Program #0053 for Monday, May 23, 2011: Michael Miller of Acton Institute and Andreas Widmer of Seven Fund

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Today’s host(s): Scot Landry

Today’s guest(s): Andreas Widmer, CEO of the Seven Fund, and Michael Miller, Director of Action Media at the Acton Institute for the Study of Religion and Liberty

• The Seven Fund
• The Acton Institute
• Faith and Prosperity blog by Andreas Widmer
• Encyclical “Centissumus Annus” by John Paul II
• Encyclical “Rerum Novarum” by Leo XIII
• “The Birth of Freedom”
• “The Call of the Entrepreneur”

Today’s topics: The roots of free markets and entrepreneurship in Catholic culture and teaching

A summary of today’s show: Michael Miller of the Acton Institute and Andreas Widmer of the Seven Fund tell Scot that it is a myth that entrepreneurship and free markets are opposed to Catholic social teaching, but in fact are rooted in Christian tradition and are the most effective tools for approaching poverty.

1st segment: Scot welcomed Andreas Widmer back to the show. Andreas has been on The Good Catholic Life several times talking about his experiences as a Swiss Guard for Pope John Paul II and then his experience at the beatification of Bl. John Paul earlier this month. He also welcomed Michael Miller. Scot said he has know as Acton as an organization that talks about the role of free markets in the creation of a virtuous society.

Michael said Acton was founded 20 years ago to look at the intersection of theology and moral philosophy on the one hand and business and economics and entrepreneurship on the other. Most people make their living in business and there’s a rich tradition of the Church thinking about these matters. It is an ecumenical organization. Fr. Robert Sirico is a co-founder of the Institute 20 years ago. Father had left the faith as a young man and was very influenced by leftist causes and socialism. He once met a man with whom he had debates about economics and the man at one point remarked, “You know, you’re delightfully dumb. You need to read something.” And so he gave Fr. Sirico all these books that he began to read and slowly began to have a conversion away from left-wing radicalism to a sense that a free-market that allows people to live out their freedom and responsibility actually helps the poor better than his previous ideas. Then he had a re-conversion to the Catholic faith and entered the seminary where he found a lot of the radical ideas he’d left behind from when he was a leftist. When he was ordained he co-founded an institute to consider these questions. They made the decision to make it broad-based and engage it from a whole Christian perspective.

The Institute does many things, including academic articles, books, and films. They are a research and educational institute. They do three main things:

1. Research, including a scholarly journal called “The Journal of Markets and Morality.” They have a lot of serious scholarly books, lots of op-eds.
2. Education, including a summer conference of 600 people in Grand Rapids, Michigan, where they talk about the moral, economic, and theological foundations of a free society, called Acton University. They also have conferences around the world.
3. Media, including two documentaries, “Call of the Entrepreneur” and “the Birth of Freedom”, both of which have been on PBS. They are working on a third documentary now on entrepreneurial solutions to poverty.

Andreas said the beauty of the Acton Institute engages reason in such a way as to attract secular groups. Andreas is both a research fellow at Acton and the CEO of Seven Fund. Seven Fund approaches the challenge of dealing with poverty through entrepreneurial solutions primarily from a secular perspective, even though its work is informed by its principals’ religious faith. Acton and Seven Fund have collaborated for about five years now. Seven approaches it from a cultural aspect, which includes religion.

Before Scot worked for the Church, in his 20s, he thought he might have a call to the priesthood. A number of his colleagues at a consumer goods company told him that he was going from the devil to God. Scot said both Catholics in ministry and businesspeople think the two areas are opposed to one another, but what Scot has always liked about Acton is that it says we should be integrated people, not compartmentalizing work life from family life, and Acton provides help for this project.

