The Nobility of the Bourgeoisie; E. Opitz

Business, in short, is the eco nomy. Business is the sector from which our material abundance pours forth, in such quantity that The Reverend Mr. Opitz is a member of the staff of the Foundation for Economic Educa tion, a seminar lecturer, and author of the book, Religion and Capitalism: Ames Not Enemies. 600 EDMUND A. OPITZ we are - in that respect - the envy of the world. Few of those in for eign nations who profess to des piseour materialism would carry their antipathy so far as not to avail themselves of our surplus which of course they accept only as a favor to us! American money and goods have poured into all corners of the globe since World War II, a golden flood financed by the American taxpaper to the tune of some two hundred billions of dollars. The American economy is an incredibly productive economy; it turns out the goods and services people want and are willing to buy in such quantities as to make us the wealthiest nation on earth. Our material well-being is directly linked to the business system, and that business system has made us an affluent society. Most of the problems that beset us are directly 1975 THE NOBILITY OF THE BOURGEOISIE 601 related to affluence; we consume a lot, there's so much to throw away, so much leisure time to fill, traffic jams - and so on.

So if we ask "What is the role of business in society?" the easy and obvious answer is "It is the role of business to respond to con sumer demand by supplying the goods and services people want." And business performs this role so well that the one-sixteenth of the world's population living in the U.S.A. not only owns the great bulk of the world's goods and lives highest on the hog, but carelessly wastes more than any other nation consumes. The American economy is highly productive, but business nevertheless finds itself with a tarnished image, the butt of many attacks. Professor J. D. Glover of Har vard Business School writes, "In volumes upon voJumes of testimony before Congressional committees, in popu~ar novels, in learned trea tises and textbooks, in poetry, in sermons, in opinions of Supreme Court justices, 'big business' and its works are seen as evil and at1tacked. The literature of criti cism of 'big business,' and of the civilization it has done so much to bring into being, represents by now a perfectly staggering mass of material."

Now, it is of course true that business is not the only sector of our society which is presently under fire. Our whole civilization - western culture - has been under siege for several generations, and to the extent that our culture em bodies bourgeois values, the attack against the west will join forces with the revolutionary thrust to unseat the bourgeoisie. Further more, an facets of our society labor to defend themselves, for have we not been told that there is a ferment in the schools, a crisis in religion, an emergency situation in government, and anarchy in the arts? "The Good Old Rule" The attack on business is noth ing new. The bourgeois is the townsman, and his emergence was opposed by the aristocracy, whose values were quite different. "The nobleman has courage, spends without counting, despises petty detail. There is a great air of freedom and unse~fishness about the nobleman. He will throw his life away for a cause, not ca.lculate the returns. That is the noble idea.

In reality, he lives by the serfdom of others, and he broadens his acres by killing, and taking other people's land - 'the good old rule, the simple plan. That they should take who have the power, and they should keep who can.'" These words are those of Jacques Bar zun, from his 1973 A. W. Mellon 602 THE FREEMAN October Lectures, published as The Use and Abuse of Art. Dr. Barzun continues, "The bourgeoisie opposed such noble free-handedness and supported a king who would replace 'the good old rule' by one less damaging to trade and manufacture - and to the peasants' crops. But the re grettable truth is that there is no glamour about trade. Trade re quires regularity, security, effi ciency, an exact quid pro quo, and an exasperating attention to detail. ... There is nothing spontaneous, generous or large-minded about it. Man's native love of drama rebels against a scheme of life so p,lod ding and resents the rewards of qualities so niggling."

"What a convenient word is bourgeois!" Dr. Barzun observes. "How expressive and well-shaped for the mouth to utter ,scorn. And how flexible in its applicati~n - it is another wonderful French in vention !" It is generally conceded tha t business is something more than the mere· prod uct.ion .of goods and services: business is the produc tion of goods and services in re sponse to the voluntary actions of people in the marketplace who either buy or refrain from buying. Business, in short, is the way a free society organizes its eco nomic activities. The buying habits of customers are a clue to producers to manufacture more of this and less of that, or, possibly to go out of business altogether. A more precise designation for this way of doing business· is The Market Economy. The Market Economy Let me draw a distinction be tween The Market Economy and the market. The market is simply a shorthand term for the voluntary exchanges that take place between people as they go about improving their economic circumstances. Tal ents vary from one individual to another, and people di~cover that they can produce more and enjoy more if they specialize in produc tion and then exchange the sur pluses that specialization generates - my oranges for your apples, and so on. Barter occurs among the most primitive of peoples, and when money is introduced it simply facilitates multiple exchanges.

