Of Crony Capitalism and Free Enterprise

In 1991, after the fall of the Berlin Wall and as the Soviet Union was disintegrating, the current editor of The Wall Street Journal editorial page, Paul Gigot, warned,

Freedom’s main enemy now is the corporate state, private business harnessed to the coercive power of government.
(Paul A. Gigot, “Trade’s Hamlet: Will Gephardt Do The Right Thing?” The Wall Street Journal, March 8, 1991)

If that was true in1991, it is far more of a danger twenty years later. As a result of recent legislation, including the Dodd-Frank Act, the massive stimulus program, and the huge healthcare overhaul, involvement of government bureaucrats in private enterprise has never been greater in the United States, not even close. Federal officials are being endowed with enormous power in ways large and small to reward favored businesses and punish those that are not so favored, all hidden under the camouflage of acting for the “public good.”

Under Dodd-Frank, for example, federal regulatory czars are given authority to decide what lines of business financial firms can or cannot engage in, what services they can offer to customers, how much they can pay their employees, which firms will be bailed out if they get into trouble, what information private firms must provide to federal operatives, and who gets to foot the bill for all of this federal intrusion. Similarly, under the stimulus plan, hundreds of billions of dollars in federal contracts are up for award under the skimpiest of criteria, while under the new healthcare system myriads of government boards will decide who can receive what medical services at what cost and under which conditions.

It gets worse. Because these government benefits or penalties can be exercised with broad discretion by government officials, staying on the good side of the federal task masters becomes very important. Paying attention to the views and interests of government officials in other matters, even those not directly related to the legislation, can become the key to success or failure for a firm. Certainly complaints about the exercise of government discretion will not be well received. This is not hypothetical. Already it is the rare bank that will publicly complain about a decision by the FDIC, and securities firms are noticeably shy about taking issue with decisions of the Securities and Exchange Commission.

This ability of government authorities to employ the force of government to help friends and penalize perceived enemies, and to use economic levers to do so, is called crony capitalism. Crony capitalism unfairly gives capitalism a bad name. It is Third World-like. It is also old fashioned; it is pretty much the way that kings and czars ran their economies. Free enterprise and free markets will always be at war with crony capitalism.

Under crony capitalism, ownership of business may remain in private hands, but private owners share control with influential public officials. It can pay off big time for a business to get and stay on the good side of these people—whose permission and authority are keys to the success of the business. With government favor, a firm not only can win government business, but rules and regulations can be written in ways that favor the firm and disadvantage competition in the private sector. A new upstart in an industry can find trouble getting licenses, experience delays in regulatory approvals, be subject to heavy paperwork demands, face onerous financial fees and requirements, and through a myriad of techniques find his business handicapped in ways not experienced by firms in favor with federal officials.

Crony capitalism not only corrupts the relationship between businesses and the government; it corrupts the relationship between businesses and their customers. Under free capitalism and free enterprise the marketplace is the arbiter of which products and businesses succeed or fail. The multitude of individual people in the marketplace, through their multitude of individual purchases and other economic decisions, are the ultimate judges of economic success. That is to say, that customers have the ultimate say over which firms are the winners and losers, which in turn makes them, the customers, the winners from a vigorous competition among businesses to please them. It takes protection provided by the government to shield an inefficient business from the discipline of customers and markets, and that is what crony capitalism provides.

Under crony capitalism, judging winning and losing is taken away from the market place. With success derived from the ability of businesses to curry favor with government leaders whose hands are on the economic controls, it is no surprise, then, that the growth of government interference has stimulated a dramatic growth in the need for businesses to have representatives in Washington to plead their cause. Fortunately, that right of representation is enshrined in the Constitution. But it would be a good idea to reduce its necessity by re-enthroning markets and the consumers behind them as the final judges in the economy and return our government to preserving life, liberty, and the pursuit of happiness.

Of Churchianity and Priestcraft

While driving to church meetings this past Sunday I was surfing through the radio stations to find something wholesome and uplifting, in keeping with the spirit of the Sabbath day. That is not so easy to do. At least, I seem to remember that when I was a child Sunday morning radio and even television were almost reserved for worship programs. It is easier today to find politicians and sports figures—and their commentators—on Sunday morning radio and television; I will leave it to you to conclude whether those are the new predominant objects of worship.

With a little persistence I did find a couple of programs on the AM dial, and their messages were memorable. The first featured a religious figure with a call-in talk show in which he gives religious-psychological counseling to troubled callers. The one example I heard was from some woman who was living with a man, the father of at least a couple of her children, who was now involved in a sexual affair with some other woman. The caller wanted out of the relationship, but she was dependent on financial support from the non-husband father. She felt trapped, and indeed she was. The host of the program gave what seemed to me some sensible advice, which he admitted was common sense counsel that just about anyone could have given to the woman.

After that point I guess that the caller line must have thinned out, because the host proceeded into a prolonged criticism of organized religion, what he called “churchianity.” He took pride in the fact—pride is the right word—that he was not associated with any particular religious denomination. His argument, to sum it up, was that Jesus did not belong to any church and did not form any church, that He just went around counseling and helping people and then moved on. As the host explained, some people “fell away” but others “made it.” The host complained that organized religions are just businesses, and people do not need them. He took a while to say all of this, but that is the gist of it.

It is a wise practice to consider that in every criticism there is at least an element of some truth, and it would be wise to look for it and profit from it. The kernel of truth, however, does not justify accepting all the rest, any more than the bait justifies swallowing the fisherman’s hook. The churchianity critic is correct that too much of religion today, as was also found anciently, is a business. Paul and his missionary companions were menaced by mobs in Ephesus when his preaching of the resurrected Jesus Christ threatened to upset the business of the idol makers for the cult of the Greco-Roman goddess Diana. Martin Luther was driven to his break with the Roman Catholic Church in great part due to the church’s apparent selling of forgiveness. The Prophet Joseph Smith was martyred in Illinois by a mob inspired by local clergymen worried that restoring the ancient church of Jesus Christ was threatening their trade in manmade religion. And there is no lack of examples today of preachers seeking popularity for praise and profit.

