The Northwood Idea; V. O. Watts

At the outset, we should note that the Northwood philosophy is based on what, for want of a bet ter phrase, we may call the Judeo Christian Ethic. Next, I shall refer to our emDr. Watts is Director of Economic Education, Northwood Institute, Midland, Michigan, a private college dedicated to the philosophy and practice of free enterprise. This article is from remarks at a recent faculty meeting there. phasis on work and thrift, not merely as economic virtues to pro duce so-called "material welfare," but as spiritual therapy; that is, as necessary means for "spiritual development" - welfare in its non material aspects. Finally, I shall remind you of the. necessity for business, that is, for commerce and finance, includ ing advertising and selling, book keeping, accumulation of cash re serves, banking, and the dickering of free markets. Business in this sense of the term is an essential aspect of every great civilization, and I believe it is necessary for the development of truly human and humane character and per sonality. That concluding idea, I expect, is the most distinguishing feature of what I have to say.

157 158 THE FREEMAN March 1. THE JUDEa-CHRISTIAN ETHIC As to the Judeo-Christian Ethic, I've been tempted to use instead the "Bourgeois Ethic," the ethic of the tradesman; but Karl Marx and others have given that phrase so nasty a connotation that I know I would have two strikes against me at the outset if I called our . moral code the "Bourgeois Ethic." Yet, whatever we call it, the moral basis for our North .. wood philosophy is the ethic which is necessary for a good life as a trader or financier. The Idea o/Individual Responsibility It begins with the idea of in dividual responsibility. This is the psychological basis for the J udeo Christian Ethic. The Ten Commandments and the moral injunctions of both the Old and the New Testaments were al ways directed to the individual: "Thou shalt have no other gods before me"; "Thou shalt not make unto thee any graven image" ; "Honor thy father and thy mother: that thy days may be long upon the land which the Lord thy God giveth thee."

These commandments were di rected to one preson, the individ ual, who is thereby charged with responsibility for his choices. In other words, humans must choose - that's what I mean by individual responsibility and self determination. Ideas and acquired values determine our specific ac tions, and they may prompt us to ignore various influences in the outside environment. We can di rect our own actions to prolong and enrich our Iives, or we can choose suicidal paths as people choose to smoke when they have abundant evidence that it shortens life. We can choose to jump off cliffs, we can choose to play Rus sian roulette; or we can choose ways of life, ways of health and welfare. The Idea 0/ Moral Law Of equal importance in the Judeo-Christian Ethic is recogni tion of the enduring nature of Moral Law. The essence of this moral law is summed. up in the "Golden Rule," and it derives from the fact that humans need one an other.

Without other human beings, we cannot be born, cannot be reared, cannot prosper; and to have the cooperation of other hu mans - to avoid the conflicts which would be suicidal for humans we must follow the "Golden Rule.:" When we apply it in practice, we find it is the unifying principle of those commandments that refer to the relations between the indivi dual and his fellows: "Thou shalt not steal," "Thou shalt not kill,"

1973 THE NORTHWOOD IDEA 159 and "Thou shalt not bear false witness." Now, it should be clear that obedience to Moral Law means voluntary cooperation and free dom. If we don't steal, we leave other persons free to use their tal ents in peaceful cooperative ways to produce goods for their own use, for exchange, or for gifts to others, such as gifts to one's family or heirs. Therefore, we have a state of individual freedom if we live by the "Ten Commandments." We have private property and number less associations for voluntary co operation. And humans develop as humans and make progress only in this condition of individual free dom and voluntary association es tablished by adherence to these moral principles. Therefore, these moral principles are antecedent to and take precedence over all man made laws and customs. Respect for Property In other words, these enduring moral principles require of us re spect for the property rights of other people - that· is, respect for their rights to control their own persons and for their rights to control those things which they obtain in voluntary cooperation, whether by gift, by voluntary ex change, or by the productive use of these things. Living by these principles requires that we fulfill our contracts, that we speak the truth, and that we revere the laws of Life and Nature. The human need for this reverence appears in the first four of the "Ten Com mandments."

We should note, incidentally, that this voluntary cooperation and ~x change is doubly productive of benefits in contrast to the one sided gain that anyone may get by coercion, as for example, by burg lary, by slavery, or by taxation. In voluntary cooperation, all partici pants must benefit if the coopera tion is to continue, for if it is vol untary, anyone may withdraw when he feels he is not benefiting, when he feels that the gains are distributed unjustly or going en tirely to one person or group at the expense of the time and energy of others. We should note also that living by the Golden Rule involves re spect for privacy - the right to be let alone and the right to choose one's associates. Coercion - the at tempt to compel people to associate with others - leads to conflict rath er than to the attitudes and ac tions which are mutually bene ficial. Freedom established by the Moral Law of the Golden Rule and the Ten Commandments includes the moral right to withdraw from an unwelcome contact with other persons, as well as the right freely 160 THE FREEMAN March to cooperate in mutually beneficial ways.

