Sunday, September 18, 2011

Why Anti-capitalism is Irrational and Harmful

At this stage in history there should not be anybody left who opposes capitalism, or, to use the term I think is more precise: free enterprise.

The 20th century has seen one socialist experiment after another fail. A few small, countries with vibrant capitalist sectors such as Sweden have managed to make the welfare state last a long time without going broke, but now social democratic Europe teeters on the brink of economic collapse. The more the US tries to imitate Europe, the closer it moves to collapse as well. The roll call of utter failure is long and depressing: the Soviet Union, China, Cuba, North Korea, Cambodia, much of Africa and South America, etc. Only market economics work in the modern world.

Yet Christians often are found among the out-dated, romantic, Utopian forces that oppose free enterprise and this is a scandal. It makes Christianity look anti-intellectual and anti-scientific. It also make us look like ideologues whose professed concern for the poor is less than totally sincere.

Here are three reasons why anti-capitalism is irrational and harmful:

1. Capitalism has lifted more people out of poverty than any other social force, system or institution in history. The invention of Capitalism in Europe was as significant as step forward as the invention of agriculture in the distant past. Middle class people people today live better than European royalty did a few centuries ago - when 90% of the population was at subsistence level or below.

Marxism has glorious, stirring rhetoric; Capitalism has measurable, observable results. The invention of Capitalism has allowed nations to create wealth by trade, entrepreneurship and innovation. One essential condition for economic success is limited government and it is no accident that Capitalism emerged only in countries where the absolute power and scope of government was kept in check. All forms of Statism including Fascism, Communism, Socialism and the Liberal Welfare State would roll back this check on big government and remove the conditions under which Capitalism works.

2. Capitalism is the only economic system that allows for individual liberty, which is essential to human flourishing. All statist economic systems produce populations of perpetual adolescents who never learn to stand on their own two feet and take personal responsibility for supporting themselves. (Just look at the recent extension of adolescence in our society to the period lasting from puberty to the late twenties.) Capitalism is compatible with personal liberty and personal responsibility because it punishes bad moral choice and rewards good ones. It allows for multiple fresh starts in life.

If a person works hard, avoids drugs and drunkenness, get married and stays married, this person will not be in poverty and will rise to the level of his or her abilities in the world. But whether a person is rich or poor, it is possible under Capitalism to be independent and fully equal before the law with others. This is to recognize the moral nature of the universe and to come to terms with it, which is an essential task of human life.

3. Capitalism is compatible with Christianity. Notice, I do not say it is Christianity nor that it is always accompanied by Christianity. Rather, Christianity makes Capitalism possible and Capitalism itself does not threaten Christianity. All forms of statism involve the all-powerful State attempting to take the place of God and are thus implicitly alternative religions to the worship of the One, True God.

A country that is highly influenced by Christianity in the form of a large church or churches will have the advantage of a strong social force preaching self-restraint and moral living. Only a society in which the majority of the population choose virtue over vice and voluntarily restrain their lusts will be able to preserve political liberty. Without the virtue that everywhere accompanies the spread of Christianity, chaos will cause people to look to the Dictator, the Police State, the Nanny State or some form of statist control in order to make life bearable. In such cases, Capitalism cannot work. Capitalism and political liberalism in general, cannot work in a non-Christian country for long without collapsing into some for of statism.

On the other hand, Capitalism creates liberty for the individuals Christianity is trying to convert to the Faith and in a capitalist society there is sufficient mobility and freedom for individuals to become Christians and function differently on the basis of their faith.

Capitalism implicitly recognizes the truth of two major Christian doctrines: original sin and the need to serve the neighbour. Capitalism is often said to be built on greed, but that is simply a slander. Capitalism involves producing goods or services your neighbour needs, wants and is willing to pay for. If you don't serve the neighbour, you starve. And Capitalism recognizes that people are naturally acquisitive and greedy because of sin and structures economic exchange in such a way that channels this negative energy into socially useful and productive endeavors. If you live next to a greedy, millionaire, would you rather that he channeled his energy into systematic looting and robbery or into building a construction business or a store? If you answered the former, you might be a socialist.

