Why Capitalism is Wrong, Socialism is No Better and Christianity is the Only Answer

Good counter-cultural thinking often takes place at the Front Porch Republic. Here is an exerpt from an interesting article by Lew Daly.
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"Many involved in Front Porch Republic embrace the idea of a smallholder economy based on family production under conditions of widespread ownership of productive resources. This was the vision of a moral economy held by the more radical republicans among America’s founders and revived in the 1790s by Thomas Jefferson, George Logan, John Taylor and other leaders of what would become the Democratic Party. Even John Adams had thought this way in the revolutionary fervor of 1776. “The only possible Way then of preserving the Ballance of Power on the side of equal Liberty and public Virtue,” he wrote in a letter that year to James Sullivan, “is to make the Acquisition of Land easy to every Member of Society: to make a Division of the Land into Small Quantities, So that the Multitude may be possessed of landed Estates.”

Catholic distributism, also important at FPR (see John Médaille’s several recent posts on the subject), helps us to ground the American smallholder ethic in a Christian anthropology and a natural-law understanding of the common good. As in all Catholic thought, this religious understanding includes a strong presumption of political responsibility for securing a cohesive, stable social order. Thus it is important today both for the political necessity it entails (given the existing pattern of wealth concentration) and for the particular kind of order it envisions. By the end of the Reagan Administration, Glenn Hubbard found, less than 9 percent of households had active business assets worth more than $5,000, but those few that did controlled about 40 percent of total household wealth. The bottom half of American households now controls less than 5 percent of our total net worth. Our republican founders could not have imagined a distribution of wealth so concentrated, nor a democracy so threatened by the rule of property.

James Matthew Wilson recently reflected here on the smallholder vision as embodying “the need for autarchy.” Property right, in this view, is designed to secure a moderate economic competence for one family and the next, but instead, Wilson argues, it has become a tool of unlimited accumulation. Of course we have social laws that restrain even “rightful” accumulation in a few minimal ways. But underlying this, it seems to me that “autarchy,” an essentially Stoical construal of the idea of a household economy—complete self-rule based on ownership of productive resources–cannot be the basis of a stable society or the ideal moral condition of its members. Most obviously, it goes too far (potentially) in opposing the household to the common good. The very architect of the idea of self-rule based on ownership of property, John Locke, already predicted the grim proletarian future of this idea in the famous passage in his Second Treatise describing the “turfs my servant has cut” as part of the landowner’s “labor” entitlement. The fruits of the labor of those without property were instantly assimilated to the justice of proprietary autarchy. Thus modern capitalism was born in contravention of the fundamental laws of God and nature, which provide for a wide distribution of productive resources and political responsibility to secure as much. Locke’s liberal seduction of Christian thought in philosophically sanctifying private property as a necessary and virtually limitless extension of inviolable God-given personhood penetrated to the core of Western culture almost without resistance until the nineteenth century. Standing athwart the anti-human extremes of liberalism and socialism, Catholic social thought, beginning with the Jesuit neo-Thomists who laid the intellectual groundwork for Rerum novarum, devised a theory of individual or household property balanced by public responsibility for securing conditions of widespread ownership or self-sufficiency by other means. Leaving much room for technical debate on the proper means for securing these ends, I ask if we can rebuild a republican-Christian synthesis in American politics today, and if we can, what kind of common action, duly justified, can dismantle the existing pattern of wealth concentration and restore the sovereignty of families and communities."
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The bolded section contains the thought I want to reflect on for a moment. To own something, from a Christian perspective, is surely different than what it means to own something from a secularized liberal perspective. Christians "own" property in the sense of being stewards of that property and, since the property really belongs to God, Christians have a responsibility to use that property for the common good. It is in this sense that private property is not an absolute in Christian thought. To accumulate endlessly and use property selfishly is unChristian. Property should be distributed as widely as possible, which means that all should be taught to accumulate some property but not become greedy and turn the acquisition of property into a vice. This, of course, is difficult because of original sin; yet it is the essence of responsible stewardship.

Locke's liberal seduction consisted of telling men that they are like God and can own as much as they can acquire absolutely and with no responsibility to anyone else; this is the whitewhashing of the vice of extreme acquisitiveness combined with an unqualified or absolute right to private property. This is part of the modern project of making man into God. It is in this sense that capitalism is a contravention of the laws of nature and of God.

The Christian answer is not to remove the temptation by abolishing private property or by removing the possibility of entrepreneurship and initiative. It is to teach men to strive to resist the vice of acquisitiveness by means of God's grace and to recognize their social responsibility to use property for the common good. Socialism has no room for grace; it is a religion of pure law. In the socialist solution, private property is taken from the rich by coercion and redistributed according to the will of an elite group - either the Party or some sort of ruling class, perhaps a professional class of civil servants who manage wealth distribution. Socialism leaves the individual as vicious as it finds him and therefore is able to achieve its goals only with regard to external and superficial equality without addressing the heart. The potential for cynicism and alienation, not to mention on-going institutionalized violence, is ominous.

Now, it seems to me that in both Capitalism and Socialism, the common thread is the control of power and wealth in society by a small group which is supposedly more virtuous than the common herd. In Capitalism this is the small group of rich people who control the means of production and they are seen as more virtuous because Providence has smiled on them and made them rich. In Socialism this group is usually the hardened, revolutionary leadership whose virtue is proven by their willingness to sacrifice for the sake of the revolution or a profession managerial class of civil servants with a politically correct ideological vision. In both cases, the common citizen is reduced to a beast of burden, someone who must be "managed" or "employed" by those with power.

Christianity stands for the dignity of the common person, who is called by God to exercise responsible freedom and choose to share, to be a good steward and to provide well for his family. This way of life, embodied in the free peasantry of much of Europe in the Medieval period and which has continued into modernity - though much assulted by industrialism, Capitalism and urbanization - is the best way of life from a moral perspective. I realize that that sounds categorical, but one needs to say it strongly because this view is so strongly hated and rejected by so many today. The independent, but interdependent, family farm or business enterprise embedded in a local community that functions as an economy is the heart and soul of democracy. It is the vision of the American founders and was rightly percieved as well-suited to a vast, unsettled continent. But under the pressures of urbanization, industrialization, commercialism, urbanism, consumerism, globalization, we see an increasing gap between rich and poor, an increasingly artificial and hedonistic way of life and an increase in depression, suicide and low-level violence.

Neither Capitalism or Socialism has the power to repair the torn social fabric. Only a revival of Christianity can do that - and even then massive social reform will be necessary, the shape of which is difficult to percieve in advance. But only Christianity has what Capitalism and Socialism lack - a God who loves all people equally and who gives grace to those who strive to be responsible stewards.

Are the Terms "Socialism" and "Capitalism" Still Useful?

Socialism and Capitalism are the two great economic systems to arise in Modernity on the basis of modern assumptions about human nature and history. Both may be regarded as Christian heresies, especially Marxism. However, neither exists in anything like a "pure" form today. People tend to invent clumsy neologisms such as "state capitalism" to describe the political economy of China and it has been asserted on this blog with great fervor that the Soviet Union was not socialist. Even the most strongly capitalist country in the world, the United States, is far from the "unbridled, robber baron Capitalism" of the Nineteenth century, with its anti-trust legislation and its welfare state apparatus. And, after all, when the President of the US decides when the CEO of General Motors needs to be fired and the federal government regularly decides on political grounds which banks will be allowed to fall and which will be propped up - well, you get the idea. Whatever it is - it isn't anything Adam Smith would recognize as Capitalism.

I would suggest that the terms "Capitalism" and "Socialism" get in the way of debate. Often, our greatest problem is not finding agreement, but more modestly, finding clarity on our disagreements. And here is where these terms let us down.

For example, to claim that of course a thinking Christian simply must be a socialist surely means different things to different people. For many, I'm sure, it means little more than "sharing is good." But it does not necessarily mean big government and social engineering. Yet, it is difficult to point to a historical example of socialism that did not actually involve big government and social engineering. To take the socialist government of Spain for instance; one could get the impression from its recent legislative record that socialism has mainly to do with sexual permissiveness and institutionalizing the sexual revolution. And yet, socialism is supposedly an economic system.

Or, on the Capitalist side, what sense does it make to call a system of multi-national corporations that specialize in obtaining government grants, tax breaks, and other financial incentives from national governments rather than actually producing things and marketing them? What is going on when a government declares that a "private" business is too large to be allowed to fail? It is a well-known fact that increasing government regulation favors large businesses and often creates insurmountable obstacles for entrepreneurial small enterprises, which cannot afford the costly compliance with byzantine regulations. It seems that the line between big business and big government blurs more with each passing year.

I would suggest that we would do well to stop using the terms "Capitalist" and "Socialist" for the foreseeable future and, instead, define the political options in terms of "Distributivism" and "Corporatism."

Let us define Distributivism as an economic philosophy that stives to keep property distributed as widely as possible through widespread home ownership, preservation of the family farm and the encouragement of small, family-run business as the major employers in the economy. Monopolies, excessively large corporations and multi-nationals would be severely limited, if not eliminated.

Let us define Corporatism as a system in which the goal is to build up a total social system consisting of a partnership between government regulators and large, multi-national corporations, which strives for efficiency, equality and continuous economic growth. Corporatism has more than a little in common with Fascism, although the militarism and aggressive nationalism need not necessarily be part of Corporatism.

To use these terms would have several clarifying effects.

First, it would become clear that both major parties in the US lean more in the Corporatist direction than the Distributivist, so US voters do not really have a serious choice under the present system. The same goes for the Canadian political parties.

Second, it would frame the basic philosophical choice as being between a large, managerial, bureaucratic government/corporation structure and little need for civil society, on the one hand, and a small, limited government and a culture of small businesses and vibrant civil society, on the other.

Third, it would allow one to be in favor of entrepreneurship, small business, and limited government without being in favor of multi-national corporations and their tendency to exploit labour and blackmail governments.

Fourth, it would put the spotlight on what needs to be given up in order to achieve progressive social policies such as the increase of the welfare state and government mandated political correctness, namely civil society.

Fifth, it would allow Christians to see that their own interests do not coincide with either of the two great Enlightenment systems.

Sixth, it would make allow for public debate to center on pressing issues that do not get much of a hearing at present, such as the implications for freedom of a centralized social class of experts and managers replacing parents and ordinary citizens in the formulation of policy and law and the complicity of governments in the violation of the principle of subsidiarity and how this is weakening civil society.

The shift of the terms of the debate from an obsolete preoccupation with two failed economic systems would benefit everyone except those who have a vested interest in the continuation of our present social trend toward the all-encompassing, bureaucratic, managerial state and the soft totalitarianism it embodies.

What Lies Beyond Marxism and Capitalism?

It was a commonplace in the 90's to remark about how the fall of the Berlin Wall, coupled with the move of China toward state capitalism, symbolized the end of Communism as an historical force. During the current economic meltdown, it has become a commonplace to speak of the end of capitalism as an economic system. But this is old news. Marxism was finished once the crimes of Stalin became widely known and Capitalism had to absorb many Marxist ideas into itself as the welfare state emerged out the New Deal. It was either that or perish in the fires of revolution. Capitalism has been like the corpse of Lenin under glass for quite some time now.

Now that we are moving decisively beyond the two great religions of the Enlightenment, what lies ahead? It seems to me that there are two possibilities: either a revival of Christian faith in the West, which will lead to a distributivist economic system and freedom or the continued rise of the bureaucratic, managerial, state and the loss of freedom.

The bureaucratic, managerial state is operated by a special class of experts who function as managers throughout the state apparatus, which continuously grows and expands until all human life comes under its purview. At that point, human life can be managed effectively for maximum efficiency and rational planning can ensure human happiness. There is every reason to believe that most people will gladly trade freedom for security, as Dostoevesky's Grand Inquisitor argued in The Brothers Karamazov. The state is nameless and faceless. No one person is in charge; no one is accountable. The state is ubiquitous (a property of Jesus Christ) and it is all-powerful (an attribute of God). The state eliminates the vagaries of chance, individual initiative, disease and fortune and provides total security for every person. The state controls most of the wealth, of course; individuals are put on "an allowance." Personal initiative or eccentricity is diminished and the pleasures of the flesh are emphasized. Through expert planning the state not only rules or governs; its controls and manipulates.

But unlike the "hard totalitarianisms" of the mid-Twentieth century, this "solft totalitarianism" does not provoke fear, hatred and resistance from its citizens because the state appears as the Great Benefactor of the populace. In other words, human nature has changed and no longer yearns for freedom from state control because people have been conditioned to love security, fear freedom and accept state control.

This dystopia is perfect in every respect, as prophet like Aldous Huxley (Brave New World), and Fyodor Dostoevesky (The Brothers Karamazov) have foreseen, except for one little detail. C. S. Lewis points it out in The Abolition of Man. In the great war of man to conquor nature, (which is the chief enemy of the bureaucratic, managerial state), the conquest of nature turns out to be the conquest of human nature as well and this means that it is the conquest of some men by other men. In other words, Nietzsche's vision wins out in the end.

If I were to boil down what it means to be a conservative today, I would say it means to oppose the bureaucratic, managerial state and all its works - including eugenics, the increasing separation of human reproduction from sexuality, high taxes and big government social programs, the endless regulation of all aspects of life, the ursurpation of authority over the family, the usurpation of authority over the Church, policies designed to ensure the continued destruction of the family farm, globalization, the government monopoly on education, and the glorification of greed, lust and sloth as the highest ideals.

If I were to answer the question of what it is, exactly, that conservative seek to conserve, I would answer: humanity itself.

First Banks, Now Auto Manufacturers: It's Time to Say No!

First it was the banks lining up to get taxpayers to bail them out on problems caused by their poor business practices, irresponsible profit-taking and short-term thinking. Now GM, Ford and Chrysler, after decades of pocketing profits, now are calling on taxpayers to bail them out of problems caused by their failure to build and market fuel-efficient cars even though peak oil was entirely predictable and their preference for short term profits rather than sustainable business practices. I say don't give them a penny.

The problem here is that there is too much concentration of the market in too few corporations. Huge multi-national corporations constitute virtual cartels and hold customers and employees hostage in order to extort money from the government. They are no better than the drug cartels in Columbia and they deserve to go under.

Capitalism is all about the private sector being more effecient than the public sector, about supply and demand, the laws of the market and business either going bankrupt or flourishing depending on how well they are run. So why not let big business go under? We are told that these business are so big that they have hundreds of thousands of employees who would all be unemployed. The loss of tax revenue, the payments of unemployment insurance etc. make it financially preferable for government to pay out large sums to private companies and thier shareholders. It is just protection money.

The biggest problem with our economic system is that there are too many large corporations and not enough smaller ones. A car company does not have to be worldwide in order to be efficients. That is just a function of a marketplace that is regulated in such a way as to produce that result. What is needed is for governments to make policies that punish companies that take over whole markets and eliminate all competition. Keep companies smaller and owned by as diverse a group of owners as possible. Then, when some fail, it does not destroy the whole industry. The unemployed workers are simply hired by the surviving companies and opportunities are created for new companies. Engtrepreneurship and risk-taking should be encouraged and rewarded.

Just sitting there like a fat cat extorting taxpayers' money from governments because you are too large to be alllowed to fail is not risk-taking entrepreneurship. It is morally no better than running a protection racket. And it works only because we let them get away with it. Our problem is not that we have too much capitalism; we have too little and too much of what we have is of the wrong kind.