpose, direction, and power.

Many analysts, for example, have emphasized the extraordinary growth of the Chinese economy: almost 14% rise in GNP per year, raising the standard of living miraculously for the 250 million Chinese living in the Special Economic Zones. The abundance of food and consumer goods in cities like Beijing and Shanghai shocked visitors like myself after parallel visits to Moscow and Pyongyang. In speaking with some Chinese, moreover, I found a kind of euphoria over the novelty of wealth after so many years of pervasive, abject poverty. Deng's slogan, "To get rich is glorious," seems to be the reigning ideology of the moment.

The economic development in China, however, unaccompanied by any traditional ethical or religious ideals, has unloosed the forces of a voracious materialism which is the ironic offspring of a defunct communism. Paul Theroux, in his lengthy folio article in a recent Harper's Magazine, reports of ubiquitous crime, corruption, prostitution, child labor, and blind greed that overwhelms a visitor to the new China. "The Chinese miracle has been a deranging process and an ecological disaster," writes Theroux. The number of beepers is a wonder of telecommunications progress in China; the number of prostitutes who wear beepers is one of the awful consequences of unbridled, amoral capitalism.

Nicholas Kristoff, in a series of articles on China in The New York Times, acknowledges the improvement in health care, education, and nutrition throughout much of the country. Yet, "The social order is disintegrating," explains one official to Kristoff, "because of an almost universal desire to make money ...." Kristoff observes how "the no-holds-barred capitalism shows in all kinds of ways. Children regularly die, for example, after drinking fake medicines that fly-by-night entrepreneurs churn out without regard to effectiveness or safety."

What Theroux, Kristoff, and others such as myself have observed is a fundamental explosion of material forces, but no "legitimating principle" or ethical worldview that could justify or make acceptable what people are doing to each other. When I attempted to organize a conference on free market economics in Beijing, then in Shanghai, I was continually confronted with how much money would be needed for non-conference expenses. Palms, I learned quickly, needed regular greasing. The conference was never held. For those who actually do "business" in China, Theroux speaks of their "moral blindness" to the immorality all around them.

Capitalism in the West has developed within either the moral framework of Catholicism, as Michael Novak has written, or within the restraining principles of a protestant worldview, as Max Weber and R. H. Tawney have analyzed. Although there have been great violations of individuals, communities, and the environment when capitalist activity has removed itself from its religious and ethical core, reform movements - emphasizing the divine nature of the person and the covenant to serve the common good - have rescued such wayward free enterprise.

Recently, for instance, Pope John Paul II has written several encyclicals celebrating the wealth-creating powers of capitalism, yet warning how this system has historically ignored the dignity of the person and violated the common good. Countless entrepreneurs in the United States have sought to create businesses with a soul, responsive to workers, the community, and the well-being of the environment. Tom Chappell, after creating a successful business - Tom's of Maine - went to Harvard Divinity School, renewed his own Christian heritage, and seeks to apply his insights to a renewal of business in America.

A Principled Economics, one centered on a classical religious and ethical worldview, has as its goal the creation of wealth as well as the well-being of the individual in community with others. Economic activities, like all other cultural activities, shape the person as well as the larger society. A classical religious and ethical worldview offers us a model of the virtuous person and the virtuous society. The creation of material wealth must be simultaneous with the creation of a virtuous society - if we are to enjoy the good life.

China, for example, has the traditional ethical system of Confucianism. Scholar Huston Smith defines it as a religion, for it deals with ultimate concerns, the foundation of a cosmic and social order. The Analects of Confucius, Smith explains, presents a prototype of the ideal Chinese character. Virtue alone, Confucius states, is the ultimate goal of man. Jen, the supreme virtue of the soul, is benevolence, love, unselfish behavior that seeks the good of others:

If there be righteousness in the heart, there will be beauty in the character.
If there be beauty in the character, there will be harmony in the home.
If there be harmony in the home, there will be order in the nation.
If there be order in the nation, there will be peace in the world.

Some have argued that communism in China has removed all memory of Confucianism. We have seen in Russia, however, that seven decades of a false ideology cannot cleanse the soul of a thousand years of religion. The Chinese ideal of family affection, which is still strong, is the Confucian norm for all social relations. Although that norm is now violated in the immediate desire for wealth, Confucianism teaches that age and tradition bring value. The ersatz ethics of Mao portraits in Chinese taxi cabs is a mockery of what is noble in Chinese culture. A renewal of classical religious ethics will not only guide economic development, but will provide a model for other societies that seek a peaceful, prosperous, and virtuous future.

The Soul of Russia (published in The Korea Herald - 4/14/94)

Due to the political struggle between Boris Yeltsin and his numerous opponents, as well as a stagnating economy, Russia seems to be on the brink of total disorder. Now more than ever, the Russian Orthodox Church and other religious groups in that country need to clarify the human, civic and transcendental norms which can bring order to the soul as well as to the state. They must address not only the problems of crime, corruption, and the sins of the last 70 years, but the religious foundation of economic, political, and moral order.

If religion is to play a central role in the public life of Russia, it must now offer a vision of that public life. The American founding fathers, in the midst of a revolution, were able to draw upon 150 years of an American religious tradition as well as the heritage of Judaism and Christianity. Their understanding of the dignity and responsibility of the person before God was the moral and cultural foundation for a political revolution.

Although Russia faces both a political and economic revolution, it can only hope for a new order if that order is informed with classical religious norms. The Orthodox Church has a 1,000-year history in Russia, even if the last 70 years have been tainted and corrupted by an enforced communism. The Church has a profound responsibility to offer its vision of personal and social wellbeing.

