Freedom and Free Enterprise

Lesson 6

Topics: Freedom, Free Enterprise, Capitalism, Law of the Harvest

Today, capitalism is regarded by many as a bad and oppressive system and unfortunately this view is perpetuated in many of the educational institutions throughout the nation. Unfortunately, many corporations have also been doing terrible things that get labelled as capitalism but that is not true free-market capitalism.

Capitalism is a social system based on the principle of individual rights. Politically, it is the system of laissez-faire (freedom). Legally it is a system of objective laws (rule of law as opposed to rule of man). Economically, when such freedom is applied to the sphere of production its result is the free-market. (source: capitalism.org)

This lesson presents a view of free enterprise, moral, principle-based capitalism that we desperately need more and more people to understand and practice in America and throughout the world. I highly recommend, before reading further, that you listen to this speech by Ezra Taft Benson entitled “Freedom and Free Enterprise”:

 

No politico-economic system in history has ever proved its value so eloquently or has benefited mankind so greatly as capitalism—and none has ever been attacked so savagely, viciously, and blindly. The flood of misinformation, misrepresentation, distortion, and outright falsehood about capitalism is such that the young people of today have no idea (and virtually no way of discovering any idea) of its actual nature.

…By their silence—by their evasion of the clash between capitalism and altruism—it is capitalism’s alleged champions who are responsible for the fact that capitalism is being destroyed without a hearing, without a trial, without any public knowledge of its principles, its nature, its history, or its moral meaning. It is being destroyed in the manner of a nightmare lynching—as if a blind, despair-crazed mob were burning a straw man, not knowing that the grotesquely deformed bundle of straw is hiding the living body of the ideal.

The method of capitalism’s destruction rests on never letting the world discover what it is that is being destroyed—on never allowing it to be identified within the hearing of the young.

(Source: Capitalism: The Unknown Ideal by Ayn Rand)

The Founders generally believed that America should be organized in a way that allows people the freedom to pursue and obtain the basic necessities of life. The idea of the American Dream is that anyone could become a commercial success. Essentially this is what we call a free-market or free-enterprise system.

Hamilton wanted to have a society where everyone is working for big entities and organizations, big industry in which a lot of people are working together to create wealth. As you can see today we’re seeing more and more of this, and less and less of what Jefferson promoted.

Jefferson recognized this would limit the people’s freedom. The model Jefferson proposed is having a bunch of people who are farmers, land owners, shop owners and businessmen and entrepreneurs. Independents. People who are more independent rather than dependent. (More info about being economically independent vs dependent)

The Law of the Harvest

Excerpts from Howard W. Hunter’s BYU devotional speech “The Law of the Harvest“:

The primary responsibility for your education is yours. It is not the Church’s; it is not the administrators’ responsibility; it is not even your teachers’ – it is yours. To the degree you accept this responsibility and are diligent in discharging it, you will succeed, you will grow and develop an educated mind and an educated heart. As you are true to the laws of God you will develop a divine character. To the degree that you do not accept this responsibility you will not grow and develop within.

People grow mentally, socially, emotionally, and spiritually only to the degree they obey on a daily basis the laws governing such growth.

The Lord tells us clearly and powerfully: “There is a law, irrevocably decreed in heaven before the foundations of this world, upon which all blessings are predicated – And when we obtain any blessing from God, it is by obedience to that law upon which it is predicated.” (D&C 130:20-21.)

What is true with an individual is also true with a nation. You can absolutely rely on this – a nation cannot violate basic principles with impunity, that is, without paying the awful price, anymore than an individual can violate basic principles with impunity.

We hear a lot of economic and political arguments going on around the country today. We have for a long time. Words like “socialism,” “free enterprise,” “the welfare state,” “states rights,” “federal control,” “human rights,” “property rights,” “communism,” are bantered around widely. You may wonder what these words mean. I wonder myself because they are used with such varieties of meaning. Often in your search to understand them you run into a barrage of more such words and even prejudice and bull-headedness, and you come out of the fray more confused and more frustrated. I believe much of this can be simplified.

You were given a great message by Elder Marion G. Romney which was inspiring and profound. He compared socialism with the United Order. I encourage you to study carefully that message. He gave much of the basic theory, the principles, the similarities and the differences between these two basically conflicting systems. The basic principle in his message is the same principle in mine, as already discussed – the principle of the Law of the Harvest – As a Man Sows, So Shall He Reap.

