Posts tagged with: capitalism

That’s the subject of my most recent article at CrisisMagazine.com.

The new Crisis web site is a reinvigoration of the old Crisis magazine. Editor Brian Saint-Paul summarizes the history in his inaugural editorial. His statement of the vision of the new Crisis includes this:

In the name of Catholic Social Thought, many in the Church continue to promote ideas of political economy that would hurt the very people they intend to help, and often do so with the suggestion that their policies are required of the faithful. With the economy as it is, and Americans looking for the cause, this effort has only increased — as has its effectiveness.

And that’s why we’ve returned. In the days and months ahead, we will lay out a cumulative case that the principles of Catholic Social Teaching are best achieved through democratic capitalism, and that the rapid growth of the state is their greatest obstacle.

Confirmation of the importance of this initiative comes by way of this report on Catholic professors arguing that cuts to welfare programs contradict Catholic social teaching.

I look forward to being an occasional contributor to the Crisis site and I hope you’ll join me there (when you’re not spending time at the PowerBlog…)

Over the last several years I find myself more and more being drawn into conversation about religion—specifically, Orthodox Christianity—and economics. Originally, my interest in the economic side of the conversation was minimal. Embarrassing though it is to say now, I only took one economics class in college and while I got a “B” I was an indifferent student of the subject.

Thanks to personal friendships I’ve discovered the work of economists such as Ludwig von Mises and Fredrich A. Hayek—two dominant voices in the Austrian School of Economics. Even here though my interests were, initially at least, not so much in policy as methodology; unlike the quantitative and empirical approach I studied in college, the Austrian school conceives of economics more along the lines of the qualitative approach at the center of human science movement. This qualitative approach to economics has resulted in some interesting, and to my mind extraordinarily helpful and insightful, research into religion by scholars such as Laurence Iannaccone and Rodney Stark.

Among other things, the economic study of religion helps us understand why pluralism is good for religion in general but to the disadvantage of some religions in particular. Ironically, the free market in religion harms those liberal religious communities who value cultural pluralism and economic liberalism (in the contemporary American sense) but are suspicious, and even overtly hostile, to economic capitalism. On the other hand, those religious traditions that resist cultural pluralism and contemporary liberalism—but who often, though not universally—favor a free market approach to economics are the main benefactors of the free for all that characterizes the American religious landscape (see for example, Iannaccone, 1994).

Through this, circuitous route, I have lately come to an interest in economic public policy. Unfortunately such an interest is usually greeted with something less than enthusiasm—at least when (as in my case) you are an Orthodox priest. At the risk of making a gross generalization, clergy are typically as ignorant of economics and business as economists and business people are of moral theology and the ascetical tradition of the Church. Since I’m trading in stereotypes already, I would say that discussions between theologians and economists break down quickly since—intentionally or not—theologians assume economists are wicked even as economists assume that theologians are ignorant. Representatives of the two disciplines rarely understand each other because they rarely have even a basic grasp of the other academic discipline and the kinds of questions and concerns that its scholars seek to address.

This is why three small books published by the American Enterprise Institute are so welcome. The books (P. Wehner & A. C. Brooks, Wealth & Justice: The Morality of Democratic Capitalism; A. J. Pollock, Boom & Bust: Financial Cycles and Human Prosperity; S. F. Hayward, Mere Environmentalism: A Biblical Perspective on Humans and the Natural World) are part of AEI’s Common Sense Concepts series. They’re all short—each took just an afternoon to read—introductions to basic ideas in economics. What is especially important is that they do this in a way that takes seriously Christian moral concerns. Meant primarily for college students and written from a broadly Evangelical Christian perspective, singularly and together they offer a good ethical and practical defense of democratic capitalism.

That said though a defense of the American model of democracy and of the free market, these works do not allow either politics or economics to drive the conversation. Rather both are examined soberly in light of “merely Christianity.” I think the authors would all acknowledge, as Wehner and Brooks do explicitly in their book, that “capitalism, like American democracy itself, is hardly perfect or sufficient by itself” (p. 8). Both require “strong, vital, non-economic and non-political institutions—including the family, churches and other places of worship, civic associations, and schools—to complement,” sustain and (when needed) reform them.

