Author: CRT Admin

We recently posted a couple more short videos on relevant and timely topics.  They include:

–Is Globalization Dead?

–Tariffs Are Not Good Capitalism

–What Happened to the Covenants of the Prophet?

–Moral Capitalism vs. Brute Capitalism

–Trump’s Return to Mercantilism

All our videos can be found on our YouTube page here.  We recently put them into 9 playlists, which you can find here.

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Now that President Trump has climbed down from his high tariff horse – but only for 90 days – maybe – who knows? – and American stock markets have, more or less, restored the capital asset value that was lost last week, we should focus on understanding an important fact: who actually pays tariffs?

From his perspective, given his speeches and social media comments, it appears that President Trump loosely thinks that foreigners pay our tariffs, so if he imposes tariffs, the U.S. will suck in money from foreigners, many of whom are, apparently to him, benighted in one way or another.

But tariffs are a form of domestic taxation – Americans who import and use goods from other countries pay the tariffs in order to obtain the goods from Customs.  They then may or may not pass on the full cost of what they have paid in these taxes to other businesses, customers or employees.

The impact of tariffs on the level of imports is, therefore, indirect.  Tariffs raise the cost of goods for Americans, so American demand for foreign goods falls – marginal cost and supply and demand curves.  As American demand for foreign goods dries up, the foreign economy loses revenue.  And so will Trump’s proposed tariffs “discipline” our trading partners.

To bring facts to bear on our thinking about tariffs, I ran across this article, “Who Pays Tariffs? Americans Will Bear the Costs of the Next Trade War,” from the Tax Foundation earlier this week and thought I’d share it with you.

Next year, 2026, will be the 250^th anniversary of the publication of Adam Smith’s book, An Inquiry into the Nature and Causes of the Wealth of Nations.

In the book, Smith excoriated those who believed in high tariffs and mercantilism.  My take is that Smith’s understanding of economic realities is still more sound and more conducive to optimizing wealth creation than Donald Trump’s judgment that free trade is bad for Americans.

Attached here is my take on Adam Smith in contrast to Donald Trump.

Here is a statement drafted and subscribed to by participants at a recent in-person round table convened for a discussion of current tensions in American culture and politics.

It reflects a convergence of their concerns.

If you would like to have your name added, please let us know by responding to this email.

We plan to share it with local leadership.

What kind of a person is Donald Trump?  Now that for two months, he has personalized the office of president, we have new facts to consider in coming up with a description of his inner orientation towards life and reality.

Both Confucius and Cicero make such an analysis an either/or proposition, at the risk of oversimplification.

Confucius advised that people come in only two sorts – one living by principle and the other not living by principle.

The first kind of person he called junzi or “ennobled” in their character.  The other kind of person he called xiaoren or “small-minded,” a “little, petty, mean-spirited” person.

Confucius insisted that: See what a person does.  Mark their motives.  Examine in what things they rest.  How can a person conceal their character?

His remarks as recorded in The Analects are:

The mind of one having ennobled character is conversant with righteousness; the mind of the little person is conversant with gain.

Those ennobled in their character think of virtue; the small-minded think of comforts.

So, looking at his performance in office, do we consider Donald Trump to be a junzi or a xiaoren?

Confucius asked: If an ennobled person abandons virtue, how can they retain their ennoblement?

He insisted that: The ennobled person does not, even for the space of a single meal, act contrary to virtue.

Confucius predicted that those who possess virtue, when they exercise government, may be compared to the North Star, which keeps its place and all the stars turn to it.

He added that he who acts with a constant view to his own advantage will be much murmured against.

He observed that the ennobled person acts before he speaks and afterwards speaks according to his actions.

Cicero’s bi-modal criteria for character were either domination by appetite or discipline of appetite.

He wrote: It is our duty to respect, defend and maintain the common bonds of union and  fellowship subsisting between all the members of the human race. (De Legibus 153)

Now we find that the essential activity of the spirit is twofold: one force is appetite, which impels a man this way and that; the other is reason, which teaches and explains what should be done and what should be left undone.  The result is that reason commands, appetite obeys.