Michael said business is a moral enterprise, because it produces goods and services people need. People need consumer goods, like cleaning supplies, which is good. Peter Drucker said the purpose of business is to create a customer. To create and sustain a customer you need to provide a value to them. (Setting aside things that are objectively morally evil) Bl. John Paul said, a business is a community of persons who gather to make a livelihood and provide something people need. It provides opportunities for collaboration, for people to work together. Jobs help you grow up, to mature, to fulfill commitments. These virtues can transfer to your family life and social life. In a job you have to deal with other people and learn to control yourself. Business brings a common good. There is a movement now called corporate social responsibility, which currently includes this idea that corporations have to give back to society as if they took something in the first place. But corporations have given back by creating lots of value already. Just by the fact of being a corporation doesn’t make them evil. Business can be an opportunity for moral evil, but it’s also an opportunity for moral good.

Andreas said there is a subconscious attitude that we seem to talk about business as if it were zero-sum, if I make money, you lose it. This isn’t true. We “make” money, because we create new value. But the language of “giving back” implies that companies take something without creating something. That’s the point of this movie, which Andreas recommends, called “The Call of the Entrepreneur,” whose basic premise is that when you make something from nothing, God is present, because only God can create something good from nothing. So if we make a new business and create a new product, we know that God is with us, which makes us co-creators with God.

Michael said the zero-sum fallacy—if I have a piece of the pie, you have less of the pie—is a really bad fallacy and leads to some very bad conclusions, including the myth of overpopulation. It misunderstands that everyone used to be poor 500 years ago, so how do you explain growth? Everyone asks the question, “How do you solve poverty?” but that’s not the right question. They should ask, “Ask do you create wealth?” If you have a zero-sum game, it makes you defensive, you don’t take risks. This is not the Health and Wealth Gospel. We are called to work. Theologically speaking, work does not come from after the Fall of Adam. We are called to be fruitful and multiply and make dominion. The Fall creates the toil of work. But work is a good thing, which John Paul II wrote about often: The dignity of work. All productive enterprise.

2nd segment: Michael described some of the principles of a free market society and how they are undergirded by Christian principles. We sometime thinks of markets as guys on Wall Street exploiting the poor. While they do exist, markets are really networks of human relationships. They are people getting together and making exchanges for things that are beneficial for each other. In a competitive free market, people make an exchange if it’s mutually beneficial. If it’s not, then we trade with someone else or seek a better price. This is why a government can’t control a market, because there are billions of transactions with all these individual preferences.

To have a market economy, you need private property, to be able to have title to property in order to live out your freedom and to exchange it freely for goods and services. In Nicaragua, 70% of the land has no title, they don’t know who owns it. If you don’t have title, you can’t use it as a collateral for a loan, people don’t have addresses, you can’t get credit. You also don’t have incentive to improve it. Private property is not a given in most of the world. In the book, “The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else”, Hernando de Soto makes this point. We think private property is normal, like fish don’t realize they’re in water. Private property is fundamental. Another condition is rule of law. You know your contracts will be enforced. Opportunities can take place because you know there will be fairness. Free association is the right to join together, whether business or unions or charities. There needs to be a culture of trust, a robust civil society, and human beings raised in families looking out for the long term, not just the short term.

These ideas come directly out of the Judeo-Christian tradition. It’s in the Ten Commandments, it’s in the early Church fathers. In 1256, the first argument for free association was by St. Thomas Aquinas. Pope Leo XIII used this as the basis of his defense of unions. The Spanish scholastics in the 15th century wrote that it is wrong for governments to prevent the free exchange of goods if it benefits the common good. Adam Smith, the founder of modern free-market economics, said almost nothing original because it had all been said by the theological traditions of the middle ages. He just said it in a new way. The reason people don’t know this is because most of this was in Confession manuals, guides for priests helping penitents make moral choices. The market economy did not come from the Enlightenment, but from the Christian medieval period. Serious scholars know there were no “dark ages”. If those were the “dark ages,” explain how the Cathedral of Chartres was so beautiful and so many modern buildings are so ugly.

This is why good Christians can be free marketers. The Church doesn’t have an economic policy, but it does have a moral orientation. People who support markets can be comfortable this a moral legitimate position to hold.