As Paul wrote in his "Second Letter to the Corinthians" 2000 years ago, "Be ye not unequally yoked with unbelievers; for what fellowship hath righteousness with unrighteousness and what com munion hath light with darkness? . . . Wherefore come out from among them and be separate saith the Lord . . . and I will receive you." (II Cor. 6: 14-17) Conditions 01 Sale I mention this because it is sometimes said that, by our rules at Northwood prohibiting the use of liquor and· marij uana and re quiring the women students to re turn to the dormitories at a cer tain time, we are coercing the students. This is not· true. We are thereby merely exercising our moral rights and duties in select ing those student associates who are to use the facilities provided by the college founders and sup porters. We use no coercion to en-' force these rules. To say that choosing our associates is coercion is a misuse of the term coercion.

We choose only to disassociate our selves from those who are not will ing to abide by our rules. Our rules are conditions for continued use of Northwood's fa cilities. We must have such rules, or standards, and we must separate ourselves from anyone not willing to accept them, if the Northwood Idea is to, have mean ing and effect. II. EMPHASIS ON WORK AND THRIFT Next, I wish to call attention to Northwood's emphasis on work and thrift as marks and means of human progress. It is fashionable in some circles nowadays to dis parage both of these. But, work is merely persistent, purposeful ef fort, and investment of human time and energy for long-range, indirect benefits. Long-range benefits are those that occur in the future. Indirect benefits are those that may first benefit another person, but bring a return benefit of some sort later. Such planned, purposeful effort for a long-range or indirect bene fit is. surely necessary for human survival and progress; and the traits of character and personality developed by such effort we regard as virtues.

Thrift is the postponement of present consumption in order to obtain greater satisfactions in the future. Like work, it requires the highest human qualities of under standing and imagination to fore see the future and to hold it in mind in order to gain the neces sary self-restraint. In short, work and thrift require understanding, 1973 THE NORTHWOOD IDEA 161 self -control. They are means, not only of self-development but of service to others. Without Savings and Tools, We'd Still Live in Caves Where would we be today had it not been for the thrift and work involved in the creation of our buildings, and the production of the myriad of tools, or capital goods, that we use ?The answer is we would still be living in caves, eking out a short-lived, hand-to mouth existence derived from the roots and grubs we could dig up, the small animals we could catch in our hands, and the berries we could get in season.

Everything that we call the ma terial aspects of civilization, and the moral and spiritual ones as well, our understanding that en ables us to live longer, to live bet ter and to cooperate - all of this comes from the thrift and work, the accumulations of thousands of years of human effort, inventive ness, planning, thrift andself-dis cipline. This Puritan Ethic - this sys tem of values, this way of life is essential to human living, not only economically but for develop ing the qualities that are most dis tinctively· human, the qualities that make us humane.,It is mental, moral, and spiritual "therapy," to use a modern cliche. III. THE IMPORTANCE OF BUSINESS Finally, if we are to have coop eration, we must exchange serv ices; and as the cooperation gets more and more complicated we need specialists to work out the terms and procedures of the multi tudinous exchanges. Therefor,e, we must use money and credit; and we must have traders and finan ciers, advertisers, brokers and salesmen, accountants and collec tion agencies to complete the ex changes, including those ex changes which are made over a period of time and which there fore require credit and finance.

Finance is the monetary aspect of credit. Credit is merely a de layed exchange, an incomplete ex change. In every civilized society, most exchanges take time to com plete because they are indirect, three-cornered or four-cornered exchanges, taking place over a dis tance and involving roundabout (capitalistic) methods of produc tion. In all such time-consuming transactions, we must have credit (trust and waiting). Therefore, money, credit and financial expert5 are as necessary for civilized life and progress as tools and ma chines, mechanics and engineers. Business, then, means those as pects of voluntary cooperation which we call commerce and fi nance, and the function of the 162 THE FREEMAN March businessman is to promote, in spire, and guide cooperation. He organizes and teaches competitive cooperation - cooperation to pro vide better opportunities for life and for a more abundant life.

These business activities - organ izing, inspiring, leading and teach ing cooperation - promote devel opment of the highest qualities of mind, character, and personality. Now, from time immemorial from the first introduction of mon ey and the specialists who traded and promoted trades - busine'ss has been widely regarded with suspicion and looked down upon as a degrading occupation. In primitive societies, the view pre vails that a merchant or money lender profits only at the expense of producers. This belief helps ex plain why such societies remain backward, or "underdeveloped." Of course, this belief is an en tire misjudgment as to what most of a businessman's wealth consists of and what he contributes to the value of other producers' services and incomes. Most of his wealth consists of the means for serving his customers, and he contributes some of the most essential ingre dients of human progress.

