The importance of asking the right questions

Recent actions taken at various governmental levels raise both cause for concern and questions. I am concerned whether we are asking the right questions.

As I write this, Chrysler is in bankruptcy under the control of the federal government, with General Motors rumored to follow, having up to 70 percent governmental ownership of that largest American car company.

Is the right question, “How do we save jobs and preserve the car industry?” or, is it “Whatever happened to American capitalism and the free enterprise system with its inherent ‘right to fail’?” Given the precedent in the TARP bailout of large banks, the answer to this question may be the former instead of the latter, and what this says about the future of the American economy should cause pause.

Also, the trillions of dollars of debt incurred by the government in its supposed effort to right the economy leads to the questions, “Should we spend future generations’ money to help the economy now?” or “Should we do everything we can to bring fiscal restraint to government?”

At the state level, New Hampshire’s so-called “advantage” often has been touted as coming from a reasonable business tax climate and low overall taxes. Recent actions in the New Hampshire House and Senate raise questions about that precedent.

The House included a capital gains tax as well as a new inheritance tax in its budget proposal, changing two fundamental principles of New Hampshire law that have attracted many wealthy retirees to New Hampshire. The Senate Finance Committee removed both of these taxes but put in expanded video slot machine gambling. This is another departure from New Hampshire traditions.

The questions that compete in this situation seem to be, “Do you just add taxes or quick-fix revenue sources when you need money?” and, “Should not the tax system in New Hampshire make coherent sense?”

The Senate Finance Committee also removed the business enterprise tax credit against the business profits tax, which virtually creates a double tax instead of adhering to the theory behind the BET when it was passed. The action raises the question, “When changing taxes, should not the drafters understand the basis of the tax in the first place?”

Choosing the right questions to answer is important.

“The Importance of the Right Question” was the title of a thought-provoking and gutsy speech given at Southern New Hampshire University’s commencement by Clayton M. Christensen, author and faculty member at the Harvard Business School.

In his speech, he told the story of a conversation he had 12 years ago with a Marxist economist from China.

The economist “was nearing the end of a fellowship in Boston, where he had come to study two topics that were foreign to him: democracy and capitalism,” said Christensen. “I asked my friend if he had learned here anything on these topics that was surprising or unexpected. His response was immediate and, to me, quite profound: ‘I had no idea how critical religion is to the functioning of democracy and capitalism.’”

Christensen recalled that the economist noticed that, historically, “most Americans attended a church or synagogue every week. These are institutions that people respected. When you were there, from your youngest years, you were taught that you should voluntarily obey the law, that you should respect other people’s property, and not seal it. You were taught never to lie. Americans followed these rules because they had come to believe that even if the police didn’t catch them when they broke a law, God would catch them. Democracy works because most people most of the time voluntarily obey your laws.”

“‘You can say the same for capitalism,’ my friend continued. ‘It works because Americans have been taught in their churches that they should keep their promises and not tell lies. An advanced economy cannot function if people cannot expect that when they sign contracts, the other people will voluntarily uphold their obligations. Capitalism works because most people voluntarily keep their promises.’”

Christensen then said, “My Chinese friend heightened a vague but nagging concern I’ve harbored – that as religion loses its power over the lives of Americans, what will happen to our democracy?

“Those who seek to minimize the role that religion can play in the public stage are making two very serious mistakes. First, they are seeking to minimize the very institutions that have given us our civil liberties in the first place. And second, the debate swirling in judicial discourse about the separation of church and state is a false dichotomy.

“There are two classes of religions, if we broadly define as philosophical traditions: theistic religions and atheistic ones. Zealots of atheistic religions who assert that theistic religions must be swept off the democratic stage, even as they knit the doctrines of their religions into our legal and regulatory fabric, are asking the wrong question, and therefore giving us an answer that may well prove to be toxic to democracy.”

Christensen’s speech left everyone thinking. It seems to me he asked the right question and his Chinese friend observed much in America that we Americans forget.

Brad Cook is a shareholder in the Manchester law firm of Sheehan Phinney Bass + Green and heads its government relations and estate planning groups. He also serves as secretary of the Business and Industry Association of New Hampshire.