Andreas said as a businessperson, it means he doesn’t have to re-invent the wheel. The teaching of the Church is a compass he can use in business dealings. He has a compass with a direction, which is good for business. This is a great way to run a company because it makes you live a centered life, so you are the same person on the weekend as you are during the week. It also helps you to run a profitable company.

Scot said free markets provide people with the most freedom, which corresponds with Catholic teaching on the dignity of the human person. A free market allows us to exercise our free will in a moral way. With the rule of law, the good actions are positively reinforced and bad actions are negatively reinforced.

The Church is primarily concerned with the salvation of souls. She is also concerned with creating the conditions for human flourishing so that people live according to the Gospel. These conditions of human flourishing happen to be the same as that for wealth creation: private property, rule of law, etc. They respect human freedom. One of the problems with Communism was it took away the space for families to live out their responsibility and their freedom.

Modern concepts of freedom are very broken and dangerous. The modern concept is that I will do whatever I want. But freedom separated from reason and truth is not freedom. Joseph Ratzinger (Pope Benedict) said it’s a diabolical “freedom.” The free market is not just about doing whatever I want and consumerism and getting stuff. It must be oriented to reason and truth, so it must be in a framework that recognizes who the human person is. Those countries that allow for human freedom are the wealthiest because God made us free.

Andreas quoted Bl. John Paul who said, True freedom allows me to do what I ought to do, not just what I feel like doing. Michael said that this is a famous quote by Lord Acton—“Liberty is not the ability to do what you want, but the right to do what you ought,” one of the two quotes most people know. The other is “Power tends to corrupt and absolute power corrupts absolutely.” He was a Catholic historian in England concerned with the history of liberty.

3rd segment: “The Birth of Freedom” tells the story of the Judeo-Christian roots of political and economic liberty. It is a myth that it came out of the Enlightenment to free people from the “shackles” or religion and superstition. They told the history of the importance that religion has played in human liberty. Featured in the movie was Rodney Stark, who wrote a book called “The Victory of Reason: How Christianity Led to Freedom, Capitalism, and Western Success”, and he makes this case from a sociological pint of view. In the Middle Ages, you begin to see the development of representative government, markets, and capitalism. (Michael doesn’t like to use “capitalism” because it’s a Marxist term; he prefers “free market”.) There was international banking and capitalism in the Eighth Century and in fact the “Dark Ages” were a time of great development for human liberty. It destroys the myth of the “Dark Ages,” which unfortunately is perpetuated by some Protestants. The sources of human liberty come from Christian tradition.

Scot said the movie answers the question “How is freedom born”? The marketing material for the movie poses the question:

But humans are separated by enormous differences in talent and circumstance. Why would anyone believe that all men are created equal? That all should be free? That all deserve a voice in choosing their leaders? Why would any nation consider this a self-evident truth?

In a world that never lived with this maximization of freedom that the United States has over the past 200 years, it seems self-evident, but for most people throughout history it has not been. The Founding Fathers knew they were living off of a deep tradition; it’s not a modern invention. Andreas said that while the Founding Fathers may have been Deists, not Christians or Catholic, they were products of their culture. They draw off the cultural wealth at their disposal.

Michael said even Nietszche acknowledged that the way we understand a lot of things is influenced by Christianity. But cultural capital doesn’t last forever. It needs to be renewed and that’s what “Birth of Freedom” is about; to encourage people and teach people to renew these sources of human liberty. It is in the concept of the human person, created in the image of God, with freedom and rights and responsibilities that has been the transforming force in history.

“The Call of the Entrepreneur” is based on Fr. Robert Sirico’s book “The Entrepreneurial Vocation
“. Entrepreneurship is a secondary vocation—after primary vocations like marriage or priesthood—and we are called to respond to our gifts. Our entrepreneurship brings benefits to society. Where societies will go depends on how they view the entrepreneur. They look at three entrepreneurs: a farmer, a banker from New York, and Jimmy Lai, a refugee from Communist China when he was 11 years old. He started working in a factory and learned English and he said for the first time he knew freedom. He came from a land of no opportunity and no freedom to a land of freedom and opportunity and now he’s worth $4 billion. He’s also a convert to Catholicism. He built not only wealth for himself, but all kinds of jobs and opportunities and better families.

