Staff Edition: Shaping Society

by Lawrence W. Reed

In a recent hour-long program examining “The Great Food Stamp Binge,” Fox News told the story of hardscrabble North Carolinians resisting the dole. Like generations before them, they wouldn’t stoop to taking handouts, preferring instead to tighten their belts in tough times. Then government social workers went to work on them and eventually broke down what was locally called “mountain pride.” The do-gooders were subsequently given awards for their “success” in turning those self-respecting, self-reliant citizens into taxpayer dependents.

Is this a case of the legal-political environment overwhelming personal character? It would seem so.

There’s a big chicken-or-egg component to this question. I think strong arguments are available to both sides. When Max first asked me to pick a side, it wasn’t easy and it took some time and thought. In the end, I’ve opted to put the premium on character, so here’s my case.

There’s more to the North Carolina story than the system corrupting character. Why should we assume that the only people in the story with character were the proud, independent mountaineers? Didn’t the social workers have character too? Of course they did, but arguably it was lousy.

Part of the problem here stems from the multitudinous meanings of the term. “Character” can be a mere description of personality, as in, “He is reserved and studious,” or “She is energetic and optimistic.” Whether those qualities are good or bad can depend on the circumstances. What would you say if someone asked you, “How would you describe the character of Adolf Hitler?” You wouldn’t reply by asserting he had none. You’d more likely respond this way: “Hitler had an evil, scheming, power-lusting, disreputable, and reprehensible character.”

Then there is the most positive sense of the term, in which a person’s character is composed of indisputably good traits almost universally admired. “Wow! What a man of character!” is an exclamatory statement that is nearly always synonymous with the highest praise. You would use that statement if you meant to suggest that the man is consistently (not occasionally) and deliberately (not unthinkingly) honest, responsible, caring, reliable, trustworthy, or fair.

So everyone has his or her own character. It may be characterized (is that a pun?) by traits that are mostly and widely regarded as good, or mostly and widely regarded as bad, or a mix that’s somewhere in between.

I approach the North Carolina story with some settled truths I accept as unassailable fact: It’s a good thing to work hard, to accept nothing from others but what they choose to provide willingly, to respect the property of your fellow citizens. Likewise, it’s not a good thing to take property by force and redistribute it, or to pressure self-reliant people to be party to such behavior. It’s a bad thing when you undermine good character traits in others and an even worse thing to accept the government’s loot to do it.

Character was overwhelmingly at work on all sides of the North Carolina story. Sadly, the side that won out was the one with the rotten (though perhaps well-intentioned) character because it had a powerful ally—other people’s money.

You don’t check your character at the door when you go to work for the government. That means that the legal-political system is itself a reflection of the character of those who made the laws and those who are employed to carry them out. A people of the highest character won’t write laws that undermine it, nor will they take other people’s money to corrupt and destroy it. People of questionable character may do both, and there’s no question that their power to do harm is greatly magnified when they have the force of the State in their grasp.

The only truly unwilling parties in the North Carolina story were the taxpayers whose money was taken under threat of force for the do-gooders to pass around. The mountaineers ultimately did not have to succumb to the temptation to take it, and they don’t have to allow it to permanently corrupt their character. Likewise, nobody put a gun to the heads of the social workers, who could have chosen a more honorable profession.

Only in the most extreme situations where free choice is impossible might there be a case that the legal-political system is more powerful than character, and that requires you to assume that the system doesn’t reflect the character of those who created or tolerate it. The late Viktor Frankl, a prominent neurologist and Holocaust survivor, might well argue that there is one dimension in which character ultimately triumphs over the most vicious and all-encompassing compulsion. He wrote in his 1946 book, “Man’s Search for Meaning,” that “Everything can be taken from a man but one thing: the last of the human freedoms—to choose one's attitude in any given set of circumstances, to choose one's own way.”

To accept the notion that the legal-political environment is more powerful in shaping society than character is to accept the rationalization, “The system made me do it.” I think that’s rarely the case, and it certainly wasn’t in the instance of the social workers in North Carolina. “But they didn’t understand that what they were doing was a bad thing,” you might say. Ignorance is regarded as no excuse for breaking the law, so why should it be accepted as an excuse for upholding it when the law is rooted in error, theft, demoralization, or injustice?

I hope this is much more than just semantics, but I believe that character shapes everything, and everything is a mirror image of it.

An old proverb teaches, “When wealth is lost, nothing is lost; when health is lost, something is lost; when character is lost, all is lost.” I can’t quite assign the same degree of indispensability to the legal-political system.

Lawrence W. Reed, economist and historian, is president of FEE and author of the forthcoming book, Are You Good Enough For Liberty?

by Max Borders

Somewhere in the Blue Ridge Mountains, good people are growing marijuana. Just like people who toil to bring up tobacco or turnips, these folks work hard to support their families. They make their living supplying a market—marijuana users. The activity creates no victims.

