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The Meaning and Benefits to Society of Economic Liberty and Economic Freedom
August 8, 2019
Economic liberty is the freedom to purchase, trade and consume goods and services without the use of force, fraud or theft.
The Wall Street Journal recently published an article “When the Market Meets Morality” telling the positive story of Father Sirico, a parish priest preaching the virtues of economic freedom and why such free enterprise concepts benefit his parish of working-class people.
Father Sirico points out that to succeed in the market requires being in touch with your customers’ needs. As Adam Smith observed: “It’s not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard for their own interest.” This has the effect of helping others. People need jobs. Jobs come from business growth. And businesses need freedom to lawfully create that.
When businesses are thriving and people can get good jobs, their dreams can become reality, like buying a home or sending their children to college. Hostility to markets of course is not new. Intellectuals like the idea of a society that’s really organized by central planners rather than left to individuals who lack expertise. But that seldom works as well as a free enterprise system.
Of course, markets can have disruptive effects. But that disruption can be positive or negative in the long term. It can be disruptive in a positive sense when motivated people are successful in providing a higher standard of living and choices for a broader group of people.
Father Sirico says market critics make a fundamental mistake in understanding free enterprise in purely materialistic terms. Markets have to be about more than making money and expanding choices. For sustainability they require a sense of higher purpose of how human beings should use their freedom. That of course depends on the realization that not all choices are seen as morally equal.
This is embodied in the rule of law, property rights and freedom to contract. It is characterized by open markets, the protection of property rights and freedom of economic initiative. While no system is perfect all the time, there is much evidence to show that when there is more economic freedom, there is more political freedom.
Clergyman, Father Sirico points out, often fail to appreciate the good free enterprise and companies do for society. Then after denouncing business as selfish and greedy, they put out their hands for donations when they have an initiative that needs funding. Ordinarily, if you don’t like how a company treats you, people simply take their business elsewhere.
There is a long history of companies and industries that looked monolithic and invincible only to have their entire business upended by upstart rivals seemingly from nowhere. Society needs constant cultivation and that requires culture thick with free institutions that understand man in all his or her human dimensions.
Empirical evidence shows that countries with a strong property rights system have economic growth rates almost twice as high as those countries with a weak property rights system, and that a market system with significant private property rights is an essential condition for democracy. Interestingly, additional evidence shows that countries and companies with traditions of fostering Corporate Social Responsibility to improve the community have stronger economic growth rates as well. Father Sirico knew what he was saying—When the Market Meets Morality—or a focus on the greater good.
This commentary is in part based on an article in the Wall Street Journal, “When the Market Meet Morality” on August 2, 2019.
Satell Institute Growth Continues
Membership at SI continues to grow with great companies and private foundations choosing to support Corporate Social Responsibility (CSR) initiatives of their choice.
With over 125 years in business and known as one of the most respected construction companies in the Mid-Atlantic States, Wohlsen Construction builds high-quality, functional projects, many which include senior living facilities, healthcare and higher education buildings. They state: “We are passionate about everything we do, from our use of Virtual Design Construction to our community involvement in the neighborhoods where we work and live.”
The Institute is proud to welcome the Wohlsen Construction Company Foundation, CEO Gary Langmuir, and the two Nonprofit Affiliates they are substantially sponsoring for four years.