What Is This Wicked Capitalism?

One of the difficulties that comes in discussing the many “isms” that populate the landscape of political discussion is that very often people use the same words without mean the same things, or indeed without having any clearly defined idea of what they do mean. While this is the case with nearly any ism (socialism, liberalism, libertarianism, conservatism, etc.) I’d like to address in this case the way in which opponents (particularly Christian opponents) of “capitalism” tend to address the object of their condemnation. This is in some ways a beautifully typical example of a Christian opponent of capitalism attempting to describe what it is he is condemning:

We must remember the capitalistic system we live in also is a materialistic ideology which runs contrary to the Christian faith, and it is a system which is used to create rival, and equally erroneous, forms of liberation theology. It is as atheistic as Marxism. It is founded upon a sin, greed. It promises utopia, telling us that if we allow capitalist systems to exist without regulation, everyone, including the poor, will end up being saved. The whole “if we allow the rich to be rich, they will give jobs to the poor” is just as much a failed ideology as Marxist collectivism.

Admittedly, this is a somewhat muddled set of statements, but I think we can draw out of it the following statements which the author, and many other self described critics of capitalism (in particular from a religious perspective) believe to be true:
-Capitalism is a system or ideology much as Communism is.
-Capitalism is based on greed or takes greed to be a virtue.
-Capitalism is a materialistic or atheistic philosophy/system.
-Capitalism could be summed up as the idea that “if we allow the rich to be rich, they will give jobs to the poor”
-Capitalism promises utopia if “capitalist systems” are allowed to exist without regulation.

While one approach to this is simply to throw out the term “capitalism” entirely, what I’d like to do is accept that claim that we live in a “capitalist” system and that this system is roughly what libertarians/conservatives advocate, and proceed to address the claims made about “capitalism” in that context.

Capitalism is a system or ideology much as Communism is.
People are often most comfortable dealing with dualities, and so it’s natural for people to want to see capitalism and communism as a matched pair. However, I think it’s reasonable to question whether there is such a thing as a capitalist “system”. Communism is, after all, a specific plan for how a state should function based on a vision of collective ownership of the means of production by the state as a representative of the workers. Capitalism, on the other hand, is generally defined as “an economic system in which the means of production are privately owned and operated for a private profit; decisions regarding supply, demand, price, distribution, and investments are made by private actors in the market rather than by central planning by the government”. As such, there are clearly many different ways in which a capitalist system might function, the only real requirement is that some person or entity other than the government be the owner of the means of production.

Capitalism is based on greed or takes greed to be a virtue.
This is one of the most common complaints about capitalism, yet I am the least clear where it comes from. How exactly is capitalism based on greed?

One explanation is that the accusation is based on the power of prominent negative examples. You see a stock trader making vast sums of money and living it up in an obvious fashion and you conclude, “This is what capitalism allows, clearly capitalism is based on greed.” Of course, in that case, one might as well look at a good communist country such as North Korea, note the way that party luminaries live compared to ordinary workers, and conclude that communism is based on greed as well.

Another approach would be to accuse capitalism of being based on greed because it is based on the theory of incentives. Ask a free market supporter why he supports private ownership over state ownership, and he’s likely to tell you that it incents people to work harder and more efficiently. Does this mean that capitalism only works better than collectivism because it harnesses the power of greed?

Not necessarily. The fact is, we human beings have a limited ability to respond to abstract situations. If someone can see how his work directly leads to providing both necessities and desired luxuries to himself and his loved ones, he will tend to work much harder than if he sees no connection between his work and any result which he clearly recognizes as good.

Labeling this tendency to respond better to perceivable benefits as “greed” seems rather harsh — one might as well say that cooking is motivated entirely by gluttony.

Capitalism is a materialistic or atheistic philosophy/system.
This seems to be a simple case of confusing a system of limited scope with a system which actively denies everything not included in it. Capitalism is, at most, a type of economy which fits certain broad standards: privately owned means of production, emergent order rather than central planning, relatively free trade, etc. As such, it simply doesn’t address questions of what the purpose of life is, what one should do with wealth, whether God exists, etc. This doesn’t necessarily mean that it is atheistic or materialistic any more than the fact that the theory of gravitation does not address God’s existence or whether you should throw your grandmother out a window makes gravity materialistic and atheistic.

