Commentary – Caux Round Table for Moral Capitalism

On the Passing of Pope Francis

The passing of Pope Francis is a great loss for humanity and in our own small sphere, for the Caux Round Table, as well.

The Pope gave his very personal endorsement to our study of the covenants of the Prophet Muhammad to respect and protect Christians – a work which has much promise for a more peaceful future for humankind, not only in the Middle East and Africa, but as spiritual leadership for all of us when we think about others of different faiths and ethnic origins.

I copy his letters to us here:

For the sake of all of us, I hope that the collective wisdom of his Roman Catholic Church will bring forth a successor with his faithfulness, humanity and ability to reach beneath the surface of our human self-mortifications to draw forth “the better angels of our natures.”

An Anniversary Deserving Our Attention

By the rude bridge that arched the flood,
Their flag to April’s breeze unfurled,
Here once the embattled farmers stood
And fired the shot heard round the world.
-Ralph Waldo Emerson, “Concord Hymn”

When does a people deserve to be a free nation? That question is now before us in Ukraine, Gaza and Taiwan.

Today, as I write this, is the 250^th anniversary of the decision by people who called themselves “Americans” to take up arms with which to oppose soldiers of Great Britain in the battles of Lexington and Concord, Massachusetts and during the harassment of British soldiers their subsequent retreat back to Boston.

As a young American, I made the pilgrimage to the town commons in Lexington and the bridge in Concord where the American Revolution took its beginning. Tiny fields of combat, but big enough to set off a great political undertaking and a war of historic significance.

The cause of the Americans had been legitimated by the arguments of John Locke in his Second Treatise of Civil Government that government is a trust to benefit the people. When the King and Parliament of Great Britain broke their trusteeship obligations as noted in the July 4, 1776, Declaration of Independence, they gave right to the colonists of their North American colonies to demand and seek independence as a free and sovereign people.

The Caux Round Table Principles for Government ground human justice on public office held only as a public trust and never as a personal dominion over others, following not only the argument of John Locke, but also the ethics of the Old Testament (Ezekiel 34), Mencius (reny), Taoism (wuwei), Cicero (trusteeship), the Qur’an (khalifa-ship) and the Thosapit Rachathamma of Theravada Buddhism.

The Wikipedia entry for those battles reads:

The Battles of Lexington and Concord were the first major military campaign of the American Revolutionary War, resulting in an American victory and outpouring of militia support for the anti-British cause. The battles were fought on April 19, 1775, in Middlesex County in the colonial era Province of Massachusetts Bay, within the towns of Lexington, Concord, Lincoln, Menotomy (present-day Arlington) and Cambridge. They marked the outbreak of armed conflict between the Kingdom of Great Britain and Patriot militias from America’s thirteen colonies.

In late 1774, colonial leaders adopted the Suffolk Resolves in resistance to the alterations made to the Massachusetts colonial government by the British Parliament following the Boston Tea Party. The colonial assembly responded by forming a patriot provisional government known as the Massachusetts Provincial Congress and calling for local militias to train for possible hostilities. The colonial government effectively controlled the colony outside of British-controlled Boston. In response, the British government, in February 1775, declared Massachusetts to be in a state of rebellion.

About 700 British Army regulars in Boston, under Lieutenant Colonel Francis Smith, were given secret orders to capture and destroy colonial military supplies reportedly stored by the Massachusetts militia at Concord. Through effective intelligence gathering, Patriot leaders had received word weeks before the expedition that their supplies might be at risk and had moved most of them to other locations. On the night before the battle, warning of the British expedition had been rapidly sent from Boston to militias in the area by several riders, including Paul Revere and Samuel Prescott, with information about British plans. The initial mode of the Army’s arrival by water was signaled from the Old North Church in Boston to Charlestown using lanterns to communicate “one if by land, two if by sea.”

The first shots were fired just as the sun was rising at Lexington. Eight militiamen were killed, including Ensign Robert Munroe, their third in command. The British suffered only one casualty. The militia was outnumbered and fell back and the regulars proceeded on to Concord, where they broke apart into companies to search for the supplies. At the North Bridge in Concord, approximately 400 militiamen engaged 100 regulars from three companies of the King’s troops at about 11:00 am, resulting in casualties on both sides. The outnumbered regulars fell back from the bridge and rejoined the main body of British forces in Concord.

The British forces began their return march to Boston after completing their search for military supplies and more militiamen continued to arrive from the neighboring towns. Gunfire erupted again between the two sides and continued throughout the day, as the regulars marched back towards Boston. Upon returning to Lexington, Lt. Col. Smith’s expedition was rescued by reinforcements under Brigadier General Earl Percy. The combined force of about 1,700 men marched back to Boston under heavy fire in a tactical withdrawal and eventually reached the safety of Charlestown. The accumulated militias then blockaded the narrow land accesses to Charlestown and Boston, starting the siege of Boston.

Two Poets Speaking to Our Time of Discouragement

Yesterday, a number of our fellows convened to comment on and exchange insights and relevant facts on the de-globalization of the global economy, so inconsistent with the vision and optimism which were present at the 1986 foundation of the Caux Round Table.

After the discussion, I was reminded of two poems written in the 1920s, after World War I had disrupted the world order with a new one – dark and threatening – beginning to arise in its place.

The two poems are:

“The Hollow Men” by T.S. Eliot

We are the hollow men
We are the stuffed men
Leaning together
Headpiece filled with straw. Alas!
Our dried voices, when
We whisper together
Are quiet and meaningless
As wind in dry grass
Or rats’ feet over broken glass
In our dry cellar

Shape without form, shade without colour,
Paralysed force, gesture without motion …

In this valley of dying stars
In this hollow valley
This broken jaw of our lost kingdoms

In this last of meeting places
We grope together
And avoid speech …

Between the idea
And the reality
Between the motion
And the act
Falls the Shadow

Between the conception
And the creation
Between the emotion
And the response
Falls the Shadow …

This is the way the world ends
Not with a bang but a whimper.

“Once By The Pacific” by Robert Frost

The shattered water made a misty din.
Great waves looked over others coming in,
And thought of doing something to the shore
That water never did to land before.
The clouds were low and hairy in the skies,
Like locks blown forward in the gleam of eyes.
You could not tell, and yet it looked as if
The shore was lucky in being backed by cliff,
The cliff in being backed by continent;
It looked as if a night of dark intent
Was coming, and not only a night, an age.
Someone had better be prepared for rage.
There would be more than ocean-water broken
Before God’s last Put out the light was spoken.

Who Pays Tariffs – Them or Us?

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.

Better if Donald Trump had Read Adam Smith

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.

A Caux Round Table Statement Open for Signature

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.

Donald Trump Through the Eyes of Confucius and Cicero

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.

Toasters and Moral Capitalism

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.

Category: Commentary