I recently asked the question at Ethika Politika, “Which Capitalism?” (also the title of my article), and I followed it up with a related question here regarding the relationship between distributism and capitalism (is the former a form of the latter?). In addition, Jordan Ballor reflected last week on the different orientation of definitions of capitalism and socialism, observing, “One definition [i.e. capitalism] is focused on structure, the other [i.e. socialism] is connected with moral ideals.”
Google Chairman Eric Schmidt defended the company’s practices [of taking certain tax exemptions], saying:
We pay lots of taxes; we pay them in the legally prescribed ways…. I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate.
So far so good. He didn’t make the rules that privilege his firm, but he will avail himself of these privileges when offered. I can sympathize. I oppose the mortgage interest deduction but still take it every April. Schmidt’s next statement, however, is about as far from the mark as one can get:
It’s called capitalism…. We are proudly capitalistic. I’m not confused about this.
A quick lesson for Mr. Schmidt: genuine capitalism is about competing on a level playing field for customer dollars. If you offer a superior product or service, customers will reward you by voluntarily parting with their money in exchange for what you offer.
Schmidt’s confusion it widespread, unfortunately, and it can make clear, charitable, and productive discussion very difficult. When many Christians say that they support the free economy, people hear it as supporting the status quo of cronyism, but that is rarely the case in my experience. If we hope to have intelligent discussions with those who disagree with us, on any issue, clear and charitable definitions of terms are essential. And that, of course, goes for terms other than capitalism as well.
Read the full post by Matt Mitchell at Neighborhood Effects here, and checkout the other posts referenced in this one by clicking on the hyperlinked text in the first paragraph above.