July

IDEASON LIBERTY 332 The Social Responsibility of Corporations and How to Make It Work CONTENTS for You by John Hasnas JULY Boom time for business ethicists. 1994 336 Communitarian and Individualist Ideas in Business by Aeon J. Skoble VOL. 44 If communitarianism prevails, it will become increasingly difficult to NO.7 sustain a modern economy. 339 Duty and Interest by Douglas Den Uyl The convergence of what we ought to do with what we want to do. 343 Ideas and Consequences by Lawrence W. Reed 346 The Worker in Contemporary Society by J. E. Chesher Expanding commerce and advancing technology offer new challenges-and opportunities. 351 The Ethics of Affirmative Action by Steven Yates Coercive preferential programs can never allocate skills where they are most needed. 354 The Parable of the Talents: The Bible and Entrepreneurs by Robert A. Sirico Is there a contradiction between business success and living the Christian life?

358 Sweet Speculation by John Ahrens The role of the speculator. 361 Art and Commerce by Barbara Dodsworth Art flourishes most dramatically when it pairs creativity with business acumen. 365 Money and Its Image Problem by Daniel Lapin The spiritual nature of money. 370 Commercial Banking in a Free Society by Steven Horwitz Free banking would mean safer, more efficient, and more productive banking. 373 Regulation and Productivity by John Hospers Three examples of how regulation adversely affects the business community. 377 Business in the Global Community by Robert W. McGee The benefits of voluntary exchange. 379 Peace, Political Science, and Pedagogy by Stephen G. Barone Can we teach peace? 381 The Tribal Premise of Welfare Capitalism Illustrated by Anne Wortham The dangers of "positive entitlement." 385 Correction, Please! by Mark Skousen 388 Book Reviews Doug Bandow reviews Phantom Risk: Scientific Inference and the Law, edited by Kenneth Foster, David Bernstein, and Peter Huber; Bankers and Regulators, reviewed by Robert Batemarco.

THEFREEMAN IDEASON UBERTY Published by The Foundation for Economic Education Irvington-on-Hudson, NY 10533 Phone (914) 591-7230 FAX (914) 591-8910 President: Hans F. Sennholz ManagingEditor: Beth A. Hoffman GuestEditor: Tibor R. Machan EditorEmeritus Paul L. Poirot Lewisburg, Pennsylvania Book ReviewEditor Robert Batemarco Marymount College, Tarrytown, New York AssociateEditors John Chamberlain Cheshire, Connecticut Bettina Bien Greaves Resident Scholar, FEE Edmund A. Opitz Chatham, Massachusetts Columnists Lawrence W. Reed Mackinac Center for Public Policy Midland, Michigan Mark Skousen Rollins College, Winter Park, Florida ContributingEditors Charles W. Baird California State University, Hayward DQug Bandow Cato Institute, Washington, D.C. E. Calvin Beisner Covenant College, Chattanooga, Tennessee Peter J. Boettke New York University Clarence B. Carson American Textbook Committee Wadley, Alabama Thomas J. DiLorenzo Loyola College, Baltimore, Maryland Joseph S. Fulda New York, New York Roger W. Garrison Auburn University Robert Higgs Seattle University John Hospers University of Southern California Los Angeles, California Tibor R. Machan Auburn University Ronald Nash Reformed Theological Seminary Maitland, Florida James L. Payne Sandpoint, Idaho William H. Peterson Heritage Foundation, Washington, D.C.

Jane S. Shaw Political Economy Research Center (PERC) Bozeman, Montana Richard H. Timberlake University of Georgia Lawrence H. White University of Georgia The Freeman is the monthly publication of The Foundation for Economic Education, Inc., Irvington-on-Hudson, NY 10533. FEE, established in 1946 by Leonard E. Read, is a non-political, educa tional champion of private property, the free market, and limited government. FEE is classified as a 26 USC 501(c)(3) tax-exempt organization. Copyright © 1994 by The Foundation for Economic Education. Permission is granted to reprint any article in this issue, provided appropriate credit is given and two copies of the reprinted material are sent to The Foundation. The costs of Foundation projects and services are met through donations, which are invited in any amount. Donors of$25.oo or more receive a subscription to The Freeman. Student subscriptions are $10.00 for the nine-month academic year; $5.00 per semester.

