Winston Churchill said democracy is the worst governing system – except for all the others. Capitalism is the most moral of a bad lot of economic systems, but only when bound to conscience. Together, conscience and capitalism steer a middle course.
We launched this examination of economics a few weeks back with Erasmus’ advice: steer a middle course. John Fletcher Moulton described a middle course between free choice and law, where nations are “obedient to the unenforceable.” The breadth of the middle course is what makes a society great. That range is shrinking today.
Our three reigning models of economics veer toward law or free choice. Those who lean toward law “put enormous faith in the knowledge of experts,” writes Yuval Levin, especially political leaders. They tend to be naïve about human goodness, however, believing elites are best suited to selflessly seek the good of others. Al Gore gives the lie to that. In Washington, he looked to expand law. Since then, he’s swung to free choice, personally enriching himself to the tune of over $100 million.
Those who lean the other way, toward free choice, “put some modest faith in the knowledge of the people on the ground and empower them to try ways of addressing the problem incrementally,” David Brooks writes. But they tend to be “naïve about sin.” Free market folks understand networked power – Wall Street and Washington – but ignore how these interlocking networks often create self-serving arrangements.
In both cases, we’re becoming a society split between free market and big government advocates. Free market folks too often espouse atomism, what Charles Taylor defines as the rights of the individual being considered more important than any other duty or obligation. This accounts for the grab-all-you-can approach to executive compensation. In 1982, the chief executive-to-worker pay ratio was 42:1; in 2012 it was 354:1. On the other hand, those calling for government to play an expanded role in the economy fail to see how this too shrinks the middle course. In both cases, “an important part of humanity does not share in the benefits of progress,” as Pope Francis warns.1
How then do we resurrect the middle course, particularly in a post-Christian world? Two suggestions: learn to translate while thinking institutionally.
First, we must “find words to express the common values of the West whose origins may be religious, in terms that are graspable by those who no longer go through the doors of churches or synagogues,” Michael Novak writes. We need a faith that can “express these originally religious concepts in non-religious ways.”2 This can be done.
The “four-chapter” gospel (creation-fall-redemption-restoration) can be translated as our behavioral DNA: ought-is-can-will. Every individual and enterprise on earth operates by this DNA. It’s universal. It’s undeniable. The Bible also describes four types of conscience – healthy, Pharisaical, defiled, and seared. They can be translated as clear-eyed, arrogant, inward-bound, and shattered. Only a healthy conscience steers a middle course. Bad conscience veers toward license, spending wealth first on yourself. Or bad conscience veers toward law, appealing to an unhealthy sense of victimhood.
When economic institutions align with our DNA, pursuing conscientious capitalism, we steer a middle course. This is seeing prosperity as beneficial – for individual wellbeing as well as the common good. Conscientious capitalism believes everyone has the natural right to economic initiative and to enjoy the fruits of their labors. It believes abundance is for the benefit of all people, not just those at the top. This kind of capitalist recognizes that capitalism can indeed be destructive but sees the solution is not to reject economic liberty in favor of government coercive systems of collectivism. He or she believes that mediating institutions can regulate a free market, fostering greater productivity and prosperity. But this requires genuine human virtue, the product of a healthy conscience.
Second, we can resurrect the middle course in a post-Christian world by thinking institutionally. Tocqueville noted the role of mediating institutions in curbing bad behavior and encouraging good. In the economic sphere, mediating institutions include financial firms such as Goldman Sacks or Morgan Stanley. They also include the arts and media, which shape how we imagine the good life. For the faith community, thinking institutionally means doing the heavy lifting of getting a foot in the door and a place at the table at these institutions. That will take time to earn the necessary cultural capital.
Pope John Paul II wrote a 1991 encyclical calling the free-market system “the most efficient instrument for utilizing resources and effectively responding to needs.” In it, he reaffirmed the right to private property, rule of law and freedom to exchange goods and services. Yet John Paul blasted markets without morals, condemning a “consumer society” that “reduces man to the sphere of economics and the satisfaction of material needs.” This is why conscientious capitalism is the only corrective. It relies on a uniquely human capacity – conscience. David recognized it, warning that we should “not be like the horse or the mule, which have no understanding but must be controlled by bit and bridle” (Ps.32:9). Animals have no understanding of conscience. People can. When nations act in good conscience, they’re obedient to the unenforceable, seeking the common good. It might take a while to create the mediating institutions necessary to support this vision for economics, but it’s revolution we might be ready to support.
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1 Cardinal Timothy Dolan, “The Pope’s Case for Virtuous Capitalism,” The Wall Street Journal, May 22, 2014.
2 “North Atlantic Community, European Community: Divergent paths and common values in Old Europe and the United States,” a speech delivered by Michael Novak for the F.A. Hayek Foundation in Bratislava, Slovakia on July 3, 2003.