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.
On Public Discourse, Acton Research Director Samuel Gregg observes in a new piece that “while moral beliefs have an important impact upon economic life, the manner in which they are given institutional expression also matters. This is illustrated by the different ways in which people’s responsibilities to those in need—what might be called the good of solidarity—are given political and economic form.”
… the rather modest welfare and labor-market reforms presently being implemented in Spain, Greece and France have sparked considerable moral indignation (and not just from welfare recipients) despite widespread acknowledgment that such reforms are inevitable. Obviously there are many whose negative reaction is partly driven by consciousness that such reforms mean that the days of not-very-demanding jobs for life may be numbered. Nevertheless it’s also true that many Western Europeans genuinely believe the good of solidarity is threatened by efforts to move beyond the present and economically unsustainable status quo, precisely because of the state-oriented institutional expression given by Europeans to the surely uncontroversial proposition that we are our brother’s keeper.
While Americans are often regarded as more individualistic than Western Europeans, this perception is partly driven by the different economic and institutional expressions that Americans have often given to the idea of concern for neighbor. This was among one of the distinguishing features of America that struck the French social philosopher Alexis de Tocqueville when he visited the United States between 1831 and 1832. The emergence of social and economic problems, Tocqueville noted, did not elicit demands from Americans for the government to “just do something.” Indeed, Tocqueville marveled at the relative absence of government from American life and the corresponding vitality of civil society, especially when compared to the state’s all-pervasive presence in his native France.
Tocqueville quickly realized, however, that this “absence” of the state was not symptomatic of a callous disregard by Americans towards their fellow citizens in need. Though Americans tended, Tocqueville noted, to dress up their assistance to others in the language of enlightened self-interest, he observed that Americans usually expressed the value of helping those in need through the habits and institutions of free and voluntary association. In short, Tocqueville wrote, Americans banded together to try and resolve social and economic problems through voluntary associations. Some of these associations (like churches) had a more-or-less permanent presence in American society. Others lasted only as long as a particular economic or social problem persisted. As a consequence, the same pressures for centralized top-down government-led solutions and all their economic implications that prevailed in France were not present in the young American republic.
Read all of “Socialism and Solidarity” on the Public Discourse website.
A Tale of Two Europes
By Samuel Gregg
The word “crisis” is usually employed to indicate that a person or even an entire culture has reached a turning-point which demands decisions: choices that either propel those in crisis towards renewed growth or condemn them to remorseless decline.
These dynamics of crisis are especially pertinent for much of contemporary Europe. The continent’s well-documented economic problems are now forcing governments to decide between confronting deep-seated problems in their economic culture, or propping up the entitlement economies that have become unaffordable (and morally-questionable) relics in today’s global economy.
While some European governments have begun implementing long-overdue changes in the form of austerity-measures, welfare-reforms, and labor-market liberalization, the resistance is loud and fierce, as anyone who has visited France lately will attest.
No-one should be surprised by this. Such reforms clash directly with widespread expectations about employment, welfare, and the state’s economic role that have become profoundly imbedded in many European societies over the past 100 years. Yet it’s also arguable this is simply the latest bout of an on-going clash of economic ideas which goes back much further in European history than most people realize.
Certainly the contemporary controversy partly concerns the government’s role during recessions. From this standpoint, Europe (and America) is rehashing the famous dispute between the economists Friedrich von Hayek and John Maynard Keynes in the 1930s about how to respond to the Great Depression. Should we, as Hayek maintained, react by giving markets the flexibility they need to self-correct? Or do we prime the pump à la Keynes? (more…)
For the first time in my life, I began to weakly contemplate the possibility that things were not as I had been told. There I was, still spewing words of hate against America and out of nowhere, and based only on my achievements, I had been offered a reward. Why? About a year before my arrival, I was leading an anti-American campaign in my hometown of Isabela calling on young Puerto Ricans to refuse to fight in the first Persian Gulf War. Paying for anti-American propaganda posters myself, I took pleasure in distributing hundreds of them calling for the refusal. Why? Why offer me any benefit at all? Yet, America embraced me and gave me opportunities I never dreamed of.
I soon found myself attended by heretical thoughts that I never before anticipated. A revolutionary wave was sweeping across my soul and I fought it with iconoclastic zeal. It is not possible, not for me. The fall of the Berlin Wall threatened to pierce another nail in the coffin of my self-confident ideology. It was not supposed to happen. Beginning to read what I previously considered meaningless “Yankee” propaganda, the shades of socialist orthodoxy suddenly failed to come to my rescue and a new world opened before me. One day, I picked up Mr. Horowitz’s book because the theme sounded familiar. I had no idea who he was at that time. As I read his account of his childhood, I wept often at his stories and anecdotes, as they brought familiar pains and similar situations to me in the context of my beloved father. Not being able again to talk to my father about my views and to see friends still hurts me.
