Capitalism Requires Honesty

by Bill Shults

More and more people today do not keep their word.  When I was young, many of the people I knew would say: “My word is my bond.”  A simple handshake would seal any deal.  Both parties would then honor their agreement.  It seems like today people honor only the parts that they like.  Another thing that seems to be fading away is fidelity.  There used to be more loyalty in our dealings with others.  Many seem to have a “sworn to one, loyal to none” mentality.  Taking advantage of people is a poor way to do business.  As a nation, it leads directly to poverty.

Honesty in contracts comes from the Ten Commandments.  The secret to the success of Western Capitalism is the Ten Commandments.  The explosion of prosperity in the early 1800’s has been explained in many ways, often overlooked is the advance of Bible Christianity.  The early 1800’s would see a revival in many Churches and a general return to the Holy Bible.  This was not only among poor people, but rather it encompassed much of our civilization.  Many of the leading Industrialists of the Gilded Age were prominent churchmen.

The Ten Commandments are just that powerful.  Two of them, the prohibition against lying and the prohibition against stealing, are directly responsible for business success.  Put another way, the Ten Commandments promote honesty in contracts.  That honesty is required for business success which is required for prosperity.  The willingness to make our word good is the bedrock for all business.  A good example comes from business.  Many businesses provide goods and/or services all month on the client’s word that they will get paid at the end of the month.  It works really well when everyone pays.  When enough clients don’t pay, then business will have to be conducted on a cash and carry basis.  That is an immediate impediment to prosperity.

Another real impediment is deceit.  The increase of scams, fraud and deceit on the internet is a real roadblock to prosperity.  When you and I transfer money for goods and services, then wealth is created.  When someone steals money based on fraud, no goods or services have been exchanged.  Fraudulent fund transfers acts like a tax, inhibiting growth.  Worse still, business is transacted based on confidence.  As the fear of fraud spreads, people are less willing to take the risks required to transact business.  For those still willing, they will require ever higher protections to guard them-selves from fraud.  You see this in the cashing of “tax refund” checks.  Many of us file our taxes directly with the U.S. Government and receive a U.S. Government check should we get a refund.  All National Banks are required to cash U.S. Government checks without fee.  However, many file their taxes through a third party which then makes them a loan against their possible refund.  The fraud rate is significant.  Their refund checks are from the bank that made the loan, not the U.S. government.  They are charged a fee from 3% to 5% to cash those checks.  The fee is high because of the significant portion of those checks not honored.  Deceit in the marketplace carries a price.

For several years, flash mobs have attacked stores and robbed them of merchandise.  A large group of teens suddenly show up at a business and then grab whatever they can hold and run.  The overwhelmed staff can do nothing.  Even video surveillance does not capture enough of an image to track these thieves down.  Then the nearby residents wonder why their stores close.  When stores close, jobs leave and vital supplies are no longer readily available.  Capitalism is based on honesty.  With the rise of dishonesty our free system of commerce will begin to die.  In some large cities they no longer want to enforce “property” crimes.  Why not rather tell the small store owner to close up shop and leave?

All change starts with individuals.  Each one of us can honor our agreements.  Each one of us can support our local merchants.  Our word should be our bond.  When we are not sure, we can say so rather than commit to something we may not be able to do.  When I was young all of the older people kept their word.  Many of them would teach me to do the same.  Life is much simpler when everyone keeps their word.  Life is much more pleasant when no one fears theft.  Dishonesty costs everyone.  Every business in America adds the cost of theft back onto the goods sold.  This means the honest are paying for the dishonest.  That means theft is everyone’s problem.

God Bless.

Bill Shults www.hungryheartsministry.com

Bill Shults is the Pastor of Hungry Hearts Ministries.  He also oversees the churches in Jackson, Murfreesboro and Cookeville TN and Corinth MS.  Bill has also written eleven books on how to have a closer walk with Jesus Christ.