Suppression of religion, whether it be of the Roman Catholic Church, the Mormons, or the Baptists, is not a worthy or appropriate response of the Orthodox Church to the current problems of Russia. Was not the suppression of the

Orthodox Church by the Communists enough to show the ignorance of intolerance? Unless the religions fill the moral vacuum, Neanderthal nationalism and the cancer of anti-Semitism are twin monsters that will discredit religion and ensure further abnormalities in public life.

What the Russian people lack above all else is a vision of the future, one that defines the nature of the person, the family, the community, and the society. From such a vision they can begin to shape a new order. Without such a vision a nation and its people perish.

A regular flow of once-influential foreign leaders and assorted policy wonks make pilgrimages to Moscow to "assess the situation" and pow-wow with Russian leaders and their opposition. But they miss the central point.

Amidst all the political, social, and economic chaos of Russia is a fundamental hopelessness of the Russian people. The fall of communism generated great hope for a period of about two years. That hope is being lost on a significant segment of the population, as evidenced by the support for the notorious ultra-nationalist Vladimir Zhirinovsky. A prisoner can feel very hopeful as he leaves the prison gates. However, if the prisoner has no vision of a better life, he is soon within those gates once more. The Russian people, no people, can sustain a vision that merely moves their material desire. Communism is proof of that fact. A person is, above all, a spiritual being, and a spiritual vision must move the fundamental self.

Free-market economics, democratic politics, and western culture, though important, are not the central cures for what ails Russia. We have the best of these in America, and no one doubts the societal problems we are facing. There has been a spiritual sickness in Russia for more than 70 years. There must now be a powerful spiritual doctor to cure the sickness. That doctor must address the nature of the sickness with compassion, understanding, and a willingness to deal with real cures which are not always found in the generality of doctrines or the great power of charismatic leaders.

The religious community of Russia, especially the Orthodox Church, must now show the example of doing the hardest task. Religious groups and religious leaders have always had a central tragic flaw: to admit they don't know the answer to a problem and to ask, with genuine humility, the community of faith to debate the relevance of religion to public life. The totalitarian temptation in Russia can be avoided only through repentance, renewal, and the guidance which religious communities bring to civic discourse.

Alternative Trade (published in The Korea Herald - 7/23/94)

Recently (June 28 - July 2), at Georgetown University in Washington, D.C., the North American Alternative Trade Organization, (NAATO) held its 11th annual conference. With almost no publicity, a minimum of organization, and an environment of little more than convenience, artisans and producers from developing nations met with their marketing counterparts from developed nations. The purpose of the conference was to help promote the economic development of the disadvantaged and impoverished in the developing nations, as well as to educate those of us in North America about ways to help the small entrepreneurs in developing countries.

Poverty, hunger, and injustice are still very real to over one billion people. Annual per capita income in much of the developing world is $250 a year. Charity and foreign aid, moreover, have not been able to sustain economic development, and many individuals survive only by their own creative efforts. They are artisans, small farmers, and individuals who have pooled their meager resources in forming small producer-cooperatives.

From the women weavers of Peru, who produce colorful textiles with traditional patterns, to the Tibetan refugees who produce classic Tibetan shirts; from Pakistani stone carvers who make lovely boxes, and the African women who string beads, to the Latin American farmers who have formed small cooperatives to sell their coffee: the artisan, farmer, and small entrepreneur seek to create wealth just like their more prosperous counterparts in developed nations.

These small entrepreneurs have been able to sustain themselves in spite of limited production, restricted access to credit, and a marketing system that reaches a fraction of the potential market. Few consumers in the developed nations are aware of these producers or of the thousands of products not marketed through huge commercial brokers and wholesalers.

Alternative Trading Organizations, those dedicated to serving the specific needs of the poor, have multiplied in the last few years and are beginning to make significant impact on the lives of millions of people. By "alternative trade" or "fair trade" these groups seek not to maximize profit, but to provide credit, marketing and design information, and sales outlets in the developed world for the millions of producers who have little access to these services: refugees, women, and the economically disabled.

At the NAATO conference, producers displayed their wares and explained their problems, while marketing organizations provided information about developing new products, marketing strategies, and access to credit.

Bridgehead, like many of the Alternative Trading Organizations, has produced a glossy catalogue that displays articles that are sold retail and wholesale, with information abut the group that has produced the product. SERRV, a program of the Church of the Brethren, provided a beautiful catalogue and explained how it "imports more than 2,200 unique handicrafts from 160 artisan groups in 37 developing countries and markets them through 3,500 church and community groups." SELFHELP crafts, a project of the Mennonite Central Committee, sells crafts produced worldwide through its shops in North America. SELFHELP purchases from artisans, allowing them to sustain employment, provide income, and to improve their quality of life.

The Small Enterprise Education and Promotion (SEEP) network, representing 31 private voluntary organizations in North America, illustrated how these groups could impact more than two million borrowers in the developing world by providing almost $500 million in loans. Along with credit, these organizations provide information, technical training, and access to the huge markets of North America.

Small loans to micro-enterprises may not create enormous wealth, and NAATO may only reach several million people and perhaps total only $1 billion yearly in "alternative trade." Not much when one considers the number of poor and the hundreds of billions of dollars of international trade each year. Nevertheless, enterprises initiated by the poor are sustainable if there is appropriate response by the consumers of the developed world. Producers and consumers can become educated about each other's situations. Each can become more responsible in serving the needs of the poor. Major commercial markets can be developed for poor artisans, farmers, and cooperatives. The well-being of disadvantaged communities and the protection of the environment can be achieved through the good works of alternative trade.

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