BETTER-OFF: UNINTENDED CONSEQUENCES

by Dr. James W. Jackson

Founder, Project C.U.R.E.
Author, The Happiest Man in the World: Life Lessons from a Cultural Economist

It was an improbable experiment that took place in 1776 starting in Philadelphia with the signing of the Declaration of Independence. Seldom, if ever, had there been a nation-building endeavor organized on such uncommon denominators. The steadfast incorporators had declared liberty, and were determined to experience the fullness of freedom. But in reality they could scarcely even comprehend the world-altering power they were holding in their hands.

They had dreamed that they would know enough freedom to be able to experience the new and enticing system of free enterprise. But they discovered that it was in the dedicated pursuit of free enterprise that they found the fullness of freedom. It was an unintended consequence to find that the most precious thing provided by a free enterprise economy was not just the abundance of material wealth, but freedom itself.

The incorporators were bent on preserving their newly acquired liberty, improving the well-being of the new nation, and guaranteeing the wise use of their resources. They knew that their only hope was through the understanding and preservation of not only their coveted culture, but also through their development of a stable economy.

The historical serendipity of the 1776 experiment was in the fact that not only was it the year of the signing of the Declaration of Independence in Philadelphia, but 1776 was also the year of the publishing of the Scottish economist Adam Smith’s book, An Inquiry Into The Nature and Causes of the Wealth of Nations. The book was a compilation of Adam Smith’s observations as he traveled and sought the answer to what causes one nation to be rich and another nation to be poor.

Adam Smith equated wealth with income and the ability to generate income. His findings showed that a nation that can generate high levels of income is wealthy, and one that is capable only of low levels of income is poor. What is it that allows a nation to create a high level of income? What is it that makes a nation wealthy? In his book he simply recorded his observations. He commented then on such unique observations as division of labor, specialization, incentives, levels of taxation, freedom of cultural and economic choice, and the opportunity to pursue the objectives and directions that are of most interest to each individual.

The incorporators of the 1776 American experiment had been greatly influenced by the observations of Adam Smith. His insights fit snugly with their ideals of independence, self-reliance, and limited government that was responsible to the people rather than the people being enslaved by the government. But what neither Adam Smith nor the young American leaders comprehended was what would be the history-making results, when for the first time those ideals could be worked out in real life, in a situation where it was possible for free enterprise to not just be haltingly tolerated, but encouraged to flourish. Since a national economic system of free enterprise had never really been tried in such laissez-faire settings, no one could fully predict the potency of the economic outcome.

The leaders of the new nation had a deep respect for the rule of law, and realized the unique necessity for a limited government to fully enforce the powers of the law. One of the basic concepts of free enterprise is that the individual citizen has the right to hold and own private property. With that goes the right to exclusively make use of the property or to transfer it to another individual of one’s choice. People are free to make voluntary agreements with each other regarding their private property or personal labor. Contracts, therefore, are vital to the enterprise system.

Contracts and agreements, however, are meaningless unless they are enforced. Free enterprise could not exist without a legal entity to hold contract makers to their agreements. So, without a viable government to enforce agreements there could be no contracts, and without contracts there could be no free enterprise.

In addition, property rights, including intellectual property through copyrights, patents, or trademarks, work to facilitate those transfers and exchanges within the system. Because of the long-term protection of the rights, people are encouraged to write more books and music. The title to a piece of farm equipment, or an indentured deed to a plot of ground, assures the buyer that the seller is the legitimate owner. The right of property owners to designate who will receive their property when they die helps sustain the confidence in those property rights. Those are all subtle benefits of the free enterprise system. Those benefits were not necessarily designed and plugged into the free enterprise system before it was formalized.

On the consumer side of the equation, free enterprise ensures purchasers they can buy the goods and services that best satisfy their wants and agree with their budgets. And workers are free to try to enter any line of work for which they are qualified. All of those benefits came as unintended consequences of the pursuit of freedom of choice.