Read “Climbing out of the Communist Faith” on FrontPageMag.com.
Acton’s Research Director in the American Spectator:
Europe’s Broken Economies
By Samuel Gregg
During September this year, much of Europe descended into mild chaos. Millions of Spaniards and French went on strike (following, of course, their return from six weeks vacation) against austerity measures introduced by their governments. Across the continent, there are deepening concerns about possible sovereign-debt defaults, stubbornly-high unemployment, Ireland’s renewed banking woes, and the resurgence of right-wing populist parties (often peddling left-wing economic ideas). Indeed, the palpable sense of crisis left many wondering if some European economies have entered a period of chronic decline — one which might eventually reduce Europe to being a bit-player on the world stage.
Obviously we should avoid over-simplification. In Germany and Sweden, for instance, unemployment is declining while economic growth and exports are rising. Not coincidentally, both countries have implemented significant economic reforms over the past ten years. To the audible disappointment of the world’s left-wingers, Sweden is no longer Social Democracy’s poster-child.
Nor can Europe’s present woes be explained in mono-causal terms. Like America, property-bubbles and over-leveraged financial industries played a role in some countries’ meltdowns. But not every European nation presently enduring economic hardship experienced banking crises on the scale experienced by Ireland and Britain.
It will be decades before economists and historians completely diagnose what’s happened to Europe’s economies since 2008. Many, however, will likely conclude that many European countries’ economic culture helped them lurch into seemingly unending crisis.
“Culture” is one of those heavily over-used words. But in sociological and historical terms, “culture” is a way of describing, among other things, the approach to life, the values emphasized, attitudes toward work, the understanding of law, and ultimately the view of science, the arts and religion prevailing in a given society. Over time, these form a type of inheritance that can remain relatively stable in particular historical settings over several generations. (more…)
In this week’s Acton Commentary, I remember German reunification and reflect on its relevance for the present.
Twenty years ago this Sunday, East and West Germany reunited, capping one of the most extraordinary transformations in modern history. Communism in the Soviet Union and its eastern European satellites had collapsed; the oppressed nations of Europe rejoined the “free world.”
My generation was the last to straddle the two worlds, pre- and post-Soviet Union. When I was in elementary and high school, fear of atomic annihilation was real. The USSR was the great, looming adversary on the world stage. Debate over the strategy of “mutually assured destruction” was the ominous focus of international policy discussions.
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.”
Chinese Communism is no longer about ideology. Now it is about power.
I reached this conclusion on the basis of six months spent in China and extensive conversations with my Chinese friend and fellow Acton intern Liping, whose analysis has helped me greatly in writing this post.
China began moving away from Communist ideology under Deng Xiaoping, whose economic reforms disassembled communes and created space for private businesses. He justified these reforms to his Communist colleagues with the saying, “It doesn’t matter if the cat is white or black as long as it catches the mice,” implying that even “capitalist” policies were justified if they succeeded in bringing economic growth. And they certainly did. Since that time, China’s economic development has been tremendous, so now Chinese people overwhelmingly approve of the reforms.
Despite the success of the opening of China’s markets, the country has not completely embraced free enterprise. The PRC’s 60th anniversary celebration last fall featured signs boldly proclaiming, “Socialism is good.” The government still controls key industries such as oil and runs enterprises in many other industries.
Further, all land in China is owned by the government. Home buyers are technically only leasing land for 70-year periods, a policy established assuming that by that time, the houses will need to be rebuilt anyway. The government sometimes sells land inside cities to developers for vastly inflated sums of money, evicting the people who already live there. The remuneration that these people receive is frequently less than the value of the house, forcing them to find inferior housing elsewhere. These policies have made housing within cities prohibitively expensive for most Chinese people, forcing them to commute from the suburbs.
Despite these continued regulations, economic freedom in China has made significant advances compared to its previous completely collectivized state. Enterprise is permitted and even encouraged, as is trade with the outside world. As people come to recognize the benefits of free markets, more and more are becoming eager to participate, which will make it much more difficult for the government to restrict these freedoms again in the future.
However, this economic freedom does not imply political freedom. Deng Xiaoping, the same leader who had spearheaded the economic reforms, was responsible for the Tiananmen Square crackdown on protesters for political reform. That incident twenty years ago is only one of the better-known examples of the political suppression that still occurs today.