These voluntary exchanges con stitute the market, so we can say that the market operates every where man has ever lived. And the market operates today even in con trolled economies like Russia and China. The market will be with us so long as man is man; it is a basic human institution. The market, yesterday, today, and forever; but the market econ omy is a rare phenomenon which has emerged only for short periods 1975 THE NOBILITY OF THE BOURGEOISIE 603 during human history. The market economy is the market institution alized. The market by its own de vices does not produce the market economy; a catalyst is needed for that - several catalysts, perhaps. The market economy needs the bourgeois virtues; it needs the middle class. Now, the middle class rarely inspires the poets and men of letters, but that remarkable woman, Freya Stark, puts her finger precisely on the point. "I will hold that the middle class pro duces civilization because it is the only class constantly trained to come to a conclusion, poised as it is between the depth and the height. It is not rich enough to have everything, nor poor enough to have· nothing - and it has to choose; to choose between a suc culent table and a fine library, between travel and a flat in town, between a car. and a new baby or a fur coat and a ball dress. It has enough of the superfluous to give it freedom from necessity but only through the constant use of discrimination; its life therefore is of one long training of the judgment and the will. This by it self does not manufacture great ness; but it is the soil on which it is possible to make it gro\v."

Now, whatever our assessluent of the middle class and its virtues, we would have to agree as a matter of historical fact that it has been a target for attack from many quarters, and it continues to be a target. Karl Marx added enormous momentum to the assault. Marx's notion of surplus value and his exploitationth~ory inspired rev olutionary frenzies on all conti nents, even though Marx was dead wrong. Marx's charge is that the income of the bourgeoisie, or the capitalist class, comes out of the hide of the working class; some people are given an economic ad vantage over other people, and thus some live at the expense of others. The Consumer in Charge This description does fit the situation wherever the market economy has not been established; feudalism operated this way, and also every aristocratic order. But in the market economy - or system of liberty - the businessman's in come is a measure of his success at pleasing customers. He's at their merey, for if they do not buy he does not stay in business. Every man's income is determined in similar fashion. A man's wage is a measure, in monetary terms, of what people think his services are worth. What a man earns is not a measure of his true worth, sub specie aeternitatis,. it simply tells us what his peers think of him, and they may be wrong.

But right or wrong, it is con604 THE FREEMAN October sumers in voluntary action who determine the division of rewards in a free market. "It is a pro position of elementary economics," writes Frank R. Knight, "that ideal market competition will force entrepreneurs to pay every pro ductive agent employed what his cooperation adds to the total, the difference between what it can be with him and what it would be without him. This is his own product in the only meaning the word can have where persons or their resources act jointly." The Power to Please In the free economy, a man advances his economic fortunes by trying to please consumers, over whom he has no authority save persuasion and the sales appeal of his goods. This is the business system. Every alternative to this voluntary arrangement puts gov ernment at the service of the powerful who, by the exercise of coercion, obtain their income at the expense of those without power. Government, in this scheme, is an instrumentality for distri buting economic advantage, and a man's income will depend on favors from the politically powerful.

Either that, or he must wield power himself. A society arranged in this latter fashion is accurately labeled a system of privilege, in contrast to the system of liberty. Neither system exists historically in pure form, but one might sche matize the difference by saying that in the system of liberty a man derives his financial rewards by pleasing the customers, whereas under every system of privilege he obtains an income by pleasing politicians. Now this latter arrangement is indeed a system of exploitation; government - by taxation and sub sidy - takes a portion of wealth from those who produce it and distributes it to people who have not earned it. But paradoxically, it is this arrangement - variously disguised - which now ranks high in public esteem, while the busi ness system - which rewards men according to their productivity is ever on the defensive. Businessmen taken individually are, I suppose, as good and as bad as the average run of people in any other sector of society. They· are guilty of fraud on occasion, and so are scientists; but no one on that account suggests that the scientific enterprise be subject to all sorts of government regula tions and bureaucratic controls.

Businessmen are sometimes tempted to overstate the virtues of their product, just as some newspapers are prone to slant and distort news items. But no one suggests government censorship of the press. Government itself is 1975 THE NOBILITY OF THE BOURGEOISIE 605 occasionally guilty of suppressing facts and keeping the public in the dark; but who will guard the guardian? The point is that when politics is invoked to cure a social ill it is usually business that suf fers a loss of portions of its free dom to government controls. Freedom Indivisible; Depends on Enlightened Self-Interest But economic freedom is not that important, it might be said. Liberties of the mind, on the other hand, or liberties of the spirit, they must be protected. The intel lectual must be free, but it matters little whether the businessman is bureaucratized or not. As a matter of fact, freedom is all of a piece, and if we fail to resist government encroachment into any sector' of life because we deem that sector unimportant to us, then we will enfeeble our capacity to resist where we deem resistance vital.

