About the Speech
With the fall of
communism and the repudiation of socialism throughout the world, the prospects
for free market economies should be bright. Yet serious questions have been
raised about their potential success. Does free enterprise — with its concepts
of economic liberty, individualism, self-interested decision-making and private
property — contribute to cultural and moral decline or does it offer a remedy?
Today there are many
forces in our society that take a dim view of enterprise and of the business
community. Some writers have said that many people educated in the humanities
and social sciences are uncritically anti-capitalistic. They think of business
as vulgar, philistine, and morally suspect. Popular culture often treats
business as its favorite villain, and sees no ethical dimension inherent in
business activities.
Studies by the Media
Research Institute show that entertainment television’s first choice for a
criminal, or someone hurting society, is a businessman. Businessmen comprised
24% of main characters, but 43% of the criminals and 36% of the murderers. Even
mobsters and convicts only accounted for 10% of the murderers on television.
Robert Lichter said
that viewers rarely witness the Horatio Alger stories of business success as
the fulfillment of the American Dream.
But the history of business success in the
Michael Novak, a
scholar at the American Enterprise Institute, holds that there are several
internal moral requirements that have to be followed if a business is going to
succeed. One is to satisfy customers with a product of real value. Furthermore,
the business must make a reasonable return on the funds entrusted to the
corporation by its investors. Businesses must also create new wealth, to expand
the pie rather than cutting it into smaller pieces. Novak also realizes that
businesses defeat envy by generating upward mobility, and rewarding hard work
and talent. The business world is filled with examples of corporations,
individual proprietorships, partnerships and other entities performing the
things that Novak talks about.
We need government,
therefore, only for what businesses or individuals cannot do by themselves.
Government should protect citizens and business entities from physical danger
and harm. Government should protect us from theft and fraud. Government needs
to protect us from damage that is caused by design, malice, and negligence or
recklessness.
But what government
should not do is to burden businesses unnecessarily by uncompensated social
costs. The government should not compete in the business arena. Moreover,
government should not pick winners and losers, or engage in so-called
industrial policy. As John Hood notes, the history of government research and
development efforts is one of false starts, misallocation of resources, and
manipulation of markets by governmentally granted monopolies. Governments have
an extremely poor track record of recognizing true innovation and rewarding it.
One of the reasons is that governments have no bottom line, so failure is not
punished. And because there is an egalitarian influence on most government
entities, good work is not rewarded.
This then is how
capitalism relates to a civil society. Fortunately, for our country and for
each of us, those who developed the political and economic systems of the