I asked my local politician, “Whatcha gonna do when the Dow gets to zero?”
He said, “That’ll never, ever, EVER happen on my watch, young man;
            we have laws, we have ordinances, we have statutes;
But it don’t matter anyway if we don’t enforce them
            or if we forget them,
            or if we ignore them,
‘Cause the Dow won’t ever get to zero.” 

I asked the prosperous preacher-man, “Whatcha gonna do when the Dow gets to zero?”
He said, “God’s gonna make you healthy, wealthy, and wise, no matter what;
            we’ve got precepts, we’ve got promises, we’ve got faith;
So go sit and confess it all inside your welfare Cadillac,
            just go ridin’,
            just go hidin’,
God bless you when the Dow gets to zero.” 

I asked the voice on the radio, “Whatcha gonna do when the Dow gets to zero?”
He said, “It makes me mad, mad, MAD, that we’re a-headed that way;
            we need to protest, we need to blog, we need to make some noise;
So don’t just sit there, write to the president,
            write your congressman,
            write and take a stand,
And I’ll see you in jail when the Dow gets to zero.” 

I asked my downtown banker-man, “Whatcha gonna do when the Dow gets to zero?”
He said, “You just hang on, hang around, and hang in there, till it’s all over;
            the market will recover, it’ll bounce back, it’ll return to normal;
So let’s assume that you have a future a-comin’,
            that you’ll still be here,
            that you’ll survive to the year,
When the Dow finally comes back from zero.” 

I asked my dear old friend, “Whatcha gonna do when the Dow gets to zero?”
He said, “I’ll be eating beans, beans and more beans, down in my fallout shelter;
            I’ll add salt, I’ll add pepper, I’ll add herbs and spices;
So dust off those outdated canned goods,
            and the firewood for your heat,
            and that strange mystery meat,
So you won’t starve when the Dow gets to zero.” 

*  *  *  *  *

            Rhetorically, how could the Dow-Jones Industrial Average ever get to such a point as described in the above text?  Beginning from the understanding that this market indicator is based on the thirty largest industrial stocks as judged by the good folks at the Wall Street Journal (and according to many, not a particularly good sampling of the overall health of the market for that very reason), then the only possible way to see it at zero would presuppose the end of the stock market.  This means that no shares of ownership of any company would any longer be available in the form of holdings which could be purchased by the investing public.  If this were the case, the only alternatives would be either completely private ownership or government ownership; and since the idea of private ownership of huge, multi-national corporations might be nearly impossible without market shares being offered to the public, that leaves some form of socialism (or collectivism or Marxism or communism or Leninism) as the only thing remaining (despite certain differences, all of these terms belong under the same umbrella, even though I personally would prefer to leave them all out in the rain).

            There are many today who speak of the “death” of capitalism.  And the news media certainly doesn’t help matters with its constant exaggerations and sensationalism, pushing forward its pessimism and driving down consumer confidence; and this is all done, of course, in the name of ratings.  Yet we recognize that if something can die, it can then be supposed that that something was once, is now, or will be, alive.

 The life of capitalism

            Without being too anthropomorphic about it, anyone who really understands capitalism knows that it does have a life of its own—a soul, if you will.  It has its own standards and makes generally predictable reactions to the activity and stimuli within its environs.  And it even appears to have a conscience and a moral code.  America’s founding fathers clearly had an instinctive understanding of this; after all, they were the ones who released the American experiment in the first place.  But they didn’t know the word “capitalism;” they talked about this economy in the more raw terms of its two primary components: commerce (as in the free market system and domestic trade) and private, individual property, now known also as “capital.”

            Two years before the adoption of the Constitution, Thomas Jefferson said, “I think all the world would gain by setting commerce at perfect liberty.”  Only a few months previously, George Washington said in a letter, “A people... who are possessed of the spirit of commerce, who see and who will pursue their advantages may achieve almost anything.”  Later, in his 1796 farewell address, Washington further stated, “… our commercial policy should hold an equal and impartial hand: neither seeking nor granting exclusive favours or preferences; consulting the natural course of things; diffusing and diversifying by gentle means the streams of Commerce, but forcing nothing; establishing with Powers so disposed; in order to give trade a stable course.”  Although these two men held to differing positions along the political spectrum of their day, they and their many colleagues agreed that commerce, that is, the American marketplace, must be free.

            John Adams was a staunch advocate of the right of personal property, as he said in Thoughts on Government in 1776, “But no part of the property of any individual can, with justice, be taken from him, or applied to public uses, without his own consent, or that of the representative body of the people.”  In 1792 in the National Gazette, James Madison wrote, "Government is instituted to protect property of every sort; as well that which lies in the various rights of individuals, as that which the term particularly expresses. This being the end of government, which impartially secures to every man, whatever is his own."  Jefferson wrote in 1788, “He, who is permitted by law to have no property of his own, can with difficulty conceive that property is founded in anything but force.”  English philosopher John Locke, who lived about a hundred years earlier, was especially influential on the thinking of the American founders with his concept of “life, liberty, and property” as being the basic inalienable rights of man (if this sounds familiar, it should be; Jefferson was merely paraphrasing Locke’s ideas when he wrote of “life, liberty, and the pursuit of happiness”).

