The Moral Foundations of Capitalism | Eric Daniels

0:00Anchored is a production of the classic learning test based in the NAPA-LIS Maryland reconnecting knowledge and virtue through meaningful assessments. Visit us at CLTXAM.com slash get started. Folks, welcome back to the Anchored Podcast. We're here today with Dr. Eric Daniels from Clemson University. Eric is the assistant director for Snow, the school for the study of capitalism. He holds a BA in history and rhetoric from Drake University and an MA and a PhD in American history from the University of Wisconsin-Madison. Prior to joining SISC, Daniel served as the head of the school in La Port Montessori, a private school in Southern California. He has started the program on values and ethics in the marketplace at Duke University, where he was nominated for a teaching award, as well as the Fund for American Studies Institute

1:02on Business and Government Affairs at Georgetown University. From 2006 to 2013, Daniels also served as assistant research professor and assistant director for SISC at Clemson University. Daniels maintained research interests in the history of capitalism, American legal history, and the history of American thought. He's published on the history of individualism in American thought, monopolies and antitrust and American political theory. Dr. Eric Daniels, welcome to the Anchored Podcast. That's great to be here. Thank you. As we often start growing up, it's always great to hear a little bit of our guests in their kind of educational odyssey, their journey. Did you love school growing up? Did you hate it? What was that like? I had a fairly typical government school education. I had a kind of hit or miss experience of education. Some things that I really, really loved and some things that I really, really did not

2:03love. And I think that it really took until almost high school that I started to find and be able to navigate into the things that I really loved about education. And my mother probably would tell you that I was a late reader, not in the sense of childhood reading, but that I didn't really get interested in all these books until almost really college. So I caught the bug a little late, but I've been doing my best to catch up all these years. Well, where do you think that comes from? Your passion, interest, specifically for American politics and economics? Yeah, it's interesting. I think that my interest in that comes from, I like in a way solving intellectual puzzles and thinking about things big picture. And I do have a fairly distinct memory in high school when we were learning American history, probably in the 10th grade. And some of the political history of the 19th century didn't quite track for me because

3:04I was only marginally aware of the history of politics in America. And so when my teacher was explaining things about what the Republican or the Democrat position was, it didn't make sense to me because it didn't, you know, I mean, the parties have changed enormously since the 19th century. And I just thought, there's no way this is possible. What are you saying? This is wrong. And then I would read the textbook and I would go do research. And I suddenly got interested in the idea that there was change over time. There was something historical going on that she was explaining and I didn't understand it. And it became a kind of passion for me to try to make sense of those types of changes. And that's ultimately what led me to my actual PhD research, which I, in American history, I went back a little bit and I studied the wig party in American history. So the party that Abraham Lincoln was originally a part of before the Republican party was formed. Again, because some of their positions and some of their ideas didn't make sense from a modern framework, but it was an interesting puzzle to try to figure out why did they think

4:04the way they did? How did they arrive at the positions that they did? And would that same reasoning lead them to the same kinds of political positions today? And so it's really kind of the puzzle aspect of it, I think that drew me most to these problems. So you have such an interesting background because you've also been ahead of a modest story school for years. Yeah. You know, the head of modest story school and then leading scholar on capitalism. I'm going, if you can connect these worlds and what was your time like as the head of a modest story school? Yeah. So my monastery experience, it's interesting. I originally joined the school as a history teacher, but I ended up teaching both science and history in the middle school ages. And my monastery training is at the adolescent level, so the 12 to 18 level. I later then, you know, I was there a couple of years and the opportunity came forward to be the head of school. And I took that opportunity because I was passionate about that as an alternative form of education. We had a lot of great families and a lot of real commitment.

