Leithner Letter No. 74
February 26, 2006

Despite certain Talmudic sayings to the contrary, no anti-commercial tradition existed in Judaism. ... Man’s earning of a livelihood and his creation of economic and material assets are seen as the reflections of Divine pleasure. Leafing through the pages of the Bible, one is immediately struck by the fact that the observance of God’s commandments leads to an abundance of material goods. ... A God-fearing man is characterised as one whose flocks and orchards bear their fruit in season and produce a bounty of goods. ...

Meir Tamari
“With All Your Possessions”: Jewish Ethics and Economic Life (1998)

Islam protects and endorses the personal right to own what one may freely gain, through legitimate means, such as the fruits of the labour of one’s hand or intellect. It is a sacred right. Yet human ownership is tempered by the understanding that everything, in the last analysis, belongs to God, including our souls and bodies, as well as the means of our living, which God has created for our benefit. What appears to be ownership is in fact a matter of trusteeship …

Muhammed Abdul-Rauf
A Muslim’s Reflections on Democratic Capitalism (1984)

Often when I am kneeling down in church, I think to myself how much we should thank God, the Holy Ghost, for the gift of capitalism.

Enoch Powell
Speech at Falkirk, Scotland (1968)

There are thousands of reasons why entrepreneurship should never take place but only one good one for why it does: these individuals have superior speculative judgement and are willing to take the leap of faith that is required to test their speculation against ... an uncertain future. And yet it is this leap of faith that drives forward our standards of living and improves life for millions and billions of people. We are surrounded by faith. Growing economies are infused with it.

Llewellyn H. Rockwell, Jr
The Faith of Entrepreneurs (2005)

Thank Heavens for Commerce and Capitalism

These days in Australia, academics and the people they train, particularly in business schools and faculties of economics, strongly influence the way people in the real world think about commerce and finance. Statist thinking – that is, the conviction that politicians, suitably advised by academics, know best – permeates universities. As a result, neither politicians nor academics trust individuals to be the primary arbiters of their own material destinies. Nor, apparently, can standards of living be allowed to depend upon the ability of businesses to serve consumers. Instead, politicians and academics agree that the fortunes of hundreds of millions and – even better – billions of people are best placed in the hands of a small number of suitably pedigreed people. They also agree that the ideas that inform decision-makers should derive from the best and brightest of prestigious universities. Once upon a time, academics were the properly obscure and safely ignored residents of ivory towers. Alas, today they are much more prominent and powerful. Indeed, in the U.S. on 1 February, one became the high priest of economics and finance (see also Letter 67 and Letter 71).

From these harmful developments spring some serious misconceptions about commerce and capitalism. Perusing their textbooks and journals and attending their conferences, it becomes plain that practitioners of mainstream economics and finance suffer from an acute envy of physicists. Hence one delusion: advanced mathematics and other technical expertise, powerful computers and mountains of aggregated data are essential – and historical perspective, subjective judgment and cautious analyses of individual businesses, their operations and prospects are pointless. If the orthodoxy is right, then the self-assured “rocket scientist” armed with a Ph.D. and an impressive list of publications is indispensable; and the sceptical, self-made businessman-investor with skin in the game and a successful track record is superfluous. But people acting in markets are not planets revolving around the sun. The problem is that the academic and political mainstreams denigrate the individual, the particular case, common sense and tacit knowledge; and they glorify the abstract, aggregate, technical and esoteric. They misapply the methods and methodologies of physical science to the realm of human action, and thus centralise decision-making in the hands of a technocratic élite.

Another unfortunate consequence of this statist state of affairs is the focus upon means and the neglect of ends. Pollies and academics, in their proudest moments, act as if they were omniscient and omnipotent; and most of them, virtually all the time, despise the general public. Hence their oft-expressed urge to serve the community is typically a false front for their urge to control it. Just as politicians obsess about their next election, economists and finance academics think about their next university or civil service appointment. Politicians grab power by espousing what voters can be bribed to believe rather than what is demonstrably true; similarly, academics attain influence by parroting politicians’ whims and rationalising their dictates. Like politicians, academics are relentlessly instrumental. They focus almost obsessively upon methods – and, never mind their incessant babble about “values,” are incurious about and indifferent towards ethics. “We’ll tell you how to discount the cash flow, write the business plans, build the models and run the regressions,” they implicitly tell their charges; “but we will either ignore or disparage the laudable goals and estimable values that underlie capitalism and motivate commerce.”

