Please disable your Ad Blocker to better interact with this website.

Image Image Image Image Image Image Image Image Image Image

Affluent Christian Investor | November 21, 2017

Scroll to top

Top

No Comments

Mutual Aid Societies: The Cooperative Spirit

Declaration of Independence (1819), by John Trumbull.

Democratic-Capitalist societies are often characterized as lands of “rugged individualism” – each person responsible only for himself, boldly standing against the rest of the world, come what may. Such a spirit is romanticized in the image of the lonesome cowboy or in William Ernest Henley’s short poem “Invictus” [i]

It matters not how strait the gate,
How charged with punishments the scroll,
I am the master of my fate:
I am the captain of my soul.

In fact, nothing could be further from the truth about capitalism. While we might admire the heroism of people who overcome great odds, that is not remotely how democratic capitalist societies operate.

In his landmark book, “The Spirit of Democratic Capitalism.” Michael Novak explains that such a system is in fact the most cooperative economic/political arrangement ever created. It begins with the family unit and grows to include commercial partners, suppliers, and customers. It includes the entire community. He writes —

“The very structure of democratic capitalism – even its impersonal economic system – is aimed at community… the community of free persons in voluntary association.” [ii]

Novak cites the founder of the concept of capitalism –

“In the “Theory of Moral Sentiments,” (Adam) Smith points out that every self is both individual and social, and has both selfish and benevolent interests. As to which represents the higher virtue, it is absolutely clear to him ‘that to feel much for others, and little for ourselves, that to restrain our selfish, and indulge our benevolent affections, constitutes the perfection of human nature….’” [iii]

In order to exercise these higher virtues, the individual must first ensure that his own needs are taken care of. But even here the individual must engage in cooperative relations with others.  Smith’s famous dictum – “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest” – makes it clear that the butchers, brewers, and bakers are not sole operators. They need others to supply the wheat, the sugar, and the sides of beef. They are not making their own ovens, vats or knives. They must have customers or their products will spoil and be worth nothing.

Not one of these other actors is compelled to cooperate with the butchers, brewers, or bakers. They do so only because such cooperation is in their own interest. Cooperation is hard-wired into every aspect of political and economic life.

This remains true today. Both Romney and Obama were right during the 2012 election when one said “I built that,” and the other replied “you didn’t build that on your own.” Even the most successful and largest enterprises begin with one person – just one – having an idea. But to take it beyond just being a swell idea, that person must persuade others of the merit of the idea – first to partners, then to investors, then to accountants, attorneys, managers, and marketers, then to employees, and finally to customers. All of these people have to agree with the initiator that the idea has merit and is worth trying out. If they don’t agree, the idea will never come to fruition.

It takes not only the idea for a new product or service, but the ability to explain the idea in a persuasive way. We all know people who are full of fascinating ideas, but never actually make them happen.

 

The Importance of Fair Play

 Novak has another important observation about all this – that it was the Anglo-Saxon culture that nurtured this cooperative approach to economics.  Other cultures were more content with “traditional societies” which were dominated by military leaders, aristocracies, or religious orders.  These societies did not encourage individual initiative or voluntary cooperation. Novak writes –

“Anglo-Saxon culture appears in this respect to be particularly misunderstood among other cultures of the world. Its leading figures speak openly of the importance of the individual, but in practice Anglo-Saxon customs and traditions nourish remarkable social orderliness and a splendid cooperative spirit. One sees it in British common law and in that peculiarly British love of liberty combined with respect for the law.” [iv]

Again he cites Adam Smith –

“Finally Smith insists on fair play. Individualism must be held in check by moral-cultural ideals — ‘In the race for wealth, and honours, and preferments, he may run as hard as he can, and strain every nerve and every muscle, in order to outstrip all his competitors. But if he should jostle or throw down any of them, the indulgence of the spectators is entirely at an end. It is a violation of fair play, which they cannot admit of.’” [v]

Does this sound quaint today? It shouldn’t. From the 19th Century “robber barons” to recent actions against Microsoft and Enron, the “spectators” (society) often step in to blow the whistle when companies are not playing fair.

So, we have a society in which individuals are allowed to innovate and prosper from their own initiative, but only within the bounds of “fair play.” Fair play is a bundle of virtues which David Green summarizes in his 1993, “Reinventing Civil Society: The Rediscovery of Welfare Without Politics.”

“We only have to look at our own language to discover the rich variety of virtues that make a free society work and which describe the obligations we all owe to one another. Good character, honesty, duty, self-sacrifice, honour, service, self-discipline, toleration, respect, justice, self-improvement, trust, civility, fortitude, courage, integrity, diligence, patriotism, consideration for others, thrift and reverence are just a few.”  [vi]

The elevation of these virtues, and the discouragement of their opposites, is necessary for a well-functioning society.  Yet today in the United States, little thought is given to the need for a virtuous people.

