Restoring our
Moral Foundations
In the middle 1900's America’s astonishing prosperity rested on strong values like mutual trust, thrift, rule of law, a commitment to service, and shared moral restraint. Those attributes were built through strong civic institutions formed in the early 1900s to combat the pervasive sense of drift, purposelessness, unfairness, reckless consumption, and moral decay so pervasive from the close of the First Gilded Age to the Roaring Twenties. The sense of social solidarity was bolstered by a far more egalitarian distribution of income and wealth.
Today, rising isolation, declining social trust, and an ethic of relentless, reckless consumption threaten the foundations that make free markets work effectively. For late-stage capitalism to endure, it must evolve into something that feels reasonably fair, distributes productivity gains widely, and answers our universal hunger for meaning and purpose.
What Needs Restoring?
The Bedrock of Markets
Capitalism depends on a robust moral framework. Our system works best when people and corporations honor their obligations, pay their debts, keep their word, put in an honest day's work, and care about their reputation for integrity and fair dealing.
Every dollar spent on "locks and lawyers" is a deadweight loss to society that could be avoided if we could count on honesty and integrity. Capitalism is an abject failure in countries—like Russia and its east bloc satellites—that do not enjoy robust "rule of law" in the sense of enforceable contracts and consistent application of law by honest judges.
When Greed Becomes the Creed
We've Seen This Movie Before
In the First Gilded Age, when capitalism ran amok, most of the predictable evils of laissez-faire economics came to dominate. It took decades of reform to bring the scales of justice into anything resembling balance.
Robert Putnam chronicles this pendulum swing on the I/we curve using over 40 civic, social, economic, and political variables to track the shifting balance of selfishness versus social solidarity. From about 1900 to 1965 our country became steadily more socially cohesive as racial, ethnic and religious barriers weakened. The gap between the very rich and desperately poor narrowed dramatically as a huge new middle class emerged to dominate American culture and consciousness. The result was a tsunami of productivity and prosperity unlike anything the world has ever seen. A voracious middle class had the income and the desire to buy all the wondrous new fruits of American ingenuity.
In 1965, the typical CEO's income was 21 times what the average worker made in wages. By 2024 that ratio had exploded -- thanks mostly to stock grants to the top brass -- so that the average CEO made 281 times more than the typical wage earner in one of their factories or shops. Much of the disparity today is driven by who owns the big corporations: The top 1% of wealthy Americans own more shares of stock than the bottom 90% combined! As a result we witness a proliferaton of luxury goods, private jets, Aspen ski chalets, and mega-yachts while more than 10 million American children languish below the poverty line.
Does capitalism erode the moral foundations on which it depends?
We are reaping the desolation of loneliness, deaths of despair, and spiritual drift that characterized the "Roaring 20's" of the last century. We have allowed greed and materialism to corrupt the soul of our nation.
"I think that rather than continuing this alternating obsession with intractable partisan battles and issues that feel distant from their quality of life, Americans want their political leaders to take a step back and ask two simple questions: What makes a good life, filled with purpose, meaning, and happiness? And what does government need to do—and not do—so that more people have access to this life? If more of us asked these questions, we might find that America is not actually as divided as the outrage industry would have us believe."
–– Senator Chris Murphy
First Gilded Age:
The Predictable Evils
Long days underground or beside roaring machines, wages barely covering food, let alone any kind of future.
Rail, oil, and steel ownership were concentrated until competition was eliminated and prices rose through monopoly power.
With no oversight, milk was watered down and meat was packed disgusting conditions
The scales of justice tilted sharply toward business. If your hand met a machine the wrong way ... buyer beware.
The Consumerist Descent
An Orgy of Consumerism
Our society has devolved into an orgy of consumerism that would be unrecognizable to prior generations schooled in the principles of thrift and moderation. Most people understand that materialism is an obstacle to moral and spiritual growth, yet we are bombarded daily by thousands of powerful messages urging us to consume far more than we need.
Adam Smith's Warning
Economists from Adam Smith onward understood that selfishness must be bounded by compassion and moral restraint. Smith himself wrote eloquently of the "stultifying" effect of the division of labor and the power of remorse to moderate naked selfishness into enlightened self-interest. "The invisible hand" was always paired with the moral sentiments. Adam Smith never imagined markets operating without virtue.
The Project Ahead
Our project is to rebuild the social institutions and renew the moral values that guided the nation to prosperity in the 1950s and 1960s, but this time without the racism, sexism, and bigotry that betrayed the founding promises of our nation.
Robert Putnam wrote in Upswing that we've been here before. At the end of the first Gilded Age, Americans were just as polarized, separated by chasms of economic inequality, and as besotted by selfish materialism as we are today.
Part of the solution at the beginning of the last century was the creation of an enormous array of service-oriented member organizations – Boy Scouts, 4H, Boys & Girls Clubs, the Elks, the YMCA, Hadasah, and scores of others – that were expressly devoted to character development and service to others.
We found our way out of this morass once before, and we can do it again.