It is true that Jesus Christ never intended His religion to become a business. He railed against professional preachers who made a business out of salvation. That is called priestcraft, and it was the leadership of the corrupt priestcraft of His day who conspired to have Jesus crucified. It is wrong, however, to conclude that Jesus Christ did not establish a Church. As Jehovah of the Old Testament, Jesus Christ called prophets and priests, had them ordained under divine commission, and by revelation instructed them on their duties. You have to overlook much of the books of Moses and reject Moses himself not to acknowledge that.

Similarly, during His mortal ministry on the earth, when the priesthood among the ancient Jews had become corrupted and turned into a business, Jesus Christ withdrew his authority from the old priests and established a new Church, with apostles and prophets. Observe how the Apostle Paul described it to the members of the Church of Christ in Ephesus:

Now therefore ye are no more strangers and foreigners, but fellowcitizens with the saints, and of the household of God; and are built upon the foundation of the apostles and prophets, Jesus Christ himself being the chief corner stone; In whom all the building fitly framed together groweth unto an holy temple in the Lord: In whom ye are also builded together for an habitation of God through the Spirit. (Ephesians 2:19-22)

I am not sure how more clearly Paul could describe an organized religion, “the building fitly framed together”. If Jesus Christ did not build a church, then what do we do with the apostles whom He ordained, and the Seventy whom He called to assist the apostles? In fact, without the Church of Jesus Christ, we would not have the scriptures that tell of His ministry nor the spreading of the gospel of Christ throughout the Roman world and beyond.

It would perhaps not be inappropriate to mention at this point that the churchianity critic concluded this portion of his commentary by mentioning that regular payments from his listeners of $5 and $10 would allow him to continue his campaign against the business of religion. In another post I may discuss the other program I heard yesterday, where the announcer offered the exact date of the Judgment Day.

Of Service to God and Service to Ourselves

In a particularly entertaining passage in The Hobbit, by J.R.R. Tolkien, Gandalf the wizard employs a clever and amusing tactic to introduce his destitute group of fifteen wanderers to the powerful and reclusive character, Beorn. As the story goes, each wanderer upon introduction and according to his custom offers to Beorn his name along with a pledge of being “at your service!” The rather impatient but also self-sufficient Beorn replies, “I don’t need your service, . . . but I expect you need mine.”

That is not unlike our relationship to God, even as we offer Him our service. God the Omnipotent has no need of our service, but we are very much in need of His, all day and every day. A difference, and important difference, is that while God does not need our service, we need to give it.

We need to give our service because of what giving does to us, especially what it does to us inside. It is the inner man that concerns God and is the reason for which He created this brief mortality that we sometimes narrowly call “life.” Our mortal life was designed by God as an opportunity to shape and develop our character for our permanent life of immortality, after our death and later resurrection. That concern for the inner man was behind God’s teaching to Samuel the prophet when Samuel was looking for a new king to govern Israel.

But the LORD said unto Samuel, Look not on his countenance, or on the height of his stature; because I have refused him: for the LORD seeth not as man seeth; for man looketh on the outward appearance, but the LORD looketh on the heart. (1 Samuel 16:7)

Our inner life changes for the better each time we do good, with each worthy service that we provide. It constricts with each mean and sinful act. In the words of the modern prophet, Spencer W. Kimball,

the more we serve our fellowmen in appropriate ways, the more substance there is to our souls. We become more significant individuals as we serve others. We become more substantive as we serve others—indeed, it is easier to “find” ourselves because there is so much more of us to find!
(Spencer W. Kimball, “The Abundant Life”, Ensign, July 1978, p.3)

A couple of simple examples may illustrate how actions can change us. In these examples we consider apparently identical actions that differ only in terms of the intent behind the actions. That intent, expressed through action, rebounds on the soul and changes the character of the soul further, for better or worse.

Consider, for example, a man who accidentally walks off with someone else’s umbrella. Compare that with a case where another man knowingly takes someone else’s umbrella. In both cases the actions in all material details are the same. The umbrella leaves in the hands of someone who has no right to it. There is a profound difference, however, in what each case does to the character—the internal moral condition—of the actor. The first may cause some embarrassment but is scarcely a cause of shame. The second has at a minimum increased the willingness of the man to cause yet another injury to the property or person of someone else and has shrunken him in spirit and in love for his fellowman.

As a second example, let us look at a seemingly good act, the giving of a gift. With a gift freely offered, with thoughtfulness and generosity, the giver grows in characteristics of kindness and liberality. The same gift, however, given grudgingly, with hopes of currying favor or with a sense of obligation rather than goodwill, with residual covetousness for the possession surrendered, will stir resentment, envy, and perhaps even elements of hatred in the heart of the giver (see Moroni 7:6-11). Again, an action apparently the same in all material aspects becomes a blessing or a cursing to the actor depending on whether it was offered with a blessing or cursing in the actor’s heart.

All of that is to say, that we need to provide our service to find out who we are or, better said, in order to become who we will become. Genuine service, given from love for our fellowman and an even deeper love for our God, born out of our heartfelt esteem for the worth and value of God and for the potential of His children, unfailingly builds our own value, our own worth, and our own potential as the children of God. God our Father does not need our service, but we need to give it as an essential way of becoming like Him, the sons becoming like the Father by imitating His example.