A person invests his money in a small enterprise, works hard, sacrifices year after year, struggling to get the business of the ground, hires people along the way, gives them good incomes so they can buy homes and educate their children. After decades of working to build this business, the person is now financially independent and living comfortably and suddenly—to many people— he’s a dirty capitalist exploiter. But what about all the value he’s created, all the jobs? Not everyone is an entrepreneur, so we need them to create jobs for others.

Andreas said of course there are people in business who have bad intentions. This is why religion is so important in the marketplace. This is why a public moral culture is important. If you are an entrepreneur, you can be an exploiter or a creator, depending on your mindset. What is your goal? To end life with the most money possible? Or to recognize that you are a steward and there is dignity in work and there is virtue in work.

Scot said if you view the people you work with as real human people created by God and not just producers and consumers, then you find a lot more people want to work with you. When you have people who love the environment they’re in and they like the people they work with and the sum is greater than the parts, then wealth is created.

Michael said in order to have self-governance, you need self-governors. For a free market to be sustainable requires free oral people. Liberty is the delicate fruit of a mature civilization (Lord Acton). Immature people are not fit for self-governance. If we live in a dictatorship of relativism we will lose freedom.

4th segment: Michael said he and Fr. Sirico have been part of a project called “Doing the Right Thing,” organized by Chuck Colson and Prof. Robert George. It is an ethics curriculum that deals with many of these questions of business and ethics.

• Doing the Right Thing

Another initiative approaches the problem of poverty through entrepreneurship and is called PovertyCure. Scot reads from the website: “We all are called to a loving and generous concern for the poor. Yet while many of us have a heart for the poor, more than 1 billion people—one sixth of the world population—live on about $1 per day. Every year millions of men, women, and children die from AIDS, malaria, and other preventable diseases. Tens of millions lack clean water and go to bed hungry.”

• PovertyCure

The typical way that developed economies have responded to the challenge haven’t produced results over the past decades. Andreas said the questions is now why there is poverty, because we are all born people and we all started out poor. The question is how to create wealth. To approach poverty as a problem is the wrong approach. John Paul said we should stop looking at the poor as a problem, by start looking at them as an opportunity, people with a latent potential.

Scot said it’s not about creating big bank accounts, but creating wealth in the form of drinking water and food, clothing. Andreas said we should call it prosperity. It is a complex issue with many aspects to it.

We can look at the aspect of the culture, both our own and that of the poor. We as Christians often have a false sense of charity. We see someone who’s poor and we say, “I’m going to take care of you,” but that’s not how it ought to work. In a crisis, you can take care of someone in the short term, but in the long term, if we’re creating prosperity, we can’t run their lives. We can create prosperity by doing business with each other, by taking our responsibility, exercising our freedom responsibly.

Michael said PovertyCure doesn’t look at what we what they don’t have (water, food, etc.), but what we don’t see that they don’t have that is preventing them from getting what they need (rule of law, private property, etc.) There isn’t a single way to solve this, but it’s time to change the discussion from looking at people as “consumers” or “burdens” to seeing them as “producers” and “entrepreneurs.” Going from the idea as aid as the model to enterprise as the model. Population does not cause poverty. People are wealth creators when given the right conditions.

PovertyCure is doing a video curriculum and a documentary. They have over 50 partners and are looking for more. Join them on the website or on their Facebook page.

That will conclude today’s presentation of The Good Catholic Life. For recordings and photos of today’s show and all previous shows, please visit our website: TheGoodCatholicLife.com. You can also download the app for your iPhone or Android device at WQOM.org to listen to the show wherever you may be. We thank our guests, Michael Miller and Andreas Widmer. For our Production team of Rick Heil, Anna Johnson, Justin Bell, Dom Bettinelli, and George Martell, this is Scot Landry saying thank YOU for listening, God bless you and have a wonderful evening!