5:05And one of the things that I think people don't necessarily realize, I mean, monastery is a big tent in a way. It's not, I mean, like classical education, there's no copyright on it. Anybody can set up a shop and call themselves a classical school or call themselves a modest story school. And the onus is really upon parents and educators to do it right, to do it well. And the thing about, the thing that drew me about monastery is that at the adolescent level and the training that I had, there's a, there's a deep emphasis on the idea of development and cultivation of the whole person. Monastery has this concept of valorization that she thinks is very important to the development of adolescent and early adult education. And the valorization for her is the development in the individual of the knowledge and capacity to act in the world independently. But she also has a very deep respect for the idea that education should not just be about one aspect of the human personality or the other. And I brought a quote because I figured you'd ask me about this. And I just, I want to read this because I think it's just such an insight into what education

6:11is in monastery's idea. She writes that education must be very wide and very thorough, not just in the case of professional intellectuals, but for all men who are living at a time that is characterized by the progress of society and its technical applications. Even laborers need education. This of course early in the 19th century when a lot of people would have argued that they didn't. And she says that the people of today, both in the intellectual trades and in the non-intellectual trades, equally need both sides of that. That study she says should not be a crushing load that burdens the young life, but instead be the privilege of initiation into the knowledge and pride of our civilization. And so that's, to me, really, that spoke to me in a sense that it's both about finding and situating the individual children and adult, ultimately in our classrooms to find a way in the world for their own economic independence, their own personal independence. They're also giving them a sense of the culture and the society that they have grown up in.

7:14So it really kind of bridges that idea of education as a purely utilitarian function, which unfortunately I think is a way a lot of people consider it today. And education as what monastery ones called the development of human potential. And I think that human potential, she recognizes, is deeply rooted in an understanding of the accomplishments of human civilization over time. She was a big believer that children starting at a very young age need to learn about the accomplishments and the ideas of Western civilization as a formation for their place in the world today. Let's say a parent when you were ahead of school there, they don't live in the education world all day and think about this. And they say is monastery classical? How do you respond to that? Yeah, that's an interesting question. I would say that it depends. And this is, and this is, this was part of the frustration to be honest that I personally had. A lot of monastery schools, I mean, as I said, it's not a copyrighted thing, even though people kind of associate it as a as a brand.

8:17And so some schools do much better than others. And I would say that the ones that take seriously the job of educating at the at the elementary and adolescent and at the very few places where they have high school programs are very few monastery high schools. The ones who take it seriously, I think have a respect for classical education and introducing, for example, at our school, the students began their their history education, for example, with ancient Greece and Rome and then proceeded through the reformation and the Renaissance and then into, you know, the modern world and then the US history as a conscious sequence through the time, not just the kind of grab bag of typical education that a lot of students receive, but also not like some monastery schools approach, which is sad to say a little bit more like the modern schools. So it's as apparent, I would say, if if monastery has any interest for you, you really need to do, and I tell parents this at the school, you need to ask to do an observation.

9:19You need to ask the head of school to explain the curriculum to you and explain why they do it the way they do it. And I would say that's true of a classical school as well. I mean, as you know, probably there are really top classical schools and there are some that probably brand themselves that because there's a kind of momentum in the culture right now and they may not do as well at actually presenting those types of education. Let's talk about Clemson, let's talk about snow and your work there. So it gives a little bit of, I mean, help us out first with the acronyms. I think I've got, we've got a lot of it. We have an introduction here. Yeah, yeah. So the snow institute for the study of capitalism originally was the Clemson Institute for the study of capitalism. We received an endowment gift from the snow family two years ago and so we rebranded it as the snow institute. The snow institute has been around, or the Clemson Institute has been around for 20 years where now and are coming up into our 21st year. And it's basically the driving mission is to explore the moral foundations of capitalism

10:21broadly. And what this means is educating students here at Clemson in the widest possible idea of this. And that's ultimately what developed our signature program, which is the Lyceum Scholars program. The Lyceum Scholars program is a four year scholarship program that's available to students across campus. They can be any major that, you know, that the campus offers. But the scholars program is a core sequence of eight classes where using a great books approach, we study the history of liberty, capitalism, the American founding, and the principles of moral character. So the Lyceum program is our really, I mean, it's our signature program, as I said. And right now we're on the path that going to having 80 scholars throughout each of the classes, you know, freshmen through senior year. And we have about 150 to 200 Lyceum Fellows who are students who participate in a non-scholarship capacity. And I think the most unique thing about the Lyceum program, in addition to the fact that students take classes in political theory, you know, modern and ancient political theory,