Milton Friedman, tongue in cheek, offers a clever observation here, linking the businessman with the intellectual as the twin ene mies of freedom. "It has often seemed to me," writes Friedman, "that the two greatest enemies of the free market are businessmen and intellectuals, for opposite rea sons. The businessman is always in favor of free enterprise - for everybody else; he is always op posed to it for himself. The intellectual is quite different; he is always in favor of free enterprise for himself, always opposed to it for everybody else. The business man wants his special tariff or his special governmental commission to interfere with free enterprise, in the name, of course, of free en terprise. The intellectual, too, wants such commissions to control the rapacious man. But he is against the idea of any interfer ence with his academic freedom, or his freedom to teach what he .wants and direct his research as he wants - which is simply free enterprise as applied to him."

Everybody wants to be let alone so that he is free to pursue his own bent, but only a handful of people have ever worked as hard for other folk's liberty as they do for their own. Wouldn't it be a nice arrangement if scientists worked for freedom of the press, and editors for the rights of medi cal doctors, and doctors stood firm for freedom of speech, and church men jealously guarded freedom of economic enterprise? Alas, it is not so, and paradox ically, many businessmen have no concern for the free economy if a political intervention maximizes their profits even though it de teriorates the general climate of economic liberty. This would not matter much, except for the fa.ct that economics deals with our sub606 THE FREEMAN October sistence, and if some one gains control over the economic means which we must have or die, he has acquired an enormous leverage over every sector of our lives. This is self-evident; it is so obvious that we tend to overlook it. We forget that the essence of slavery is the command over another's will gained by controlling his access to the food and shelter he needs to survive.

,Parliaments discovered "the power of the purse" centuries ago; an unruly king could be made more pliable if an elective body could cut him off at the purse strings. Alexander Hamilton reminded the Colonists of this point in his 73rd Federalist Paper: "The legisla ture, with a discretionary power over the salary and emoluments of the Chief Magistrate, could render him as obsequious to their will as they might think proper to make him. They might, in most cases, either reduce him by famine, or tempt him by largesses, to sur render at discretion his judgment to their inclinations." Hamilton does acknowledge that there are some men whom no threat can cow: "There are men who could neither be distressed nor won into a sacrifice of their duty; but this stern virtue is the growth of few soils; and in the main it will be found. that a power over a man's support is a power over his will." Economic Control Hamilton was so keen on this point - that economic control is the. control of the means for all human ends - that he drove it home by a further reference in his 79th Paper: "In the general course of human nature, a power over a man's subsistence amounts to a power over his will."

Work is built into the human situation; human beings must actively transform portions of their natura:I environment - raw materials - into consumable forms (food, clothing, shelter, and the amenities) or we perish. We are not "free" to disregard this or any other fact of the human situation, that is,· if we want to succeed in our various endeavors. We are not "free" not to work. People who work in a system of privilege totalitarianism, Communism, So cialism, collectivism - labor for a single employer, the State. This is a command economy; every person labors at the task the State as signs him, or else! As George Bernard Shaw once put it, "Com pulsory labor, with death as the final penalty, is the keystone of Socialism." People are controlled by State control of their livelihood. Material necessities are omni present, and a system of liberty the free economy - does not elim inate them: human energy must be expended in order to fashion con1975 THE NOBILITY OF THE BOURGEOISIE 607 sumable goods out of natural re sources. But here, in a free soci ety, every man and· woman is free to choose the context for his or her productive actions; a person may choose to work for himself or, al ternatively, he may choose among employers and work for wages.

And if the wage and price struc tures are flexible, the free economy has an insatiable demand for la bor; when the market is truly functional, jobs are abundant. The economic forces generated by the business sector of society do not cause unemployment; mass unem ployment results from the politi cal distortion of economic forces. Business Serves Society I am suggesting that the blame is misplaced when business is ac cused of causing unemployment, and of somehow falling down on its presumed responsibility to keep everyone working. The real rea sons for poverty and unemploy ment must be sought from the economists and political scientists. Meanwhile, let us ask what posi tive contributions business makes to the good society, in order to give credit where due. Some ye.ars ago I was involved in a project in this area, with Admiral Ben Mor eell, and I'd like to summarize our conclusions. We found, first of all, that the social forces set in mo tion by business and industry tend to reduce coercion, prejudice and irrationality in human af fairs.