            From the above we can see that an America without capitalism would not be the America of those who initially conceived our nation and gave to the world a working model of what a country could become if freedom was its basis of existence and not merely a concept or a bit of whimsy arbitrarily bestowed by some potentate.  The freedom to engage in commerce coupled with the right to own property as an individual had become the pillars of the system that the citizens used as they applied the abundant natural resources from the frontier lands and built the unique and amazing United States of America.

 Equal to greed?

            Detractors of capitalism would like us all to believe that the term is synonymous with greed.  They generally consider the ultimate statement of this greed/capitalism to be the famous movie quote from Wall Street: “Greed is good.”  It is true that greed rears its ugly head within the capitalist system very easily, and creates an inordinate addiction in its more selfish adherents to an exaggerated competitive drive which I have written about elsewhere (see the article “Number One” in the NHC companion section).  But although greed is an unfortunate side-effect, it most certainly does not qualify as a part of the essence of a healthy free market system.

            When selfish persons “play the system,” the usual result is the increase of the monetary value ascribed to the products or services which result from the efforts of workers.  For example, when a business wishes to increase its bottom line, it may raise prices and thereby increase the percentage of its profit, resulting in an increase in the confidence of its stockholders.  Then when consumers notice that the prices for goods or services have increased, they often demand higher wages or salaries in order to pay for what they need.  Then in order to meet these labor demands, business must adjust prices again to compensate.  Government seizes the opportunity and adjusts taxes so that it can meet increases in the need for regulation and enforcement—and so it goes.  Such uncontrolled spiraling must ultimately lead to a corrective downfall; this scenario cannot perpetuate itself without exacting a price of its own.  Thus recessions and depressions are its natural ipecac, a force which can and should rid any society of the sickening infection of such greed in its economic system.

            Again, here are more quotes—this from Benjamin Franklin, “Only a virtuous people are capable of freedom.”  And as John Adams famously said, “Our constitution was made only for a moral and a religious people.  It is wholly inadequate for the government of any other.”  The greed and immoral economic behavior described in the previous paragraph was not a part of the original plan for this nation.  Civic freedom must be supplemented by ethical and moral virtue and the sense of personal restraint and generosity which that virtue supplies.  When charity is little more than a tax shelter for people with small hearts, the charitable purpose is still served, but the problem attitude at the root of it all goes uncorrected, if it is uncovered at all.

 Parenting the economy

            I am blessed to have been raised by parents who had a basic understanding of the job of parenting (those of you who are similarly blessed or are yourselves parents will hopefully recognize what I am trying to convey here).  Wise parents will govern a child by setting behavioral boundaries that are reasonable and prudent for that child’s age, level of development and ability to handle responsibility.  The child is then free to act of his or her own accord within those boundaries, but there are consequences if those boundaries are breached, and adjustments are made periodically when the child demonstrates either a new level of maturity or else a new reason for some further restriction.  In time, both the parent and the child will usually develop a basic mutual understanding of the types and severity of the disciplinary actions that follow a particular transgression.

            Governing a capitalist economy should work the same way.  The government sets regulations which create ethical boundaries for the activity of a free market, and imposes legal disciplinary measures if those boundaries are violated.  A properly balanced body of legislation will provide the necessary measure of protection for the consumer while allowing business to freely operate within wide yet reasonable parameters.  At this point any vigilant administrative body must take care to avoid the twin extremes of puppet-like control on the one hand and anarchy on the other.  Of course, in government circles there is much discussion about how much regulation is too much versus how much is enough.  But like a wise parent, if a child shows responsible behavior, the boundaries can usually be somewhat widened to allow greater freedom, or else they must be further restricted if infractions become frequent in a particular area.

            Unfortunately, the trend over the past seventy-plus years in our government has been toward a gradual narrowing of such parameters, partly in response to creative new forms of abuse, but also partly due to a paranoid and megalomaniacal sense of control on the part of the more vocal critics of the capitalist system.  This has led to a counter-productive suppression of some entrepreneurship through bureaucracy and taxation despite a plethora of lip-service being paid to the small business owner.  At the very time the economy could best profit from a relaxation of regulation, along with a more vigorous enforcement of the modest regulation which remains, our legislators have chosen to devote their efforts to expand the government’s role in business operations by imposing selective demands in selected areas of the business community as an effort to micro-manage certain more highly publicized scenarios, for little other reason in view than their own political gain.