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Democratic Capitalism
by Micheal Hartoonian, Mississippi Market Member News, Volume 19, #5

Editor's note: Our guest speaker at this year's Annual Meeting was Dr. Michael Hartoonian, whom I had the pleasure of meeting through the Minnesota Active Citizenship Initiative. Dr Hartoonian is a professor of philosophy, ethics, and economics and Director of the Center for Economic Education at the University of Minnesota. He touched on topics at our meeting which were originally part of the following speech delivered to the MACI in November 1996.

I want to spend a few minutes with you talking about one fundamental idea. Let's start with a line from Charles Dickens' Christmas Carol. "If you don't understand that Jacob Marley is dead, nothing wonderful will happen." The idea we need to understand, or nothing wonderful will happen, is, without active attention to common wealth there can be no private wealth. The idea we must resurrect and understand again is the notion that our own well being-physical, psychological, economic, spiritual-is a measure of the well-being of the community in which we live. It doesn't matter how many walled suburbs you build, it doesn't matter how many jails you construct, unless you understand "common wealth" nothing wonderful will happen.

Values for the New Republic
I want to take us back to the year 1776. That was an important year basically because of two documents that were written that year. One was written primarily by Jefferson (The Declaration of Independence) and the other was written in Scotland by Adam Smith (An Inquiry into the Nature and Causes of the Wealth of Nations). The reason that we should focus on both of these documents is that they provide the political and economic foundations for this republic. In the Declaration of Independence Jefferson borrowed freely from John Locke. The phrase that we should focus on here is "life, liberty and property." Jefferson did not want to use the word property for a number of reasons, not the least of which was the fact that the meaning of the word was changing, and he wanted to use a concept that would be more to the point of what he thought the new republic should have as its core value. So he struggled and struggled to find a word that could take the place of property.

Jefferson was an admirer of Marcus Aurelius, the last sane Roman emperor. And Marcus Aurelius in his orations use to go around saying things like this, "You ought to serve your city not because its the right or even good thing to do, but because it is the joyful thing to do." What Jefferson was searching for was a concept that would embody the notion of joy and the action of service. And so he wrote, "life, liberty and the pursuit of public happiness." He brought the document back to the committee. And it was Ben Franklin, the editor, who said something like, "Come on, Tom, anyone with half a brain knows that the only kind of happiness there is, is public happiness. Let's get rid of that modifier and we'll have a great statement, 'life, liberty and the pursuit of happiness.'" Wonderful! These were men of the Enlightenment who understood their history. They understood that it was more blessed to give than to receive. They understood that Pericles lived in a mud hut so that he could donate his wealth to the glory of Athens and be proud of something bigger and more noble than himself.

These men understood happiness in a way that is different from our common understanding of the concept today. I believe this because over the last five years I have asked perhaps 3,000 high school juniors and seniors, "What do you understand by the pursuit of happiness?" To a person they think it has something to do with their personal happiness. It's my happiness! It doesn't occur to them that they live in a community, in a context, in a situation that calls for reciprocal duty with parents, neighbors, teachers and students. It's my personal happiness, they say. And, when you pursue the idea further, they think their own personal lives are going to be blessed. They're going to marry the right person. They're going to make lots of money. They're going to live in a big house. Their personal situation will be wonderful. Then, if you ask them about the general condition of the community, they say that we are going to blow ourselves up; we're going to poison ourselves; racism and discrimination will increase; and so forth. And I have to ask them, "Where do you think you are going to live?" "How can you have these fundamentally wonderful private notions and not be concerned about where you are going to live?"

Self-interest, Properly understood
In that same year of 1776, Adam Smith provided us with what became the economic foundation of our nation. And that was his phrase self-interest, properly understood. What is properly understood self-interest? It means that unless the free market is encased in ethics it won't work. Is that what we understand by capitalism? Think about it. Unless the market is encased in ethics, it won't work. I don't care how many lawyers you hire. I don't care how many contracts you write and I don't care how many prisons you build. Unless commerce is shot through with ethics, you can't operate a free market economy. One of the reasons we have trouble competing internationally has less to do with the high cost of labor or even the price of materials or bad management. It has to do with insurance costs and the cost of litigation. It has to do with a lack of ethics. Self-interest properly understood basically means that if you do not understand that your self-interest is tied to the interest of others in the community, you're not going to make it personally or as a community. Our private wealth is always a function of our common wealth.

These are the two foundations of the republic, public happiness and self-interest properly understood, and they are played out by people who understand that they are citizens of the republic before they are housewives, truck drivers, physicians, or teachers.

Ethical Fitness for a Time Between the Times
Now let me just say a word about the present, because that was then and this is now. We are living in a time between the times. We are moving from one basic economic epoch to another—from what we might call an industrial base to something called a service, information, or bio-technological based economy. We have not, nor should we, give up on agriculture or industry, for without these industries our base is gone. But almost 85% of us now work in the new economy, and at times like this we begin to ask fundamental questions like, "Who am I?" "What's my relationship to God?" "What's a family?" "What's a school?" And, "What is a nation?" The United States of America as a nation state—as a common wealth—is in question. We seem to have forgotten the relationship between civility and city, between civilization and citizenship. We need to take these relationships seriously, and understand that we are or should be moving from a culture of entitlement to a civic culture. This trend is important for democracy can only live within a civic culture—a culture that values citizenship.

If we think about this time as a time of opportunity, then we can redefine and address some of the problems that we have and reconstruct something better. What we need is a new ethical fitness. We have been active about physical fitness. Let's now think and get active about citizenship. Based upon new conceptions of work, particularly the work of the citizen, can you imagine what we could do if we played out our role as citizen? We need a new conception of the notion of citizen, and a new understanding of community, one that goes beyond the bonds of geography and embraces the public realm. The bigger part of community is what we understand as the public realm, the common values, the common wealth, the shared history, the shared memories and the personal and common dreams we have about the future. We need to re-conceptualize that community and to re-think our responsibility particularly as a reciprocal duty to one another.

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