Within business schools, overt and vociferous communists are few. But here, as much as in the arts and social science faculties, anti-capitalists have long been legion (see in particular Ludwig von Mises, The Anticapitalistic Mentality, Libertarian Press, 1956, 1994, and Robert Nozick, Why Do Intellectuals Oppose Capitalism?). They are anti-capitalistic ultimately because they strenuously deny that capitalism has any honourable characteristics. Indeed, they usually regard it as suspect if not downright immoral. Those who teach and write about business ethics, for example, seem to regard businessmen and corporations as naked savages that must be yoked with myriad laws and cloaked with “corporate social responsibility” before they can parade acceptably in public. People who have been incarcerated at uni usually display a dual view regarding commercial activities among consenting adults. On the one side are businesses, the benighted people who run them and their dubious morals; and on the other are the many, varied and ever-growing responsibilities that the anointed heap upon businessmen – and which the latter must accept without protest in order to be (or at least appear to be) ethical.

Just as bad as academics, it is sad to say, are theologians, priests, ministers and cadres of religious bureaucracies. When they talk about commerce, economics or finance – and these days in Australia, some of them can’t hold their tongues – they typically embarrass themselves. In this respect they resemble politicians (see also Letter 59): their knowledge, both abstract and applied, is typically deficient and sometimes almost completely non-existent; and their repudiation of St Thomas Aquinas’ legacy is so complete, and hence their command of reasoning and evidence is so faulty and their vocabulary so emotive, that it is painful to hear and read their words. There are some honourable exceptions, of course; but as a rule of thumb most clerics in Australia – including prominent ones who call themselves “conservatives” – support to various degrees the sentiment uttered by the American theologian Paul Tillich. In his view, “any serious Christian must be a socialist.”

It is therefore difficult to find religious writing in Australia that unequivocally celebrates commerce and capitalism. If one seeks insightful and sympathetic treatments of these things, then one must either turn to Australian academics and politicians (of all people!) who take religion seriously (see in particular Christian Morality and Market Capitalism: Friends or Foes? by Ian Harper and Christianity and Free Enterprise by Robert Clark), or consult the work of theologians and religious scholars in other countries (see John Paul II’s 1991 encyclical Centesimus Annum; Wayne Gudrem’s Business for the Glory of God: The Bible’s Teaching on the Moral Goodness of Business, Crossway Books, 2003; The Catholic Ethic and the Spirit of Capitalism, The Free Press 1993 and Toward a Theology of the Corporation, AEI, 1981, both by Michael Novak; and The Church and the Market: A Catholic Defence of the Free Economy, Lexington Books, 2005, by Thomas E. Woods, Jr).

Although it is hazardous to generalise, Australians as a whole do not embrace commerce and capitalism. (For a brief overview of contemporary attitudes, see the chapter about economic reform in Shaun Wilson et al., Australian Social Attitudes, UNSW Press, 2005). Australians dislike these things because their teachers, secular and religious, imply that they are dishonourable. Media of mass communications, who dutifully feed people what their rulers want them to eat, reinforce this message. According to Michael Medved (Hollywood Versus America, Harper, 1993), before 1965 television programs were twice as likely to portray businessmen as virtuous than as villainous. During the 1970s, this ratio reversed – two crooks, in other words, appeared on the small screen for every good fella. “And by 1980 a majority the CEOs portrayed on prime-time committed felonies.” Given the healthy dosage of American programming on Australian television, together with Australians’ animus towards business, it is reasonable to suppose that these ratios have deteriorated further during the last 15 years.

The lamentable reality is that Australians presently face a relentless barrage of messages – secular and spiritual, written and spoken, visual as well as acoustic – that commerce and capitalism are bad, and that a life spent in business is at best amoral and possibly criminal. Yes, many school leavers study business “to get a good job” and “to make heaps of money.” (Few attend university mostly in order to broaden and deepen their minds. And for good reason: Australian universities long ago abandoned the ability to do so.) But young people often hasten to add that they hope eventually to do something less grubby and more rewarding, and thereby “to make a difference.” Australians whose vocation is business thus get little joy from those upon whom they once relied for instruction and inspiration. Equally sadly, they bulk smaller as role models among the youth whom they might once have inspired.