Capitalism could be summed up as the idea that “if we allow the rich to be rich, they will give jobs to the poor”
I’m conflicted as to whether to plead guilty to this, or to disagree with it. On the one hand, it seems to me that as capitalism is not, like communism, a utopian ideology (see next) it does not necessarily make any predictions as to what will happen to “the rich” or “the poor” given private ownership of the means of production. On the other hand, if in a capitalist system it is generally owning the means of production (and thus reaping the benefits of their operation) which makes people most wealthy, than it stands to reason that the rich will give jobs to somebody (assumedly someone less wealthy than they) because owning the means of production will not do them any good if they are not worked. So generally, in a capitalist economy, people will only become wealthy through means that do end up providing lots of other people with jobs. And since people who attain wealth usually want to buy goods and services with that wealth, and since the means of providing those goods and services will be privately owned, the spending of the wealthy will usually involve paying money to others — typically others who are less wealthy than they.

One could also simply appeal to the empirical and point out that while the rich in a “capitalist” country like the US may be slightly richer than Kim Jong Il or the Castro brothers, the big difference is that the poor in the US are far better off than the poor in North Korea or Cuba.

Capitalism promises utopia if “capitalist systems” are allowed to exist without regulation.
There are a lot of truly foolish people in the world, and so I’m sure that in a fit of enthusiasm one such person who supports capitalism has done something along the lines of promising utopia if free market systems are left unregulated. However, I think it’s pretty clear that most people who advocate capitalism do so simply because private ownership of property (including the means of production) is what has predominated through most of history, and they’d like to keep muddling along as things have been in the past. As such, it is very far from being a utopian system.

Certainly, it is much different in this respect from communism, which was described by Marx as being a transformative system which would be reached at the end of a series of human social and historical evolutions, and which would result from and in human nature becoming different than in the past. If anything, capitalism is based very much on the assumption that human nature will remain the same as it has been in the past.

31 Responses to What Is This Wicked Capitalism?

  • Donald R. McClarey says:

    “If anything, capitalism is based very much on the assumption that human nature will remain the same as it has been in the past.”

    And that is one of the safest predictions about the human condition that anyone can ever make.

  • Both capitalism and Marxism promised to point out the path for the creation of just structures, and they declared that these, once established, would function by themselves… And this ideological promise has proven false.

  • Jay Anderson says:

    The closest thing one might find to a “Capitalist Manifesto” would be Wealth of Nations. Although Smith argues that free market economies are more productive and more beneficial for society, I don’t recall anything that “promise[d] to point out the path for the creation of just structures”.

    Of course, it’s been 20+ years since I read it, so my memory may be faulty.

  • The closest thing one might find to a “Capitalist Manifesto” would be Wealth of Nations. Although Smith argues that free market economies are more productive and more beneficial for society, I don’t recall anything that “promise[d] to point out the path for the creation of just structures”.

    To be honest, I haven’t read Wealth Of Nations since college, though I did read Theory Of Moral Sentiments fairly recently. I’m not sure I’d say Smith really seems to talk about “just structures” one way or the other. He thinks that freer trade will tend to result in better outcomes, and that’s about as far as he goes. Morally he’s a very psycholical/emperical kind of fellow, and as such it seems to me that while he’s very solid on how people tend to relate to each other and to experiences, he’s not the sort you’d turn to for any kind of sweeping moral vision.

    It we take Smith as the “Mr. Capital” of capitalism, it seems to me that capitalism is the very opposite of utopian.

  • T. Shaw says:

    Excerpted from a WSJ Letter to the Editor, today:

    FDR got by because almost no one understood how bad government policy distorts the economy by misallocating resources. Today many understand that the current recession is rooted in the massive distortions caused by the (bipartisan) political crusade for making home ownership affordable to nearly everyone.

    In the 1930s very few people understood that government policies meant to stimulate the economy are counterproductive. Today, in contrast, we have abundant evidence that further government interventions can only prolong and increase our economic distress. Many knew that the “stimulus” spending would fail to lower unemployment even before the bills were passed. Now only deep idealogs believe more government action will be our salvation.
    Better economic comprehension today is creating very choppy waters for President Obama and his party.

    Before my lib genius brothers get your knickers in a bunch, here’s a pithy quote from Congressional Research Service; 2/1/2010; “Government Interventions in Response to Financial Turmoil” – Summary:

    “ . . . an unprecedented housing boom turned to a housing bust.”

