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+++++++++++++++++++++++++++++++++++++++++++++++++++++++ IS THIS AN UNTAMPERED FILE? This ASCII-file version of Imprimis, On Line was packaged by Applied Foresight, Inc. (AFI hereafter). Every AFI-packaged ASCII version of Imprimis is distributed in either an "-AV protected" ZIP file format or a SDN (Shareware Distributors Network) protected SDN file. "AV" is the authenticity verification feature provided to registered PKZIP users, which Applied Foresight, Inc., is. If you are using the MS-DOS PKUNZIP.EXE program written by PKWARE Inc. and do not see the "-AV" message after every file is unzipped AND receive the message "Authentic files Verified! #JAA646 Applied Foresight Inc." when you unzip this file then do not trust it's integrity. If your version of PKUNZIP is not the PKWARE-authored program (for instance, you are running a non-MS-DOS version), then this message may not be displayed. (Note: version 2.04g of PKZIP was used to create this authentication message.) SDN is the major distributor of Shareware and Copyrighted Freeware and users who extract files from an SDN file with the current version of the archive utility ARJ, should see: *** Valid ARJ-SECURITY envelope signature: *** SDN International(sm) SDN#01 R#2417 This file is an SDN International(sm) Author-Direct Distribution. It should be verified for the SDN Security Seal by the FileTest utility available at The SDN Project AuthorLine BBS 203-634-0370. (Note: prior to about May, 1993, SDN used PAK to archive its distributions and its authenticity message differs from the above.) Trust only genuine AFI-packaged archives ... anything else may be just that: ANYTHING ELSE. +++++++++++++++++++++++++++++++++++++++++++++++++++++++ Imprimis, On Line Special Edition June 1994 IMPRIMIS (im-pri-mis), taking its name from the Latin term, "in the first place," is the publication of Hillsdale College. Executive Editor, Ronald L. Trowbridge; Managing Editor, Lissa Roche; Assistant, Patricia A. DuBois. Illustrations by Tom Curtis. The opinions expressed in IMPRIMIS may be, but are not necessarily, the views of Hillsdale College and its External Programs division. Copyright 1994. Permission to reprint in whole or part is hereby granted, provided a version of the following credit line is used: "Reprinted by permission from IMPRIMIS, the monthly journal of Hillsdale College." Subscription free upon request. ISSN 0277-8432. Circulation 540,000 worldwide, established 1972. IMPRIMIS trademark registered in U.S. Patent and Trade Office #1563325. --------------------------------------------- "Capitalism and the Future of America" By George Roche, President, Hillsdale College --------------------------------------------- Special Edition Hillsdale College, Hillsdale, Michigan 49242 June 1994 --------------------------------------------- The brilliant young economist George Gilder has written that the most important event in recent history is "the demise of socialist dream." However, he also notes "_the failure of capitalism to win a corresponding triumph." Why is this so, when capitalism has so obviously provided more material benefits for every individual, regardless of economic or social condition, than any other system in the history of the world? Why, when capitalism's intellectual defense has been so ably undertaken by some of the greatest minds of our time is socialism, thinly disguised, still taught in our schools and promoted by our politicians? And why, when capitalism's results are so demonstrably humanitarian, is it still seen as a symbol for greed and exploitation? The perplexing answers to these questions share a common root: They all lie in the realm of ideas. Ideas, I find myself often saying, rule the world--not armies, not economics, not politics, not any of the things to which we usually give our allegiance, but ideas. "Ideas have consequences"--in just three words Richard Weaver encapsulated an entire philosophy of life that is also a challenge, a call to action for all of us. Throughout history there have been formative moments in which particular ideas and particular leaders exert a profound impact on the character and events of a nation. These special epochs, marked by the emergence of a new consensus, can readily be found in American history. The first great sea-change in American society occurred fully 150 years before the American Revolution when our colonial ancestors enjoyed a large measure of self-government. From the start, the American colonial experience had drawn heavily upon the traditional liberties of British subjects and upon their rich heritage of individual freedom guaranteed by the Magna Carta. By the eighteenth century, however, the British were pursuing a different goal. A new economic idea, mercantilism, dominated British thinking. Government planning and control regulated society and manipulated individuals. Eventually, the American colonists ran out of patience with this growing governmental interference in their affairs. During the summer of 1776, Thomas Jefferson wrote the Declaration of Independence, a revolutionary document destined to represent liberty for the American republic as long as it should endure. Coincidentally, during that same summer in 1776, a book was published thousands of miles away from the American colonies, a book destined to have a profound effect on America. The author, Adam Smith, was a professor of moral philosophy at the University of Glasgow, and the book was The Wealth of Nations. As a moral philosopher, Smith contended that men must be free to make their own decisions because, if they are not, a moral paralysis soon sets in. From this basic truth, he examined mercantilism and discovered that this early form of the planned economy was denying men freedom of choice and thus distorting British society. Eleven years later, fifty-five men met in Philadelphia to draft our Constitution. Motivated primarily by the ideas articulated by Jefferson and Smith, our Founding Fathers charted our national path toward limited government, the dignity of free men, and the marvelous prosperity we have enjoyed in this country. The next great sea-change in our nation's history occurred around the turn of the twentieth century. Unfortunately, these new ideas favored the collective over the individual, redirecting America on an increasingly hazardous path as the century progressed. The setting was