The Left sees mankind largely in political terms. They want universal suffrage and a robust government to rein in economic players and assure that basic needs are met for all. The Right focuses on economic freedom. They want people to be secure in their possessions and free to engage in commerce with a minimum of restrictions.

But Green and Novak see an indispensible role for a third leg of society – the moral/cultural sector. In this they are very close to the American founders who believed that virtue was a necessary precondition for liberty. Liberty by itself could easily lead to hedonism. The Washington, Jefferson & Madison Institute of Charlottesville, Virginia recently compiled a few citations of this principle: [vii]

George Washington — “Virtue or morality is a necessary spring of popular government,” and “Human rights can only be assured among a virtuous people.”

Benjamin Franklin — “Only a virtuous people are capable of freedom.”

James Madison — “To suppose that any form of government will secure liberty or happiness without any virtue in the people, is a chimerical idea.”

Thomas Jefferson — “No government can continue good but under the control of the people; and … their minds are to be informed by education what is right and what wrong; to be encouraged in habits of virtue and to be deterred from those of vice … These are the inculcations necessary to render the people a sure basis for the structure and order of government.”

Samuel Adams — “Neither the wisest constitution nor the wisest laws will secure the liberty and happiness of a people whose manners are universally corrupt.  He therefore is the truest friend of the liberty of his country who tries most to promote its virtue.”

John Adams — “Our Constitution was made only for a moral and religious people.  It is wholly inadequate to the government of any other.”

 

 

Cooperation in a Free Society

What does this mean in practice? There are times when neither the political nor the economic sectors are capable of providing for the needs of the people. Such times are not rare. In fact, for most of the world, that is the normal state of affairs. Governments might be corrupt or inept, markets might be poorly developed or lack stability. Entrepreneurs might be few. What are people to do? Wait around for conditions to improve?

No, people will sometimes join together to take care of their mutual needs. But to do this requires the “social orderliness and a splendid cooperative spirit” Novak describes.

To cooperate for mutual benefit, people must trust one another. They must have the virtues Green discusses – “Good character, honesty, duty, self-sacrifice, honour, service, self-discipline, toleration, respect, justice, self-improvement, trust, civility, fortitude, courage, integrity, diligence, patriotism, consideration for others, thrift and reverence.”

At least these are the conditions required by a free people.  Similar activities might come about through the direction of a strong man, a tribal leader, or a gangster boss – “You will cooperate or I will kill you.” That might work for a while, until the current boss is usurped by another, or until people’s resentment builds and the boss is overthrown. Then there is chaos until a new boss emerges.

Green and Novak are well aware of totalitarian societies.  They understand that this is the traditional way to organize an economy – have a boss at the top to tell everyone else what to do. This is the default system for humanity. It isn’t even old-fashioned. There is plenty of it going on today, even underneath a façade of elections and parliaments.

The Anglo-Saxon approach to liberty tempered with virtue is all the more remarkable, then. It is a counter-intuitive way to order human affairs. It has existed for only a few centuries of human history, and there is constant pressure to lay it aside and return to the default system. It takes constant nurturing, and especially education in what is virtuous behavior. We cannot assume that such skills are instinctual or inherited.

[i] William Ernest Henley, Invictus, http://en.wikipedia.org/wiki/Invictus

[ii] Michael Novak, The Spirit of Democratic Capitalism, Madison Books, New York, 1991. P. 126

[iii] Ibid. P. 146

[iv] Ibid. P. 144

[v] Ibid. P. 147

[vi] David G. Green, Reinventing Civil Society: The Rediscovery of Welfare Without Politics, Civitas, London, 1993, P. viii

[vii] No Liberty Without Virtue, The Washington, Jefferson & Madison Institute, Castle Hill, Virginia, April 3, 2011. http://wjmi.blogspot.com/2011/04/no-liberty-without-virtue.html

Greg Scandlen
Greg Scandlen has over 30 years experience in health care financing. He is an advocate of patient empowerment, consumer choice, and increased competition. As founder of the Council for Affordable Health Insurance in 1991 and Consumers for Health Care Choices in 2004, he helped get Health Savings Accounts enacted and implemented. He is now retired and living in Waynesboro, PA where he is active in his church and local politics.

 

Join the conversation!

We have no tolerance for comments containing violence, racism, vulgarity, profanity, all caps, or discourteous behavior. Thank you for partnering with us to maintain a courteous and useful public environment where we can engage in reasonable discourse.

The Affluent Mix

Become An Insider!

Sign up for Affluent Investor's free email newsletter and receive a free copy of our report, "How the Trump Impeachment Crusade Costs you Money ."

Send this to a friend