But this symphonia is impossible without “an educated citizenry.” Such an education must be more than technical—essential though a sound technical foundation is. To fulfill the vision sketched out in these three books assumes that we possess personally what Peter Kreeft (1992) might call the “soft” virtues “such as sympathy, altruism, compassion” as well as the “hard” virtues of “self-discipline, perseverance, and honesty.” Like technological skill, personal virtue alone is insufficient. We need not only healthy, robust and vibrant families and churches, but also a political culture that supports and abides “by laws, contracts, and election results (regardless of their outcome). Without these virtues, capitalism [and democracy] can be eaten from within by venality and used for pernicious ends.”

Why are personal virtue and the rule of law essential? Because:

…capitalism, like democracy, is part of an intricate social web. Capitalism both depends on it and contributes mightily to it. Morality and capitalism, like morality and democracy, are intimately connected and mutually complimentary. They reinforce one another; they need one another; and they are terribly diminished without one another. They are links in a golden chain (p. 9).

As both an Orthodox Christian and a social scientist, seeing democratic capitalism in this way helps me understand how the ascetical and liturgical tradition of the Church can make a contribution to American civil society.

Especially for St Maximos the Confessor and St Gregory Palamas, the ascetical struggle does not extinguish desire (i.e., self-interest) as much as does purify it. As St Augustine argues, prayer, fasting and almsgiving teach me to order rightly the different elements of my life in light of the Gospel; asceticism points me beyond myself to Christ, helps me to love Christ, and in Christ to love my neighbor. Just as asceticism purifies my desires, the Church’s liturgical tradition provides me with a sense of the larger, eschatological context within which I live my life. Apart from such an eschatological experience, I will invariably and necessarily succumb to the temptation to take and make ultimate “the cares of this life” rather than to lay them aside as we hear in the Cherubic Hymn.

If Wehner and Brooks are correct, capitalism and democracy are “part of an intricate social web.” Understanding this social network requires not only personal virtue and just laws, but the eschatological vision that we receive in the sacraments and which we constantly accept and embody in the ascetical life.

In Christ,

+Fr Gregory

Work Cited:

Iannaccone, L. R. (1994). “Why Strict Churches Are Strong.” American Journal of Sociology, 99(5), pp. 1180-1211.

Kreeft, P (1992). Back to Virtue: Traditional Moral Wisdom for Modern Moral Confusion. San Francisco: Ignatius Press.

If you weren’t able to join us in person for the inaugural lecture of the 2011 Acton Lecture Series, fear not: today, we’re pleased to present Rev. Robert A. Sirico’s “Christian Poverty in the Age of Prosperity” for our loyal PowerBlog readers.  The lecture was delivered on February 3rd at the Waters Building here in Grand Rapids, Michigan.

The next lecture in the 2011 Acton Lecture Series takes place on March 16 and features Peter Greer, President of HOPE International.  If you’re interested in attending, click here to register.

Continuing our recap of last year’s Acton Lecture Series in anticipation of Thursday’s opening lecture of the 2011 ALS (which you can register for right here), we’re pleased to present the video from February and March of 2010.

On February 18, 2010, Acton’s Director of Media Michael Miller Delivered a lecture entitled “Does Capitalism Destroy Culture?” His lecture discussed the positive and negative impact of capitalism in society today. Miller pointed out that it’s not just Christians that are worried about culture and that it is just not a right or left issue. Many are also worried about rampant consumerism and the perceived danger of technology. Miller also addressed the Southern Agrarians and their conservative critique of industrialization. Video is below:

A month later on March 18, we welcomed Rudy Carrasco to our podium to deliver a lecture entitled “Do the Poor Need Capitalism?” A 2009 paper from the National Bureau of Economic Research says that the number of people in the world living on less than $1 per day fell from 403 million in 1970 to 152 million in 2006. An analysis from the American Enterprise Institute says the biggest factor was the rise of the middle class in China and India, at a time when the world’s population grew by 3 billion. Carrasco discussed whether capitalism is a greater asset than liability in the fight against poverty, and whether capitalism must be moderated by virtue and morality before a Christian can embrace it. Again, the video is below:

Blog author: jcouretas
Thursday, December 16, 2010
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In “Human Nature and Capitalism” on AEI’s The American, Arthur C. Brooks and Peter Wehner look at three different “pictures” of what it means to be human and point to the one, foundational understanding that has undergirded the flourishing American culture of democratic capitalism:

“If men were angels,” wrote James Madison, the father of the Constitution, in Federalist Paper No. 51, “no government would be necessary.” But Madison and the other founders knew men were not angels and would never become angels. They believed instead that human nature was mixed, a combination of virtue and vice, nobility and corruption. People were swayed by both reason and passion, capable of self-government but not to be trusted with absolute power. The founders’ assumption was that within every human heart, let alone among different individuals, are competing and sometimes contradictory moral impulses and currents.

This last view of human nature is consistent with and reflective of Christian teaching. The Scriptures teach that we are both made in the image of God and fallen creatures; in the words of Saint Paul, we can be “instruments of wickedness” as well as “instruments of righteousness.” Human beings are capable of acts of squalor and acts of nobility; we can pursue vice and we can pursue virtue.

And they draw a parallel to institutions of government where democracy, with all of its flaws, also works itself out to be the most fitting form of government under this model of human nature. When I engage with critics of the market economy, I use the following Churchill quote but substitute “market economy” for “democracy.” Valid, I think, because we have some disastrous experience with political systems that do not operate in concert with a more or less open market.

Many forms of Government have been tried and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time. — Winston Churchill (House of Commons, Nov. 11, 1947)

Brooks and Wehner:

… our “picture of human nature” determines, in large measure, the institutions we design. For example, the architects of our government carefully studied history and every conceivable political arrangement that had been devised up to their time. In the course of their analysis, they made fundamental judgments about human nature and designed a constitutional form of government with it in mind.

What is true for creating political institutions is also true for economic ones. They, too, proceed from understanding human behavior.

It is hard to overstate the importance of this matter. The model of human nature one embraces will guide and shape everything else, from the economic system one embraces (free-market capitalism versus socialism) to the political system one supports (democracy versus the “dictatorship of the proletariat”). Like a ship about to begin a long voyage, a navigational mistake at the outset can lead a crew to go badly astray, shipwreck, and run aground. To use another metaphor, this time from the world of medicine: A physician cannot treat an illness before diagnosing it correctly; diagnosing incorrectly can make things far worse than they might otherwise be.

Those who champion capitalism embrace a truth we see played out in almost every life on almost any given day: If you link reward to effort, you will get more effort. If you create incentives for a particular kind of behavior, you will see more of that behavior.

A free market can also better our moral condition—not dramatically and not always, but often enough. It places a premium on thrift, savings, and investment. And capitalism, when functioning properly, penalizes certain kinds of behavior—bribery, corruption, and lawlessness among them—because citizens in a free-market society have a huge stake in discouraging such behavior, which is a poison-tipped dagger aimed straight at the heart of prosperity.

Read the full article on The American.

I just sent off a draft of a brief review of Carl Trueman‘s new book Republocrat: Confessions of a Liberal Conservative to appear in the next issue of Religion & Liberty. (You can get a complimentary subscription here).

I recommend the book as a very incisive and insightful challenge to any facile and uncritical identification of the Christian faith with particular political and economic ideologies.

Here’s a snippet of the review:

[Trueman’s] project is not about demonizing capitalism, wealth, or profits one the one hand, or political power on the other. It is about putting the pursuit of profit and power in its proper place. Thus what he writes about the market applies equally well to the government: “no economic system, least of all perhaps capitalism, can long survive without some kind of larger moral underpinning that stands prior to and independent of the kinds of values the market itself generates.” It is in this larger and prior system of belief and action, the Christian faith, that we are to seek our primary identity and unity, and in pursuit of this Trueman’s book is a bracing and worthwhile effort.