ripe. For years, as America's industries boomed, immigrants poured in and cities mushroomed, it began to seem to some that the scale of life itself had so magnified that the common man no longer had a fair chance to get ahead in the world. Far from what one might expect, the momentum for collectivism was imparted not by public figures but by little-known men of ideas whose names not one in a hundred Americans would recognize. In certain elite circles, some wondered whether the answers for America's growing pains might not lie elsewhere than in the common sense of the Founding Fathers and the time-tested traditions of our Judeo- Christian heritage--and whether those answers might not instead be found in the work of certain "daring" European thinkers like Marx, Darwin, and Freud whose ideas had rocked the Old World during the 1800s. So a relative handful of professors and intellectuals, writing in the first years of this century and drawing on iconoclastic theories already well advanced in Europe, brought those ideas to America and began a process that remade the face of American society within thirty years, roughly between 1900 and 1930. These collectivist ideas spread from a few seminal thinkers, to the second- and third-hand purveyors of ideas--teachers, ministers, the working press--the word wielders. The collective mentality continued to spread, reaching the professions, the business community, the courts, the novelists, the artists, the general public and last--always last--the politicians. Of the first seminal thinkers of the new era, John Dewey has had a lasting impact on our philosophy, our education, our culture, and, ultimately, our government. From his "progressive school" experiment of the mid-1890s at the University of Chicago, Dewey advocated a system of education which would produce a new generation of Americans with a preference for group and social activity and who viewed themselves not as individuals but as members of a "total democratic society." He emphasized the unfinished nature of society and the universe and called for "a new kind of religion" to be derived from human experience and relationships. Dewey's intellectual colleagues were themselves busy on other fronts. At Col-umbia, anthropologist Ruth Benedict and her mentor Franz Boas were developing the ideas that man could be understood only as a social animal, since his character was allegedly the exclusive creation of his society and environment. Charles Beard's An Economic Interpretation of the Constitution was another key turning point. He set aside the traditional ideas of American society in favor of an essentially Marxian philosophy of history in which the Founding Fathers were portrayed as having placed the economic welfare of a few ahead of the total social welfare of all. The flamboyant Thorstein Veblen poured out his bitter frustration on the business community in shrill anticapitalist diatribes like The Theory of the Leisure Class. Meanwhile, Veblen's fellow economists John R. Commons and Richard Ely pioneered in charting a vastly expanded role for organized labor in the new collectivity. Sociologist Lester Frank Ward, one of the true patron saints of the modern American collectivist ideal, saw politics as a manipulating device designed to control all society, stating: "Modern society is suffering from the very opposite of paternalism--from under-government." In Ward, all those years ago, we thus find the original germ of an idea that has been central to the social planner's rhetoric from the New Deal era to the Clinton era. By 1932, the year the arch-collectivist and political pragmatist Franklin D. Roosevelt was elected president, the intellectual revolutionaries had already done their work, and they rapidly became the new political establishment. Under FDR, the new generation of intellectuals managed to use the Depression as a pretext for a massive collectivization of American society throughout the decade of the 1930s. They failed to cure the Depression, but a "fortunate" circumstance- -World War II--did it for them. After the war, the social engineers stood ready with further collectivist gimmicks such as the Full Employment Act of 1946. There was steady pressure throughout the Truman years for major expansion of the federal role in health, in education, and in welfare--pressure that finally resulted in new government programs under the succeeding Republican president, Dwight D. Eisenhower. Thus Eisenhower proved once again that Republican administrations usually ratify rather than reverse the collectivist inroads of their Democratic predecessors. The same pattern of ratification and acceleration was repeated two decades later when the Nixon and Ford administrations helped consolidate most of Lyndon Johnson's Great Society programs, exacerbated the oil crisis and other economic woes through an unprecedented program of peacetime wage-and-price controls, and presided over the regulatory explosion of the early 1970s. In the last months of the Reagan presidency, we wondered if the pattern had been repeated. Many saw Reagan's election in 1980 and his subsequent reelection in 1984 as genuine evidence of Americans' disenchantment with government, a disenchantment that cuts across ideological lines and is an inevitable reaction to the love affair with statism that has been carried on for so long. But whatever one thinks in retrospect of Reagan's actual accomplishments, it is uncertain whether much has changed. Critics on the left have declared that the end of the Reagan era signaled the end of conservatism's brief resurgence. Undeniably the idea of capitalism, a central tenet of conservatism, remains under constant assault, and its detractors comprise a majority in our schools, our media, and even our political and cultural leadership communities. One faction we may dub the "anti- capitalists," those who regard the redistribution of wealth in the name of "economic justice" as the proper goal of all economic activity. They claim that modern capitalism began with the Industrial Revolution and heralded child labor, wage slavery, urban squalor and a Hobbesian existence for the working class. The late 20th century, they insist, is still an era of exploitation. A second group, however, focuses less on capitalism's evils than its supposed inadequacies. It is all right to defend free enterprise, so the reasoning goes, but today there are simply too many demands on the