Money and Its Image Problem; D. Lapin

A frightening change during this period has been a war on the wealthy conducted in response to the public perception that some how the rich got that way by stealing from the poor. This perception includes the no tion that wealth-producing activities are faintly unseemly and that economic activity causes rather than cures poverty. There is a way to restore the prestige of business success that requires a return to tradition. In order to examine it we must first analyze the nature of money. Decades before our computer-controlled "virtual laboratories, " Einstein created his famous "thought experiments." They al lowed him to solve problems for which actual laboratory experiments would have proven too expensive, if not impossible, to conduct. Rather than measuring gravity in an elevator dropping down a three-mile elevator shaft, the great physicist showed that we can just as well, and a lot more safely, analyze the situation from the com fort of our desks.

In the social sciences, too, we can make excellent use of thought experiments. Let us Rabbi Daniel Lapin, president of Toward Tradi tion in Seattle, serves the Pacific Jewish Center. He is a senior fellow at the Claremont Institute and at the Jewish Policy Center in Washington, D.C. conduct a thought experiment to see if we can understand the origins of our own cal endar. The protocol proceeds as follows. We deposit a young boy and girl on an otherwise-deserted tropical island. Taking care that they have enough to eat, we set up concealed surveillance equipment and ob serve their development. After a century or two, they will have increased their numbers substantially. By now a full-fledged society, they remain oblivious of any other people or any human history. However, they will certainly notice periodicity in the heavens, eventually de veloping a calendar. After further centuries of experience, they will most likely discover that the solar year contains 365V4 days, in the same way that prolonged scrutiny of the skies will eventually yield them a lunar month of about 30 days.

However it is highlyunlikely that they will adopt a seven-day week. Not only is there no visible astronomic seven-day cycle, but seven does not divide evenly into 365, or into 30, which makes it an illogical choice. They would most likely establish a five-day week, as this would make each year a calendar replica of the preceding one. Why, then, do we have something as confusing and artificial as a seven-day week when switching it to five would make so much sense? Only because we retain a primeval, collective memory: that long ago, God initiated a seven-day cycle as a kind of 365 366 THE FREEMAN • JULY 1994 divine circadian rhythm. It is hard otherwise to account for the wide acceptance of the seven-day week. As the seven-day week is the product of a collective memory of a religious tradition, so too is money. While our clandestine survey will reveal the islanders bartering with one another, it is less certain that they willmakethe leap of assigningvalue to disks of metal. That, in all probability, would not happen on our island, as·indeed it failed to happen in many parts of the real.world. Most populations that were isolated from Bible based religious tradition failed to make the leap from barter to coins and capital.

Where the Bible served as the earliest source of wisdom, people understood the role of gold and silver. They learned how greatly to expand trade-and therefore wealth-by employing precious metals as an exchange medium. They understood the role of private property and the role of the law in protecting that property. Naturally, these peoples enjoyed a gigantic head start over those who had to discover this all by trial 'and error. The Faith Habit There was another reason why those Western civilizations based on the Bible flourished economically. The individual character traits that Judeo-Christian thought promoted are the very qualities that best prepare people for effective roles in commerce. One of the most important of these is the faith habit. This accustoms people to the real world, wherein almost every worthwhile venture requires one to make a major commitment without assur ance of success. For example, couples must marry without the help of a crystal ball that would predict all the ups and downs of their life ahead. Farmers plant and await crops that mayor may not ripen. And, of course, investments of capital always involve risk.

In fact, the very act of accepting metal disks or even pieces of paper, in exchange for a day of backbreaking labor, requires enormous faith. To understand the true dimensions of that faith, observe how things change in its absence. When investors lose faith in markets, when depositors lose faith in banks, when citizens lose faith in the currency, disaster strikes. As long as the faith habit is intact, how ever, people will accept payment for their goods and services. They do so out of faith that when they require some commodity, a vendor will, in turn, accept their little metal disks or scraps of paper. As long as the future remains uncertain, people who main tain Bible-inspiredfaith have a great advan tage whether as spouses, farmers, or inves tors. Judeo-Christian thought nurtures another personality trait which well serves those who practice capitalism: deferment of grat ification. A religious outlook helps to pro mote savingrather than impulse spending. It also inculcates in people the idea that there is merit in doing the right thing for its own sake, rather than for reward. This too is a valuable mindset for the ambitious entre preneur who must focus on filling a need rather than on other people's purses. Ev erybody wants money; but those who pur sue it directly instead of seeking a niche, usuallyfail. The most conspicuous commer cial successes are won by those who find a way to serve other people, or provide them with things they want.

Religious teachings that emphasize the virtue of charity, would thus fit well into business school curricula. Charity helps to loosen the tight grip many of us have on our funds. No miser ever made a great investor. Religion encourages people to raise fami lies, the best incubators of capitalism. There, the young future business profes sional learns the value of labor and its specialization. From wise and responsible parents, he learns virtually all the skills necessary for a first job. Finally, religion's emphasis on family helps an economy be cause few great commercial enterprises are built in one generation. It is children that fuel a man's ambition to drive himself be yond the needs of his own lifetime. For these reasons, the world still awaits a society that has embraced atheism and also operates a successful free market. That this MONEY AND ITS IMAGE PROBLEM 367 has not happened is no coincidence, but rather a consequence of the spiritual nature of money.