I have been saying in various venues for quite some time now that Trueman’s book can be read as a kind of complement to my recent book, Ecumenical Babel: Confusing Economic Ideology and the Church’s Social Witness. But whereas Trueman’s proximate context is the conflation of conservative politics and the Christian faith by evangelicals, my book’s context is the conflation of progressive politics and the Christian faith by mainline ecumenists.

But both books share a basic thesis that, in Trueman’s words, “The gospel cannot and must not be identified with partisan political posturing.”

The Hastert Center at Wheaton College will host a debate tomorrow night between Jim Wallis, president of Sojourners, and Arthur Brooks, president of the American Enterprise Institute, on the question, “Does Capitalism Have a Soul?” Washington Post columnist Michael Gerson will moderate.

In framing the debate, Dr. Seth Norton, Hastert Center director, notes in the press release:

“It’s a good chance to compare different visions of capitalism and market economies, and to discuss the role of government in those economies. There is a lot of debate on these issues in secular venues, but this is a chance to hear two people who have a spiritual common denominator address complicated issues related to economic systems, and that’s a rare event.”

The event begins at 7 p.m. and is open to the public.

Blog author: jcouretas
Thursday, October 7, 2010
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In the “Wealth Inequality Mirage” on RealClearMarkets, Diana Furchtgott-Roth looks at the campaign waged by “levelers” who exaggerate and distort statistics about income inequality to advance their political ends. The gap, she says, is the “main battle” in the Nov. 2 election. “Republicans want to keep current tax rates to encourage businesses to expand and hire workers,” she writes. “Democrats want to raise taxes for the top two brackets, and point to rising income inequality as justification.”

This is a constant refrain from the religious left, which views the income or wealth gap as evidence of injustice and grounds for reforming political and economic structures. In the video posted here, you’ll see Margaret Thatcher, in her last speech in the House of Commons on November 22, 1990, brilliantly defending her policies against the same charge.

Furchtgott-Roth zeroes in on a recent interview with Robert Reich, Secretary of Labor for President Bill Clinton and now a professor at the University of California, Berkeley.

[Reich said:] “Unless we understand the relationship between the extraordinary concentration of income and wealth we have in this country and the failure of the economy to rebound, we are going to be destined for many, many years of high unemployment, anemic job recoveries and then periods of booms and busts that may even dwarf what we just had.”

Mr. Reich is wrong. He and other levelers exaggerate economic inequality, eagerly, because they rely on pretax income, which omits the 97% of federal income taxes paid by the top half of income earners and the many “transfer payments,” such as food stamps, housing assistance, Medicaid and Medicare. This exaggerated portrait of inequality undergirds the present effort by the Democrats to raise income tax rates for people with taxable incomes of $209,000 a year on joint returns and $171,000 a year on single returns.

A more meaningful measure of inequality comes from an examination of spending. On Wednesday the Labor Department presented 2009 data on consumer spending, based on income quintiles, or fifths. This analysis shows that economic inequality has not increased, contrary to what the levelers contend.

Much of the discussion around this issue from the left uses the data to portray America as a heartless land of haves and have-nots. Here’s a quote from a Sept. 28 AP story on new census data, including income figures:

“Income inequality is rising, and if we took into account tax data, it would be even more,” said Timothy Smeeding, a University of Wisconsin-Madison professor who specializes in poverty. “More than other countries, we have a very unequal income distribution where compensation goes to the top in a winner-takes-all economy.”

Here’s an amazing statistic: The average 2009-10 faculty salary at Wisconsin Madison was $111,100. But the median household income for all Americans in 2007 (a roughly parallel comparison) was just over $50,000. Isn’t something out of whack here? Isn’t this evidence of severe economic injustice demanding structural reform? Sounds to me like the Bucky Badger faculty has been helping itself to second and third helpings at the “winner-take-all” buffet.

The faculty at Prof. Reich’s school do even better on average income: $145,800. I suspect some celebrity professors might even be … above average.

