National Economist Says Cure for Ailing Economy is "Character"

  • Lawrence Reed

Article by: Jean Torkelson

Lawrence Reed has spent his life as an economist, but he doesn't look to the Dow or to fiscal policies to fix America.

Ultimately, only character will cure the country. "If we allow character to erode, we will not be the type of people who will thrive in a free society,: Reed said at Colorado Christian University's seventh annual Values-Aligned Leadership Summit (VALS) on April 22 in Denver.

"If character slips, it means you've lost integrity, self discipline, humility, patience, and a respect for the lives and property of others."

Character, liberty, and a free society -- that's the message Reed delivered to 300 CCU students and business leaders at the VALS event. "Our economic crisis is one symptom of a crisis of character," Reed told the audience.

A return guest speaker to CCU, Reed is head of the Foundation for Economic Education and the author of Great Myths of the Great Depression. Reed told the crowd that the foundation, which has been located in Irvington, N.Y., since 1946, is seeking a new headquarters. The move could be made before the end of 2009, and Denver and Colorado Springs are "leading candidates."

Reed told the VALS audience that Americans have been focused on the wrong things as the economic crisis has unfolded. "Americans are focused on some trees but missing the forest," he said. Those trees -- the housing bust, the stimulus package, the banking crisis -- are all parts of a larger, more serious picture, he said.

"There is a blight on the forest that will overwhelm everything," Reed said. That blight is the crisis of character. When people give up self reliance and personal integrity, liberty itself is at stake, he warned.

However, Reed also believes that there's hope. The American people are beginning to ask the right questions, he said, and are willing to fight to preserve their country's values of liberty and freedom.

It's a fight that Reed, 55, joined when he was unusually young. Although he grew up as a baby boomer during the tumultuous, left-wing clamor of the 1960s, his lifelong ideas about freedom took root in a deceptively simple movie classic, The Sound of Music.

As a kid growing up in the cozy safety of western Pennsylvania, what grabbed Reed wasn't the music so much as the movie's disturbing sub-theme. The main characters, the Von Trapp family, had to flee for their lives when the Nazis came to power.

That got him thinking about personal liberty for the first time: "It struck me that this perfectly fine family wanted to be left alone and this rotten regime came in and wanted to take over."

So Reed became a '60s countercultural protester, joining the Young Americans for Freedom and subscribing to magazines that furthered the causes of liberty and the idea that free markets and free minds are inextricably linked.

Ironically, one of his first subscriptions as a kid was to The Freeman. The magazine is published by the foundation which Reed now heads.

As he addresses audiences across the country, he's hopeful that many young people are beginning to understand what liberty requires to keep it alive.

At VALS, like he does before other audiences, Reed used a simple example to show people the consequences of character -- and its lack -- on a society.

First, he asks whether anyone in the audience has bought iPods and other expensive electronics lately. When they answer yes, he asks if they had a tough time getting the package open -- and he gets knowing chuckles.

The reason they have to fight to open a simple thing like a sealed package is that the manufacturers have had to make them virtually impregnable to deter thieves.

"That's called a 'character premium,'" he tells his audiences. "If this was an honest society, manufacturers wouldn't have to do that."

Mushy, character-deadening values will have consequences for America, Reed warned.

"Bad character leads to bad economics which is bad for liberty," he told the crowd.


Lawrence Reed's Foundation for Economic Education, which teaches the principles of liberty and free markets, will hold two seminars at the CCU campus for high school students, home schoolers, and parents: May 15-16, "Is Freedom Practical?"; June 15-19, "Freedom 101".

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