Alasdair MacIntyre's Flawed Critique of Capitalism

Robert T. Miller has a great article in the February 2011 First Things entitled "Waiting for St. Vladimir" in which he critiques Alasdair MacIntyre's critique of capitalism. (It is not available online except by subscription so I can't link to it.)

I have taught MacIntyre's great book After Virtue (hereafter AV) in my Christianity and Culture class for the last 7 or 8 years and I have greatly profited by reading and re-reading it. Like Miller, I revere MacIntyre as one of the greatest living philosophers and I think AV is one of the great books of the 20th century. It amazes me how lucid and engaging it is compared to some of MacIntyre's other books, which leave me cold and bored.

But AV is a story and a corker at that. It is the story of how we got to the point where, as a culture, we can no longer articulate coherent reasons for moral positions and are thus left drifting aimlessly along with no way to resolve moral disagreements other than by force. It seems clear that a culture in this predicament faces the alternatives of collapsing or embracing tyranny. And that is a lot of insight to get from one 300 page book.

I completely resonate with him when Miller calls MacIntyre one of his "intellectual heroes" and so Miller's criticism of MacIntyre is not based on any desire to undermine MacIntyre's ethics in general or to discredit him as a Christian philosopher. I believe MacIntyre is right about so many things that it pains me to find him wrong at one very important point. For the past several years now, in my final lecture on AV I have had to point out that MacIntyre seems to be somewhat naive about Marxism and Capitalism insofar as he seems to think that the Marxist critique of Capitalism is valid even though Marxism itself has been completely discredited. Miller explains the root of MacIntyre's critique of Capitalism and thus throw light on this puzzling position of MacIntyre's.

Miller describes a lecture given by MacIntyre at Cambridge in the summer of 2010 on the financial crisis of 2007-08 in which MacIntyre reiterated his anti-Capitalist views and expounded on them. Miller points to the classical Marxist theory of surplus value as the foundation of MacIntyre's argument. Miller writes:

"Following classical Marxist theory, MacIntyre defines surplus value as 'the difference between what the labor of productive workers earns in wages and what capitalists receive for the products of that labor' - that is, the difference between the value of the goods produced by a firm and the amount paid in the aggregate to its workers. Capitalists appropriate this difference and so exploit labor." (38)

MacIntyre argues that capitalists are caught in the dilemma of wanting to maximize profits by minimizing wages, on the one hand, and needing consumers with buying power to purchase the goods, on the other. Capitalism solves this dilemma by inventing credit, what he terms "the infliction of debt." (38) In creating the necessary financial products to facilitate debt, capitalists transferred a high amount of risk to unsuspecting individuals without explaining what was going on and thus caused a debt crisis.

Miller points out that if MacIntrye is right, the only solution is not regulation but revolution. The whole system is rotten morally and must be replaced. So we are not waiting for a new St. Benedict, but for a new St. Vladimir (as in Lenin). In the 1995 preface to his 1953 book Marxism and Christianity, "MacIntyre mentions 'relatively small-scale and local communities' such as certain ancient cities, medieval communes, and 'modern cooperative farming and fishing enterprises.'" He claims that in such communities the uses of power and wealth are subordinated to the goods internal to communal practices. While it is not clear in AV, Miller observes that "the local communities in which civility and the intellectual and moral life can be sustained" that MacIntyre mentions in AV's conclusion turn out to be economic communities.

As Miller observes, the Marxist theory of surplus value is rejected by most economists today. Theologians and philosophers, apparently, have not all received the memo as yet, however.

Why is the theory wrong? It is because the value of goods is determined by all the inputs into the production process and not merely the labor of human beings alone. It depends on the cost of raw materials, plant and equipment, patents and technology and other inputs. Workers are entitled not to the entire value of the goods produced, but only to the portion of the value of the goods due to their efforts. Owners of capital deserve the portion of the value of the goods attributable to the capital.

Miller points out that MacIntyre's argument is implausible. For one thing, capitalists are not really able to set wages at any level they want because of stiff competition from other firms who compete for the services of workers. Wages set in a competitive environment are fair.

MacIntyre speaks as if all capitalists functioned as a collectivity, when in reality they are competing against each other. As Miller points out, capitalism has produced, through this kind of competition, a greater equality of wealth and income than any other system in history. Even workers are investors (capitalists) in contemporary societies. Most large companies are publicly traded and owned partially by workers. Workers invest their retirement savings in mutual funds, which invest in companies.

Credit products like mortgages exist because they meet a need, not because capitalists scheme to inflict debt on unsuspecting workers. A young couple thus can buy a house when their children are young, rather than waiting until the children are grown.

Miller is clear that capitalism is not perfect. But the costs of the capitalist system are less than those of the alternatives. All that need be claimed is that it is the least imperfect system in a fallen world; no Utopianism is required. Thus, as Miller says, an attack on capitalism is really an attack on poor people, who have been most helped by capitalism.

MacIntyre admits that capitalism has generated more material prosperity than any other system but is still unjust because of the surplus theory of value. But this theory is simply false.

Miller may well get to a deeper reason why MacIntyre thinks capitalism is evil when he notes that MacIntyre, following Aristotle, thinks that all communities have a purpose and that since capitalism is so good at generating wealth that must be its purpose. However, Miller argues that capitalism exists not to facilitate any particular purpose but rather to facilitate the attainment of the goals individuals set for themselves.

MacIntyre has made some serious mistakes in political philosophy. But Miller demonstrates that MacIntyre's anti-Capitalist view are not derived from his Aristotelian philosophy. They are merely the barnacles of MacIntyre's rather old-fashioned Marxist ideology.