Wherever this disparaging atti tude toward business becomes gen eral, you'll find that business is harassed, regulated, plundered, and repressed; and under such persecution, the character and wis dom of businessmen tends to be low. Where opinion-makers teach that business is a dishonest racket, then those that are willing to be racketeers or cheats will monopo lize business, while achievers who value the good opinion of their fellows will choose other occupa tions, such as politics and the mil itary. Then we find the kind of government the Pharaohs had in ancient Egypt, or that prevailed as the Roman Republic gave way to the Empire. Under such oppres sive governments, a businessman must be something of a trickster to survive. Spreading Hostility As hostility to businessmen grows, politicians tax them more heavily, while debasing and in flating the currency to maintain an illusion of prosperity. Then, when these policies cause rising price levels, a deluded populace demands price controls, which am bitious politicians are all too ready to impose.

The resulting shortages and "black markets" provide further excuses for more government ac tion to combat these supposed evi dences of private "greed." This cancerous growth of gov ernment produces political "lead ers" who promise peace and plenty even while they squander the 1973 THE NORTHWOOD IDEA 163 fruits of industry in pauperizing the poor and waging "perpetual war for perpetual peace." The result must be, sooner or later, a spreading decline in the quality. of life despite (or because of) the increasing largess to "the poor" and the privileged, the rise of great new public works, and the display of awe-inspiring arma ments. Civilization progresses when business is widely regarded as Horatio Alger represented it in his stories 75 or more years ago. In those once-popular tales, work and thrift in honest business service were the high road to personal suc cess in the broadest sense of that word. That view of business helped attract able, enterprising youths into business careers. It prevailed in this country long be fore Alger wrote and helps explain the astounding economic and cul tural progress of the United States during the past two centuries.

On the other hand, insofar as we lose the Horatio Alger under standing and spirit, we succumb to increasing paternalism and des potism, collectivism and war, which demoralize and belittle the individual and produce a wide spread cultural decline. This has happened time and time again in history, and if we don't learn the lesson from this history, we shall be doomed to repeat it. Every nation has developed and flowered - with art, music and the other ornaments and means of civilization - only on the basis of flourishing business, trade and commerce. This was true of the Phoenicians, Ancient Greece, and Ancient Egypt, the Chinese civili zation, the Byzantine Empire, Venice, Florence, Spain, England, France, Germany and the United States. Go through the history of each and you'll find in its origins this period in which commerce and finance were highly regarded and relatively free in a developing civ ilization.

Again and again, however, these eras of progress have ended as the intelligentsia became worshippers of the Almighty State .. Then these intellectuals - scribes and priests - became more and more scornful of businessmen; and business lost its vision because it lost its men of vision. Men of talent and imagi nation, instead, accepted the faith of the state-employed intellectuals that a well-schooled elite must make more and more choices for the general run of the population and compel the inferior masses to accept this planning and direction of their lives. Submerging the Individual With this elitist excuse for tyr anny, governments organize mili taristic and imperialistic gangs to 164 THE FREEMAN March substitute forms of slavery for the voluntary cooperation of free in dividuals. Then, as in Communist China and Russia today, even the ablest of the ruling bureaucracies find that any individual is expend able - trapped and exploited or liquidated - as millions of humans are sacrificed on the altars of Planned Perfection. The Moral Law of the Golden Rule and of the Ten Commandments may be vio lated, but not with impunity. He who harms others, harms himself; he who deceives another, cheats himself.

This faith in Moral Law, I find, permeates the thinking of our Northwood administration and faculty. Along with it goes insigt ence on the fact of individual re sponsibility and a broad, long range view of personal success. A businessman's moral responsibility is no less than that of a teacher, physician, minister, artist or writer. Essential to the Northwood Idea, then, is appreciation of the unlimited opportunities for char acter development in voluntary business enterprise. Temptations correspond to the opportunities, and each occupation has its own peculiar temptations as it has its own peculiar oppor tunities. As few find the "strait gate" and "narrow way" of right eousness in other walks of life, like wise few businessmen will claim that they have always followed the right path in their own work. Only those who look for business profits in life-supporting efforts that are mutually beneficial can achieve success in the true mean ing of that word.

This, I believe, may be the most distinctive feature of the North wood Idea - the view that our graduates should look on business not merely as an easier way to at tain ease and affluence, but as an opportunity for utilizing their highest human qualities and at taining lasting satisfaction in a life well spent. ~ IDEAS ON LIBERTY Courtesy: A Saving Grace To BE DISAGREEABLE is high treason against your role in civiliza tion. Examples of this crime are: to say some sickening thing off handedly and make the victim writhe, or to provoke others into breach of good manners, or to indulge in crude behaviour or lan guage. There is no possible excuse for vulgarity. The Royal Bank of Canada Monthly Letter, September, 1972 CLARENCE B. CARSON THE FOUNDING OF THE AMERICAN REPUBLIC 20 Steering a Course for the Nation REPUBLICS had been notoriously unstable, fiscally irresponsible, subject to being pulled hither and yon by foreign influences, divided and laid open to civil commotions by partisan conflicts, and rent by contests over succession to leader ship. No fact troubled the more thoughtful of the Founders of the United States more than this one.