When Capital Is Nowhere in View

By: Jeffrey A. Tucker
From: Mises Daily

A Travel Channel episode of No Reservations, a cooking-focused show narrated by Anthony Bourdain, took viewers to Port-au-Prince, Haiti. I had heard that the show offered unique insight into the country and its troubles. I couldn't imagine how. But it turns out to be true. Through the lens of food, we can gain an insight into culture, and from culture to economy, and from economy to politics and finally to what's wrong in this country and what can be done about it.

Read the entire article HERE.

Patient Capitalism

Business and the Good Samaritan

Today, Catholics everywhere will once again hear the story of the Good Samaritan from the Gospel of Luke. It is one of the world's most famous parables.

In the time of Christ, Jews and Samaritans were bitter enemies, each considering the other heretical. The idea of a Samaritan helping a wounded Jew would have been unsettling. Even more disturbing would have been the fact that the two other orthodox Jews in the story, a priest and a Levite, ignored the suffering of their kinsman.

There are many lessons we can draw from this parable. For people in business -- that is to say, for anyone involved in the process of wealth creation -- one of the most important lessons comes from Margaret Thatcher, Prime Minister of the United Kingdom from 1979 to 1990.

In a 1987 speech to Scottish Conservatives, Thatcher observed, "No one would remember the Good Samaritan if he'd only had good intentions. He had money as well."

Wealth makes charity possible. The creation of more wealth makes even more charity possible.

One other person in this parable is often overlooked. He is the unnamed innkeeper who took in the wounded Jew, and extended the Good Samaritan credit for the Jew's care. The innkeeper was not acting charitably, but the resulting business arrangement made him an important player in the Samaritan's charitable effort.

Business and charity are not the same thing, and it is a mistake to make them act like they are. But they can work well together towards the same end when each acts according to its strength and purpose.

Stossel Teaches Bill Gates A Business Lesson

ABC News anchor and 20/20 correspondent John Stossel, one of the few people on television who appreciate the productive and ethical wonders of competition, had a business lesson for Bill Gates after the Microsoft billionaire spoke at Harvard in June.

In his speech, Gates lamented the suffering of the world's poor who have "no power in the market and no voice in the system." Stossel responded that the solution to poverty and human suffering is not philanthropy or blanket criticism of markets:

"Gates faults the free market for problems caused by governments. What constricts the reach of the free market is the state. Gates seems oblivious to all the ways that governments here and abroad cripple enterprise. In poor countries, corrupt bureaucracies smother entrepreneurship while enriching cronies. The lack of formal property rights and stable law keeps average people from accumulating capital. So the poor stay poor. That's what causes "scarcity of clean water" and kills 'children who die from diseases we can cure.'"

People are not poor because of lack of charity. They are not poor because markets make them poor. They are poor because their governments do not protect their lives, their property and their freedom to trade.

Business and High Profile Philanthropy

If the first rule of business is “It takes money to make money,” the second rule is fast becoming “Then give it all away.” Ted Turner started the current round of high-profile philanthropy in 1997 with a $1 billion gift to support the work of the UN. The Gates Foundation, philanthropic child of Bill and Melinda Gates, has $30 billion in assets. And Warren Buffet has pledged 85% of his $44 billion fortune to philanthropy.

Noble actions, yes. Philanthropy is a conspicuous good deed. But business improves the world in ways immeasurably more important than what it gives away.

Every day, we take thousands of business goods and services for granted, from wi-fi, to coffee, to restaurants, just to name a few. Every day, we wake up in a world where strangers work hard to offer us many of the things we want, even if we have not yet decided that we want them. We don’t know where we will eat lunch, but we are confident that someone will work with no guarantee of success to give us that choice. Business does this not because it is philanthropic, but because business serves its own interest by serving ours. Great fortunes are built by satisfying the needs of a great many people, one at a time.

In isolation, such small measures of satisfaction are easily overlooked. But added together from all the individuals involved, they reveal a world that is more satisfied, more cooperative, less violent, and wealthier. The sum of business activity is a better world.

To the extent that business philanthropy is described as “giving back,” it obscures the fundamentally beneficial nature of commercial activity. To the extent that philanthropy is described as business’s most important role in improving the world, it flatly contradicts the facts. To the extent that philanthropy funds individuals and organizations that oppose business, it funds the most dangerous opponents of human progress.

Anyone who wants to really improve the world should stick to what works. First, build an honest and profitable business that takes good care of its most reliable employees, suppliers and customers. Second, when the urge to give it all away strikes, consider whether the gift will promote or destroy the kind of world that made success possible in the first place.

Image property of Walter O. LeCroy