system--too many poor, too many problems, too many inequities--for individuals or the free market to handle. Government must, therefore, step in and act as the problem-solver. Far more people belong to this group than the first. They have accepted the need for intervention even though they may harbor no hostility to capitalism. Both groups are obsessively results-oriented. They begin with the premise that the world is perfectible and that man possesses the means to perfect it through his own reason and through man-made institutions. Capitalism simply cannot fulfill their expectations. Yet no amount of intellect and no economic system--no man-made system at all, for that matter--can cure every ill the world produces; it probably can't even cure half of them. Sadly, the false notion persists that some other system, some other grand vision, can achieve the impossible. The central idea of capitalism does not lie in the miracle of the market or even the ingenuity of the entrepreneur. It rests, rather, on the fundamental principle of freedom. One of the great sources of strength for America has been our commitment to economic, political, and religious freedom. Within our open society, individuals are free to provide for themselves and their families, to compete with others and to join with them in voluntary associations. We have been free to support those professions, businesses, schools, hospitals, churches, and cultural institutions which best meet our individual needs and preferences. In other words, we have prospered with competition and voluntary association in the private sector. The American economy, despite its ups and downs and the serious threats it faces from over regulation, the deficit, and the other problems of our times, has worked beautifully--beyond the wildest dreams of the utopian social planners. But it has worked precisely because we have allowed individuals to act freely on their own. Self-transcendence is the ability to rise above the merely animal, merely physical self and freely choose the conditions and terms of our own existence, to decide what is of ultimate importance and act upon it whether or not other people understand, whether or not it is dangerous, whether or not it makes us rich. Only human beings have that capacity. Only you and I do. We have the capacity to rise above our merely physical selves. Self-transcendence, based on individual choice, touches every aspect of our lives. If economic transactions were based on the immediate cave man rip- off--the idea that I want to grab all I can get, and I want to get it right now, and I will not honor any obligation that interferes with this--no long-term economic planning would be possible. No investment, nothing of what we call a capital structure, could ever come into existence, unless legal contracts were honored. That necessitates self-transcending people, people willing to honor their commitments. That is the leadership commitment we are discussing. All civilization is based upon the integrity of the self-responsible individual, directed by a view of justice, of restraint, and of responsibility. There was a time when this country of ours valued such an idea. It placed its faith in the responsible individual and the institutional structure, giving form to our lives. And it is the erosion of that faith which today destroys us from within. I submit to you that unless we recover it, all the methods in the world to do something better economically, technologically, or socially are just so much spitting in the wind. We must insist upon a return to a hierarchy of values which gives primacy to the dignity of the individual and to the instructional forms which guarantee that dignity. It is here that the free market, private property, private institutions--that whole private sector idea-- has special validity, because it does leave people free to build their own voluntary associations, to be uniquely self-transcending, to get on with the dignity of leading their own lives. Remember, then, when we as leaders are talking about the private sector, that we are committed to it not because it works, though it works very well. All kinds of economic arguments demonstrate that the free market provides prosperity. It solves social problems. It works. But that is not the argument that we should advance. People are not inspired by the argument that they will have more refrigerators if they are free men. Our message must not be that the free market is good because it works, but rather that it works because it is good--because it has the fundamentally proper view of human nature. This is what capitalism offers for our American future. Together we can invest our resources and energies in a system which provides a level of prosperity and personal dignity unheralded in the history of the world. Its legacy of freedom, passed from one generation to the next, is now ours to defend for our children, and for all who will follow. --------------------------------------------- George Roche has served as president of Hillsdale College since 1971 and in the last two decades has attracted international attention for his battle to protect the school from federal intrusion. (Despite the fact that Hillsdale has never accepted federal funds, the Supreme Court has challenged Hillsdale's independence.) Firing Line, the MacNeil-Lehrer News Hour, News-week, the New York Times, Reader's Digest, Time, Today, the Wall Street Journal, and scores of other television, radio, magazine, and newspaper sources have chronicled his efforts. Formerly the presidentially-appointed chairman of the National Council on Educational Research, the director of seminars at the Foundation of Economical Education in New York, a professor of history at the Colorado School of Mines, and a U.S. Marine, George Roche is also the author of 12 books, including A World Without Heroes: The Modern Tragedy (1987), A Reason for Living (1989), One by One: Preserving Values and Freedom in Heartland America (1990) and The Fall of the Ivory Tower: Government Funding, Corruption, and the Bankrupting of American Higher Education (1994). ### +++++++++++++++++++++++++++++++++++++++++++++++++++++++ End of this special edition of Imprimis, On Line; Information about the electronic publisher, Applied Foresight, Inc., is in the file, IMPR_BY.TXT +++++++++++++++++++++++++++++++++++++++++++++++++++++++


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