Business, Rules, and Reality

I am no expert on finance. As you know, that would be my brother Ben. Nonetheless, I am going to opine on the current situation. I beg you, dear reader, to comment on this and correct all my ignorant and lame statements.

Obviously, the most important ingredient in successful business is confidence. To put it on a small scale: An entrepreneur proposes a plan to benefit people in some way that they will be willing to pay for. For the plan to come to fruition, people who have money have to have confidence in the entrepreneur’s prudence, dedication, and honesty.

Their confidence is ultimately vindicated by two things. First and foremost, if it is vindicated, it is because of good fortune. For the most part, the things that happen to us are out of our control. But something else is also needed: The entrepreneur’s mind must be connected with reality. Leaving bad and good luck aside, money-making schemes tend to work when they are realistic, and they tend to fail when they are unrealistic.

Therefore, a very important question is: Who can judge reality correctly? Someone who possesses two things. A businessman’s correct judgment of reality always begins with this: “My plan is fallible, but God’s plan is infallible. My business will truly profit precisely to the extent that it cultivates the gifts of God. My first duty as a businessman is to receive God’s gift with gratitude. Then I can put them to good use.”

The second thing a businessman needs to perceive reality is: virtue. Reality is correctly perceived by a virtuous person. This is not simply a matter of someone being honest because he or she has no vices to hide (though of course it is a lot easier to tell the truth all the time when you have no serious vices). There is more: Being just, sober, courageous, and honest enables a person to perceive reality. In other words, the virtue of prudence requires all the other virtues. A greedy liar cannot be prudent because he cannot see reality as it is.

Again, I confess my profound ignorance of high finance. My understanding of the problem we have right now is that it is basically the result of home prices that were not realistic. The country will now witness extensive political debates about how to regulate the real-estate market so that this does not happen again. I am sure that experts have good ideas about regulations that will help to keep things more stable.

I would like to propose, however, that ultimately business cannot be successfully regulated in this way. External rules cannot keep pace with entrepreneurial creativity (thank God.) But there is always a sure rule for business, a rule which always applies. If everyone followed this sure rule, we would not have Wall Street meltdowns requiring massive government bailouts. The rule for business is: the virtuous man himself. Church law calls this rule the “steady man.” Reality is the measure for a business scheme. Only a virtuous person can see clearly when a proposal is unrealistic.

Perhaps this reads like a long-winded, moralizing statement of an obvious fact: If more Wall Street bankers were virtuous, we would not have a financial crisis. But this is not exactly my point. My point is that everyone needs to pay more careful attention to the virtuous people we know. God has given us these people to help to guide us; they help us to avoid the mistakes and disasters that inevitably occur when we make decisions without connecting with reality. As soon as a virtuous person starts to get uncomfortable with something, then there is a problem. All of us should have the sense to put the brakes on at such a moment.

PS. And let’s all pray fervently to St. Jude Thaddeus that the bailout plan will work and we won’t have another Great Depression.

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