Next Week: Better-Off Conclusion

             (Research ideas from Dr. Jackson’s new writings project on Cultural Economics) 

© Dr. James W. Jackson   

Permissions granted by Winston-Crown Publishing House

  

www.jameswjackson.com 

Dr. James W. Jackson often describes himself as "The Happiest Man in the World." A successful businessman, award-winning author and humanitarian, Jackson is also a renowned Cultural Economist and international consultant, helping organizations and governments to apply sound economic principals to the transformation of culture so that everyone is "better off."

As the founder of Project C.U.R.E., Dr. Jackson traveled to more than one hundred fifty countries assessing healthcare facilities, meeting with government leaders and "delivering health and hope" in the form of medical supplies and equipment to the world's most needy people. Literally thousands of people are alive today as a direct result of the tireless efforts of Project C.U.R.E.'s staff, volunteers and Dr. Jackson. 

To contact Dr. Jackson, or to book him for an interview or speaking engagement: press@winstoncrown.com

SYSTEMS MATTER Part 5: Investigation into Free Enterprise

by Dr. James W. Jackson

Founder, Project C.U.R.E.
Author, The Happiest Man in the World: Life Lessons from a Cultural Economist

In the year 1776, a unique serendipity occurred that eventually affected the cultural economics of the world. The unusual occasion, however, could never have taken place had King John not signed the Magna Carta at Runnymede, England, in 1215. That proclamation of emancipation for the first time established a constitutional underpinning that the power of the king could be limited by a written document. Historically, that agreement became the cornerstone of freedom and the main line of liberty against arbitrary and unjust treatment of the citizens of a nation state.

In 1776, Thomas Jefferson articulated the Declaration of Independence expressing the general thinking and desires of his countrymen. There would be a new nation formed upon the vision of the Magna Carta, established on the principle that every person is entitled to pursue his or her own values.

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights: that among these are Life, Liberty, and the pursuit of Happiness.”(1)

The other component of that 1776 serendipity was the economic masterpiece that was published in Great Britain March 9 of that same year. Adam Smith was a brilliant and energetic professor well trained in the early concepts of economics. Smith was intrigued as he pragmatically viewed the cultures and economics of the different nations of the world. I like to think of Adam Smith as the first ever cultural economist. He was not only concerned about the charts and matrices of the discipline of economics, but was also concerned about people, jobs, human desires, motivations, factories, and systems.

Adam Smith’s intellectual curiosity drove him to seek the answer to a fascinating cultural economic question, Why are some countries rich and other countries poor? He was willing to travel and simply observe and research and then compile and report. He did not just sit back and conjecture or speculate. He did not simply rely on the jaded propaganda of the politicians. He was not trying to figure out an economic and political scheme to control the world.

Smith was not coming from a position, as was Karl Marx, where he felt his true calling in life was to debunk, destroy, and overturn the world as he had found it. Neither was he coming from a position like that of Vladimir Lenin, where he was driven to follow a different path. That path had led Lenin on a sick and vindictive payback scheme for the Czar’s hanging of his brother for the attempted assassination plot. Lenin had vowed to totally destroy, through a Marxist-style uprising, every vestige of Russia’s culture and economic system through total revolution. Adam Smith simply wanted to find out and report the answer as to why some countries were rich and some were poor.

In 1776, Adam Smith’s findings were published in his book An Inquiry into the Nature and Causes of the Wealth of Nations. That book established the Scotsman, Adam Smith, as the father of modern economics. He felt that “The theory that can absorb the greatest number of facts, and persist in doing so, generation after generation, through all changes of opinion and detail, is the one that must rule all observation.”(2)

From their experiences and observations, Adam Smith and Thomas Jefferson were each aware that concentrated government power could be a great danger to the ordinary man. They saw the protection of the citizen from the tyranny of the government as a necessary and perpetual need. Adam Smith observed that “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.”(3)

Based on Smith’s observations regarding the role of government in the affairs of a nation, he concluded that it was “first, the duty of protecting the society from the violence and invasion of other independent societies; second, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice; and, third, the duty to erecting and maintaining certain public works and certain public institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain: because the profit could never repay the expense to any individual or small number of individuals, though it may frequently do much more than repay it to the great society.”(4)

So, in the nations that were viewed as better off, the functions of the governments were intentionally more restricted to protecting the civilians from enemies from without, protecting the civilians from each other from within, and establishing and maintaining certain public works that could not be offered by limited individuals.