But the Drug War—our legal-political environment—turns these good people into de jure criminals. One might argue that a marijuana grower is someone who lacks character. And certainly there are circumstances under which he may lack character. Maybe he has threatened another grower over “territory.” Maybe he has lied to his neighbors about his work. But we have to ask: Would these character deficiencies exist in a different legal-political environment—such as one in which marijuana is legal? This grower, while he may have other character flaws, would be far less likely to threaten or lie if marijuana were legal.

Now consider Janet. People think she’s lazy. And maybe she is. She hasn’t worked for two years. When asked why she doesn’t work, she says “there aren’t any jobs.” But when you press her, it turns out a few positions are available nearby—jobs for which she’s qualified—only she would have to work the second shift. Adjusting her justification, Janet says she’s waiting for the “right” job. It turns out there are plenty of jobs across the state line, 100 miles away. Janet doesn’t want to move. Still, why doesn’t she just take what work she can get?

Janet is on unemployment. She is being paid the same amount to do nothing as she would be to work the second shift or to move out of state. The incentives of the legal-political environment are powerful. Her laziness is real. But it is a byproduct of a legal framework that guarantees generous benefits for inaction. Some people of good character can overcome these incentives, but most cannot. The welfare state will write a million more such stories.

Personal character is no doubt a powerful determinant in the health of a society. Our legal institutions and our mores are interrelated. But I urge you to think about Ice-T’s words:

“Don’t hate the player, hate the game.”

The rules of the game (the legal-political environment) are a more powerful determinant of society than the better angels of our nature. Eventually, the rules overwhelm a people. Again: we need people of character. We’ll need them to help us rebuild from our economic malaise. When Martin Luther King, Jr., changed minds about Jim Crow, legal changes followed. If Ron Paul can vote his conscience for 30 years, other legislators can be inspired to so the same.

But these are the exceptions. The rule is: rules matter.

The legal-political environment is powerful even within a single organization. Consider the Freeman interview of Paul Green, Jr.,  a “colleague” at a company with no structural hierarchy. There are leaders, but no bosses nor managers—and no employee is kept back by a title. People are rewarded for their effort and ideas, so the sky’s the limit. No one can tell you what to do, but people will tell you when you need to pull your weight.

At Morning Star there are two guiding principles: “Don’t harm or threaten harm against another colleague” and “Honor your obligations.” When people sign on with the company, they commit contractually to these principles and to a culture of “total responsibility.” Total responsibility means that if you see something you think needs changing so the company will achieve its mission, you have total responsibility to act. Given these rules, how do you think the employees behave?

Paul Green, Jr., says:

People recognize immediately that success will come only as a result of what you do: You are generally unimpeded by bureaucracy or stifling regulation that might keep you from whatever measure of success that you want to achieve…. It all flows out of your drive, commitment, hard work, and ingenuity.

And—surprise—we’ve found that that kind of success, the kind that is unquestionably the result of your blood, sweat, and tears, is incredibly invigorating. Our colleagues fall in love with it, and embrace it almost universally. And, anecdotally, I see that it affects the way they live their daily lives outside of work—their relationships with others in the community, friends, families, and other businesses.

One can guess that in organizations that are bureaucratic, top-down, and layered with managers, there is a lot of buck-passing, shirking, backbiting, and politicking. These environments are rarely conducive to cultivating personal character.

Now, let me leave you with a thought experiment—one I hope will test your ideas about character in a crony-capitalist world.

Pretend you own a flange company. You have $1 million to invest. In his book Government’s End, Jonathan Rauch writes:

For $1 million you could hire one of the best lobbyists in Washington. This fellow is a former staff member of the House Valve and Flange Subcommittee: He knows the legislators, he knows the issues, and he is persuasive and ingenious. With his help, you could invest some of your $1 million in campaign contributions to members of the Valve and Flange Subcommittee. Though you can’t count on buying anyone’s vote, your money would buy you access, which your competitor might not enjoy. Your lobbyist and your PAC might win you a tax break, a subsidy, or, best of all (because it’s least visible to the public), a law or regulation hobbling mini-flange mills. Any such tax break, subsidy, or regulation could easily be worth, say, $10 million a year.

So here’s the question: Are you going to invest in capital improvements or in a lobbyist?

Before you answer, let me add something to Rauch’s thought experiment. Suppose you know your competition is already paying a lobbyist. The bill could kill your business. The prize for successful lobbying is $50,000 for every dollar invested. Whatya gonna do? Like it or not, you’re in a lobbying arms race. It’s winner-take-all. Does character tell you to fight for your business, or refuse to play the game?

The rules of the game—the legal-political environment—are a powerful set of incentives. They can make or break people of character. It all depends on which rules are in place.

Max Borders is the editor of The Freeman and the author of Superwealth.