11:26the history of the American founding, the revolution, they also take seriously the idea of development, the human formation of moral character. So students that are in the program get to participate in a program that we call the Socratic Tutorial program, which I think is the thing that really marks us as unique. There are a lot of great books programs, probably not affiliated with the study, in Institute for the Study of Capitalism, but our program, the Socratic Tutorial program, is a process where every student in the program meets with a faculty mentor. So they rotate around every semester. I have a few students this semester that have just come into our program that are my Socratic 2Ts. And we meet with these students who one-on-one for an hour to an hour and a half every other week. And the purpose of this conversation is not to review class material or to have any kind of graded assignment, but rather to have a conversation with them about serious moral considerations, right, the development of their moral worldview. And to give them take seriously the question of who they are as a person, and really to

12:31help them translate what they do in the classroom into their lives. Because one of the things that the LycM program takes most seriously is that it's not just about reading old books with young people, which is kind of what we do every day. But it's also about helping those young people become full humans and to flourish in their lives as they go forward out of school. They come, they learn a trade, I suppose, or they learn professional training in their major. But then in the LycM program, they can really focus on the big ideas that have shaped human civilization, Western civilization, American civilization, and then also think a lot about themselves and where they are in the world. So this program has become really popular among CLT tests, what we call kind of core audience. It's grown in familiarity and awareness within kind of the classical school, home schooling movements for sure. The students coming out of classical schools or homeschooled, do they make up a large percentage

13:32of the students in the program? You know, it's interesting. I just had a psychotic tutor session yesterday with a young man from here in South Carolina. He asked me a question. He said, is it really the case that 90% of the people are in a classical school or homeschooled? I said, yeah, I don't know about 90% is an exact figure, but it's disproportionate for sure. We have a lot of interest from homeschooling families, classical conversations as a popular platform for students in the homeschool world that we attract. But also classical schools more generally, we've had students from a number of schools from around the country really apply and become part of the program. And I think the reason for that is that we not only have that similar approach in terms of how we take books seriously, how we read the great tradition, but also the fact that we have a smaller community within a large university. One of the great things about the LICM program for the students is that they get to know each other really well.

14:33They proceed through the program in a cohort model. So when you come in in your first year, you have classes with those same 20 students and you go through and you take all those classes together, no matter which ways you end up on campus in terms of your major and your other interests, you always have the LICM program as a smaller, closer knit community within the larger university, which helps balance, I think for a lot of students, the opportunities that a large university like, or mostly large, I don't know, it's not one of the largest, but a large university in the 20,000s of students. But also have that community where you get to know faculty, you have events just within the program, you make lifelong friends really and can develop those relationships that help mentor you into graduate programs or into internships and job opportunities. And so it kind of has the best of both worlds, it's a small school, but within a large university. Now I would have been impressed and surprised and encouraged if you would have said 40%. 90%, 90%.

15:33Yeah, yeah. It's a cool movement. Yeah, it's really amazing. The young man that was asking me yesterday thought that I didn't even realize because we track when students come into the program, we track where they have finished high school. And he related to me that as he was getting to know his classmates, he was talking to some of them about how many of them had some homeschool background. So for example, he was homeschooled up through the eighth grade and then went to a private classical school, or maybe seventh grade and then he went to the private classical school after that. So when we originally tracked him, we just marked him down as private and classical, but we didn't even realize until I spoke to him that he had a homeschool background at the earlier ages. So I think if you take a survey like of our freshmen this year, his sense was that it was 80 or 90% that were homeschooled and certainly a very high percentage of those using a classical model. Incredible, incredible. Yeah. So you did not know that this question was coming, but I'd love to just put you on the spot to help CLT understand our own situation because this wears with your academic area of

