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I just finished an economics course. It was fun. In January I am starting a Finance course. I really like the economics way of thinking.

The following is a piece of a transcript from the small business school tv program. I think it really rings of truth of capitalism. Adam Smith in the "Wealth of Nations" (1776) talks around this fundemntal concept that Novack puts in a nice simple wrapper. I really like this.

HATTIE: We talk about our economic system so little. Michael Novak says that democratic capitalism can be thought of as a three legged stool. One leg is the rule of law. Democracy, the government, public servants. I like to think of them as referee's. they have on the black and white shirts and they're running up and down the field trying to make sure the bad guys are corrected or thrown out of the game. As a business owner, I feel that sometimes some are bureaucrats who are heavy handed, controlling, demanding and sometimes downright irritating. But we do need them.

The second leg of the stool is a market economy based on private ownership of land and businesses.

In his book, The Spirit of Democratic Capitalism, Novak says:

(Voiceover) 'The new capitalism is not a matter of adventure or privacy but of continuous enterprise, planned and organized. Evaluated for profit and loss.' And this is the key point: 'The invention of the market economy in Great Britain and the United States, more profoundly revolutionized the world between 1800 and the present more than any other single force. After five millennia of blundering, human beings finally figured out how wealth may be produced in a sustained systematic way.'

The third leg of the stool is morality. Novak says that truth, fair play, trust and respect for others are key. We think this is the least understood and the most important of the three. There is confusion. Novak is saying that business people have to be moral to succeed. Historically we've been seen by the elites, academics, journalists, and bureaucrats as greedy and self-serving. And of recent, too much of business has been just that. Next, Michael Novak explains that there is a difference between greed and self-interest.

Who will stay up with a sick cow in a socialistic society and who will stay up with a sick cow (or llama) in a capitalistic society?

Novack carefully implies that a degrading morality in American Business will destroy democracy.


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