1. Coercion There is general agreement among political philos ophers as well as the public at large that political action is co ercive. What about business ac tion; ,is it also coercive? The an swer is No. The businessman, as such, has no power to coerce. He cannot force people to buy his goods or services. He may call up on government for special privi lege and thus obtain a coercive monopoly. But by doing so he for feits his status as purely a. busi nessman and hecomes in part a politician, or at least the junior partner of a politician. The production and exchange of goods and services is a wholly peaceful procedure. A business so ciety tends to be a peaceful soci ety if only because peace maxi mizes the conditions under which the production and exchange of goods is facilitated. And peace is essential for social progress and individual advancement. The businessman, having no means of coercion at his disposal 1 must rely on persuasion, advertis ing and public relations. Every other person, at home and abroad, is his potential customer; so other persons must he cultivated if they are to become customers. The peaceful exchange of goods 608 THE FREEMAN October throughout the world paves the way for exchange of ideas and en courages personal travel. These are of the essence of business ac tivity, and they comprise the things which make for peace. So, on the whole, business tends to reduce coercion in human affa.irs.

2. Prejudice A man's judgment can rise no higher than his ac quaintance with the facts. Preju dice is a premature judgment based on insufficient evidence. As applied to human affairs it implies an irrational dislike of some peo ple based on their opinions, their nationality, the color of their skins, or their religion. What does the rationale of business do about overcoming prej udice? The clear cut answer is that, in this area, economic considerations have top priority for the businessman. In general, the businessman does not concern himself with the color of another person's skin if the color of his money is all right. Thus money may be a social device pro ductive of great good, even though the love of money. be the root of all evil. , As an employer, the business man penalizes himself when he refuses to hire the best available man for the job because of some noneconomic considerations. His business sense dictates otherwise.

The same is true when, as a seller of goods, he refuses to make a sale for other than economic reasons. Thus the mechanism of trade acts to break down the barriers of prejudice. 3. Irrationality In a good so ciety people act in reasonable, sane, and sensible ways, and busi~ ness disposes them so to act. Mod ern business rests on technology which, in turn, rests on science. Science and technology demand a high-level, rational pattern of thought and action. The scientist, the engineer, the busjness man ager must an be rational. Thus, business contributes to the forces in our society which exert a strong pull in the direction of reason ableness in human affairs. Desirable Business Traits Now let us see what desirable positive traits are fostered by business. There are at least four important ones; integrity, under standing, reasonableness, and in dividuality. 1. Integrity No society can long cohere unless people find that they can trust one another, nor can a business long endure unless its products represent honest workmanship. Regular customers, an essential for the survival of any business, cannot be attracted and held without a quality prod·· uct. Our entire system of deferred exchanges and credit is based on trust. The enormous network of 1975 THE NOBILITY OF THE BOURGEOISIE 609 mutual trust and confidence which underlies our system of business is a social force of gre,at momen tum, heading in the· right direc tion. It makes for integrity in so ciety.

2. Understanding A hermit who grows his own food and pro duces for his own use consults only his own needs and tastes. But everyone who produces goods or services for exchange must consult the needs and desires of other people. The businessman must build up a clientele. He can not do this unless he understands the need of his customers and causes them to feel that he can be trusted to fill that need, now and in the future, for products they want at a price they can afford to pay. 3. Reasonableness The vital stake which business has in peace tends to create situations in which men seek a reasonable adjustment of their differences instead of fighting about them. A businessman does not want conflict with his customers, he wants to reason with them so he can persuade them to accept his goods. As the atmosphere of rea sonableness begins to permeate all of society, people come to appreci ate the variety in human life. In stead of a desire to make other people over in their own image, they want every other person to progress as far as he can "on his own steam." In a reasonable soci ety no man tries to play God for other men.

4. Individuality To the extent that business enables persons to take care of the economic require ments of life with a minimum ex penditure of time and energy, it puts at their disposal incre1asing amounts of both, to be used in whatever individual and creative ways they see fit. Not every per son will use them wisely, but if the surplus does not exist, if peo ple are bound down by unceas,ing toil, there can be no flowering of those higher faculties of man which I have mentioned before. Thus, business provides the con dition which can release whatever potentiality individuals may pos sess. The chief end of man is not to accumulate material goods; nearly everyone would agree that human destiny lies in another dimension. Every person is gifted with po tential talents, and he's equipped with an innate drive to bring them to a full and harmonious realiza tion. Now, neither the free eeon amy nor its business sector can guarantee such realizatlion to ev ery person; this is a matter for individual decision. All the free society can promise is maxim urn and equal opportunity - and this is all the guarantee we need. ~ @@~~@[f Bread ~[fu(ID0lJ @@(ID@ PRIVATE PROPERTY has been the object of attack ever since the first nonproducer enviously viewed the fruit of the labors of the first pro ducer. The institution of private property has been condemned for perpetuating every manner of so cial inj ustice imaginable. Marx and Engels called for the abolition of it, and Pierre Joseph Proudhon, a social-theorist contemporary of Marx, declared, "property is theft."! But how can one steal if there is no concept of property?