Steve Gardes
Of all the economic systems that have developed over the last two centuries, none has created so much wealth as Capitalism. With that wealth has come the lengthening of the life span, the increased possibility of eliminating poverty and famine, and the expansion of the range of human choices. However, despite all the significant benefits of Capitalism, it has been a system that has been greatly misunderstood and frowned upon by many economists, political and religious leaders because it was deemed too materialistic and corrupt. That significantly changed in 1991 when Pope John Paul II issued his encyclical “Centesimus Annus” which professed that when Capitalism is properly applied by a religious and moral society, it generates the liberty and creativeness of man to produce the wealth necessary to improve the world and take care of the poor, just as God intended. A good example of this was World War II; Capitalism gave America the wealth to defeat Nazi Germany and Japan—and afterwards, help rebuild a war destroyed Europe and pay off its own war debt.
John Paul II had developed a new religious approach to initiative, enterprise, profit, free markets, a limited state with constraints upon welfare rights, democratic checks and balances, and Capitalism itself. In addressing poverty, he urged inclusion in property ownership, and the spread of knowledge and skill. However, he had serious concerns about the decline in morality and culture and stated, “solving serious national or international problems is not just a matter of economic production or social organization—most problems call for specific ethical and religious values.” He also criticized rather harshly the present excesses of the welfare state in economically advanced countries—and this was in 1991.
So, is America moral, religious and properly applying Capitalism today? Should we be concerned that our political leaders have used capitalism to bail out their cronies on Wall Street as they created significant income inequality, to fund universities promoting socialism with government controlled student loans, to fund public school systems which graduate disadvantaged youth who are not proficient in reading, writing, and math, and to assist themselves in annual deficit spending on a gigantic welfare system that pays its citizens in a manner that promotes having children out of wedlock, not working, and buying opioids? We would do well to remember the warnings of Ben Franklin in 1790 about political leaders: “When man can be placed into a position of honor that is also a position of wealth and power, he will move heaven and earth to obtain it.”
Steve Gardes is a certified public accountant (CPA) and certified valuation analyst (CVA) with over 40 years of public accounting experience.