From my own experience in business and as a lawyer and church worker, and from my firsthand observations in this country and other countries of the world, there appears to me to be a trend to shift responsibility for life and its processes from the individual to the state. In this shift there is a basic violation of the Law of the Harvest, or the law of justice. The attitude of “something for nothing” is encouraged. The government is often looked to as the source of wealth. There is the feeling that the government should step in and take care of one’s needs, one’s emergencies, and one’s future.

The right to own and control private property is not only a human right; it is a divine right. We will largely be judged, if I understand the Savior’s teachings correctly (see Matthew 25), by how we use our property voluntarily for the blessings and benefit of our Father’s other children. President McKay continually teaches us that this right of free agency is our most precious heritage. It is our greatest gift in this world and is to be valued even more than life itself.

If you deprive a man of his right to fail in the righteous use of his property, you also deprive him of his right to succeed. If you remove from a man his right to “go to hell,” you likewise remove his free agency to go to heaven. Satan’s entire philosophy is based on a “something for nothing” philosophy: salvation without effort – a free gift. This counterfeit doctrine was rejected by God our Father. Our Elder Brother, Jesus Christ, accepted our Father’s plan and agreed to pay the infinite price to become our Savior and Redeemer and to show us the way back to the Father. The way is often the hard way. It is the Law of the Harvest. It is the same basic law in the spiritual realm which the farmer must obey in the physical realm. He plants in the spring and cultivates, waters, weeds, and nourishes the ground and its new life and then harvests in the fall.

What is the real cause of this trend toward the welfare state, toward more socialism? In the last analysis, in my judgment, it is personal unrighteousness. When people do not use their freedoms responsibly and righteously, they will gradually lose these freedoms.

Let me illustrate: If I, as an employer, in my policies and practices exploit my employees, I will either lose them and my business, or my employees will gather together and threaten to strike me. They will strive to exercise an influence on the legislative process so that laws will be enacted dictating fair employment policies and practices, thus limiting my freedom to determine these things for myself.

If man will not recognize the inequalities around him and voluntarily, through the gospel plan, come to the aid of his brother, as outlined by Brother Romney, he will find that through “a democratic process” he will be forced to come to the aid of his brother. The government will take from the “haves” and give to the “have nots.” Both have lost their freedom. Those who “have,” lost their freedom to give voluntarily of their own free will and in the way they desire. Those who “have not” lost their freedom because they did not earn what they received. They got “something for nothing,” and they will neither appreciate the gift nor the giver of the gift.

The only way we can keep our freedom is through our personal righteousness – by handling that freedom responsibly. We are our brother’s keeper. We must be concerned for the social problems of today. We must take that responsibility upon ourselves according to the gospel plan but not according to the socialistic plan.

You know that it is vain and foolish for a doctor to criticize the symptoms of a disease and refuse to work upon the roots. So, also, it is superficial to only criticize socialism and the welfare state and the many other evil “isms” growing up among us unless we work upon the roots. It is only in the changing of a man’s heart – a second birth – the changing of an individual, that the root strength comes to change a people or a nation.

I recommend that you read Howard W. Hunter’s “The Law of the Harvest” speech in its entirety.

Ezra Taft Benson also spoke at length about Freedom and Free Enterprise, below are some excerpts from the talk, which you may have already listened to, as recommended above.

Far too many today are enjoying a comfortable complacency. We are a prosperous nation, our people have high paying jobs, our incomes are high, our standard of living is at an unprecedented level. We do not like to be disturbed as we enjoy our life of ease. We live in the soft present and feel the future is secure. We do not worry about history. We seem oblivious to the causes to the rises and falls of nations. We are blind to the hard fact that nations usually sow the seeds of their own destruction while enjoying unprecedented prosperity. I say to you with all the fervor of my soul, we are sowing the seeds of our own destruction in America and much of the free world today.

It is my sober warning to you today that if the trends of the past forty years and especially the last fifteen years continue we will lose that which is as priceless as life itself: our freedom, our liberty, our right to act as free men. It can happen here, it is happening here. The outlook for free enterprise in the world has never seemed so uncertain as now. (note: this message was given 40 years ago in 1977)

Do we as American citizens have the desire and will for capitalism, and free enterprise to survive?