16:38expertise. SAT, ACT like a lot of monopolies or do opales. I mean, they're really dropped up by legislation. It doesn't seem like it happened maybe even intentionally. It happened slowly over many decades with them getting embedded in legislation at the state level. And then it became very difficult for any new player to enter the arena. Would you describe college board as a monopoly and? Oh, yeah. Oh, certainly. Actually, I mean, Jeremy, one of the things that I have been most pleased to see is not only the CLT success, but the fact that you've been having that success in the face of what is essential. I mean, it's now a monopoly because they've, as I understand, they've acquired at ACT. So it's now one big company. Yeah, there are myriad ways. I think it's weird. It's weird. ETS acquired AC. Oh, did they? Okay. Yeah. Yeah. But ETS has done the test of element for the college board. Yeah. They're all intertwined in some ways.

17:40Yeah. No, I think a lot of people don't realize the extent to which the myriad ways that the testing regime, including the AP testing, which I'm happy to see that you have started pioneering with the classical baccalaureate and the idea of pushing into that market as well, the testing organizations have a kind of monopoly on this because it's state legislators, sometimes without knowing any better, perceive that this is the one way that they can help schools in their states as well as the colleges understand what students are doing. Unfortunately, what happens is they have a kind of kickback scheme, right? I mean, they have local school districts get tax incentives or state money incentives from the fact that they have a number of students taking AP classes, which to them is a perceived quality marker. I have to confess, I don't think it always is. I think that there's a lot that goes into just this relationship where the testing organizations want to have their product out there. They incentivize states, the states incentivize schools, and then it kind of just feeds on

18:42itself. And I don't think it's actually serving the interests of the students or the families. I think that it has become kind of a treadmill where, although it's a test, it tells university something, people ought to look into the way that the test has changed over the last 20 years, right? The SAT that the mom and dad took back in the day is not the same as the SAT that the junior was taking. Yeah, it's not your dad's SAT. That's right. Yeah, exactly. I didn't say this at a high level as you did, but I taught you as history at the high school level for years. So we would teach Teddy Roosevelt as a great trust buster. What once a monopoly is propped up the way the college board is, especially with AP, no competitors, does it take the hand of the government or does it just or a fierce competitor or both? Well, you know, this is interesting. I think if you look at the history of a lot of the most odious monopolies and what was originally understood to be a monopoly, they're the ones that have the government somehow

19:46backing them up and keeping competitors out of the marketplace or making it too expensive for competitors to get into the marketplace, either through price regulations or entry requirements, et cetera. And the most successful businesses that have challenged monopolies often do so. They're scrappy, they're startups, and they do so in defiance of the fact that they're not only up against the companies, they're up against the fact that the companies are able to influence legislation or policy. And I think that the best way really to advocate, I mean, my personal position, the best way to advocate for the elimination of these types of monopolies is to advocate for an open market, to advocate for the idea that we ought to let the best products in the best services, and their customers in the marketplace, because I'm a real believer that, you know, in this case, parents and schools will vote with their feet. When they see, as I think a lot of schools now are seeing, I see this on your feet all the time. I mean, the more and more partner schools, when schools see that a different testing regime

20:50or a different test can provide them better data about the quality of the students that they're considering, I think that they're going to want that. And it's only by dent of the fact that there's this embedded relationship between ETS and the college board and the schools and the states that that persists. And so, you know, I know one of the things that that parents might do or that, you know, your supporters might do is, is let their local state legislators know that there are these alternatives. Yeah. And that it ought to be something that they allow or even encourage in their schools. It's great that the private schools can make this choice because I think that's probably where you're getting a lot of traction. But having the ability to do it across the board would be a lot more helpful, right? So that students don't get locked into the other system. I, this is it's so great to be able to pick your brain and I envy your students who can do this on a daily basis. But this is what keeps me up at night, right? Yeah.