The Spiritual Nature of Money Let us further analyze the spiritual nature of money. All human activities can be lo cated somewhere on the spectrum that is anchored at one end by spirituality and at the other, by physicality. Praying is near the spiritual end; reading and writing, compos ing music and making tools are its neigh bors. As the source of both great sensual pleasure and also of all new life, sex might be somewhere near mid-spectrum, while eating and excreting belong over toward the physical end. One way of identifying a spiritual act is by determining whether a chimpanzee would understand it. This is because God endowed man with His spirit and so distinguished between man and chimpanzee. When I re turn home from work and slump into a comfortable armchair, a primate could un doubtedly sympathize. As I move to the dinner table and begin eating, he certainly understands. When I open a newspaper, however, and hold it motionless before my face, he becomes quite confused.

This test suggests that a business trans action is more spiritual than physical. A chimpanzee would not have the slightest idea of what is transpiring between propri etor and customer at the counter of a store. Economic exchange takes place only after two thinking human beings will it. The process is spiritual. Human beings are always slightly uneasy about pursuits that have no spiritual over tones at all. When necessary, we superim pose spirituality precisely to avoid being exclusively physical and thus uncomfort ably animal-like. We apply ceremony and ritual to those of our actions that are also animalistic. Only people read a book or listen to music; hence these activities re quire no associated ritual. On the other hand, all living creatures eat, engage in sexual activity, give birth, and die. If we do not confer a uniquely human ritual upon these functions, we reduce the distinction between ourselves and the animal kingdom.

Therefore, we celebrate the birth of a child, often by a namingceremony; no animal does that. Even if our hands are quite clean, we wash them before eating rather than after, like a cat. We prefer to serve food in dishes on a tablecloth rather than straight out of the can, although the physical, nutritional qual ities have not been enhanced. We even say a grace or a benediction. After encountering an attractive potential partner, people do not proceed directly to physical intimacy. An engagement announcement followed by a marriage ceremony serves to accentuate that all-important distinction; no animal announces its intention to mate and then defers gratification for three months while it calmly prepares its wedding and future home. The more physical the activity, the more awkwardness and subconscious embarrass ment surround it. Photographer Richard Avedon shattered a barrier by capturing images of people as they ate. Frozen in the act of chewing, humans resemble apes rather than angels. Our mothers, themselves raised in America's Judeo-Christian tradi tion, taught us never to eat in public. Sim ilarly we express a normal and healthy reticence about bathroom activities. On the other hand, as purely spiritual occupations, reading and art evoke no discomfort.

Likewise, buying and selling should evoke no psychic discomfort. Economic activity is another way in which we satisfy ingly distance ourselves from the animal kingdom and justify our humanity. This helps to explain why the most secular ele ments in America commonly lead assaults on the free market. Those who have rejected religion are eager to find other outlets for their moral expression. There is no better way than to exhibit a revulsion for ethical capitalism. Today we hear people referring to the eighties as a period of moral deprav ity. Being unaware of the spiritual nature of money and wealth creation, these individu als consider the miracle of economic enter prise to be the human equivalent of dogs fighting over a bone.

368 THE FREEMAN • JULY 1994 The Origins of Man The great historic clash between social ism and the traditional wisdom of the West is really just a reflection of a far more fundamental disagreement. This is over the question of the origin of Man. This is not a question that needs to be debated in churches and divinity schools as much as it is a question that needs to be settled in corporate board rooms and business schools. Either God created us, or we evolved from primeval protein sludge, pass ing through a primate-like phase on the way. No one has yet proposed a third alternative. If we accept the Godless alternative, then indeed we do not differ in kind from mon keys or other animals, only in degree. We are less facile in speed, strength, and hearing than some animals but we think and speak a little better. Animals do not create wealth, they merely seize the commodities they need and people obviously do the same.

They may employ more sophisticated meth ods like bonds, debentures, and other tools of trade, but it is seizing nonetheless. Clearly, morally sensitive people must de cry this activity. Sure enough, American politics and academia long dominated by those hostile to a traditional view, echo this approach. Those that most strongly advance evolution as the one and only approach to studying the question of our origins are also those that most strongly oppose the free market. On the other hand, if God created us and touched us with His abilities, then we are qualitatively different from animals. Our ability to speak and to create is unique. Therefore, animals plunder but people prof it; the creation of wealth is an expression of our godly origins. This view of Man's origins helps to subdue the feelings of guilt often brought on by success. Frequently those with little religious faith who enjoy sudden success, such as Hollywood celebrities for instance, develop an almost irrational ded ication to socialist causes. The idea that we are descended from angels rather than as cended from apes has undoubtedly played a role in one of the most magnificent consequences of history: American ethical capi talism.