Other principles that emerged from Smith’s observations and recorded in his book were:

• The basic assumption that the prime psychological drive in man as an economic being is the drive of self-interest
• He assumes the existence of a natural order in the universe which makes all the individual strivings for self-interest add up to the social good
• The best program is to leave the economic process severely alone (non-intervention)

One more helpful insight that is gleaned from Smith’s report in the Wealth of Nations is that his definition of real wealth is the annual produce of the land and labor of the society. In other words, he sees production, or the ability to produce income, or the per capita income of a nation, as the determination of the true wealth of that nation. A nation that can produce high levels of income is wealthy. One that is capable of only low levels of income is poor.

But what is it that allows a nation to create a high level of income? Smith declares that the answer to that question is a simple one. The key to a wealthy nation is a productive nation. A productive nation is based on an economic system of individual freedom. The key lies in a system of free enterprise.

Indeed, the serendipity that came together in the year 1776 initiated a glorious experiment in economic and cultural freedom that has expanded the hopes, dreams, and expectations of the pragmatic and spiritual world of culture and economics. What now should we do with this system . . . with this dream?

Next Week: SYSTEMS MATTER: Part 6: A Productive Nation
 

(Research ideas from Dr. Jackson’s new writing project on Cultural Economics)

© Dr. James W. Jackson   

Permissions granted by Winston-Crown Publishing House

  

www.jameswjackson.com

Dr. James W. Jackson often describes himself as "The Happiest Man in the World." A successful businessman, award-winning author and humanitarian, Jackson is also a renowned Cultural Economist and international consultant, helping organizations and governments to apply sound economic principals to the transformation of culture so that everyone is "better off."

As the founder of Project C.U.R.E., Dr. Jackson traveled to more than one hundred fifty countries assessing healthcare facilities, meeting with government leaders and "delivering health and hope" in the form of medical supplies and equipment to the world's most needy people. Literally thousands of people are alive today as a direct result of the tireless efforts of Project C.U.R.E.'s staff, volunteers and Dr. Jackson. 

To contact Dr. Jackson, or to book him for an interview or speaking engagement: press@winstoncrown.com

SYSTEMS MATTER Part 2: Poles Apart

by Dr. James W. Jackson

Founder, Project C.U.R.E.
Author, The Happiest Man in the World: Life Lessons from a Cultural Economist

What is the most efficient method possible to successfully utilize the resources of planet earth in order to meet the needs of the planet’s inhabitants? Each answer will reflect the varied respondent’s world view. Two diametrically opposed views are represented by two different men who lived almost exactly a hundred years apart.

Adam Smith was a well trained and intuitive economist and teacher. He was raised in Scotland and influenced by an agrarian and mercantile culture that operated under the British monarchy. The country also operated under the significant prominence of the Magna Carta.

Until 1215, kings and queens had ruled England with an iron hand. But then, King John’s rebellious barons won from the monarchy a series of concessions that established for the first time a paradigm- shaking, constitutional principle. The signing of the Magna Carta established for the first time that the power of the king could be limited by a written document. It is historically considered the first nationwide emancipation document that became the cornerstone of liberty and the mainline defense against arbitrary and unjust treatment of the citizens.

In his studies, Smith became intrigued with the question “why are some countries rich and other countries poor?” It appeared that some countries experienced relative wealth and others knew only misery and poverty. Why did that difference exist?

Adam Smith’s intellectual curiosity compelled him to travel the world and conduct his research. Perhaps he could discover the reason why some countries were rich and others poor. Currently, most people just abbreviate the title of his book and refer to it as Wealth of Nations. But the true title of his book is An Inquiry into the Nature and Causes of the Wealth of Nations. His work explains what he found to be successful components of economic systems that were producing wealth for their nations and satisfaction for their constituents.

