Capitalism and its Contradictions

Capitalism and its Contradictions November 12, 2012

A friend asked me to clarify some comments I made about capitalism in my First Things piece last Friday. Thinking there may be wider interest in the question, I offer a revised version of my answer to him.

As a starting point, let me clarify that the term “capitalism” here refers to the actual economic form that has evolved over the past several centuries. It does not refer to a theoretical ideal of a “free market.” Capitalism as a historical ordering of economic life has not taken shape in a “state-free” zone. In many places (including the US), industrial capitalism was promoted if not created by the state. Whatever the theoretical virtues of a state-free free market, it is not the economy we have or have ever had. One may reserve the word “capitalism” for the ideal free market; that is anyone’s semantic prerogative. But I don’t.

This definition puts us in a particular stance toward capitalism from the outset. If “capitalism” means an ideal of economic freedom, one might give it unqualified support. One might even say that the American economy might be far better off if it conformed to the capitalist ideal. Theoretical models can be pure, historical societies and economies are not. Since we’re talking about a historical form, we have to discriminate between goods and lesser goods and evils, pluses and minuses and things in between.

My essay alludes to Daniel Bell’s The Cultural Contradictions Of Capitalism: 20th Anniversary Edition . Bell wasn’t quite the prophet he aimed to be. He didn’t anticipate the revival of capitalism’s fortunes that happened with Reagan and Thatcher (though he did predict the collapse of the USSR), and he certainly didn’t anticipate that capitalism could thrive in the hands of Bobos. But he identified some real tensions in capitalist democracies – structural tensions between the aims of economic life and the aims of politics and culture, and tensions between the virtues needed for capitalism to succeed and the desires that its success tends to arouse. He worried that capitalism is so good at responding to and meeting consumer desires that its slick efficiency inhibits the development of settled public moral standards.

As Bell argued, the capitalist system has had a corrosive effect on families and traditional societies. Sometimes the structures that it destroys need to be destroyed, and the benefits are worth the costs. But when, for example, the notion of consumer choice infiltrates families and sexuality (which it has), then big social problems follow. Sometimes the corrosions arise because the wealth capitalism generates enable people to pursue morally questionable fantasies. Sometimes the corrosions have happened because the state broke up traditional patterns of life in the name of “modernization” or “industrialization.” Capitalism’s infatuation with novelty spills over beyond the economy. (That image is a problem, since the economy is never bounded off from the rest of life in the first place.) Whatever the cause, my goal was to point out that promoting capitalism might inhibit other goals of the religious right.

In my essay, I made some noises concerning the “preferential option for the poor.” As a matter of biblical theology, this needs to be worked out carefully. Torah instructs judges to be indifferent to social class, but then the prophets constantly inveigh against Israel for abusing the poor and marginal. In my judgment, the best way to synthesize those two emphases is this: The rich and well-connected always have ways of getting fair (or better than fair) treatment in the legal system. But the poor and poorly connected get fair treatment only when the legal system is truly just. So the test is always whether the poor have a fighting chance to get justice. The wonderful Mamet film The Winslow Boy provides a dramatic illustration of the principle: A boy takes on the British Navy over a false accusation about something he did at military academy, and the boy wins!

The point is broader than the legal system, though. The test of whether our economy is healthy is not primarily a growing GDP or growing profits for the Forbes 100. The prophets devote far more attention to whether the least have their material needs taken care of. In many societies (ancient empires, the Soviet Russia, Maoist China), the top classes got wealthier and wealthier while the poor starved by millions or suffered in slavery. Those are not, obviously, just societies.

The question is: What social and economic order best promotes the good of the poor? It’s clear that the massive American welfare system is not the way to take care of the needs of the poor; quite the opposite. Any statist system is dangerous, if not outright evil. Some of the basic features of capitalist economies are crucial to forming a just economy: Free markets and protection of property rights are good for the poor (as Henando de Soto has emphasized). Elijah, Isaiah, and Amos stood up for the property rights of small landowners against the machinations of the wealthy. Further, Scripture provides various models for how the church can address poverty – gleaning laws and even the Old Testament slavery laws offer much food for thought. The economic system that best secures and protects families is also the best economic system for the poor; family breakdown is often a cause of poverty, and even where it is not a cause, it regularly accompanies poverty.

Of course, there’s no either-or choice. In a just society, there are opportunities for expanding wealth and also opportunities for the poor to rise from poverty as well structures for the relief of poverty. Both are social goods, but the test of whether the society is just is the latter not the former.

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