Today it seems evident that we are rearing a generation of Americans who do not understand the productive base of our society and how we came by such prosperity. Evidence of this fact is found in surveys taken among some of our high school and college students. The majority of whom it is reported believe private enterprise is a failure. Although they don’t have a clear understanding of what private enterprise is. With them as with many adults there is a vague notion that it is some unfair system which stands to give special advantage to big corporations and wealthy individuals.

Many of you see the idea of the free enterprise or the free market system as only an alternative economic system to our other systems. This is a serious oversight and causes many to miss the most crucial element to the free market system. May I mention some of these features?

  • The free market system rests on a moral base.
  • The free market is based on the right to property.
  • The free market is based on the right to enjoy private enterprise for profit.
  • The free market is the right to voluntary exchange of goods and services, free from restraints and controls.
  • A free market survives with competition.

A free market society recognizes private property as sacred because the individual is entitled to ownership of goods and property which he has earned; he is sovereign so far as human law is concerned over his own goods. He may retain possession of his goods; he may pass his wealth on to his family or to charitable causes. For one cannot give what one does not own.

James Madison recognized that property consisted not only of man’s external goods, his land, merchandise and money, but more sacredly he had title to his thoughts, opinions, and conscience. The civil government’s obligation then is to safeguard this right and to frame laws which secure to every man the free exercise of his conscience and the right and control of his property. No liberty is possible except a man is protected in his title to his legal holdings and property and can be indemnified by the law for its loss or destruction. Remove this right and man is reduced to serfdom. Former United States Supreme Court Justice George Southerland said it this way. “To give man liberty but take from him the property which is the fruit and badge of his liberty is to still leave him a slave.”

Nothing is more to be prized, nor more sacred than man’s free choice. Free choice is the essence of free enterprise. It recognizes that the common man will make choices in his own self interest. It allows the manufacturer to produce what he wants, how much, and to set his own price. It allows the buyer to decide if he wants a certain product at the price established. It preserves the right to work when and where we choose.

When government presumes to demand more and more of the fruits of a man’s labor through taxation and reduces more and more his actual income by printing money and furthering debt, the wage earner is left with less and less to buy food, to provide housing, medical care, education and private welfare. The individuals are left without a choice and must look to the state as its benevolent supporter of these services. When that happens liberty is gone.

Economic literacy among our people has not been one of the bright spots in our 200 year old history. Yet it is apparent that when ignorance prevails the people eventually suffer. The principles behind our American free market economy can be reduced to a rather simple formula. Here it is, and I hope if you forget everything else I said, you’ll remember this formula. It is so basic and so simple.

Free Market Economy’s Simple Formula:

  1. Economic security for all is impossible without widespread abundance.
  2. Abundance is impossible without industrious and ambitious production.
  3. Such production is impossible without energetic, willing and eager labor.
  4. This labor is not possible without incentive.
  5. Of all forms of incentive, the freedom to obtain a reward for ones labors is the most sustaining for most people, sometimes called the “profit motive”. It is simply the right to plan and to earn, and to enjoy the fruits of your labor.
  6. This profit motive diminishes as government controls, regulations and taxes increase to deny the fruits of success to those who produce.
  7. Therefore any attempt through government intervention to redistribute the material rewards of labor can only result in the eventual destruction of the productive base of society, without which real abundance and security for more than the ruling elite is quite impossible.

The best way, the American way, is still maximum freedom for the individual guaranteed by a wise government that provides for the police department and national defense. History records that eventually people get the form of government they deserve. Good government which guarantees the maximum of freedom, liberty, and development of the individual must be based upon sound principles. We must ever remember that ideas and principles are either sound or unsound in spite of those who hold them. Freedom of achievement has produced and will continue to produce the maximum of benefits in terms of human welfare. Freedom is an eternal principle. Heaven disapproves of force, coercion and intimidation. Only a free people can be truly a happy people.

Of all sad things in the world, the saddest in the world is to see the people who have once known liberty and freedom and then lost it.

I leave with you this challenge that you help others see that the real issue is not over economic systems, it is the issue of freedom and limited or no freedom, the same issue that brought about this nation’s birth and independence. Yes, with God’s help and inspiration perhaps we may rekindle a flame of liberty that will last us long as time endures.

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