21:50The SAT is basically, it stays in the same level of rigor from 1926 until 19, at least 1959 when the ACT launches. And I asked this question as somebody who generally loves the free market and of course, typically companies compete on quality and price point. But the way the SAT and ACT really have been competing is by becoming the easier test because the easier test gets market domination because students want to take the test. It's the easiest way to path the pathway to scholarships and admissions. And so it seemed like there's a, that the competition instead of having a positive good, in some ways the competition has had a, has a negative impact in terms of lowering academic standards. So I, I'm like, you know what, if CLT is going to dislodge SAT and EC, we need to figure out a different way to do it than becoming the new dumbest test. I thought this is a conundrum in terms of the way markets work. Yeah. Yeah.

22:50Yeah. That's interesting. I hadn't thought about the way, I mean, I, I see the same pattern that you're suggesting. It hadn't occurred to me though that this is, this is one of those instances that, that my friends over in the economics field like to call. This is a, this is a market signal. That's probably a distorted signal. I mean, some, some economists, I know like to compare this to sort of putting a penny in the fuse box, not that anybody, you know, has old fuse boxes that they would put a penny in. But essentially your, your sorts, your short circuiting mechanism, you're, you're, you're putting that signal that this, that this ease or the, or the facility with which this test can get you into these other things like scholarships, admissions, et cetera, incentivizes, as you say, the bad behavior on the part of the testing companies, which is to cater to the larger and larger market. And I wonder, I, you know, it's interesting. I wonder whether there's, there's not some element. I haven't, I haven't really thought about the history, but I wonder whether there's some element that the types of scholarships and the, and the types of incentives that

23:51were there. At some point in that development got more and more lodged to just the test as opposed to, you know, when I, when I applied to college, I had to do interviews. I mean, I know what we do in the reason the Lyceum Program, but it's a, it's a rare thing now that scholarship programs or even admissions boards consider personal interviews. I mean, you know, they've now gone to these testing and very, I mean, a lot of the admissions questions. One of the things that we pride ourselves on in the Lyceum Program is that we have three really serious questions that we ask students to write essays on as opposed to these kind of free open, just signal us about how you're a virtuous, you know, member of the community or, or signal us how you can get around the boxes. We're not allowed to ask you to check anymore types of essays that universities are using these days. And I wonder whether that, that tight connection didn't develop at a certain point and, on based on certain kind of connections and incentives that were at work.

24:52Yeah. I'm wondering if you could speak into it. And I asked this on behalf of parents listening. Yeah. And I think it's become so popular and, and well, no, kind of a top gun kind of destination for a lot of kids coming out of classical schools. What do you recommend for students to put their best work to have a shot of getting admitted? Because again, it's small. You know, you've got hundreds. Yeah. Yeah. We're growing, but maybe not as fast as, I mean, one of the things we are growing. So we recently, when we had the, this no endowment, we moved from doing, for having ten students admitted per class to having twenty, which is a doubling, but the rate of growth of applications and interest in the program, it's far exceeded that doubling. I mean, we now receive over a thousand applications a year for twenty-six months. And we just can't, we can't accommodate everybody who might like to be part of the program. What I would say is, I think that the best students, the types of students that, that do very

25:53well, I think most of the students that we attract, just because of the affinity for the program and their intellectual backgrounds, they write good essays. But I think that the real mark of distinction in the admissions process is we do a half-hour interview. So two faculty, myself and a couple of their faculty, sit down with the student, just like this, on a Zoom call and... You have to make that interview, like, do you interview all thousand applicants? Oh no. Oh gosh, no. No, we would not have nearly enough time to do that. But yeah, you're interviewer. We finalists, basically. Yeah, we read the applications. And when we read the applications, every application, we read every single application is read by at least two people. We have a whole team of the professors here that just, you know, we get together, we sort out the applications and the stacks, and every team reads each application two people read it. And then those are passed on. And at that stage, then those applications that have moved on from that phase are read