The truth, of course, is diametrically different. Commerce and capitalism are not inherently bad. Nor are they neither-good-nor-bad-depending-upon-the-context. Quite the contrary: properly conceived and practised, they are inherently and unambiguously good; and they are admirable for reasons that most of today’s politicians and academics cannot fathom and most of today’s clergy cannot bear to admit. Commerce and capitalism are noble for reasons that, when they stop and think, Christians, Jews and Muslims – and, indeed, when modestly restated, coherent agnostics – can readily accept. God created us in His own image. He therefore bequeathed to us minds with which to reason and choose. He also gave us the will, if we choose to use it, to honour covenants. He created us so that we would imitate Him; He rejoices when we do so; and He rewards us when we honour our covenants with Him and punishes us when we do not. Commerce and capitalism are thus inherently and unambiguously righteous because, when conducted according to the golden rule, they reflect God’s glory.

I am unable to locate in the Scriptures any admonition to shun material prosperity. Quite clearly, they instruct us to reject the worship of material things. Equally clearly, however, they praise the creation of material wealth. The message, it seems to me, is clear: we should thank God for commerce, capitalism and the wealth that springs from them; and one way to thank Him is wisely to buy and sell goods and services, prudently to accumulate and generously to divest capital. Make as much as you can, save as much as you can and give as much as you can – the sheer excellence of this maxim hardly restricts itself to the followers of John Wesley.

Let’s Define Our Terms

What is commerce? What about capitalism? Commerce is as old as the Bible, but capitalism’s pedigree is much more recent. Max Weber, who said some wise and also some mistaken things about capitalism, concluded that although it had ancient roots capitalism arose after the Protestant Reformation. In 1848, Karl Marx emphasised the novelty and marvelled at the tremendous impact of this new thing. Most remarkably, “the bourgeoisie, during its rule of scarce 100 years, has created more massive and more colossal productive forces than of all preceding generations together.” Marx thus acknowledged a consequence of capitalism, one that his hordes of descendants obscure or deny: like no other way of organising production and consumption, capitalism creates material plenty.

Karl Marx gave capitalism, something he hated, its now-standard definition. As he saw it, capitalism has three crucial elements: private property, unhindered exchange of titles to property, and individual (but often through collections of individuals, such as businesses) retention of profit. Given this emphasis upon individual rather than collective action, the more capitalism prevails the more likely the state will be small and its functions strictly circumscribed. A very long queue of people has accepted this definition. Ian Harper, for example, writes “to begin, we need a definition of market capitalism. Market capitalism [as opposed, presumably, to “non-market capitalism,” whatever that is] is a system for organising economic activity based on three core principles: private ownership of the means of production, generally free markets and limited but not absent government. The aim of the system is to raise material living standards by accumulating capital (physical, financial and human), which in turn raises per capita incomes over time.”

As with most of the rest of what he wrote, logic and evidence contradict Marx’s definition. Private property, markets and profits were present in Biblical times, and so there is nothing novel about them. Indeed, and as Ludwig von Mises noted, “all civilisations have up to now been based upon private ownership of the means of production. In the past, civilisation and private property have been linked together.” Tom Bethell’s survey of economic history corroborates Mises: whenever private property and markets are suppressed, civilisation suffers (The Noblest Triumph: Property and Prosperity Through the Ages, St Martin’s 1998).

Marx’s definition is a reasonable definition of commerce as it has been conducted at most times in most places; but it is not a sensible characterisation of capitalism. What is novel, and what Marx observed but wholly misconceived, is that beginning roughly in the mid-18th century a critical mass of practices and institutions, some new and some old, began to coalesce. A new word such as capitalism was needed (and was first used during the first decade of the 19th century) because a new thing appeared. This new thing, or rather collection of new things, transformed the ancient and sleepy marketplace and the commercial economy into a dynamic search for and creation of new goods, services, methods and processes – that is, into a modern capitalistic economy. Technological improvements and the accelerating ability to accumulate and harness capital in its varied forms revolutionised traditional methods of production, distribution and marketing.