Revealing his own brand of genius in Paradise Lost, John Milton etched the Bi ble's centrality in man's literary conscious ness. He showed how the opening chapters of the Bible focus on the eternal tug-of-war for man's soul between the angels and the apes. There is a Titanic struggle between the Divine aspirations of a person's nobility and his basest indulgences. Whom would Adam obey, God or the serpent personification of the animal kingdom? After· thousands of years of human history, the lingering mem ory of that tussle still resonates in the human soul. All heirs to the Judeo-Christian tradi tion feel the need to distinguish themselves from animals and to unequivocally demon strate who won that Eden conflict. Seizing another's property by force is animalistic and a victory for the serpent, purchasing it voluntarily for the price set by the seller finds favor in God's eyes. A store or market is one of the few places in which people interact voluntarily leaving each party hap pier than he was before. No wonder then that God smiles upon the marketplace. Free dom from tyranny is a necessary precondi tion for both worship and trade.

It is therefore not surprising that econom ics used to be a field of study that belonged with religion and theology. Adam Smith as wellas many other eighteenth-century econ omists were religious philosophers before they were economists. Smith wrote Theory ofMoral Sentiments before he wrote Wealth of Nations. When the great universities moved the study of economics from their religion departments to their science depart ments they were actually driving a wedge between capitalism and the moral argu ments and spiritual dimensions that under pin its validity. After all, whether a man dissipates his money frivolously or invests it wisely and whether or not he will bend rules to earn it depend mostly on his character and on his moral makeup. No wonder that the science that seeks to predict these things, economics, is known as the dismal science. Money is spiritual and how men relate to it depends mostly on the state of their spirit.

MONEY AND ITS IMAGE PROBLEM 369 Faith is the fuel that drives both commerce and religion. God and the Marketplace Establishing that a close relationship ex ists between God and the marketplace helps us in three crucial areas. Firstly it helps to explain why atheism and business are not natural allies. One would haye supposed that a philosophy of secular humanism, recognizing no authority and sanctioning all behavior would be naturally drawn to the world of money and power. One would have expected the political Left to excuse what it calls the "greed" of capitalism and to rec ognize it as nothing other than Darwinian law applied to the life of modern man. Yet, this is not possible; something as truly spiritual as commerce simply cannot coexist with socialism. The atheist himself recog nizes that to be true to his credo, he must reject the free market because of its Godli ness. Secondly, it helps us integrate our careers into our lives instead of regarding those daily eight or ten hours as a distasteful and isolated part of life.

Finally, recognizing the congruence be tween work and spiritual reality, the busi ness professional is all the better able to sell himself and his product. His work is creative and therefore a legitimate way of emulating God and His infinite creativity. Anyone with a sneaking conviction that socialism has a point, that Man and his abilities are finite as is the economic pie and that he who brings that pie to market and slices it for customers exploits both the baker and the public, is forever handicapped as a businessman. N 0 body throws himself wholeheartedly into an endeavor he secretly considers demeaning and unworthy. The difference between the animal instinct of a squirrel gathering nuts and the inherent nobility of a human being earning a living becomes clear when you perceive economic enterprise in its correct position, at the spiritual end of the spec trum. Failure to grasp the interdependency be tween a people's morality and their econ omy can levy a high cost. People often lose sight of how a statist government and its confiscatory tax policies will force increas ingly desperate citizens to become petty felons as they struggle futilely to preserve the fruit of their labors. As people inevitably begin to cut corners, they lose some of their moral self-esteem, thereby lowering the trig ger threshold of their internal moral alarms.

This corrosive effect ripples out to every corner of the population. Americans are just beginning to sense that many of the social pathologies that have made life more dangerous and squalid over the past three decades have their foots in the uprooting of religion from public life. We should also realize that the furious secular ization that has wreaked havoc on our schools and families has not left our econ omy immune. It does not require a very elaborate thought experiment to demon strate how much our economy would be boosted by restoring a traditional view of money. We need only contemplate why so many people glorify art and music and why they treat galleries and concert halls with an almost religious fervor. They do so out of a deep human need to devote at least part of their existence to activities which uplift. Art and music elevate because they are God given and therefore unique to humans.

America's wealth-producing institutions ought to arouse the same feelings of respect and awe, for precisely the same reasons. By joining the frantic rush to abandon every vestige of our religious tradition, we free market enthusiasts have unwittingly con tributed to the sabotaging of our prosperity. Our thought experiment will show that once our business infrastructure enjoys similar social esteem to that of the art establishment which it so generously underwrites, there will be at least one very valuable outcome. Politicians will tremble in fear before ven turing an assault on that fountainhead of prosperity that for so long has been Amer ican business. D THEFREEMAN IDEASON L1BERlY COMMERCIAL BANKING IN A FREE SOCIETY by Steven Horwitz A lthough we can say a great deal about the institutions of a free society, and why they are desirable, speculating about the specific ways in which people will choose to organize themselves within such institutions is always a tricky matter. After all, the whole justification for the institu tions of a free society is that only through its institutions can human beings discover pro gressively better ways of dealing with scar city (of both goods and knowledge)and thus improve both our material and non-material welfare. Our ignorance of the details of a free society is precisely why having a free society is so important.