A hundred years later, on the other side of the world, another intellectual was writing. He, too, was writing within the context of his world view. Karl Marx was born in 1818 in Prussian Rhineland. The Marx family was Jewish, but disconnected from their Jewish faith. Karl’s father was appointed a local magistrate a year after his formal conversion to the Evangelical Lutheran Church. Karl Marx received no formal Jewish education, but his Jewish self- consciousness was unavoidable.

Marx’s educational background was eclectic and scattered. The doctoral dissertation that he presented to the University in Jena in 1841 was entitled The Difference between Democritean and Epicurean Philosophies. Young Karl Marx felt his task of philosophical reason was to

“Criticize whatever exists, whether in social institutions, religious doctrines, or the realm of ideas, for what exists is limited, always incompletely rational, and politically open, illusions, self deceptions, group delusions, plain factual errors were to be exposed, the incompletely rational, the spurious, and the idolatrous would be recognized, and partly by being known, righted .”

Philosophy, for Marx “turns itself against the world that it finds.” In 1842 he became first a contributor, then the editor of a politically extreme newspaper in Cologne, where he met Friedrick Engles, the son of a wealthy fabric manufacturer and merchant. A year later they moved to Paris and aligned themselves with French radicals and communists. In 1849 he was deported from France and moved to London.

Except for the brief time with the radical newspaper, Marx was unemployed and earned no money to support his family. For the rest of his life, Friedrick Engles had to give Karl Marx money to keep him in housing, clothes, food, and necessities for his family. In 1848, they together wrote Manifesto of the Communist Party, and in 1867 Marx wrote Das Kapital. The following is an example of Marx’s views regarding free market capitalism: 

''The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his ‘natural superiors’, and has left remaining no other nexus between man and man than naked self-interest, than callous ‘cash payment.’ It has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation.''

Karl Marx spent his lifetime fully expecting that the masses of the world were going to suddenly and violently rise up at any time and completely abolish all elements of freedom, capitalism, and free trade in exchange for the redistribution of the wealth that they had not earned but could now suddenly possess by murder and brute force.

Even though the rhetoric continually emphasized that the governance of the proletariat would be carried out by the masses of the workers themselves, at the top there was never any question that a small group of elite thinkers and philosophers, the politburo, would be in total control of determining just how equal all the “equals” would be. Marx’s claim was that “the class struggle necessarily leads to the dictatorship of the proletariat.”

The most important principle of communism is that everyone is one and no private ownership of property or production is allowed. Previously accumulated wealth, property, and all means of production, as well as all wealth flowing from future production, is to be held by everyone and distributed to everyone equally, “from each according to his abilities, and to each according to his need.”

Additionally, under communism there is an abolition of all rights of inheritance; emigrants and rebels lose all property rights; all procedures of banking and credit are centralized and owned by the state, as well as are all means of transportation, communication, and education. Each person voluntarily submits to the state to determine occupation, education, residence, and lifestyle. Religion is outlawed and resistance to the state is punishable by death.

But there was always the enduring confidence promoted that through communism’s economic and political system of equality, protection, fatherly care, and provision for everyone, there would be lasting personal peace and sufficiency forever.

Next Week: Investigating Free Enterprise

              (Research ideas from Dr. Jackson’s new writing project on Cultural Economics)

© Dr. James W. Jackson  

Permissions granted by Winston-Crown Publishing House

www.drjameswjackson.com 

Dr. James W. Jackson often describes himself as "The Happiest Man in the World." A successful businessman, award-winning author and humanitarian, Jackson is also a renowned Cultural Economist and international consultant, helping organizations and governments to apply sound economic principals to the transformation of culture so that everyone is "better off."

As the founder of Project C.U.R.E., Dr. Jackson traveled to more than one hundred fifty countries assessing healthcare facilities, meeting with government leaders and "delivering health and hope" in the form of medical supplies and equipment to the world's most needy people. Literally thousands of people are alive today as a direct result of the tireless efforts of Project C.U.R.E.'s staff, volunteers and Dr. Jackson. 

To contact Dr. Jackson, or to book him for an interview or speaking engagement: press@winstoncrown.com