This excerpt is taken from “The American Idea Renewed,” a new collection of speeches by late Republican visionary Jack Kemp on America’s leadership in the world, economic growth, freedom, dignity and opportunity, and the competition of ideas.

Democratic capitalism has been history’s sharpest weapon against poverty, oppression and tyranny.

Capitalism properly understood, as George Gilder explains, is the systematic behavior of free individuals making productive investments of their time, energy and resources in acts of faith. Specifically, he wrote in “Wealth and Poverty,” “It is love and faith that infuse ideas with life and fire. All creative thought is thus in a sense religious, initially a product of faith and belief.”

Adam Smith, who by the way wasn’t an “economist” but rather a moral philosopher, understood the driving force inside all human beings. “The desire to improve our lot in life,” he wrote, “comes to us out of the womb of our mothers and never leaves until the day we die.”

How could it be that, in the United States of 1776, the year Adam Smith wrote “An Inquiry into the Nature and Causes of the Wealth of Nations,” was the same year Thomas Jefferson penned the Declaration of Independence, emphatically declaring, “We hold these truths to be self-evident”?

How could we declare the fundamental principles of free markets and the inalienable rights to life, liberty and property without having studied economics, without there being “economics”?

Our economic system is the natural offspring of our legal system. And, the origin of our common law tradition that was handed down to us from our British ancestors has at its roots, morality as handed down to them through the Bible and the Ten Commandments Eventually, these decisions became precedent for future decisions, and thus the birth of an organic legal system.

Interestingly, one of the greatest difficulties faced by common law judges in the past, are similar to the difficult disputes faced by society today; namely, disputes that arise from people from different communities and religions. Richard Maybury discusses “the two fundamental laws” in “Whatever Happened to Justice?” which was designed for high school-level students. In that book, he argues that common law judges finally boiled down these disputes into two fundamental laws on which all major religions and philosophies agree:

One, do all you have agreed to do, and two, do not encroach on other persons or their property.

It is fascinating what Maybury observes about these two fundamental laws. They are stated and restated throughout the lore of all the great religions:

The Ten Commandments are strong in support of private property, devoting not one but two commandments to this fundamental issue: The Eighth Commandment says “Thou shall not steal” and The Tenth Commandment says “Thou shall not covet thy neighbor’s house.”

The Koran says, “Woe unto the unjust who, when others measure for them, exact in full, but when they measure or weigh for others, defraud them.” The Unjust, 83:1.

And, of course, there is the Golden Rule in both Judaism and Christianity: “Do unto others what you would want others to do unto you.” The same point is made in Confucian philosophy.

Thus, the foundation of capitalism is firmly embedded in morality and ethics. And, just as the Bible warns in Matthew 7:24-28 of the foolish man who built his house on sand, a corporation built without morality or ethics will surely fall with a great crash, just as Enron, WorldCom and others did when the rains of recession came pouring down.

As I mentioned earlier, the study of economics is rooted in our legal tradition, which is embedded in philosophy, which is encapsulated in morality.

T.S. Eliot wrote that, “It is impossible to design a system so perfect that no one needs to be good.” This is simply a restatement of a very simple principle: the state of the human soul determines the shape of human society.

A government conceived in liberty has none of the tools of tyranny. It cannot enforce the savage “virtue” of the French Revolution or shape the socialist “new man.” It depends, instead, on other institutions — structures between the individual and the state — that instill character, purpose and virtue. Churches and synagogues that raise a moral standard. Parents who provide a moral and spiritual example to their children. Schools that teach only the basics of citizenship and character lessons that come from an understanding of the Decalogue as well as the Declaration of Independence.

Edmund Burke called them the “little platoons” that temper our freedom with internal restraint. They enable us to achieve the ideal of the American founding: liberty constrained, not by law, but by character.

The late Jack Kemp served in Congress and was secretary of the Department of Housing and Urban Development, as well as a former NFL quarterback. “The American Idea Renewed,” which includes 18 of his speeches, is published by the Jack Kemp Foundation.

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