March 7, 2005
Monsignor Richard Liddy
Director of the Center for Catholic Studies
Seton Hall Univ,
Dear Monsignor Liddy:
I am looking forward to meeting with you, Bill Toth, and Dr. Martin in a few weeks. By then I will have read more of Bernard Lonergan.
I am an optimist by nature but have never been more concerned by the threats to both democracy and capitalism based on the present policies of our government, both Republican and Democrat. The special interests are in control because the citizens do not have an agenda. This is why I believe that the universities must become the agent of change and help the citizens to understand the matters that will determine the world that their children will live in.
This lack of a citizen agenda has existed from the beginning of this great democratic experiment but the impediment has escalated to a dominating force in the last quarter century. In Washington’s cabinet Hamilton wrote the rules while Jefferson whined about them. With all of Jefferson’s incredible intellectual range he did not understand monetary and fiscal matters well enough to take on Hamilton. Hamilton was an extraordinarily hard working genius who almost single-handed built the civic structure needed for the new republic to survive. He did, however, provide the privileges for the wealthy and powerful that allowed them to make fortunes speculating with borrowed money in contradiction to the Constitutional mandate to “control currency and credit for the general welfare.” It is the resulting concentration of wealth since that has kept democracy and capitalism in tension, not in harmony. It is this impediment that has now grown so large that it does not just impede, but threatens the whole system.
Jefferson and Madison knew there was a problem in general but could not match Hamilton’s financial sophistication and propose specific reforms. Nothing has changed, few citizens have the requisite knowledge to oppose the concentration of wealth and reform the system. The answer lies in movement from ultra-capitalism to democratic capitalism and is well documented in my book Democratic Capitalism. The problem is not that complicated. I present three actions on my website www.democratic-capitalism.com under ACT NOW that will begin reform: Citizens need to understand why corporate surplus must be returned to the economy in dividends and not wasted on acquisitions and stock buy backs; citizens must know that company performance be measured and held accountable to a three-year projection of sales, profits, and cash flow, not quarterly earnings; citizens must understand that every recession and depression in the country’s history has been caused by privileges to speculate with borrowed money. Until these policies are changed our job growth economy will continue to be ravaged by the demands for short-term earnings.
Our Founders were clear that government policies should be based on the will and wisdom of the people who would elect an aristocracy of talent and virtue. They were equally clear that democracy could work only if quality education equipped citizens for their responsibilities. Hamilton took the opposite view that only the wealthy and powerful, not the unruly masses, knew how to manage the country. This argument between Jefferson and Hamilton was never settled and Hamilton and his elite successors were left free to write the rules.
Throughout my published book, and the one I am now working on, there is a consistent theme: in every human association performance improves with trust and cooperation. This primacy of the individual, in harmony with others, is common to both Catholic teaching and Marx’s manifesto. This intellectual bridge has not been well identified largely because Marxism contradicted it so completely. Marx is the author of hypothesis # 1 that I use in chapter 10 in which he proposes in the arrangement of culture, political system and economic system, that it is the economic system that must receive priority with the culture structuring the political system in its support. This is not our society’s priority or the way government is run. It is grid locked between those who write the rules to concentrate wealth and those who try to write rules to tax and redistribute it.
These thoughts lead to the conclusion that all students, citizens in training, must develop a functional knowledge of fiscal and monetary matters. As the quotations at the beginning of the enclosed point out, however, there is argument within the universities whether the enlightenment mission of using reason to find the best way to organize human affairs is possible, and there is further argument whether the university does have an obligation to educate students to be effective citizens. In this confusion it may seem extreme to suggest that Liberal Arts students should concern themselves with distribution of corporate surplus, three year measurement, or elimination of borrowed money for speculation. Until some universities, however, take the lead in an Enlightenment II the rules will continue to be written for the benefit of the few and the world will continue to be one of folly and violence. I hope that Seton Hall University will provide such leadership.
c. Monsignor Robert Sheeran
c. Prof. William Toth
c. Dr. Stephen Martin