Missing the Mark on Capitalism

America has published a lengthy essay by Arthur Brooks, defending the compatibility of capitalism and Catholic social teaching. Brooks is a writer worth reading, even if one disagrees. And Brooks is not wrong to say that sometimes progressive Catholics are excessively anti-market or anti-capitalism. The point should be taken, and a more productive conversation could be had if sloganeering critiques of capitalism per se were more carefully developed. But the essay also displays the limitations of the argument Brooks is trying to make, and does so with immense clarity.

Three images do considerable work in this essay, and each of them mislead. (Each of them can also be found throughout standard defenses of capitalism.) The first is the story of life as “nasty, brutish, and short” before the coming of free market capitalism, which then emerges and lifts billions out of poverty. The second is the appeal to the televisions and air conditioners of the poor as evidence that capitalism in fact makes everyone better off, and so we should worry less about inequality. And the third is the the defense of the status quo by pointing to certain examples – so, for example, defending American equality by comparing it to China and Argentina – while ignoring other examples that might be more helpful in developing a capitalism compatible with human flourishing.

The first image should be accepted, but with significant qualifications. What has actually created a sustainable widespread prosperity is not simply the free market, but the free market circumscribed by strong institutions infused with moral convictions. Now, that’s still market entrepreneurship and exchange driving things forward, but one that is managed and guided by a social process. By conjuring up images of crony capitalism and command economies as the dreaded alternative, Brooks ignores the fact that a strongly-regulated economy – as America had increasingly from the early to late 20th century – is the correct model. This is stated quite clearly in a well-known passage from John Paul II’s Centesimus Annus, which should more often function as the baseline in these sorts of discussions:

“Can it perhaps be said that, after the failure of Communism, capitalism is the victorious social system, and that capitalism should be the goal of the countries now making efforts to rebuild their economy and society? Is this the model which ought to be proposed to the countries of the Third World which are searching for the path to true economic and civil progress?

The answer is obviously complex. If by "capitalism" is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a "business economy", "market economy" or simply "free economy". But if by "capitalism" is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative.” (#42)

But, Brooks might ask, what caused the prosperity? Isn’t it the market? This is like asking whether capital or labor caused a business to grow. The fact is capital without labor is useless, and labor without capital is not very productive. So government regulations of anemic enterprises (or perhaps government enterprise itself) won’t necessarily help things, but simple unrestrained enterprise is destructive on multiple levels and in short order.

Catholic free market defenders like Brooks would be well-advised to spend more time articulating with precision the “strong juridical framework which places [the market] at the service of human freedom in its totality.” If conservatives took this responsibility with seriousness, then perhaps we could get past the canard that government regulation is always and everywhere a hindrance to business and prosperity.

The second image, of the poor whose lifestyles benefit from material goods unavailable to the richest kings of two centuries ago, also has some merit, but ignores the key point that Brooks himself makes later on about real prosperity. Real prosperity does not consist in TV’s and air conditioning and smartphones, but in other things that the market not only does not provide readily, but in fact endangers. Secure employment, reliable and efficient health care, good schools – these were, as Robert Putnam displays vividly in his example of his hometown, available to rich and poor in Port Clinton, Ohio in the 1950’s. But now they are gone.

As with the first image, Brooks’s case ignores complexity. It imagines some kind of easy distinction between the acquisition of possessions and some other set of non-material goods. In fact, a good like secure employment at a job which embodies what John Paul II calls “the subjective value of work” is something that is simultaneously material and immaterial. These sorts of mixed goods very frequently have what economists Fred Hirsch and Robert Frank call “positional” qualities, since both their production and consumption are to some degree relative to that of others. Because the “miracle” of simply increasing productivity does not suddenly make millions more good schools or secure jobs, the market at the very least can’t solve this problem of inequality. But often enough, by subjecting these things to market competition, they make things worse. Thus, as schooling becomes more competitive and positional, wealthier actors respond (rationally) by allocating more and more of their incomes to buying houses in “the best” school districts.

Thus, the third problem is that Brooks authorizes his perspective by referring to other examples – the old stock example of command economies, and then the new stock examples of crony capitalism. Why doesn’t Brooks refer to, say, Canada or Germany or Japan? I am not saying that these nations are perfect. But they are much more interesting as comparisons in which the US may fall short. Of course, as Brooks would be right to point out, they are all capitalist countries. But none are the too-often-cited small “utopias” of Scandinavia, either in terms of size or socialism. Again, the image Brooks uses to make his case needs to be complexified.

At bottom, Brooks reproduces the fundamental dualism of material and spiritual that Christian defenders of capitalism always seem to rely on. Perhaps the most objectionable portion of Brooks’s article is at the end, where, after worrying that capitalism (for all its good effects) may be bad for the soul, claims it is not… because we can be “detached” from our wealth. This is an almost entirely fallacious argument. I am sure Brooks can cite many Church Fathers who recommend detachment, but I can cite others who are much more forthright in denouncing specific possessions. Call it a draw. The real issue is not citing this or that ancient authority, but the issue of how “detachment” is supposed to exist for those who live in contemporary capitalist economies. It is simply false to imagine a psychology where one can, on the one hand, have a system that encourages maximum competition and maximum consumption from as much of the population as possible, and on the other, be “detached” from this and put faith and family first. One has to imagine a powerful system which reshapes society by encouraging acquisitiveness and luxury, and then turn around and claim that the problem is with these vices, not with the system itself. At best, this is something possible for a few people of immense privilege in a market economy, most notably (a) those fortunate enough to be shielded quasi-monopolist industries where there is security to make grand gestures of generosity along with pots of money, and (b) those fortunate enough to receive and live off of some of the largesse of these gestures. But for the middle manager at Walmart, the franchisee on the Indiana highway, the swing shifter in a factory barely hanging on, the taxi driver going under – this is just absurd. And it is even more absurd to think that we can have a culture of relentless overconsumption of absurdities (on which the current economy depends) by agents who are, at the same time, detached and responsible and sober Christians. The social encyclical tradition agrees with me on this point about consumerism, and Brooks conveniently ignores it.

Still, if Brooks is serious about this claim, then at least he should be leading the charge to name and call out (in the Church) those who are in fact clearly not at all “detached” from their possessions, but spend enormous time and energy on their luxuries. Who can deny that such economic promiscuity is probably even more widespread in our parishes than the sexual promiscuity with which moralists are often obsessed? Addressing this would be a good thing.

But it would not be adequate to the gospel. It would be like those whom Pope Benedict critiques in Caritas in Veritate for believing that charity and generosity are simply supposed to go on “after” the “neutral” market transactions take place. Benedict, by contrast, wants to infuse markets themselves with “quotas of gratuitousness,” a phrase which if taken seriously would require a radically altered Econ 101 that assumed different things about agents and about the sort of economy that would be optimal. That is, what Brooks should be aiming for is a different sort of market economy – not “defending” the market, but transforming it by embedding it in a moral ecology of persons, groups, and institutions that actually calculate a maximization of the flourishing of the person and (I might add) the natural ecology on which that flourishing depends.

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David Cloutier is an associate professor of theology at the Catholic University of America and the author of Walking God’s Earth: The Environment and Catholic Faith.

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