Not long ago, the Business School of the Jesuit University of Wheeling printed up a T-shirt for its annual gathering, inscribed as follows:

Permit me to borrow that quotation from a T-shirt as a starting place.

Behind that quotation lie six presuppositions, whose validity was established by Business as a Calling.[1] We might as well start out by making them as clear as the snowy peak of Mont Blanc against a cold blue sky:

Until a few years ago, these six solid premises were being widely ignored, under the spell of unreality cast on many social thinkers by the dream of socialism.[6] Those of you still undecided about one or more of these premises may consult an array of studies.[7]

Few today believe that socialist economics is the wave of the future. But most nations still find it difficult to root themselves in capitalism, democracy, and moral purpose. Most have little experience under the rule of law. Most of the countries of the former USSR, most of Asia (emphatically including China), much of the Middle East, and most of Africa lack many of the cultural and political habits (and institutions) required for a successful capitalist system. What, then, is the proper conduct for U.S. businesses with respect to such countries? Let us invent a composite, fictional nation called Xandu, and do a case study.

Suppose that a graduate from the Notre Dame Business School went to work for Kavon (a fictional, new electronics firm) and suppose that Kavon was scouting out the possibility of launching an operation in Xandu. The general rationale for these projects is that "constructive engagement" is the only way in which Xandu will be brought into the circle of democratic, capitalist, and law-governed nations. No doubt, that rationale has merit. But will its premises be realized? What must be done to make sure that they are?

The political system in Xandu is still a narrow, closed, paranoia-feeding system, whose elites remain in power only by maintaining total political and psychological control over their population. These elites are intelligent, and have come to see that capitalist methods deliver abundance where socialist methods deliver scarcity.

But the Xandunese leaders have studied recent history, and found that many societies that first pursued economic growth then awakened demands for political democracy. That was the sequence in Greece, Portugal, Spain, South Korea, and the Philippines; from Chile and Argentina in South America's southern cone northward throughout Latin America; and in Kenya. They can see that a system of economic liberties generates a desire for political liberties. The social mechanism seems to be as follows: Successful entrepreneurs learn by experience that they are smarter and in closer touch with some realities than political commissars.[8] They resent being badly governed. They begin to demand republican institutions (that is, institutions of representative government).

Thumbnail sketch: In the year 1900, there were only four democratic regimes on earth, but by the year 1998 there were at least seventy.[9] All are characterized by capitalist economies, and many followed the path from economic to political liberty.[10]

In the Xandunese diagnosis, therefore, the business corporation is the camel's nose under the totalitarian tent. They know that they need Western corporations, at least for the next twenty years. But they discern the essentially moral character of business, and its subversive effect, since the corporation embodies principles of limited government, the rule of law, and high internal ideals of person and community. Through the practices of business corporations, these ideas spread like a "disease," which Xandu wants to keep in quarantine. The Xandunese need the technical and moral culture of the corporation--the technology, the skills, the methods, the training. They do not want the political culture it gives rise to. They hope that by redoubling their efforts at control, they can quarantine liberty within the economic sphere. They want at all cost to prevent the principle of liberty from gradually seeping into the political life of Xandu.

By seven or eight favorite devices, the Xandunese leaders attempt to control the efforts of Kavon and all the other foreign companies now bringing their factories, know‑how, and new technologies to Xandu.

First, the Xandunese insist that all employees of some new foreign firms be selected and "prepared" by a Xandunese personnel company. This company will be run by the Xandunese National Party, and this Party will insist on having an office on the site of the foreign firm to mediate any labor problems. From that office, it will also maintain strict political control over the work force.

Second, to the extent that labor unions will be represented within the foreign firm, these will be limited to official Xandunese National unions, and will also be used as instruments of political control.

Third, some foreign firms will be required to provide information about the behavior of their employees. For instance, signs of religious practice or having children beyond the mandated minimum or reading certain political materials are matters about which the labor monitors want to be informed.

