Cecil's Enlightened Capitalism Part II - Oct. 26, 2009

This is the second in a series of blogs on the basic tenets of Enlightened Capitalism as espoused by the person who coined the phrase, Andrew R. Cecil. Cecil pointed out in his speech that the intentions of capitalism are sound. Capitalism was believed to be based on doctrines of a "natural order," as Cecil called it, that involved free trade and laissez-faire. There was a belief that freedom of enterprise was completely in harmony with "natural liberty." The problem, however, was that this system, without any checks or balances, could lead to great prosperity for a few but suffering for many people in society if the interpretation of the term became "dogmatic and absolute." Cecil gives as an example the problems that occurred during the potato famine in Ireland in the nineteenth century. One of the contributing factors to the human disaster, according to Cecil, was the official position of the person in charge of the British Treasury at the time. That person remained faithful to laissez-faire and the protection of grain owners (a dogmatic position) when the establishment of government grain depots might have greatly alleviated the suffering.

Cecil uses the concept of Enlightened Capitalism to describe a system that is based on capitalism and the essence of laissez-faire, but he understood that there is no system that, on its own, is likely to provide the greatest good for the greatest number of members of a society. Everything has to be taken, as the adage says, with a grain of salt. Thus, Cecil describes the other 'invisible hand' of capitalism. The other invisible hand, as Cecil stated in his speech, "should guide the activities of society, namely concern for one's fellowman. This is the core of a harmonious order within the framework of the existing system of free enterprise."

It is important to keep in mind that in the real world that we are increasingly familiar with today, there is a reality that cannot be ignored. It is a reality that has always existed and is likely to exist far into the future. Some people are born into propitious circumstances while others are born into abject poverty. There is, of course, a substantial middle segment of people that are not found at either extreme, and perhaps this number is greater than ever before. However, considering the many statistics available about the billions of people on earth who must try to eke out an existence on a pitifully small daily budget, there is no doubt that there are simply too many people who are disadvantaged through no fault of their own.

Cecil described the situation in the United States quite eloquently in his speech. Let me quote him directly:

"Enlightened Capitalism is the realization that different groups of our society are joint partners who, by accepting the social creed of cooperation, can work by a mutually advantageous live-and-let-live policy. This policy is more than an ethical notion; it is the law of life upon which the prosperity of our mechanized, complex, and interdependent society depends."

I think that one of the most important words used by Cecil in that part of the speech is 'interdependent.' The United States is known for being a highly individualistic society. Our history is a testimony to the spirit of individualism, something that was dramatically underscored by the frontier spirit, something that can still be felt today. However, it seems to me that too much emphasis on individualism and that frontier spirit is problematic. This is more so in the early twenty-first century when this country has a greater degree of diversity than ever before. That diversity is something to be discussed in relation to Enlightened Capitalism in future blogs.

Interdependence is an extremely important concept in any society. It implies that all citizens have a role to play and a contribution to make. We must not put too much emphasis on the idea that some societal groups make a greater contribution than others. Everyone has something at stake and wants society to improve and be more inclusive. Each person should feel the responsibility to do what he or she can to contribute to everyone's well being. The idea that, "I'll take care of myself and those close to me, and everyone else should do the same, and if so everyone will be alright" fails to recognize that some people are born in disadvantaged circumstances and do not have the means to take care of themselves (or count on being taken care of by someone close to them). Those who "have" must always understand that some people in society will "have not" and need some help in becoming productive citizens.