This is from “Capitalism: The Continuing Revolution,” an article by Peter Berger in the August/September 1991 issue of First Things. Emphasis mine.

… recent events have added nothing that we did not know before or, more accurately, should have known as social scientists or otherwise as people attentive to empirical evidence. The crucial fact here, of course, is the vast superiority of capitalism in improving the material standards of living of large numbers of people, and ipso facto the capacity of a society to deal with those human problems amenable to public policy, notably those of poverty. But, if this fact had been clear for a long time, recent events have brought it quite dramatically to the forefront of public attention in much of the world, and by no means only in Europe. It is now more clear than ever that the inclusion of a national economy in the international capitalist system (pace all varieties of “dependency theory”) favors rather than hinders development, that capitalism remains the best bet if one wishes to improve the lot of the poor, and that policies fostering economic growth are more likely to equalize income differentials than are policies that deliberately foster redistribution.

[ … ]

to opt for capitalism is not to opt for inequality at the price of growth; rather, it is to opt for an accelerating transformation of society. This undoubtedly produces tensions and exacts costs, but one must ask whether these are likely to be greater than the tensions and costs engendered by socialist stagnation. Moreover, the clearer view of the European socialist societies that has now become public radically debunks the notion that, whatever else may have ailed these societies, they were more egalitarian than those in the West: they were nothing of the sort. One must also remember that, comparatively speaking, these European societies were the most advanced in the socialist camp. The claims to greater equality are even hollower in the much poorer socialist societies in the Third World (China emphatically included).

Blog author: rnothstine
Wednesday, September 29, 2010
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Whittaker Chambers began Witness, the classic account of his time in the American Communist underground, with the declaration: “In 1937, I began, like Lazarus, the impossible return.” The line was most of all a deep recognition of the power of God to redeem what was once dead. Witness was a landmark account of the evils of Communism but most importantly a description of the bankruptcy of freedom outside of the sacred. “For Chambers, God was always the prime mover in the war between Communism and freedom. If God exists then Communism cannot,” says Richard Reinsch II. And it is Reinsch who reintroduces us to Chambers, the brilliant intellectual, anti-communist, and man of faith in Whittaker Chambers: The Spirit of a Counterrevolutionary.

After his exodus from the Soviet Communist spy network in Washington, Chambers then outed U.S. State Department official Alger Hiss as a communist, setting up a dramatic espionage trial played out before the nation. Chambers became a household name thanks to a trial that was wrapped in intrigue, treachery, and Cold War drama. Chambers would become a hero for many in the conservative movement. William F. Buckley, Jr. called him the greatest figure who defected out of communism. But Chambers’ pessimism about the future of the West led him to be dismissed by many others, conservatives too.

This pessimist view of the survival of the West against Marxism stems from Chambers’ understanding that the West was abandoning its sacred heritage of Christian thought, and within it, the proper understanding of man. A supposedly free but rampant secular and materialistic society still leads to the same ending as Marxism, outside of God, and unable to explain its reason and purpose for life.

One of the chief takeaways from this book is that there must be more to conservatism than free-markets and limited government. For liberty to be prosperous it must be oriented toward greater truths. Reinsch points out that Chambers understood that the “West must reject Communism in the name of something other than modern liberalism and its foundation in the principles of Enlightenment rationalism.”

Reinsch delves into Chambers prediction of the eventual collapse of the West and his belief that there was a lack of moral fortitude to combat the communist surge. The apparent unwillingness of the free world to sacrifice and suffer for freedom troubled Chambers. He also surmised that the intellectual class possessed a waning ability to articulate a meaningful defense of the ideas and value of the free society.

The United States did indeed emerge as the leader of the free world after the Second World War, rebuilding its former enemies with the Marshall Plan and other programs. Early on, the United States and Western Europe showed a stoic and moral resistance throughout the Berlin Airlift of 1948 and 1949. Future presidential administrations would pledge support for free people who toiled anywhere across the globe. President Ronald Reagan emerged in the latter half of the 20th Century, unveiling his own crusade against communism, making many of the deeper spiritual contrasts with the Soviet system first articulated by Chambers.