Fourth, foreign entrepreneurs who own small firms will be obliged to enter into "partnerships" with Xandunese firms, firms owned either by the government or by freelancing officials. From time to time, in fact, a recalcitrant foreign entrepreneur has been arrested, thrown into jail, his assets seized, and communication with the outside world entirely cut off. One such imprisonment has already been known to last six years. Larger foreign firms will be expected to turn a blind eye.

Concerning the government, there is no rule of law. Even one or two large firms have been bilked out of large sums--$50 million in one deal, $100 million in another--when Xandunese partners (government officials or their proxies) walked away from losses caused by their own behavior.

Fifth, foreign firms are sometimes expected to accept suppliers assigned to them. Factories in Xandu, unhappily, are very often staffed with slave labor maintained in appalling conditions, and forced to toil for years for the sole benefit of the ruling Party elite. To say that standards of nutrition, sanitation, and living quarters in the Xandunese labor camps are primitive is too weak. They are intended to humiliate and to intimidate. Details have been confirmed in texts smuggled out by survivors.

Sixth, Kavon and other high-tech companies will be requested, cajoled, and compelled to share with their counterparts in government firms important secrets of U.S. satellite, missile, metallurgic, or computer technology. (Obviously, they will also have to share these secrets with their own Xandunese workforce, put in place by the Party.) Xandunese engineersscientists, and technicians learned enormous amounts from their American counterparts, particularly when their own rockets, hired to carry aloft U.S. satellites, blew up and when, to avoid more such heavy expenses, U.S. technicians coached the Xandunese in the details of more advanced rocket technology. The latest Xandunese rockets are now being sold to at lease three sworn enemies of the United States.
Seventh, the government of Xandu regards religions of the Creator (such as Judaism, Christianity, and Islam) as threats to its own total power. Because the leadership is obscurely aware that respect for the individual arises from belief in a Creator Who transcends the power of governments, the government of Xandu regards personal acts of religious piety as dangers to the regime. It discreetly watches over Xandunese employees of international firms for signs of religious deviation. It especially persecutes Christians.

Under conditions such as these, the mere presence of American firms in Xandu will not necessarily lead to social change for the better. "Constructive engagement" that is complicit in the practices described above can be a delusion. If American businesses blindly, unintelligently, and uncritically collaborate with leaders who implicate them in barbarous practices, they will destroy the reputation of capitalism, democracy, and their own declared moral purposes.

If, on the other hand, fully prepared for techniques such as those listed above, and armed with countermeasures and a firm insistence on living up to their own international standards, American firms might well use their bargaining power (Xandu needs their know-how) to creative moral purposes.

A handful of American firms, for instance, are led by evangelical Christians with a strong commitment to following the practice of Jesus by taking their efforts to the whole world, no matter how unsavory the reputation of the regime. Even such firms will need to have procedures in place to protect themselves against complicity and scandal, lest they be taken advantage of. So also will other firms whose interests are predominantly economic. There may be some firms whose leaders are so cynical that they make it a practice not to raise moral or political questions about potential business activities. Yet even they will need to take precautions against the sort of abuses listed above, lest large sums be lost in crooked dealings.

Corrupt government officials are found all around the world. Some firms better than others know how to draw a bright line around the edges of their own dealings, and to instruct their agents clearly to live by U.S. company standards. They do not enter negotiations expecting Sunday School, but they are prepared to spot and to avoid abuses in advance.

No doubt, few are the governments that in the full range of their attitudes and practices manifest all the behaviors ascribed above to this fictional country of Xandu. Yet even within countries whose record on the whole is good, there are rogue operations that need to be checked.

Thus, in planning their operations in Xandu, the executives of Kavon might wish to consult a checklist of all the abuses of sound business ethics that have been reported in various countries. They should certainly prepare defensive tactics. They will need an ongoing capacity to gather accurate information about their business contacts. They will also need to be on guard against contractual provisions for any practices that they would not wish the world public to know about. They need a set of positive proposals to suggest in the place of those they find objectionable.

Having looked briefly at a concrete (albeit fictional) case, let us now return to some of the underlying substantive issues.

As a set of practices, business is an inherently moral occupation--rooted in free creativity, dependent on and nourishing an important form of cooperative association, and inculcating humble realism. But if business is an inherently moral occupation, then in the very practice of their craft its practitioners are capable both of moral and immoral acts. Again and again, every day, they must choose whether to fulfill their own firm's moral ideals, presuppositions, and tendencies--or to betray them. Since the practice in which they are engaged is inherently moral, they are held to high standards. Should they betray those standards, they injure not only their firms and themselves, but the reputation of the entire business system. Those three betrayals--of their firms, themselves, and the business system--inflict an enormous loss on a great many human beings, especially the poor, whose economic welfare depends upon a successful business system.

Moreover, betrayals by business are certain to be noticed. Many members of the literary class--journalists and moviemakers as well as novelists, poets, cultural critics and historians--have inherited a literary culture steeped in anti-business sentiment. Such sentiments flow abundantly from two reservoirs--one socialist, the other aristocratic. Both tories and socialists teach that "economic liberalism" is a sin--in Spanish, Liberalismo es pecado. Both are inclined to hold that business is immoral; even worse, that it is amoral (i.e., nonhuman). Business, in the view of socialists and aristocrats alike, is irretrievably vulgar. It is concerned with the cash nexus, the almighty dollar, filthy lucre, greed. It overlooks such noble things, such ends-in-themselves, as beauty, truth, and compassion. This view is wrong, of course, but it is deeply entrenched in literary culture and among historians.[11]

Hence it is that we often meet in literary productions the figure of the humanly misshapen businessman, whose callous misdeeds (those of Scrooge, for instance) are employed as an indictment of an entire profession, even an entire economic system. I ask you point-blank: Can you think of a novel, play, poem, or essay in literary criticism that does not portray business in terms of moral inferiority?

For such reasons, people in business must anticipate that every moral failing of theirs will not be discounted merely as a personal lapse. It will be magnified as evidence of the moral corruption of the entire system in which they spend their lives. Really good people, it is sometimes suggested even in serious universities, even Christian universities, would not go to business school. Serious Christians, in particular, called to lives of compassion for the poor, and service to a Divine Master who lived in such poverty that he had not whereon to rest his head, should want more out of life than merely to make a buck. Going to business school, hoping to make a lot of money, expecting to live well and constantly to better one's position--such things are held to sit uncomfortably with the Gospel of Jesus Christ.

We know from the history of Christian reflection on business that such derogations from the vocation of business represent neither moral reality nor true Christian belief. If you remember that in fine textiles, design, fashion and other fields, Northern Italy has for centuries been one of the most entrepreneurial regions of the world, it should not surprise you that popes from Northern Italy have often envisioned a large and creative social role for entrepreneurs, as in this text from Pius XII in 1956:

Almost ten years later, Pope Paul VI, told men and women in business that he saw in them reflections of the divine:

There should be no doubt in our minds. The vocation of business is inherently noble.

An historical example from the early economic development of the West may deepen our insight. From the fourth century onwards, Benedictine monasteries were the first outposts of civilization. Around their walls, and taught by their learning, the wandering barbarian tribes of Europe learned for the first time how to live above the level of subsistence, and how to establish towns for many new civilizing pursuits around the monastery libraries and centers for the arts. Invention and discovery flourished.[14] The monasteries also became the first multinational business corporations. By organizing long-term economic systems for efficient, lawlike, and rational production,[15] the monks were able to invest in the construction of institutions of higher civilization, and take some of their own profits in the form of leisure for prayer and contemplation.

Today, the high hopes of the poor depend on a widespread fulfillment of the business vocation. When national economies are in free-fall, in recession, or in decline, it is difficult even to imagine raising up the poor from poverty; the creation of new jobs, new wealth, and open opportunity; the strengthening of civil society and its nonprofit sector; the economic growth that inspires confidence in democracy; and leisure for contemplation and the pursuits of civilized living. Under conditions of scarcity, depression, or economic stagnation, such goods are threatened. Social well-being depends upon at least some measure of creative business activity.

Yet none of these potential contributions removes from business endeavors the fateful ambiguity that inheres in all human freedom. None of these good fruits of business activity flows automatically, ineluctably, necessarily. Being in business is a morally serious vocation, freighted with grave consequences for nations and civilizations.

An index of this ambiguity is found in the opinions of the American founding fathers. The problem of the international vocation of American business is not, at the end of the day, much different from the burning question posed for the founders of our republican experiment in the beginning, Whether to foster an ethos of active commerce? We should not forget that North America was the original "underdeveloped country." By comparison, South America was awash with gold and silver, and blessed by abundant and easily plucked supplies of food. The decision whether to promote commerce and invention in North America was a fateful decision.

The American founders held that each type of political regime influences the habits of its people, but each in a different way. Aristotle had noted long before that under occupation by a foreign power, some people become sycophantic and corrupt, while others resist corruption heroically. In other words, the individual does not mature in isolation, but in a particular city. Each individual is a child of his polis: man is a political animal. Ethics, properly understood, is a branch of politics: the character of the polis shapes the ethos.[16] This ethos, in turn, impresses the sentiments and habits of individuals.

This insight was familiar to the founders; it was part of their own worldview. A republican form of government, they believed, would form a better type of citizen than a monarchy. A monarchy forms subjects; a republic would form citizens. As the character of the polis is different, so also the ethos.

For instance, in a letter written to Mercy Warren six months before the Declaration of Independence, John Adams took up the fundamental Aristotelian principle: "It is the Form of Government which gives the decisive Colour to the Manners of the People, more than any other Thing."[17] Since Adams believed a republic demands a high ethical standard from its citizens, he at first believed a republic would not work in America:

Nonetheless, Adams had no doubts about the comparative effects of a republic and a monarchy upon moral character:

Yet even after Adams became convinced that republican self-government is morally better, he was deeply worried that the commercial spirit would undercut republican virtue.

Thomas Jefferson, Adams' life-long friend and correspondent, shared similar fears:

The spiritual strength of a nation, Jefferson held, lies in the proportion of its citizens who husband the soil, and he believed (like many of the ancient poets such as Horace and Virgil) that manufacture and commerce introduce rot into the body politic.[22]

For Jefferson, the corruption of morals that arises from commerce is:

Some of these are powerful arguments. Even today, we see some evidence on their behalf.

Montesquieu, whose The Spirit of the Laws was well known to the American founders, is usually regarded as the progenitor of the new American ideal of the "commercial republic." His basic insight was that every regime is centrally constructed around one social class: either the royal family and its aristocracy; the military; the clergy; men of manufacturing and commerce; or the lower classes (hunters or cultivators). In Montesquieu's time, the freest country in the world and the most mildly governed was Britain, and Britain was manifestly a "nation of shopkeepers." In this, Montesquieu saw an important connection:

Is Montesquieu right about this? We may test his thesis against contemporary examples. Under Communism, shops in Eastern Europe were run by state bureaucrats; customers expected to be ignored and insulted. In the same shops a few years later, under the spirit of commerce, agreeable manners slowly returned. In Washington, D.C., to go to City Hall for a driver's license and to shop in a private store are two quite different experiences. Commerce does seem to encourage agreeable manners, more so at least than government agencies.

Next, Montesquieu adds another testable observation about building democracy on commerce:

In America, Tom Paine used an even stronger argument against the fears about commerce expressed by Adams and Jefferson:

Alexander Hamilton's observations from his own upbringing in Jamaica also brought him to lessons almost opposite to those of Jefferson. Hamilton argued that men do not work well in uncongenial fields; in nations, therefore, the larger the variety of occupations, the more abundant the flowering of human talent.

In direct opposition to Jefferson, Hamilton adds that the spirit of enterprise "must be less in a nation of mere cultivators, than in a nation of cultivators and merchants; less in a nation of cultivators and merchants, than in a nation of cultivators, artificers [manufacturers] and merchants." In a nation in which enterprise multiplies the fields of activity, the tyranny of a majority is less likely.[28]

Finally, Alexis de Tocqueville also praises the spirit of commerce in America; he sees both its dangers and its positive advantages. At first, he seems to give a sharp rebuke to Jefferson:

Still, Tocqueville makes only modest claims for commerce. It does not produce high virtue, but it prepares the soul for it:

The inner structure of commerce, in fact, encourages many garden-variety virtues:

A little later, though, Tocqueville sees an opposite danger:

Yet, while success in commerce may breed moral laxity:

The human being is an embodied spirit. Concern for one's own body cannot be entirely separated from care for the interior life of one's soul. Each without the other lacks an essential side of one's being. This seems to me a sound Christian point.

But here is a third argument for commerce: To invest in the future is to give up consumption in the present. Parents or even an entire generation must sacrifice their pleasures for the benefit of those to come in the future. It is a condition of business that people are able to transcend their own immediate gratifications.

The font and origin of business, in other words, lie in the human spirit. But a total preoccupation with commerce--or with physical pleasures--dries out the soul; the cistern cracks, and there is no living water.[35]

In short, the life of commerce is more closely related to the life of the spirit than its critics often suppose.

To summarize this section: Despite the ambiguities inherent in founding a republic upon commerce, the founders soberly considered commerce the best of available foundations. Commerce increases diversity; the diffusion of power and wealth and talent; and the healthy multiplication of interests, in such fashion that no one faction can become tyrannous.[36]

And yet a man of solely commercial interests and commercial purposes may lose sight of larger purposes. He may stultify his soul. He may lose his taste for eternal life, and thus his sense of the immortal dignity of every human being, the very ground of human rights.

This ambiguity, inherent in the commercial republic, is a fact of human life. It is not an ambiguity unknown to other types of regime. Yet, in the commercial republic, facing it squarely is even more important than in other regimes. For the commercial republic depends on a doctrine of rights and, therefore, on a doctrine of the incomparable worth of the human person.

Let us now return to our main theme. Earlier, we noted seven or eight ways in which Xandunese authorities have asked Western firms to carry out certain political activities on behalf of the government. Some major American corporations have refused to go along with these demands, and in those cases, the Xandunese authorities have let the matter drop. One can imagine the surprise and contempt that the Xandunese authorities must feel towards those companies who without any sign of resistance simply comply with their demands.

The chief justification for encouraging American businesses to invest in foreign societies such as Xandu is to help to build up an international civil society. If and when business corporations indulge in activities that injure or destroy civil society, then, they commit a fourfold evil: (1) They do things evil in themselves; (2) they distort and damage the internal moral structure of the corporation; (3) they injure the moral reputation of their firm; and (4) they defile the model of the free society to which they swear allegiance, and in whose name they justify constructive engagement in the first place.

By such practices, some companies have injured the moral reputation of capitalism around the world. They have acted as if all they were interested in was their own financial gain. They have allowed observers to infer that they were indifferent to the plight of human beings and to the immoral and oppressive structures of the lawless nations in which they operated.

It is because business organizations are economic organizations, rather than political or moral organizations, that they are allowed to function in totalitarian countries, while moral and political institutions are not. Nonetheless, business corporations are not merely economic institutions, for they develop to normal growth and in normal ways only within certain kinds of political regimes, and only in certain kinds of cultural ecology. In this sense, corporations are fragile plants; they grow only in certain kinds of soil. Corporations, therefore, cannot shed their commitment to law, liberty, and moral purpose as snakes shed their skin. (Unless, of course, some are snakes.) Commitments to law, liberty, and moral purpose are part of their inner constitution.

What should corporations do in countries like Xandu? Let us suppose that in recent years a number of prison labor camps have been identified in Xandu. Suppose that these camps were built both for political and religious dissidents. In these labor camps, torture is a frequent practice. Punishment is meted out daily, and indoctrination and "moral reeducation" are daily aims. In these labor camps, goods are produced that are offered for sale to Western and other corporations. Some American corporations may already have unknowingly participated in buying goods from slave labor camps. This would be evil stuff.

First, if such happenings became known, such purchases would be impossible to justify before the world. Trade in goods made by the sweat and blood of slaves is an abomination.

Secondly, Western companies themselves have a stake in the rule of law. Some foreign authorities already treat Western companies capriciously, seize their assets, change unilaterally the terms of contracts earlier signed. The abrogation of the rule of law, in short, imposes heavy costs.

Third, absent an active civil society, there will be no associations or groups within Xandunese society to protest against abuses. Naked authority will rule nakedly. This would not be a long-term environment for productive commercial activities.

In such circumstances, it is crucial for American and other Western firms to maintain their moral self-respect. They must become acutely conscious of their own moral and political identity, determined not to sell themselves as less than they are. Business corporations truly are the avant-garde of free societies. They represent the first wedge of the development of healthy civil societies, the rule of law, and the new birth of activities, associations, and organizations independent of government.

The first practical step for Kavon and other companies is to recognize that some rare nations may for a time, under a certain regime, be so bad that it would be a blunder for any self-respecting firm to collaborate with them. Such decisions are easier when international sanctions (or even national laws) prohibit trade and investment. They are more difficult when companies must reach decisions in hard cases without political guidance. Today, of course, sanctions are too profligately and unsystematically used; the U.S. currently exercises sanctions against some 70 countries. This renders long-range investment planning useless.

Still, the long-range good of the human race depends on bringing all nations, even rogue nations, back within the circle of law-abiding and tolerably moral behavior. The leaders of nations are not choirboys, and the morality of nations is in some ways more gross and less observant than the morality of individuals (although in some ways it can also be nobler and higher).[37] Still, there are four powerful reasons why the executives of Kavon and other companies must support the rule of law and sound moral codes:

The second practical step is for some enterprising business school to launch a major research project outlining new rules of engagement for our new international era. This project would consist in two closely related surveys. The first survey would develop a list of 50 or so of the most common abuses of ethics or human rights by governments or firms around the world--a kind of checklist of pitfalls that alert managers ought to have in hand. Such a list should include the seven or eight abuses enumerated in this paper, plus others such as bribes, secret fees, kickbacks, hidden shares in profits, and sweetheart deals, whether demanded by local officials or offered by competitors.

The second survey would generate a parallel list of practical strategies and tactics for successfully defeating all attempted abuses. A corporation whose field officers are fully trained and amply armed with the relevant authority to foil anticipated abuses would have in hand, as it were, clearly stated "rules of engagement," by which to report and to repel outside attempts to compromise the home company.

Internal rules of behavior (it goes without saying), including conditions of immediate dismissal for specified acts of wrongdoing, would guide internal corporate initiatives and practices. The cleaner the ethical principles within the company, the easier decisions are for executives in the field. They know in advance which sorts of behavior will receive moral support from the home office, and which will end in reprimand or dismissal. In business as in football and other contact sports, energy is more swiftly channelled when the rule book is clear.

Negatively, then, businesses must avoid those activities that injure or destroy the moral structure of civil society. Positively, they must proactively seek out ways--quiet ways--to nurture the political and moral soil that the universal growth of commerce requires.

For instance, using due prudence, modestly and without fanfare, they might instruct employees in the rule of law and the corporate code, and teach them the elementary history of liberal political and economic institutions (so that employees might understand the ethos of the firm). Obviously, companies should avoid proselytizing for a particular political party or engaging in domestic politics (local or national). Nonetheless, they should import reading materials and introduce the literature of liberty to their own executives and employees, as well as into schools and libraries in the host country. For practical reasons, they need to regard themselves as teachers. They should be forthright in recounting the history of their firm, telling the stories of its heroes, explaining its corporate ethos, and defending the cultural and political presuppositions on which its being depends. They should always conduct themselves as full-fledged carriers of the thinking and morals of the free society. To do less would be to lack self-respect.

If they fail these responsibilities, they will win disdain from the very foreign tyrants who will welcome them like prostitutes bought and paid for. And they will not deserve to be honored by their fellow citizens back home.

By contrast, when firms fulfill their responsibilities to their own full identity, they strengthen commerce, and commerce is the foundation of a free polity. Commerce is the "commercial" half of "the commercial republic" envisioned by our founders. Commerce multiplies human opportunity and generates economic growth, and thus opens upward pathways for the poor. Commerce promotes inventions and discovery. As new talents rise, and obsolete technologies die, commerce constantly stirs the circulation of elites. Commerce helps to establish a complex system of checks and balances. Further, commerce makes resources available for projects outside the orbit of state activities, and thickens social life while subtracting from the power of the central state. It gives incentives to enterprise and character, and inculcates an important range (but not the full range) of moral virtue, especially the virtues necessary for prudent living and the rule of law.

Let me summarize: The success of many new businesses from the bottom upwards is crucial to economic growth. The success of these businesses is crucial to the success of democracy, especially where large majorities are poor.

All these goods belong not solely to Americans, but to all people on earth. To help set in place the preconditions for the achievement of these great social goods--to help break the chains of worldwide poverty--is the international vocation of American business.

Being a business leader today, then, is a highly moral profession. The bad news is that one can fail at it. The good news is that one can succeed.

That is the human drama. That is the suspense.

Notes

1. The tee-shirt was created by Prof. Edward Younkins; quotation from my Business as a Calling (New York: Free Press, 1995), p. 175. This lecture builds on, and goes beyond, the argument of Business as a Calling.

2. Centesimus Annus, #32.

3. Centesimus Annus, #32:

Important virtues are involved in this process [the work of firms], such as diligence, industriousness, prudence in undertaking reasonable risks, reliability and fidelity in interpersonal relationships, as well as courage in carrying out decisions which are difficult and painful but necessary, both for the overall working of a business and in meeting possible set-backs. This process, which throws practical light on a truth about the person which Christianity has constantly affirmed, should be viewed carefully and favorably.

4. Peter Berger, The Capitalist Revolution (New York: Basic Books, 1986), pp. 78-81.

5. Business as a Calling, p. 136.

6. "Socialism is the name of our dream!" wrote Irving Howe in the premier issue of Dissent. Fortunately, the Catholic Church never fell into that dream. Pius XI taught definitively in 1931 that: "‘Religious Socialism,’ ‘Christian Socialism’ are expressions implying a contradiction in terms. No one can be at the same time a sincere Catholic and a true socialist."

Quadragesimo Anno, #120 in The Church and the Reconstruction of the Modern World: The Social Encyclicals of Pius XI, ed., Terence P. McLaughlin, C.S.B. (Garden City, NY: Image Books, 1957), p.261.

Leo XIII had seen, 40 years earlier, that socialism is not only against nature, inhumane, and evil, but also unrealizable:

The Socialists may do their utmost, but all striving against nature is vain. There naturally exists among mankind innumerable differences of the most important kind; people differ in capability, in diligence, in health, and in strength; and unequal fortune is a necessary result of inequality in condition.

Rerum Novarum, #9 in Seven Great Encyclicals, ed., William J. Gibbons, S.J. (New Jersey: Paulist Press, 1963), p. 158.

7. See, e.g., Peter Berger's The Capitalist Revolution; Irving Kristol's Two Cheers for Capitalism (New York: Basic Books, 1978); my own The Spirit of Democratic Capitalism (Maryland: Madison Books, 1991), and The Catholic Ethic and the Spirit of Capitalism (New York: Free Press, 1993); Richard Neuhaus, Doing Well and Doing Good: The Challenge to the Christian Capitalist (Garden City, New York: Doubleday, 1992).

8. Berger, op cit. pp. 78-81.

9. World Survey of Economic Freedom 1995-1996, Freedom House, ed. Richard E. Messick (New Brunswick: Transaction Publishers, 1996).

10. This progression from economic to political liberty is noted on p. 10:

With few exceptions, countries the Survey rated economically "free" during 1995 also earned a "free" rating on political and civil liberties.

11. Friedrich A. Hayek, Capitalism and the Historians (Chicago: University of Chicago Press, 1954).

12. Cf. also:

One would rather compare such activity to a scientific invention or to an artistic work sprung from a selfless inspiration directed to the whole human community, which it enriches with new knowledge and with more powerful means of action.

Address of Pope Pius XII to the Italian Federation of Commerce, The Pope Speaks, vol. 3, no. 1, Spring-Summer 1956, p. 46.

13. Address of Pope Paul VI to the Christian Union of Employers and Executives, The Pope Speaks, vol. 10, no. 1, Autumn, 1964, p. 17.

14. See David S. Landes, The Wealth and Poverty of Nations: Why Some are So Rich and Some are So Poor (New York: Norton Books, 1998).

15. Randall Collins, Weberian Sociological Theory (Cambridge: Cambridge University Press, 1986), p. 52.

16. Nichomachean Ethics, Book I, Chapter 2, in The Basic Works of Aristotle, ed. Richard McKeon (New York: Random House, 1941), p. 935.

17. John Adams to Mercy Warren, January 8, 1776, in The Founders' Constitution, vol. 1., ed. Philip Kurland and Ralph Lerner (Chicago: University of Chicago Press, 1987), p. 669.

18. Ibid., p. 669.

19. Ibid., p. 670.

20. Ibid.

21. Letter to John Adams, May 17, 1818, The Founders' Constitution, p. 670.

22. Note on the State of Virginia, Query 19, 1784: The proportion which the aggregate of the other classes of citizens bears in any state to that of its husbandmen, is the proportion of its unsound to its healthy parts, and is a good-enough barometer whereby to measure its degree of corruption. p. 675.

23. Ibid.

24. The Spirit of the Laws, XX, 2, trans. Thomas Nugent (New York: Hafner Press, 1949), p. 316. On the same page, he adds:

The spirit of trade produces in the mind of a man a certain sense of exact justice, opposite, on the one hand, to robbery, and on the other to those moral virtues which forbid our always adhering rigidly to the rules of private interest, and suffer us to neglect [private interest] for the advantage of others.

25. Ibid., V, 6, p. 46.

26. Thomas Paine, Rights of Man, Part 2, 1792, in The Founders' Constitution, p. 140.

27. Alexander Hamilton, Report on Manufactures, December 5, 1791, in The Founders' Constitution, p. 140.

28. This argument, against the tyranny of a majority, is picked up by Tocqueville in Democracy in America, ed. J. P. Mayer (New York: Doubleday, 1969), pp. 250-254.

29. Ibid., p. 552.

30. Ibid., p. 527.

31. Ibid.

32. Ibid., p. 540.

33. Ibid., p. 546.

34. Ibid., p. 547.

35. Jeremiah 2:13, The Bible (Revised Standard Version):

For my people have committed two evils; they have forsaken me, the fountain of living waters, and hewed out cisterns for themselves, broken cisterns that can hold no water.

36. See Federalist #10 and #53.

37. See Reinhold Niebuhr's Moral Man and Immoral Society (New York: Charles Scribner's Sons, 1932); Man's Nature and His Communities (New York: Scribner's, 1965); and my essay on Niebuhr, "Moral Society, Immoral Man," in A Time to Build (New York: Macmillan Company, 1967).

Michael Novak is the George Frederick Jewett Scholar in Religion, Philosophy, and Public Policy.