In pre-capitalistic economies, production occurred piecemeal and by individuals or small teams of individuals; in capitalistic economies, in contrast, mass production by large groups of workers, aided by machines, factories, new methods of management and the like, became the norm. Before capitalism, transport and communications were scarce, rudimentary, slow and expensive, and thus markets for goods and services were local and markets for capital embryonic; in capitalistic economies, on the other hand, thanks to numberless innovations, transport and communications has become ubiquitous, quick (and often instantaneous) and cheap; and markets – including capital markets – thereby broader, deeper, national and inter-continental. In pre-capitalistic economies, standards of living were so low and stagnant over such long periods of time that the production of necessities of life comprised the lion’s share of commercial activity; but in capitalistic economies, standards of living have risen to such a level that the consumption of luxuries and ancillary services – in a word, “marketing” – has become the focus of activity.

It is important to emphasise that an economy in which private property predominates and markets are relatively free is not necessarily capitalist. Most societies, from the ancient world to today, have (albeit to varying extents) displayed these characteristics. Jerusalem during Biblical times, for example, was a market town. It was neither an agricultural nor an industrial centre, and in economic terms it was nothing if not a commercial centre. Although it lay at the crossroads of three continents and received merchants from far and wide, its trade was overwhelmingly local. Similarly, during most of this period, property in Jerusalem and its surrounds was predominantly private – otherwise the commandment “thou shalt not steal” would have been pointless. Jerusalem was commercial but it was not capitalist.

Capitalism, then, presupposes secure and stable rights to private property, the ability to exchange titles to this property, and the creation and accumulation of private savings and profit. Like the commercial economy that preceded it and supplies its foundation, legitimate government in a capitalistic society is limited to the protection of private property rights. Unlike the commercial economy, however, capitalism gives full reign to human ingenuity: it harnesses people’s inherent propensity to conceive new and better goods and services, to discover new resources, to ascribe “goods character” to resources and to create improved and cheaper methods of production and distribution. Capitalism is not synonymous with commerce, but it is synonymous with entrepreneurship.

Do laws establishing markets, private property and private profit – like those passed in Eastern Europe during the 1990s – beget capitalism? Not by themselves. The crucial element, and capitalism’s defining characteristic, is personal economic initiative and creativity. It is in this sense that capitalistic attitudes are virtues. Like other virtues, these attitudes are habits of the intellect and will. They include the disposition to notice or discover things – namely goods or services, or means to produce or distribute them – that consumers are likely to value but have overlooked. They also include the disposition to incur risk – that is, in the face of pervasive uncertainty and the consequences of failure, to transform a subjective possibility into an objective reality. Enterprise is the courage, persistence, frugality and hard work – in short, the self-sacrifice – required to realise a dream. The virtues of capitalism thus include steadfast, down-to-earth, co-operative and self-correcting behaviour (see also Letter 58 and Letter 65).

In Recapturing the Spirit of Enterprise (ICS Press, 1992), George Gilder contrasts these habits of enterprise and the hunger of the entrepreneur with the established, defensive, protective, complacent and above all bureaucratic habits of the status quo. Enterprise, he writes, “is the creation of surprises” that renders established practices superfluous. It proceeds not by mastery of the known, but by stepping into the unfamiliar and rendering the results of discovery commonplace. Telephony, for example, was unknown before the birth of Sir Alexander Graham Bell; thanks to his and others’ efforts, however, it was ubiquitous at his death. And so it is with cheap steel and Andrew Carnegie, affordable motorcars and Henry Ford, and so on. Enterprise is action, not reaction; and it obliges other businesses, consumers and governments to react. Accordingly, it is constantly upending the old order and building the world anew. The results of this habit of creative destruction, as Joseph Schumpeter dubbed it, is a vital source of wealth – and a significant threat to vested interests. Conceiving and organising it, and striving to ensure that it will fulfil the demands it intends to satisfy – all of these efforts have during the past quarter-millennium created heretofore-unimaginable wealth.

Following in Marx’s footsteps, many people have identified greed as capitalism’s essence. But like private property, trade and profit, covetousness is nothing new. Like these defining characteristics of commerce, it is as old as the Old Testament. Max Weber concluded correctly in The Protestant Ethic and the Spirit of Capitalism that “it should be taught in the kindergarten of cultural history that this naïve [conception] of capitalism must be given up once and for all. Unlimited greed for gain is not in the least identical with capitalism, and is still less its spirit.”

Capitalism is a 250-year-old collection of institutions and practices. They include legal incorporation, liability protection and joint-stock companies, venture capital, open entry into and exit from markets, the light hand of taxation and regulation, and bookkeeping practices; and their purpose is, by enabling daring and creative producers to create goods, services and methods that did not exist before, to serve consumers in ways that have not hitherto been considered. Capitalism is not solely or even primarily about things. Rather, it is about virtues that harness and spur human ingenuity. Max Weber incorrectly identified the calculation of profit and loss, the strictly cost-conscious analysis of means in relation to ends, as its essence. Correctly, however, he foresaw that these things would fertilise the growth of bureaucracy – and the syllabus and catechism of contemporary business schools. Weber likened the tyranny of established ways to a lumbering locomotive that confines spontaneity to iron rails. He seemed to have in mind the huge industrial complexes of the turn of the 20th century and the private-but-privileged-by-the-state behemoths of today’s welfare-warfare state. He quite rightly dreaded the locomotive’s approach.

Abraham’s Capitalist Children

Capitalism arose first in one corner of the world, namely the British Isles and parts of Western Europe, that the Christian, Jewish and Muslim faiths have influenced. These religions taught their faithful that the material world is ultimately intelligible. How so? Because all things therein spring from the mind of an omniscient Creator who made man His steward. Over the centuries, their adherents learnt that the earth is a realm given to them in trust but not in its final material form. They also learnt that in order to exercise their dominion and receive their inheritance they must, among other things, investigate and establish its properties; and to do so, they must bring to bear their propensity to inquire, choose and create. This belief and these behaviours facilitated the development of an economic system premised upon the notion that wealth springs from the individual’s mind, its will and their output.

Clearly, however, humans are not creators in the same sense that God is. People cannot make something from nothing. If we had not first inherited the world, then we would have naught with which to produce. Given the incomplete and ever-changing world bequeathed to us, and given the abilities endowed in us, we can, if we so choose, devote ourselves to the Creator’s service. For Muslims, Jews and Christians, “be it according to His will” is the basis of prayer and work. We open ourselves to Him so that He might act through us. This means, among other things, that we must constantly seek more and better ways to act as stewards. Like that of any steward, our tenure is conditional. Hence the necessity that we strive to do more, do it better and correct our many faults.

It is important that Christians and Jews recognise the important contribution of the Muslim faith to commerce and capitalism. As Imad Ahmad shows, there is a strong relationship, little appreciated or even known in the West, between Islam and Markets (see also the “free markets” link at the Minaret of Freedom Institute). The Koran “is filled with parables using the language of trade. It was merchants, not soldiers, who were mainly responsible for the spread of Islam throughout the world.” The rise of Islamic civilisation contributed decisively – and, ironically, more in Christendom than in the Muslim world – to economic development and economic science. Indeed, “in his history of economics [An Austrian Perspective on the History of Economic Thought], Murray Rothbard noted the more advanced understanding of markets found among the Scholastics and in the 16th century school of Salamanca, compared to that of the ancient Greeks” (see also Islam and the Medieval Progenitors of Austrian Economics).

Ahmad also advances a dismaying (for the evil neoconservatives) and exhilarating (for the glorious paleolibertarians) hypothesis: “the rising tide of Islam today is in part a reaction against the Arab socialism that has destroyed the markets of the Muslim world. That the rejection of secularism and of socialism should come hand-in-hand should not be surprising. One cannot be a Muslim and [also be] opposed to freedom of enterprise.” Tom Bethell provides corroborating evidence. “Property is [presently] held insecurely all over the Arab world. ... The problem is that there is no security against the depredations of the state. ... Ruthless autocrats, guarded by their own military, have been able to prevail for decades against impoverished masses.” The embrace of “Arab Socialism” in the 1950s, aided and abetted by Western governments, entailed widespread expropriation of property and the imposition of centralised state control. Bethell notes “economic decline has been just one consequence” and adds presciently that “this situation is potentially serious for the rest of the world. Young men growing up in large numbers with no material prospects have in the past posed a serious threat to civilisation.”

Ahmed’s conclusion is upbeat. “Like their cousins, the Jews, the early Arabs had a strong commitment to trade and bargaining. The rise of Islam did not change, nor did it seek to change, the centrality of trade and commerce to the Arab way of life. On the contrary, the establishment of commercial law, the expansion of property rights for women, the prohibition of fraud, the call for the establishment of clear standards of weights and measures, and the uncompromising defence of property rights (even while calling for a greater responsibility for alleviating the plight of the poor and needy) pushed the Islamic civilisation to the front of the world’s economic stage and made the Muslim world the defining force in international trade for over 800 years. The Islamic activists throughout the Muslim world can help to usher in a new Renaissance if they avoid the temptation to yield to political pragmatism and hold fast to the pro-market principles of Islam.”

Leges Sine Moribus Vanae

Our Creator has endowed us with the capacity to distinguish right from wrong. He has also bequeathed to us the responsibility to choose among competing alternatives. Each individual must therefore decide whether he will be led towards virtue or succumb to vice. To be truly free is constantly to strive towards and, more often than not, choose virtue. As Lord Acton put it (Selected Writings of Lord Acton: Essays in Religion, Politics and Morality, Liberty Fund, 1988), “Liberty is not the power of doing what we like, but the right of being able to do what we ought. ... Liberty is the prevention of control by others. This requires self-control and, therefore, religious and spiritual influences. ... [In Western countries] liberty has not subsisted outside of Christianity.”

Like people in all other walks of life, therefore, businesspeople can, as they deploy the material resources at their disposal, choose to act rightly. Seen in this light, the gift of commerce and capitalism is that it encourages people to choose upright behaviour. Buying and selling in the market and accumulating and divesting capital facilitate various virtues. The first and foremost is honesty; and others include independence, diligence, intelligence, prudence, trust and co-operation. But the choice is ours: whilst commerce and capitalism encourage virtue, they hardly guarantee it. Indeed, action in the market offers many vices and temptations to sin. Yet given man’s ability to reason and exercise judgement, it ultimately allows him, if only he will choose this path, to practice virtue, shun wrongdoing and therefore glorify God.

Private Property

The private ownership of labour, land and capital is fundamentally good because it provides many opportunities to glorify God. The Bible’s prohibition of theft would make no sense if God did not intend that we exercise dominion over ourselves, the earth and the fruits of mixing our labour with land. The individual’s ownership and maintenance of property is his way of exercising stewardship over a tiny portion of the universe. Clearly, individuals own nothing in any absolute sense; instead, as stewards, their task is to preserve and fructify what ultimately belongs to God. What does stewardship entail? One aspect is the husbandry of resources, i.e., the provision for one’s children and grandchildren. To husband resources is to deploy them as efficiently and effectively as possible. Good stewards act prudently because they always bear the future in mind. Implicit in good stewardship, then, is the preservation and growth of resources that have been entrusted to you.

Another aspect of stewardship is the devout enjoyment of God’s bounty, that is, the use of property as thanksgiving. Good stewardship thus balances consumption today and consumption tomorrow; equally clearly, God rewards those with low time preferences. Finally, good stewardship is charitable. Stewards willingly and gladly give some of what they own to the poor and unfortunate. Because God provides and preserves, and is merciful and compassionate, He rejoices when we imitate these virtues.

To own property and act as a responsible steward of it imitates God’s sovereignty over the universe. Faithful imitation of God, in turn, glorifies God. Accordingly, to restrict and deny the opportunity and responsibility of ownership, as politicians, academics and clergy of all stripes unthinkingly do these days, is to deny individuals the opportunity to exercise stewardship – and thus to imitate and honour God’s sovereignty. Seen in this light, critics and opponents of private property mock God.

Buying and Selling in the Market

Buying and selling in the market are fundamentally good because they too provide the opportunity to glorify God. Buying and selling – that is, undertaking exchange beyond barter – are necessary conditions of anything beyond subsistence. If autarky reigned – that is, an individual or family could buy and sell nothing, and had to subsist exclusively from the food, shelter and clothing it produced – then material standards of living would be woefully and needlessly low. Conversely, becoming a specialised producer of a particular good or service, trading one’s output in exchange for money and then exchanging that money for the output of other specialised producers – in short, introducing and following to its logical conclusion the principle of the division of labour – will over time raise material standards of living. To live a materially richer life, in turn, fulfils God’s purpose that we enjoy with thanksgiving the resources we have inherited.

Commercial transactions, then, are not a necessary evil. Nor are they morally neutral. Quite the contrary, they are inherently good because they are means towards an unequivocally good end – the benefit of other people. Through our innate capacity to reason, God has given us a mechanism, the market, whereby we can advantage one another. Buying and selling thus provide a concrete means to love one’s neighbour – whom one might never have met because he resides on the other side of the world – as one loves oneself.

This point is fundamental. Precisely because they are so often impersonal, and precisely because buyers and sellers are usually honest, business activity exerts a significant civilising influence upon buyers and sellers. People who might not normally trust one another (because they live on different continents, speak different languages, practice different faiths, etc., and therefore might never come into direct contact with one another) learn, from their repeated and usually satisfactory experiences in the market, that it makes sense – because it is beneficial – to trust others. “Commerce,” Baron de Montesquieu famously said, “is a cure for the most destructive prejudices; for it is almost a general rule, that wherever we find agreeable manners, there commerce flourishes; and that wherever there is commerce, there we meet with agreeable manners.” Hence the insight of Britain’s foremost pamphleteer of free trade, Richard Cobden: “I see in the [principle of voluntary exchange] that which shall act on the moral world as the principle of gravitation in the universe, drawing men together, thrusting aside this antagonism of race, creed, and language, and uniting us in the bonds of eternal peace.”


Stripped of many and varied complications, if I sell a good for more than I expend in order to produce it, then I earn a profit. If I am a baker, bake a dozen loaves at a cost of $12 and sell them for $18, then I have earned $6 of profit. If people are prepared to pay for my bread, then they tell me, in effect, that the fruits of my mind and labour are valuable. In that sense, these activities benefit me. But there is much more: if people are prepared to pay $1.50 for a loaf that costs me $1 to produce, they demonstrate that the loaf is more valuable to them than it is to me. My labour has thus added value to the materials I have expended to produce the bread. Profit is thus not just a tangible indication that I have made something that other people value: it is also evidence and that I have benefited them.

Clearly, the lower my costs then, other things equal, the greater my profit. Thus profit can indicate that I have used resources relatively efficiently and effectively – that is to say, that I have acted as a good steward of these resources. If I use fewer resources to produce a given amount of output, then more remain for use today or tomorrow, either by others or me. Far from being a necessary evil, then profits are a tangible sign of service and stewardship.

In the parable of the minas (Luke 19:12-26), Jesus recounts that a nobleman summoned ten of his servants and gave one mina (a sum roughly equivalent to three month’s wages) to each. The nobleman then said “engage in business until I come.” The servant who greatly fructified the resources entrusted to his care, who turned one mina into ten, was rewarded greatly. Rejoiced the nobleman: “well done, good servant; because you were faithful in a very little, [you shall] have authority over ten cities.” Another servant, who generated five minas from one, also found favour. He received authority over five cities. But the servant who generated no profit, who placed the mina entrusted to him in a handkerchief and then returned it to his master, was severely rebuked. “Why then did you not put my money in the bank, that at my coming I might have collected it with interest?” Added the nobleman: “take the mina from him, and give it to him who has ten minas. ... For I say to you, that everyone who has will be given; and from him who does not have, even what he does have will be taken away from him.”

The nobleman, of course, is a proxy for Jesus, who travelled to a distant country to receive a kingdom and then returned to reward his servants. Clearly, the parable applies most fundamentally to the spiritual gifts that Jesus entrusts to us. Tellingly, however, it is presented in explicitly commercial terms, and in order to make sense it must also apply to material and financial resources. They are part of what God has entrusted to us; profits, in turn, help us to gauge the results of our commercial and capitalistic services to others; as such, they can and should be used to glorify God. Hence the vital point: commerce, capitalism and stewardship have many rewards, material and spiritual, but they also entail great responsibilities. “ And that servant, which knew his lord’s will, and prepared not himself, neither did according to his will, shall be beaten with many stripes. ... For unto whomsoever much is given, of him shall be much required: and to whom men have committed much, of him they will ask the more” (Luke 12:47 – 48).

Some Lessons Spiritual and Secular

For both spiritual and secular people, commerce is inherently good because it encourages us, as individuals acting in the market, to practice virtue. And capitalism, which builds upon the foundations laid by commerce, is inherently good because it enables us, as groups of co-operating individuals such as businesses, to accumulate capital and thereby help others to help themselves. In Australia and around the world, business is the best hope for the poor. As Friedrich Hayek put it, “capitalism created the proletariat, but not by making anyone any the worse off; rather, by enabling many to survive who would not otherwise have done so.”

Hence the first lesson is to students, undergraduate and postgraduate, who are presently suffering through the dreary irrelevancies and laughable absurdities of business school and mainstream economics: there is something that your instructors have probably not told you (likely because it has never occurred to them). This something may be more important than anything else in your life except your marriage and your children. It is that business is a calling, and people are called to it because commerce and capitalism, properly conceived and practised, are inherently good. Do you want to make a difference? One way is to do business.

The second lesson is to entrepreneurs, company directors and funds managers. Forget the platitudes, irrelevancies and inanities of most “mission statements,” codes of conduct and the like. Remember above all one thing that, like the Ten Commandments, is very simple to understand but very difficult to practice: you are stewards. Great rewards, spiritual and material, await faithful ones; and great punishments (also spiritual and material) will condemn disloyal ones.

The third lesson is for Pharaoh and his priests. Let us acknowledge that these days in Australia, significant parts of organised and bureaucratised religion have succumbed to statism and thereby repudiated Scripture (see Letter 59). By embracing the very Scripture that many churches have abandoned, individuals can liberate themselves. Yes, tyrants – secular and religious – misuse it in order to oppress groups. But let not these abuses obscure the truth that the Gospel of Jesus Christ is an individual-level, voluntary and thus extraordinarily powerful regulator of human behaviour. Subservience to God (if you are devout) and service to others (whether you are devout, agnostic or atheistic) and above all the triumph over the welfare-warfare state, whose agents dare to regard themselves as God – these things presuppose mastery of oneself.

Scripture promotes self-mastery. It reveals the foibles of human nature and the possibility of redemption; it inspires the defeat of misfortune; and it cultivates a disciplined way of life that inculcates peace of mind. Let us therefore rejoice that we, together with Jews and Muslims, are the children of Abraham; that there is one God who made all things; that God ought to be worshipped; that He helps those who serve others; and that the soul who embraces Christ is saved for eternity. And let us never forget the message that the Tenth Commandment sends to politicians, academics and anybody who believes, for whatever reason, that property should be confiscated, markets suppressed and profits redistributed. That message is unmistakably loud and clear: go to Hell.

The final lesson is for humanity. Ian Harper recounts it admirably in Christian Morality and Market Capitalism: Friends or Foes? The writer of the Book of Ecclesiastes, identified only as Qoheleth, seeks to discover the meaning of life. He pursues worldly pleasures and material riches but is ultimately disappointed (Eccl.2: 10-11):

I denied myself nothing my eyes desired;
I refused my heart no pleasure.
My heart took delight in all my work,
and this was the reward for all my labour.
Yet when I surveyed all that my hands had done
and what I had toiled to achieve,
everything was meaningless,
a chasing after the wind;
nothing was gained under the sun.

Qoheleth was not an anti-materialist. “I know that there is nothing better for men than to be happy and do good while they live. That everyone may eat and drink, and find satisfaction in all his toil – this is the gift of God” (Eccl.3: 12-13). Yet he also knew something that eludes most of us: namely that wealth (and, by implication, commerce and capitalism) is not an end: it is one of several means towards an end. “Whoever loves money never has money enough; whoever loves wealth is never satisfied with his income” (Eccl.5: 10). So what is that end? How to close the circle of our felicities? How, in short, to live one’s life? Qoheleth concludes: “fear God and keep His commandments, for this is the whole duty of man” (Eccl.12: 13).

Chris Leithner


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