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Some 20 years ago, when I wrote my book, Moral Capitalism, to provide a thoughtful framework to vindicate the importance of the Caux Round Table Principles for Business, I brought forward a tension between the capitalism promoted by Adam Smith and the capitalism promoted by Herbert Spencer.

In 1851, Spencer wrote Social Statics to present human nature as self-centered, without a moral compass.  Smith, on the other hand, had written a book of moral philosophy, The Theory of Moral Sentiments, which universalized to all persons an inborn capacity for seeking and acting on constructive, wealth-creating, social connectivity.

Smith’s capitalism, therefore, was synergistic and symbiotic, ending towards a balanced dynamic equilibrium and win/win transactions.

Spencer’s capitalism was more a dog-eat-dog struggle, driven by instincts of endless self-seeking, where only the fit prospered and the devil take the hindmost.  Spencer aligned with the political views of Thomas Hobbes on the nature of us being, at best, a grim scenario, where life is “solitary, poor, nasty, brutish and short.”  Spencer presumed that since we descended from the great apes, we retain their self-referential animalism and lack of conscience and that we, too, followed the law of nature that either kill or be killed, eat or be eaten.

Later in the 19^th century, Spencer’s approach was given the name “social Darwinism.”  This, though, was an unkind misuse of Darwin’s thinking about human nature.  Darwin, in fact, wrote a book, The Descent of Man, which was closer to Smith’s thinking.  Darwin argued that humanity was an evolutionary step beyond animality, where regard for others, a capacity for rational thought and language and a sophisticated and reciprocal socialization gave us moral sentiments and a capacity for collaboration.

But in presenting the Spencerian alternative to Smith, I aligned it with Hobbes’ thinking and called it “brute capitalism.”

I attach here chapter 3 on brute capitalism from my book.

The timely question is whether or not Donald Trump is a brute capitalist.  If he is, his policies will be out of sync with what is best for America and the world.

This past Tuesday, in an editorial, the Wall Street Journal said of Trump: “Mr. Trump thinks he can bully everyone into submission, but he can’t bully Adam Smith, who deals in reality.  Markets know that tariffs are taxes and taxes are anti-growth.”

Trump’s win/lose understanding of globalization and international trade and markets seems to adopt Spencer’s understanding of the human condition.

Consider Trump’s remarks on “Liberation Day,” when he proposed to throw off the shackles which foreigners had used to “rip off” Americans.  Were they not win/lose, beggar your neighbor, don’t give the suckers an even break?

He said:

“For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike.  American steelworkers, auto workers, farmers and skilled craftsmen, we have a lot of them here with us today.  They really suffered gravely.  They watched in anguish as foreign leaders have stolen our jobs, foreign cheaters have ransacked our factories and foreign scavengers have torn apart our once beautiful American dream. … Our country and its taxpayers have been ripped off for more than 50 years, but it is not going to happen anymore.  It’s not going to happen.  In a few moments, I will sign an historic executive order instituting reciprocal tariffs on countries throughout the world, reciprocal.  That means they do it to us and we do it to them, very simple, can’t get any simpler than that.  This is one of the most important days, in my opinion, in American history.  It’s our declaration of economic independence.  For years, hardworking American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense, but now it’s our turn to prosper.”

This is win/lose thinking, as Spencer would validate as quintessentially human.  Kind of brutish, don’t you think?

Jamelle Bouie recently wrote in the New York Times his own take on Trump as a brute capitalist:

He did not reason himself into his preoccupation with tariffs and can neither reason nor speak coherently about them.  There is no grand plan or strategic vision, no matter what his advisers claim — only the impulsive actions of a mad king, untethered from any responsibility to the nation or its people.  For as much as the president’s apologists would like us to believe otherwise, Trump’s tariffs are not a policy as we traditionally understand it.  What they are is an instantiation of his psyche: a concrete expression of his zero-sum worldview.

The fundamental truth of Donald Trump is that he apparently cannot conceive of any relationship between individuals, peoples or states as anything other than a status game, a competition for dominance.  His long history of scams and hostile litigation — not to mention his frequent refusal to pay contractors, lawyers, brokers and other people who were working for him — is evidence enough of the reality that a deal with Trump is less an agreement between equals than an opportunity for Trump to abuse and exploit the other party for his own benefit. For Trump, there is no such thing as a mutually beneficial relationship or a positive-sum outcome.  In every interaction, no matter how trivial or insignificant, someone has to win and someone has to lose.  And Trump, as we all know, is a winner.

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.”

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

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.

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.

If you aren’t following us on Twitter or haven’t liked us on Facebook, please do so.  We update both platforms frequently.

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.