The government holds a monopoly on the media, dominates the flow of information, and censors any ideas it finds potentially threatening. It blocks access to web sites that range from information on tense political issues to social networking sites like Facebook and YouTube. When I was studying there, during a one-on-one session a teacher asked me what I knew about the Tiananmen Square massacre, admitting that due to censorship I probably knew more about it than she did. When we had finished the discussion, she erased all relevant vocabulary from the board, saying that she didn’t want anyone to know what we had talked about. Through the high school level and frequently afterward, students are indoctrinated with Marxist philosophy, and studies of literature are focused exclusively on nationalistic or patriotic themes. Political dissent is strictly censored, and dissenters are often denied work or restricted from moving or publishing their work.
According to Liping, most new members of the Communist party do not actually believe in Marxism; they just see membership as a way to improve their chances of finding a good job. Similarly, officials suppress opposing ideas, not because they are persuaded of the truth of Marxism but because they want to prevent dissent and opposition to their own party. Promoting Marxist ideas serves as a way to silence political rivals and to enforce popular support for their own rule. The first Chinese communists sought power to serve their ideology, but today’s Chinese communists use ideology to preserve their power.
The expansion of economic freedom coupled with the continued political repression may seem like a contradiction, and indeed areas with more trade connections like Shanghai also have more political freedom than government centers like Beijing. Yet fundamentally, this paradox exists because of the shaky foundation for what freedom they do have.
Deng Xiaoping’s justification for moving away from Communist economic ideology was based solely on pragmatic reasoning. He figured that since the Communist system was failing miserably, changing economic systems might bring prosperity, a prediction that has been proven true. Yet abandoning the one-party state did not have any such obvious benefits. In fact, retaining a monopoly on political power was in the leaders’ personal interest. They could even argue that it was good for the nation, creating what current president Hu Jintao euphemistically calls a “Harmonious Society” unified by common political beliefs.
In the West, arguments for freedom are closely tied to belief in individual rights which the government cannot legitimately violate. These beliefs originated in the Christian view that people have special dignity because they are made in the image of God. This foundation means that even if it would be expedient for the government to restrict freedom, it has no right to do so. Officials may not always act to preserve the people’s freedom, but in violating freedom, they behave inconsistently with their own ideals.
In contrast, the Chinese Communist Party is consistent in pragmatically following policies that they think will be beneficial, whether they increased freedom or not. Freedom can bring tremendous practical benefits, which is what one would expect of a concept based on a true vision of human nature. Yet these practical benefits alone do not constitute freedom’s foundation. The freedom the government gives pragmatically, it can take away when freedom is no longer practical, or when the benefits it provides are less obvious.
Thus, what China lacks is not merely policies that allow people to act freely but an understanding of the essence and importance of freedom. Freedom cannot be guaranteed by government pragmatism, but only by a genuine understanding of the rights of the people within the country, coupled with leaders who are willing to restrain their desire for power in order to respect these rights.
I think that the oppression threatening democracies will not be like anything there has been in the world before….
I see an innumerable crowd of men, all alike and equal, turned in upon themselves in a restless search for those petty, vulgar pleasures with which they fill their souls….
Above these men stands an immense and protective power which alone is responsible for looking after their enjoyments and watching over their destiny. It is absolute, meticulous, ordered, provident, and kindly disposed. It would be like a fatherly authority, if, fatherlike, its aim were to prepare men for manhood, but it seeks only to keep them in perpetual childhood; it prefers its citizens to enjoy themselves provided they have only enjoyment in mind. It works readily for their happiness but it wishes to be the only provider and judge of it. It provides their security, anticipates and guarantees their needs, supplies their pleasures, directs their principal concerns, manages their industry, regulates their estates, divides their inheritances….
Thus, it reduces daily the value and frequency of the exercise of free choice; it restricts the activity of free will within a narrower range and gradually removes autonomy itself from each citizen. Equality has prepared men for all this, inclining them to tolerate all these things and often even to see them as a blessing.
Thus, the ruling power, having taken each citizen one by one into its powerful grasp and having molded him to its own liking, spreads its arms over the whole of society, covering the surface of social life with a network of petty, complicated, detailed, and uniform rules through which even the most original minds and the most energetic of spirits cannot reach the light in order to rise above the crowd. It does not break men’s wills but it does soften, bend, and control them; rarely does it force men to act but it constantly opposes what actions they perform; it does not destroy the start of anything but it stands in its way; it does not tyrannize but it inhibits, represses, drains, snuffs out, dulls so much effort that finally it reduces each nation to nothing more than a flock of timid and hardworking animals with the government as shepherd.
I have always believed that this type of organized, gentle, and peaceful enslavement just described could link up more easily than imagined with some of the external forms of freedom and that it would not be impossible for it to take hold in the very shadow of the sovereignty of this people.
Alexis De Tocqueville, 1840.
Democracy in America, pp. 805-6.