The appetites, moreover, must be made to obey the reins of reason and neither allowed to run ahead of it nor from listlessness or indolence to lag behind; but people should enjoy calm of soul and be free from every sort of passion.  As a result, strength of character and self-control will shine forth in all their lustre. (De Officiis 103)

For he who knows himself will realize, in the first place, that he has a divine element within him and will think of his own inner nature as a kind of consecrated image of God. (De Legibus 365)

Those of us who are not influenced by virtue to be good men, but by some consideration of utility and profit, are merely shrewd, not good. (De Legibus 343)

Curse the one who separated utility from justice.

For in proportion as anyone makes his own advantage absolutely the sole standard of all his actions, to that extent he is absolutely not a good man; therefore, those who measure virtue by the reward it brings believe in the existence of no virtue except vice. (De Legibus 35)

The question that must arise in our minds after reading these insights of Cicero and Confucius is whether or not a person of appetite (Cicero), a little person (Confucius), can effectively implement the Caux Round Table Principles for Moral Capitalism and Moral Government?

Cicero provided us with an example of such failure in a letter he wrote to his friend Atticus in 59 BC, as the Roman Republic was starting to collapse.  In this letter, Cicero exposed the social force which was dissolving the sustainability of the Roman Republic.  The first triumvirate of Pompey, Crassus and Caesar had been in power for several months.

Cicero wrote:

The truth is that the present regime is the most infamous, disgraceful and uniformly odious to all sorts and classes and ages of men that ever was … They hold nobody by goodwill …

Popular sentiment has been most manifest at the theater and the shows … [an actor attacked poor Pompey quite brutally:” to our misfortune you are great” (Magnus) – there were a dozen encores … When Caesar entered, no one clapped.

We are held down on all sides.  We don’t object any longer to the loss of our freedom. … All with one accord groan of the present state of affairs, yet no one does or says a thing to better it.  The only one to speak or offer open opposition is young Curio.

All this only makes sadness the greater, for we see that the sentiment of the community is free, while its virtue is in chains” [dolor est maior, cum videas civitatis voluntatem solutam, virtutem adligatam]

Some years ago now, the Caux Round Table adopted Cicero’s standard as its motto: Virtus non adligata – “Virtue is not Chained.”

In another letter to Atticus of February 27, 49 BC, Cicero speaks of his ideal public servant, who would not let the Republic down:

Just as a fair voyage is the object of the pilot, health of the physician, victory of the general, so our statesman’s object is the happiness of his countrymen – to promote power for their security, wealth for their abundance, fame for their dignity, virtue for their good name.  This is the work I would have him accomplish, the greatest and noblest in human society.

Adam Smith has his epiphany about the civilizational good that was the new, infant, capitalism arising around him in Scotland and England when he considered a pin factory – a small manufacturing facility where 10 skilled workers with special tools produced about 48,000 straight pins per day to be used mostly for sewing clothes.

Smith saw that not only did the price of pins drop so much that even poor seamstresses could afford them, sales would increase due to the lower price and the making of clothes would rise along with the quality of life for thousands of families.

Since I was a boy, I have been toasting slices of bread in toasters without ever asking who invented the toaster.  It was and still is a remarkable convenience to have at home – easy to toast bread, easy to use and very safe – even little kids can use them.

In our local newspaper, the St. Paul Pioneer Press, there was a story by Mary Divine that the toaster was invented in a town in Minnesota in 1919:

“Stillwater master mechanic Charles P. Strite reportedly invented the pop-up toaster in 1919 because he was tired of the burnt toast served in his company’s cafeteria.

To circumvent the need for continual human attention in the making of toast, Strite designed an electric toaster that “featured heating elements that simultaneously toasted both sides of the bread, a timer that automatically turned off the heat, and springs that pushed up multiple pieces of perfectly browned toast,” according to the Minnesota Historical Society.

A Toastmaster pop-up bread toaster, invented by Stillwater factory worker Charles P. Strite and manufactured in Minneapolis by the Waters-Genter Company in 1921 (courtesy of the Minnesota Historical Society).

Strite filed the patent for his pop-up bread toaster in 1920.”

Here are pictures of two of his toasters:

Thus, the gift of capitalism – invention, more products, lower prices, happier people – keeps on giving.  Today, we are anticipating that this beneficial process will be jump started once again by AI.