Additional copies of single issues of The Freeman are $2.00. For foreign delivery, a donation of $40.00 a year is suggested to cover mailing costs. Bound volumes of The Freeman are available from The Foundation for calendar years 1972 to date. The Freeman is available in microform from University Microfilms, 300 North Zeeb Road, Ann Arbor, MI 48106. PERSPECTIVE Introduction When I learned of the chance to edit a special issue of The Freeman, I did not hesi tate with the topic I wanted to have explored, namely, how business is faring in our culture. I am slowlywritinga book, Business-Bashing, Why Commerce Is Maligned, so my attention was already focused on the topic. For years I have found the phenomenon of business bashing one of our world's greatest trage dies as well as paradoxes. In the following essays we explore how commerce is deni grated by many of the literati and why this is a mistake-and offer a better perspective on business and modern society.

A startling example of subtle denigration of at least big business is available in what film critic Vincent Canby says as a mere aside in his review of the 1992"docudrama" movie Hoffa. Here is how Canby delivers his clever anti-big business punch: "Hoffa's ties to the Mafia not only cost the rank-and file Teamsters millions of dollars but also set a pattern for corruption that tainted the entire labor movement. His is a quintessen tially American story, for only in America did Big Labor become a big business to rival Big Business." (Vincent Canby, "Big La bor's Master of Manipulation," The New York Times, December 25, 1992, p. Bl) Oddly, the bignessofmuch ofbusiness is in no smallway due to the heavy restraints imposed on business by the anti-commercialmentality. This has made it extraordinarily difficultfor small business to shoulder the legal burdens of holding the regulators at bay, of meeting their irrational and unjust requirements.

The assault on business does not come only from the intellectual left. Conserva tives perceive the nature of human eco nomic concerns no less unfavorably. Just notice The New York Times' conservative intellectual, A. M. Rosenthal, offering the following self-revealing comment: "In the 1992 campaign the Presidential candidates did their best to convince Americans that jobs, jobs, jobs were more important than freedom, freedom, freedom. Yes, the econ omy is essential and of course an econom330 ically weak American can't help the world. But those truisms became puffed up to a moral philosophy. They are neither moral nor a philosophy. Economic policy can cost or save jobs. Foreign policy costs or saves lives. History knows the difference, as do mourners." ("Zones of Freedom," The New York Times, December 25, 1992) This glaringly ignorant remark is illustra tive not only of the flippancy pundits are licensed to perpetrate but also of what ails some conservative thinking. We here wit ness the "private vice, public benefit" out look that has characterized much of it in modern times. The view has it that eco nomic considerations for human beings are necessary but by no means morally signifi cant. Jobs are not ethically important; life however is. Never mind that jobs are one of the main factors that make life possible for human beings. A public policy that stifles our economic efforts is as vicious, as vile as one that stifles democracy and freedom of speech. All these are aspects of a promising human community life.

Unfortunately prevailing political ideolo gies demean economics as dealing with something lowly, not with the proper, moral, or noble. The contributors to this issue do not share this perspective. Their articles should shed some light not only on the role of commerce and business in our lives, but also on what happens to a culture when that role is systematically denigrated. - TIBOR R. MACHAN Auburn University, Alabama A Harmony of Interests A man who criticizes the conduct of business affairs and pretends to know better PERSPECTIVE methods for the provision of the consumers is just an idle babbler. If he thinks that his own designs are better, why does he not try them himself? There are in this country always capitalists in search of a profitable investment of their funds who are ready to provide the capital required for any reasonable innovation. The public is always eager to buy what is better or cheaper or better and cheaper. What counts in the market is not fantastic reveries, but doing. It was not talking that made the "tycoons" rich, but service to the custom ers....

Under capitalism the acquisitiveness of the individual businessman benefits not only himself but also all other people. There is a reciprocal relation between his acquir ing wealth by serving the consumers and accumulating capital and the improve ment of the standard of living of the wage earners who form the majority of the con sumers. The masses are in their capacity both as wage-earners and as consumers interested in the flowering of business. This is what the old liberals had in mind when they declared that in the market economy there prevails a harmony of the true inter ests of all groups of the population. -LUDWIG VON MISES "The Economic Foundations of Freedom" Aristotle on Self-Love Therefore the good man should be a lover of self (for he will both himself profit by doing noble acts, and will benefit his fel lows), but the wicked man should not. -ARISTOTLE Nichomachean Ethics 1169a12 331 THEFREEMAN IDEASON L1BERlY THE SOCIALREsPONSIBILITY OF CORPORATIONS AND How TO MAKE IT WORK FOR You by John Hasnas A re you looking for a promising new vocation? Tired of the humdrum rou tine of life as an investment banker, corpo rate attorney, or electrical engineer? Want to get in at the ground level ona field with unlimited growth potential? Then you should consider a career as a business eth icist.