26:54by myself and the two assistant directors of the ICM program. So they're read potentially for a third, fourth, and fifth time, sometimes only third and fourth of, like, it came out of my stack. And then from there, we select the applicants that we want to interview. And we do, you know, on the order of, I mean, any given year, 50 or 60 interviews to get down to that 20 that we make the offers to. But the interview is really where students stand. You know, there's a real mark that students stand out. And I think the way that parents and students can think about this is that you have to be intellectually open and willing to consider and kind of play with ideas. I think, unfortunately, maybe the tendency is for people to think about as a kind of job interview, or you're supposed to say the right answer. And you know, what we're really interested in is, are you a thinker? Are you someone who's going to be in our classes reading these texts possibly for a second

27:56or third time and getting value out of that, right? We think that there's a lot of wisdom in what we do in reading these great texts. And part of that process is having an openness and curiosity and willingness to test and challenge one's ideas. And the more that one can demonstrate that in the interview, I think the more it becomes clear that such a student would be a good fit for the program. And those students really do rise to the top during the interview phase. Well, one final question. This is them. I'm so curious about it. I mean, we're living through right now just an incredible moment. I mean, it's always hard to have a perspective on the moment you're inhabiting as you're in it. I think we can look back now at the dot com revolution or the social media revolution of late 2000s and have perspective. But right now we're in the midst of the AI revolution. What do you, I mean, if you had, and a lot of people are saying, you know, we have to have big, gov regulate. That's the only solution. How do you weigh into this conversation at the national level?

28:58Yeah. I mean, I think I think one of the interesting things, one of the, you know, going back to what we were talking about with monopolies and government involvement, to me, one of the most dangerous signs is when the companies themselves are asking for the regulation, because more often than not, that means that they're trying to entrench their, entrench their position in the marketplace, right? They know that they're going to be competitors. They know that they're going to be people who might do things better or differently from how they might. And you know, when they want to see that the table, not to provide the best product and respond to the market, but rather to have a seat in the halls of legislation and have that influence, more often than not, that influence redounds to their own benefit, not the benefit of average Americans, right? And so I think although there may be in certain instances, reasonable consideration of regulation of these products, I guess if we call them products or the types of models and companies and everything else, that they ought to be considered by legislation and that they ought

30:02to be directed around the question of enforcing rights, not enforcing benefits for the companies themselves, protecting Americans and their rights. And that may be everything from protecting intellectual property rights, which a lot of people allege that the companies are running roughshod over by just consuming books and then using them without permission. NMA deal with how they devise relationships, one of the unfortunate things in my mind is that these companies are now getting in bed with many universities, right? Universities are almost jumping over each other to sign agreements. And I think it's a little short-sighted. I think they need to be a little bit more deliberate and consider whether having these relationships because one of the great things is that a lot of students, right, the younger people who we fear might be more prone to using AI to cheat or to not really be educated. A lot of those younger people are starting to think harder about these questions and

31:03to resist this idea that their universities are just going to create computer bots to teach them. They still seek that human connection. They want to learn from people. And so I think it's a short-sighted thing for the universities. But yeah, the types of regulation or the types of ways that we can protect our country, I don't know yet, but I know that it's a bad idea if the government's taking these companies or if the government's letting the companies write the rules for themselves. Eric Daniels, again, we're here with the Eric Daniels from the Snow Institute for the study of capitalism at Clemson University. I'm so encouraged that young people are getting this kind of wisdom. And these are going to be the people on Capitol Hill, you know, a sudden generation. You're doing great work. I'm already there, actually. Yeah, we just had a student who was clerked for the United States Supreme Court, who had students working in the White House on Capitol Hill.

32:07These are students that are really having an impact on the world. Incredible. Love what you're doing. Keep up the great work. Yeah, you as well. I mean, I have to say, from our perspective at the university, we really think what CLT is doing is awesome. And we love getting students who have had that exposure. It's mutual Brad Thompson. It's been a good for the LT for 10 years now. And we've been just enthusiastic to see this go from, you know, a hidden gem to this kind of national flagship that a lot of folks are trying to get into. So, yeah, appreciate it. How about you too? Thanks for listening to this episode of Anchored. If you enjoyed it, please be sure to leave a rating or review on your podcast platform of choice. And remember to subscribe and share with your friends and colleagues. Thanks for joining us, and we'll see you next time.