Anti-Capitalism, then, is irrational and harmful to society. The problem with modern Western nations like Canada, America and the nations of Europe is not that we have too much Capitalism; it is that we do not have enough of it. Most of Capitalism's bad press derives from people thinking that distortions of it are the real thing. What Obama is doing with "green energy" or the auto industry is not capitalism but cronyism and statism. What they do in China is more like Mercantilism than Capitalism despite the use of the term "State Capitalism."

Capitalism does require the rule of law. There must be laws enforced by the State which create a level playing field by, for example, limiting monopolies, making bankruptcy possible and enforcing a minimal level of health and safety regulations. The goal is equality of opportunity. But the tendency of the State in modern society is to try to create equality of outcome, which requires government intervention on a scale that is incompatible with individual liberty.

Human inequality of abilities and character is a permanent feature of life in a fallen world. Therefore some will become rich and others remain poor, while the majority will be in the middle. We should care for the poor with charity and accept that equality of income is impossible without a coercive assault on individual liberty that will cause more problems than it solves.

If this life were the end of human existence and if there were no future life - no heaven and hell or Day of Judgment - then human inequality would be tragic. But for the Christian, this life is important but not all we have to hope for. Therefore, personal liberty exercised through moral choice is a necessary aspect of fulfilling our human purpose on this earth. This world is a preparation for the next life and any economic system that depresses individual choice in favor of a vision of social justice as income redistribution and equality of outcome is inimical to religion. In trying to bring heaven to earth, it fails to let us be prepared for the real heaven. As every serious Christian theologian in the history of theology has recognized, relative wealth and poverty (above the level of subsistence) is of secondary importance to character, religious commitment and worship.

This is a hard saying for materialistic, atheistic, socialists. But it shows what a gulf exists between Christianity and all forms of statism. It really is a worldview divide that cannot be bridged except by conversion in one direction or the other.

14 comments:

Troy McConnel said...

“Capitalism has lifted more people out of poverty than any other social force, system or institution in history. Middle class people people today live better than European royalty did a few centuries ago - when 90% of the population was at subsistence level or below.”

Yes, the middle class lives better than European royalty did a few centuries ago. Something happened between centuries ago and now which funded the emersion of this happy middle class. It was the colonial resource extraction, cultural devastation, and human exploitation of North and South America, Africa, Asia, and the Middle East. The impact of the colonial legacy is rather evident today, in terms of both the benefits enjoyed by the oppressor and the poverty endured by the oppressed.

It’s kind of a big deal and I wonder how this could have escaped your notice. Perhaps you touched on an explanation; “human inequality of abilities and character is a permanent feature of life”. It’s THEIR deficient ability and character which has lead to their demise.

You praise capitalism based on the “measurable, observable results”. I oppose capitalism because my “measurable, observable results”, unlike yours, include the reality of people who are not white.

Gordonhackman said...

I'm curious what sort of economic system you think should take the place of capitalism Troy?

Craig Carter said...

Troy,
If your explanation were true, then why did not other empires in history not result in the extremely fast rise in living standards that occurred in the Industrial Revolution in the West? Why not Rome? Why not Greece? Why not the Muslim empires? Why not China? Why not India?

The wealth of nations is not a fixed amount which is stolen back and forth. It is dynamic and can increase through inventions, trade, etc. The key is to figure out how to make it increase.

You might consult Rodney Stark's book: The Victory of Reason. It is an introduction to these matters. I'm afraid what they teach in anti-colonialist, anti-Western classes today is heavily ideological and bereft of historical sophistication.

Peter W. Dunn said...

My experience in Africa has taught me that if colonialism never existed there, the continent would still be poor. Here are the reasons: (1) Tribalism: sub-Saharan Africa doesn't have political parties on the left and right as in West--not even a party of the little guy and party of the rich capitalists. Rather, the countries I've been in divide itself along lines of tribe, and this means that those in authority extend privilege and power to their own tribesmen while others are left out. This leads to jealousy and rage, sometimes to war and genocide. (2) Kleptocracy and corruption: countries will go nowhere as long as the leaders of the countries pad their own Swiss bank accounts; and every bureaucrat supplements his salary through bribes and extortion; (3) Nepotism: family members rather than those who merit are the beneficiaries of office. (4) Collectivism: as soon as one person gets ahead, the members of his family begin to leach off of him. This leads to the view also that the little guy can collect from the big guy and never fulfil his contractual obligations or repay his loans (cf. African friends and Money Matters, by David Maranz).

Undoubtedly, I will be accused of being colonialist and racist. But this is what I've observed, in many cases first hand, in my dealings with African people.

Most of the world suffers from a lack of free enterprise and freedom. The government is not the solution, because the government is incapable of changing the human heart. But government is not the only culprit. In Africa, the tribal/collective culture is the thing that inhibits economic growth. But then, the trade off is that unlike our culture, few people seem to experience our loneliness and isolation, leading to depression and often suicide. There is a huge cost to Western individualism too.

jonathanturtle said...

Granted I'm not that well versed in economics but here's a few thoughts:

1) The phrase "free enterprise" could use some clarification. The Christian understanding is a far cry from our societies view of freedom. Certainly this would influence any talk of "free enterprise". Christian freedom is not unrestricted power and the absence of obstacles. Rather, Christian freedom (as I'm sure you well know) is directed. Thus, any notion of "free enterprise" if we wish to talk about it Christianly in a theologically meaningful sense must take note of the guided nature of Christian freedom. Does the "free enterprise" which you assume here submit to this understanding of freedom?

2) I'm surprised to hear you concerned about the appearance of Christians as "anti-intellectual" or "anti-scientific". Is part of your argument for Capitalism to avoid seeming anti-intellectual to our secular Capitalists?

3) You argue that we should avoid an anti-Capitalist stance because i) Capitalism has lifted more people out of poverty than any other social force…, and ii) Capitalism is the only economic system that allows for individual liberty. Yet, neither a liberation from poverty nor individual liberty necessitate a Capitalist economic. Both of these things, liberation from poverty and individual liberty, preceded Capitalism. Further, Capitalism is the *only* economic system that allows for individual liberty? So, prior to Capitalism were individuals not free?

You hold up "statist economic systems" and Capitalism as if these are the only two options and we are forced to embrace one and reject the other. I don't buy it. I can neither fully embrace nor fully reject aspects of either of these options and yet I also cannot embrace either as "the way"...

jonathanturtle said...

hmm...for some reason I can't post the rest of my comment, will try again later.

jonathanturtle said...

...Further, the individualism rampant in what you present as free enterprise is disturbing. You say things like, "all statist economic systems produce populations of perpetual adolescents who never learn to stand on their own two feet and take personal responsibility for supporting themselves," as if standing on your own two feet and supporting yourself is the highest good. Again, I don't buy it and frankly I think it stinks of the sort of secular individualism which is rampant in our society. How you can embrace such an individualism and the economic systems which it produces as gospel truth in light of the Triune God who made human creatures in his image and fashioned them in such a way that they are fundamentally relational and not-individual is a mystery to me.

You argue that "If a person works hard, avoids drugs and drunkenness, get married and stays married, this person will not be in poverty and will rise to the level of his or her abilities in the world." As a counter argument, I know a family who once was quite well off financial but when their daughter (1 of 2 children) reached the age of 7 she developed an extremely rare neurologically degenerative disease. While her parents worked hard, avoided drugs and drunkenness, and got and stayed married the family came close to bankruptcy due to medical costs. The only reason they were able to survive was due to the intervention of others. Does your free-enterprise allow for such intervention? Further, poverty is not necessarily the result of laziness, drunkenness or singleness/divorce. I know people in poverty (in Capitalist economies no less!) who are in such a state due to mental illness or lack of marketable skills (though they have skills). Your argument here seems weak and detached from engagement with the real world. You accuse those who would critique Capitalism of chasing after some sort of Utopian ideal but it seems to me you could be accused of the same thing. For example, the crux of your argument seems to rest here: "A country that is highly influenced by Christianity in the form of a large church or churches will have the advantage of a strong social force preaching self-restraint and moral living." But we live in no such society and even in such a society people are still fundamentally sinful and willfully say "no" to God in favour of their own way. Whether or not a country is influenced by Christianity and has many churches would not change the point that people will still freely chose selfishness over self-giving love.

I haven't even got to any of the critiques of Capitalism that I think are entirely justified and necessary if we are to think Christianly. But I'm off to watch a film with my wife and daughter so perhaps I'll write more later. At any rate, your embrace of Capitalism and the conditions which you deem necessary for Capitalism to be a success seem to me to be just as much of a Utopian pipe-dream of that which you accuse others of embracing.

Andrew said...

Jon,

A few comments:

(1) I think the original post gives some indication of the purpose of political and economic freedom: "Capitalism involves producing goods or services your neighbour needs, wants and is willing to pay for." The free market is a system where your freedom is granted so that you can serve other people voluntarily. This is, of course, distinct from what is called "crony capitalism", which is what we live in today, and which is basically a system of welfare for the rich.

(2) You say that liberation from poverty occurred before capitalism. I have a sincere question: when did such liberation occur on the scale that it did because of the industrial revolution, before that revolution?

(3) Was there another economic order prior to the industrial revolution in the Protestant nations, in the history of the world, where people were as free, politically and economically, as they were then?

(4) Trinitarian anthropology, if it is truly trinitarian, will recognize that neither community nor individuality is more fundamental than the other, since God is neither more 3 nor more 1. Further, if we really want to model a political economy on the Trinity, we would have to have an entirely voluntary market, since there is no coercion in the Trinity.

jonathanturtle said...

Thanks Andrew, that was helpful.

(1) I agree with you that Capitalism as we know it (crony capitalism?) is a far cry from anything good and praiseworthy. But in arguing for some "ideal" Capitalism that is different from what we actually experience aren't you and Dr. Carter guilty of the same thing as proponents of some form of "ideal" non-Capitalist framework which is different from what we *actually* experience? Personally, I don't think the pure Capitalism which you describe ("producing goods or services your neighbour needs, wants and is willing to pay for") really takes into account human sinfulness (i.e. Capitalism becomes about taking advantage of others including the created order for the sake of profiting as much as possible for you and your shareholders).

(2) To think about this Christianly I'm convinced that we need to move beyond talking about liberation from poverty to imagining a society in which both poverty and excess are unnecessary. Ideally, I think the church, for example, provides the space for this sort of community to exist that is not based on a Capitalist system or it's opposite (i.e. in the early church and through church history we see often that within the Body of Christ the needs of all are met, and not through the buying and selling of goods but rather through the sharing and gifting of goods). Thus, to think Christianly about this (and I think more in line with the eschatological kingdom) we ought to think in terms of "sharing and gifting" rather than "buying and selling".

(3) I believe the term we're looking for to describe that economic order is, "church".

(4) Agreed. And you think that in *real life* Capitalism can provide the setting for an "entirely voluntary market"? I have my doubts.

jonathanturtle said...

Also, in regards to my first point on Capitalism and human sinfulness, this doesn't take into account that we don't know what we truly want. In fact, the free-market as we know it has entire sectors within it devoted to creating desire for things we *don't* want. I see this as an intrinsic part of Capitalism, the manufacturing of desire. But, we don't know what we desire. We must learn to desire rightly.

Andrew said...

Jon,

Thanks for the follow up. I think this will help to move the discussion along.

(1) I think Dr. Carter actually suggested some ways in which capitalism directly takes sin into account: it requires people to channel their greed in ways that other people will find beneficial. That is, to make a profit, you must first sell your wares, and to sell anything, someone else must be willing to trade for it. Further, a capitalist economy depends on trust: if you are found out to be fraudulent, no one will trade with you. This will mean you will have to produce everything you require to survive, and reduce you to subsistence production, if you can even manage that. And, yet further, a capitalist economy makes it so that all other people in the market, both buyers and sellers, function as checks and balances against unscrupulous people. If you try to lower your wages for your workers too much, an industrious competitor might take advantage of that, offer your workers a higher wage, and take away your production force, leaving you with no way to make money for yourself. Further, as I noted, the sellers themselves function as a check: if they detect that you are lying or are trying to harm you, your bad reputation will spread fast, and you will be out of luck. In these ways and others, I think a free-market does take into account human sinfulness. Of course, in addition to these points, both Dr. Carter and I believe there is a place for the state. Sometimes force is needed to keep people from doing certain actions that the market would take too long to fix. But, nevertheless, bringing too much force into society is far more harmful than keeping it at a minimum, as past failed Socialist states have demonstrated.

(2)I think, though, we need to continue the model along, asking how it would logistically work. It's an established fact that there is not infinite goods for people; we have scarcity, and so we have to take care to use our limited goods wisely. And you seem to agree that a division of labour is not intrinsically sinful (i.e., you don't totally agree with the Marxian view that trade is intrinsically alienating and bad). Given scarcity and the wisdom of division of labour, how would a voluntary Christian community decide to use its goods? Would it delegate all power to a central authority, and have it decide arbitrarily how much of good x y an z should be produced for the people? But then, how would that authority know how much of each is needed, unless the people were to communicate how much they would like to have? If, however, the people were to communicate in this manner, why would they need a central authority to decide? They could just inform each other of how much of good x, y and z to produce, so that each person working in each divided field of labour would know how much everyone else wants of what he produces. What I've just described, of course, is a free-market economy. I'm not sure, in other words, what possible alternative to this model there is, even in a sinless world. We still need to be wise stewards of our scarce goods, and it still makes sense to divide up labour (for various reasons such as economies of scale, etc.), and if we grant these points, then a free market just seems to be pragmatically necessary. But nothing about this way of doing society together implies anything immoral or exploitative is going on.

Andrew said...

(3) Unless we accept Christendom as a legitimate outgrowth of the mission of the church, though, the church has never been a political order in the sense that the question implied. We need to compare like with like, since we are implicitly asking "what should the state do?" And if we are asking about past states, and which has been most permissive of economic and other types of freedom, I think Dr. Carter is correct: the Protestant nations after and around the industrial revolution are still the best we've seen.

(4) No, I don't think an entirely free market would work. But see my comments (1) above.

(5) Re: desire: I am not wholly on board with the socialist consumer society critiques. To some degree, I think the manufacturing of desires isn't really what it seems, in that consumer society produces new goods we didn't directly desire before as symbols of things we have always desired: status, etc. On the other hand, I'm not sure how it is that we know that people don't really desire these things. No one even knew what an iPhone was 100 years ago, yet I still wanted one when it was released, simply because of the functionality of the device. Is that somehow evidence that I've been brainwashed? Or is it just that new products have been created to meet needs we've always had in new ways?

Thanks again for your comments.

Andrew said...

One further note, per the sharing vs. market issue: I think even the earliest church thought along the lines of a free market, with occasional charity when necessary. The reason I suggest that is 2Th 3:10: For even when we were with you, we would give you this command: If anyone is not willing to work, let him not eat.

Thus, people were expected not to remain permanent recipients of charity, insofar as it was possible for the recipients to extricate themselves from that situation. In other words, the community expected them to be productive, which can mean nothing else but do things that were useful to other people, and not just receive gifts. This implies the kind of communal calculation and allocation I mentioned in (2).

Peter W. Dunn said...

Andrew: the requirement that widows serve the saints also supports your contention that charity was not a one-way street, but those receiving it were expected to work (1 Tim 5.10, RSV): "and she must be well attested for her good deeds, as one who has brought up children, shown hospitality, washed the feet of the saints, relieved the afflicted, and devoted herself to doing good in every way."