Fifth Amendment Capitalists

My friend in Nashville also talked about a Studs Terkel book he is reading about hope. As I got on the plane he gave me two of the interviews from the book – John Kenneth Galbraith and Wallace Rasmussen.

Galbraith is not an economist that I ever put much stock in. One of my most polemic papers in a public finance course I did leading to my doctorate was one about the manifold falsehoods in the Affluent Society. But Galbraith used a catchy phrase in the interview – which following the (Former University of California President Jack) Peltason rule I will use once more and then take as my own. He suggested that when he was a young man there were a lot of 5th Amendment Communists. Today there are a lot of 5th Amendment Capitalists.

Rasmussen, the retired head of Beatrice foods has some interesting comments about finding honesty in corporate activity. “In God we trust, everything else we audit.”

Both interviews suggest we need to continue to work on clarity in financial reporting. Rasmussen worried in the interview that corporate managers seem only to be out for themselves – how much can I get out of it? Clearly, a misreading of Adam Smith (in reality most of the corporate leaders who adopt what they think Smith was writing about probably have never read anything but the title of An Inquiry into the Wealth of Nations and surely have never encountered the second book – the Theory of Moral Sentiments.) The Terkel book is about hope – and indeed with some additions of things like Sarbanes Oxley – there is reason for hope.