Reinsch also notes that while Chambers perhaps underestimated some of the spiritual will and capital to resist and overcome the Marxist onslaught, most of Chambers’s identification of the sickness of the West remained true. Reinsch declares of an America in the 1960s and 1970s:

Racked by mindless violence, strikes, rampant inflation, economic torpidity, and the rapid unfolding of sexual liberation, liberal democracy seemed to display, in acute form, the crisis of a material progress that had been severed from faith and freedom. Thus, the spirit of Chambers’s brooding over the fate of the West retained relevance.

This is evidenced in part by the immense suffering of Hanoi Hilton POWs like Admiral Jeremiah Denton, who in his captivity memoir When Hell Was in Session, described the disconnect of a man who sacrificed so much for freedom and who came out of the dark night with a deep sense of spiritual renewal only to come home to unearth an increasingly secular nation that was also retreating in its ability to defend and define its greatness.

Reinsch even points to further evidence that Chambers was right about the dangerous trajectory of the West when he cites the victory of the Cold War and how that surge of freedom did not posit any great change or realization of a higher transcendent understanding and purpose. While the superiority of markets was temporarily buoyed by the events, socialism has shown a staying power in the West.

Reisnch has crafted an important and essential book for anybody fatigued with the daily grind of hyper-partisan politics. By reintroducing conservatives to a deep thinker like Chambers, he reminds us of the limits of politics as well as the frustrating shallowness it can embody.

Just as markets and small government offer little ability in offering peace and happiness, though they certainly create greater space for a working towards that end, this account is a reminder that the best of conservatism is at its core within the ancient truths that tower above the vain materialism and individualism of secular Western democracy.

Believers can see this clearly when they look at the vanity of a society that prods, primps, and chases after meaning outside of God. Thus, as Reinsch adds, Chambers so wholly understood that “man’s problem was the problem of understanding himself in light of his fundamental incompleteness.” And that problem exists under communism just as it does in democratic capitalism, with its temptations to consumerism and selfishness.

The Marxist Utopian dream was man’s attempt at trying to fulfill its incompleteness with all the wonders and technology of modernity and materialism. The free world still is unable to relocate itself in the proper order. And, as Reinsch declares, this is a great warning to us all. Chambers so thoroughly understood and knew that “man was never more beastly than in his attempts to organize his life, individually and collectively, without God.”

Blog author: jballor
Monday, September 20, 2010
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Victor Claar, Acton University lecturer and professor of economics at Henderson State University, will give a talk tonight in Washington, D.C., hosted by AEI, “Grieving the Good of Others: Envy and Economics.”

If you are in the area, you are encouraged to attend and hear Dr. Claar as well as two respondents discuss the topic of envy and its moral and economic consequences.

Here’s a description of the event:

Critics of capitalism often argue that this economic system is irretrievably tainted by the sin of greed. They claim that by empowering government to “spread the wealth around” we can free ourselves from the tyranny of greed, purging the influence of sin. But are they right? At this event, Victor Claar, associate professor of economics at Henderson State University, will discuss the role of envy in collectivist and redistributive economic systems. Beginning with an explanation of the classic theological understanding of envy, Claar will argue that “grieving the good of others” is an unavoidable aspect of social democracy.

Update: The audio and video of the AEI event is now available. (There’s a nice plug for Acton University at the beginning.)

Tomorrow Dr. Claar will also be appearing as part of The King’s College Distinguished Visitor Series in NYC.

Dr. Claar is co-author of Economics in Christian Perspective: Theory, Policy and Life Choices as well as author of the Acton Institute monograph, Fair Trade? Its Prospects as a Poverty Solution.

As Dr. Claar will elaborate, the question that epitomizes envy, which is defined as “sorrow at another’s good,” is the self-centered concern, “What about me?” For fans of the hit TV series Lost, I can think of no better illustration of this than the turn from envy to malevolence in this climactic confrontation between Ben Linus and Jacob from the conclusion of season 5: