Self-interest ‘wrongly understood’
The financial meltdown and the decay of civil religion
The worldwide financial meltdown stemming from overvalued sub-prime mortgages has shaken the very basis of America’s free-market system: Faith that acting in one’s self-interest will lead to the economic betterment of all.
“Those of us who have looked to the self-interest of lending institutions to protect shareholder’s equity – myself especially – are in a state of shocked disbelief,” Former Federal Reserve Chairman Alan Greenspan told the Congressional Committee of Government Oversight and Reform.
The new University of Massachusetts Press Book, Religious Liberty in America: The First Amendment in Historical and Contemporary Perspective by Bruce T. Murray, analyzes where laissez-faire economics comes into conflict with the civic good and civil religion – Americans’ sense of connection between themselves, the state, and a higher authority.
Even Adam Smith, the “founding father” of America’s economic system, had no illusions of the limitations of self-interest. Smith rejected the notion that man alone – without God – was capable of creating a moral system.
“The care of the universal happiness of all rational and sensible beings, is the business of God and not of man. To man is allotted a much humbler department, but one much more suitable to the weakness of his powers, and to the narrowness of his comprehension; the care of his own happiness,” Smith wrote in his treatise, “The Theory of the Moral Sentiments.”
Even self-interested economic behavior that confers benefits to the greater society does so only incidentally – “without intending it, without knowing it,” Smith wrote. “The rich,” he said, act out of “natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires.”
Religious Liberty in America tracks the numerous other issues relating to civil religion – from the political rhetoric of Barack Obama and the civil rights movement to the public response to the Sept. 11 terrorist attacks. In addition, Murray surveys the development of religious pluralism in America for the past 400 years – from early debates to present controversies, such as the mixing of religion and politics, battles over religious symbols in the public square, the “culture wars,” immigration and faith-based initiatives.
Religious Liberty in America was selected by Choice – a publication of the Association of College and Research Libraries – as an “Outstanding Academic Book.”
“This book is a splendid presentation of the First Amendment – with civil religion as a parallel theme – especially as presently related to so many issues in American political and religious life. Other books on these issues have been appearing of late, but none as clear and thorough as this one.”
— G.H. Shriver, Professor Emeritus, Georgia Southern University
Purchase Religious Liberty in America on the University of Massachusetts Press Web site.
Find out more about the author here.
Alexis de Tocqueville, Democracy in America, Book 2, Chapter 8
“The Americans are fond of explaining almost all the actions of their lives by the principle of self-interest rightly understood; they show with complacency how an enlightened regard for themselves constantly prompts them to assist one another and inclines them willingly to sacrifice a portion of their time and property to the welfare of the state.”
Claire Berlinski, Los Angeles Times, Oct. 21, 2008
“A bit of intellectual honesty is required of free-market economists. Free markets work splendidly, in theory. But as no less a free marketer than the great Adam Smith himself observed in The Theory of Moral Sentiments – the book that preceded The Wealth of Nations – in application, free markets rely on specific social, moral and political institutions. These institutions must be exceedingly robust if the free market is to deliver on all of the splendid promises made for it.”
"We'll succeed beyond our wildest dreams ... I think we also have to be prepared for the fact that we may, and probably will, overdo it."
— Alan Greenspan in Maestro: Greenspan's Fed and the American Boom by Bob Woodward
Michael Hiltzik, Los Angeles Times March 19, 2009
"For decades, the wealthy have been held up as people to be admired, victors in the Darwinian economic struggle by virtue of their personal ingenuity and hard work. ... That mind-set has all but been eradicated by the damage sustained by the average worker's nest egg, combined with the spectacle of bankers and financial engineers maintaining their lifestyles with multimillion-dollar bonuses while the submerged 99% struggle for oxygen."
"The banking industry wasted no time last week declaring its opposition to President Obama's proposal for a regulatory agency that would protect consumers from rapacious lending practices." — David Lazarus, Los Angeles Times, June 21, 2009
Michael Hiltzik, Los Angeles Times Dec. 31, 2009
Economics philosopher Peter Drucker said profit fails as an explanation of a businessman's behavior "or his guide to right action." Moreover, a narrow view of the corporation's role inspires the hostility toward profit that is "among the most dangerous diseases of an industrial society."
Executive pay a function of market forces? “When British economists David Ricardo and Adam Smith examined this question 200 years ago, they concluded that what a person earns is determined not by what the person has produced but by that person's bargaining power. It was Smith who explained that the bargaining power of each party is determined by the laws that the government passes and the way that it enforces them, and that, as a rule, the government sides with employers against employees.” — Los Angeles Times op-ed by Moshe Adler
Column by Donald J. Kochan