Illusions and Realities: The Bishops and The Entrepreneurs

Last December 22, before the Joint Economic Committee on Economics of the U.S. Congress, Archbishop Rembert G. Weakland of Milwaukee revealed a strange understanding of enterprise. Senator William Proxmire and Congressman David R. Obey, both from Wisconsin, listened to the Archbishop. When Chairman Obey asked the Archbishop about some views of the lay commission headed by William E. Simon and myself, the Archbishop gave the following response, which is best quoted in full:

I find this to be, and I’ll say it simply, un-American. It’s a kind of an elitist concept that certain people are able to handle money, therefore they’re wealthy, and the rest are not. And you have to increase that wealth of those elites so that the money gets back into the system again. I find that is very unconvincing.

We had some economists, who tells us that just as you need a minimum wage, perhaps we need also a maximum wage, that, is there really some who are so much better than others as to deserve the kind of incomes that they receive?

And at times, I would say that this can become a moral scandal, when you find certain entrepreneurs taking enormous bonuses in salaries, while at the same time others are being let go at work. This creates a kind of morale problem which is serious in a nation.

So I would hope that we haven’t reached that stage of greed in our society, where one has to imitate the Marcoses, for example, in order to work — in order to take any kind of risk. I find that to be very disturbing.

First off, I didn’t much like having my views called “un-American.” People from the state of Senator Joseph McCarthy, especially, ought not to do that.

Second, 750,000 new businesses were started last year in the United States, about six every minute of every working day, some 14,400 per week. These weren’t started, typically, by some grand elite, but by ordinary people, often putting their savings at risk. About eighty percent of the more than 15 million new jobs produced during the past decade were created by small businesses employing under 50 persons. Far more than Chevrolet, small businesses are the heartbeat of America. The total number of employees in the Fortune 500 shrank during the same period (as “rust-belt” bishops should know). The Lay Commission is not talking about large corporations, then, but about the main engine of job creation, new small enterprises, conceived by creative imagination and brought into reality by risk, sacrifice, and hard work.

Third, the Archbishop seems to confuse entrepreneurs with corporate managers, when he speaks of “certain entrepreneurs taking enormous bonuses in salaries, when at the same time others are being let go at work.” In the view of the Lay Commission, corporate managers play an important role in a large continental-size economy such as ours. In their fashion, they try to be entrepreneurs. But they — like the bishops running their dioceses — are essentially managers. They inherit established giants (dinosaurs, Irving Kristol calls them) which they can only move slowly, a degree at a time. It is crucial to distinguish managers, important as they are, from entrepreneurs. It is the latter who are the hope of most new job creation, of invention, of dynamism, and of forward economic progress.

Fourth, the Archbishop worries about greed like that of the Marcos family, but he forgets a crucial point. Ferdinand Marcos was neither a corporate manager nor an entrepreneur, but the head of state. Perhaps the Archbishop will understand, therefore, why the Lay Commission is even more acutely worried than the bishops about the danger of putting further economic powers in the hands of the state. To prevent that combination of economic power with political power (so typical of Latin Catholic nations) is one crucial contribution the U.S. Constitution made to history.

Finally, probably no nation on earth is as favorable to enterprise among poor people without a track record, people without status or noble birth or pedigree or college degree. That is why the poor of the world still flock here, and why there are long lines of people all around the world waiting to get in, like lines for a smash hit on Broadway. America is still a land of opportunity — not merely opportunity to “get a job,” but opportunity to “start a business,” which is something else again. Without lots of persons willing to “start a business,” there are even longer lines of people looking in vain to “get a job.” You will not get millions of jobs for the latter unless you encourage a climate conducive to millions of the former.

That is one reason why the Lay Commission holds that to talk about creating jobs without talking about enterprise is to forget the necessary means. But there is also a second reason. One of the most original inventions of the U.S. Constitution was the independence it established for enterprise. The U.S. Founding Fathers (Madison particularly) saw in the multiplication of independent enterprises the most reliable basis for an open, tolerant, self-checking, and successful democracy. The American experiment rests upon the hypothesis that free economic life is a necessary but not sufficient condition for democracy.

Most of the Catholic nations of the world, by contrast, are rooted in the traditional pre-enterprise ethic. Such nations long favored large landholders, the aristocracy, the military, and (the root of much anti-clericalism) the clergy. Such nations seldom have institutions making credit available to poor people who would start businesses. They make the process of incorporation cumbersome, expensive, and laden with bureaucratic obstacles. To protect existing wealth, they keep markets closed. They shut the poor out.

The United States isn’t like that. Today, in New York City, new immigrants have taken over the wholesale food industry. All around the country, new immigrants are establishing footholds in taxi services, food stores, variety stores, high-tech shops, restaurant chains, and other businesses. When people say that the U.S. is the “land of opportunity,” they mean above all a “land of enterprise,” where, having nothing, one can begin to create.

This is not merely a rhetorical point. It is a crucial insight needed by such vast Third World regions as Latin America, where some 70 million youngsters under the age of 15, already born, will be entering the labor force between now and the end of the century. Where will they find jobs? Those jobs will have to be created by millions of small entrepreneurs. But where are the Catholic leaders who promote the virtues of enterprise and the skills of entrepreneurship in Latin America?

The Lay Commission believes that the virtue of enterprise is rooted in Catholic teaching about human beings “made in the image of the Creator,” and that the skills of entrepreneurship are at least as valid as the skills of land-holders, aristocrats, generals, and clergymen, even though they are, alas, much less universally praised, taught, and encouraged in desperately needy parts of the world.

We wish our bishops had said so.

Michael Novak

By

Michael Novak held for many years the George Frederick Jewett Chair in Religion and Public Policy at the American Enterprise Institute and is now a trustee and visiting professor at Ave Maria University. He is a philosopher, theologian, and author, as well as the 1994 recipient of the Templeton Prize for Progress in Religion. He has been an emissary to the United Nations Human Rights Commission and to the Conference on Security and Cooperation in Europe. He has written over twenty-seven books on the philosophy and theology of culture, especially the essential elements of a free society. He also founded Crisis Magazine with Ralph McInerny in 1982.

MENU