Theodore Roosevelt Malloch, Spiritual Enterprise

Theodore Roosevelt Malloch, Spiritual Enterprise (New York: Encounter Books, 2008), 163 pp., xxii.

The modern market economy has, with some notable exceptions, from the time of Rousseau and Marx down to the present been largely defined by its ignorant adversaries. They see only the bad and attribute every conceivable evil to it. The defenders of the market economy in the discipline of economics often see only a soulless process in which it no longer makes sense to raise questions about right and wrong. Curiously, the first great and positive account of the modern market economy given by Adam Smith comprehended the larger cultural context within which markets operate. What Theodore Malloch gives us in Spiritual Enterprise is a sustained account of the role of faith in the leadership and operation of a successful business and the necessity of spiritual capital for a healthy market. He writes in the tradition of Max Weber, Michael Novak, Wilhelm Röpke, and Deidre McCloskey.

Expanding Putnam’s concept of social capital, Malloch defines spiritual capital as “the fund of beliefs, examples and commitments that are transmitted from generation to generation through a religious tradition, and which attach people to the transcendent source of human happiness.” (pp. 11-12). Malloch maintains that it is not possible to understand the economic success of the market economy without understanding the religious and moral culture which undergirds it. He would dismiss the claims of Daniel Bell in the “Cultural contradictions of Capitalism” that a market economy undermines its own original moral tradition. He offers in rebuttal a host of detailed examples from prominent business leaders of the important role that a religiously inspired ethics has played in their whole life as well as in their business. Without denying that professed non-believers can lead moral lives and business, he questions whether this can be sustained over generations. He forces us to raise the question of whether we are now living on borrowed and diminishing spiritual capital.

In our overly rational age we suffer from an intellectual hubris which refuses to recognize that there is a pre-conceptual domain (practice) that cannot be conceptualized (theory). There is a mystery at the heart of the universe that moderns refuse to countenance. This hubris has ethical implications. If practice could be conceptualized then the relationship between theory and practice can itself be explained in theoretical terms. If one could give a theoretical account of the relationship between theory and practice, then such an account would dictate what practice should be. At the heart of this hubris is the epistemological claim that once the correct theory is in place then the practical consequences or the ethical implications are entailed. Whatever qualifications are introduced, the adherents of this view believe that rules can be understood to apply themselves. This hubris is reflected in many business ethics courses in business schools, courses which are based on the claim that you can teach someone to be ethical. This hubris has had a devastating effect on ethical practice. It transforms morality into an intellectual exercise, the application of theory to practice or morality as the reflective observance of rules or ideals. Emphasis is put upon having a correct and defensible theory rather than on how to act. The ideals too quickly turn into obsessions. Inevitably moral sensibility is inhibited or even eroded in favor of an elaborate casuistry. The object seems to be to observe a rule instead of behaving in a certain concrete manner. It achieves the appearance of stability at the price of imperviousness to change. When change can no longer be resisted it occurs as a revolution rather than as an evolution.

What Malloch offers as an antidote are the traditional virtues. The moral life, then, is “not a matter of what you do but of what you are”; the task of the moralist is to “describe the virtues that we should emulate and teach our children” (p. 18). Malloch first focuses on the three theological virtues of faith, hope, and charity. His examples taken from the lives of real business leaders can only be described as inspiring. The specific virtues germane to business practice, what he calls the hard virtues, are leadership, courage, patience, perseverance, and discipline. Rather than bracketing off the hard virtues, Malloch then connects them to the soft and social virtues of justice, compassion, forgiveness, gratitude, and humility. This is not a laundry list or historical curiosity; rather it is a coherent and integrated account of how some religious traditions give transcendent meaning to the creation of wealth, how that wealth is not an end in itself but becomes the resources for human accomplishment, and how that achievement translates into socially responsible action.

Lawrence Kudlow urges that Malloch’s book should be read by every CEO. I could not agree more. Perhaps more than any other figure, the entrepreneur is the embodiment of the classical virtues. He is his own boss. His successes and failures are his own. He eats what he kills. He gains or loses in proportion to his ability to serve the wants and needs of those who trade with him voluntarily. In the free, capitalist economy, the entrepreneur is the motive force. The practical significance of entrepreneurship is abundantly evident. Every place of business, from the humblest storefront to the gleaming corporate campus, is testament to the existence of an entrepreneur and his vision. Despite his significance in practice, however, the entrepreneur is diminished or dismissed entirely in theory. Acknowledgement of the entrepreneur’s contribution to our civilization lags significantly among those whom Robert Nozick termed wordsmith intellectuals. We are awash in academic, journalistic, and cultural cues that deny or ignore the value of entrepreneurial activity

For roughly the middle five decades of the 20th century, the entrepreneur largely disappeared from mainstream intellectual inquiry in the discipline that should be most sensitive to the effects of his activity: economics. In the regnant neoclassical paradigm, his activities are assumed out of existence in the model of the perfectly competitive market that serves as a touchstone for much of the field’s thought. But the marginalization of the entrepreneur is most notable not in the realm of theoretical economics, but rather in that portion of the academy ostensibly devoted to practical instruction in the ways of commerce—the modern business school. Since at least the early 1960s, academic business education has viewed the entrepreneur mainly as the anachronistic forerunner to the technocratic, scientifically-trained, corporate manager. Where entrepreneurship does appear in the business curriculum, it is at the margin. Courses devoted to entrepreneurship are almost invariably elective and virtually never part of the core curriculum. It is as if entrepreneurship were a deviant form of business practice, alien to the typical, mainstream business-doing to which the core curriculum is putatively devoted. Further from the academy, public intellectuals of the middle 20th century, like John Kenneth Galbraith, filled their books and columns with tales of the entrepreneur’s virtual extinction and irrelevance in a coming economy dominated by large, state-like corporate behemoths. In popular culture, the entrepreneur suffers much the same fate as the corporate entities that are supposed to displace him. With rare exceptions, literature and film find the entrepreneur interesting (if at all) only in his capacity for predation.

What is the future of spiritual capital in America? Is American spiritual capital being eroded? We believe there is a natural progression from governmental bureaucratic centralization to secularism to materialism to a social-collectivist conception of human welfare. We assert that the welfare state undermines institutions (e.g., family and religion) that promote spiritual capital; militant secularism as a quasi-religion promotes a reductive conception of human nature, one that denies freedom and responsibility. We already see the results full blown in the impoverishment and implosion of the Communist empire and we are seeing the gradual evisceration of spiritual capital in Western Europe. It is time to retrieve, restate, and revitalize America’s spiritual capital. Malloch’s book is the best place to start this renewal. For not since Adam Smith himself have we witnessed so forceful a treatment on the linkage between the economy and moral reasoning.

Nicholas Capaldi
Legendre-Soulé Distinguished Chair in Business Ethics &
Director of the National Center for Business Ethics
College of Business Administration
Loyola University New Orleans
6363 St. Charles Avenue
Campus Box 15
New Orleans, LA 70118
(225) 772-6523
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www.cba.loyno.edu/faculty/Capaldi