    And, you can thank Andrew Cuomo and Christine Gillibrand for it.

    I am not current with on the books. I’ve been working in this financial services whirlwind for 33 years, and his is the fourth or fifth (and direst, is tha a word?) financial crisis I’ve experienced.

    What is just about mass brigandage? – Whether I do it or the government, it’s theft.

  • For those mocking Pope Benedict, you might want a longer quote:

    The problems of Latin America and the Caribbean, like those of today’s world, are multifaceted and complex, and they cannot be dealt with through generic programmes. Undoubtedly, the fundamental question about the way that the Church, illuminated by faith in Christ, should react to these challenges, is one that concerns us all. In this context, we inevitably speak of the problem of structures, especially those which create injustice. In truth, just structures are a condition without which a just order in society is not possible. But how do they arise? How do they function? Both capitalism and Marxism promised to point out the path for the creation of just structures, and they declared that these, once established, would function by themselves; they declared that not only would they have no need of any prior individual morality, but that they would promote a communal morality. And this ideological promise has been proved false. The facts have clearly demonstrated it. The Marxist system, where it found its way into government, not only left a sad heritage of economic and ecological destruction, but also a painful oppression of souls. And we can also see the same thing happening in the West, where the distance between rich and poor is growing constantly, and giving rise to a worrying degradation of personal dignity through drugs, alcohol and deceptive illusions of happiness.

    Ask Blosser if you need help finding what Pope Benedict has said. He has it on his Ratzinger blog. Oh, and btw, you just proved my point. Thank you. Good bye.

  • Henry,

    Your attempt to quote Benedict completely out of context, and then accuse others of mocking him, does not say much for your ability to engage the topic at hand, or indeed comprehend it.

    Proof-testing is not argumentation, nor a valid path to knowledge, as you should well know.

    Benedict is not addressing the relative merits and differences of Marxism and capitalism as systems in that passage, nor their origins or natures. Rather, he is relating historically how attempts to treat either Marxism or capitalism as if they would, in and of themselves, create just systems, failed in the Latin America.

    The key difference between capitalism and Marxism in this respect, as I pointed out and you have failed or refused to understand, is that is that capitalism is not in the first place a utopian system that claims to have such an ability.

  • Blackadder says:

    Funny to see the great Catholics mocking Pope Benedict here.

    This post mocks Pope Benedict in the same way that jokes about grown men living in their parents’ basement mocks the traditional family.

  • Joe Hargrave says:

    I don’t even think he wrote that as pope.

    But some people love blindly following authorities more than they do thinking. A lot of popes have said a lot of things about a lot of economic issues. But there have been no decrees forbidding anyone from starting a business and making a profit.

  • Donald R. McClarey says:

    “This post mocks Pope Benedict in the same way that jokes about grown men living in their parents’ basement mocks the traditional family.”

    Best comment of the week BA!

  • Actually, I would agree with the more full Benedict quote (though perhaps Henry would not) and indeed would go further and say that no economic system will create just structures by itself and without prior individual morality by promoting communal morality. It is not in the capacity fo an economic system to do such thing.

  • Joe Hargrave says:

    Ah. I stand corrected. Still, I’ll wait for the statement that says we can’t start businesses or make profits.

    On the other hand, we do have pretty clear denunciations of socialism, such as I referenced in my last post.

    The neo-Calvinists at Vox Nova, though, holding to their view of the depravity of man, believe that a large managerial state is the necessary requisite of charity and justice.

    If only they could see how it destroys and mocks both.

  • Foxfier says:

    Maybe a better way to “sum up” capitalism in one little sound bite would be “if you let people control their own resources, they’ll make better choices”? Or maybe “Each person is best suited to watching his own interests”? Still a bit broad for an economic system…. Maybe “Let people spend their own money, and they won’t waste as much”?

  • Henry,

    Where did capitalism “promise to point out the path for the creation of just structures”? Was that in the Capitalist Manifesto written by Mr. Capital?

    “Was that in the Capitalist Manifesto written by Mr. Capital?”

    ROFL

    —-

    The comments were mocking a quote of Pope Benedict. It is clear how clueless the people who comment here really are. I just quoted that text. You can’t say I said anything out of context– I just quoted the text. And the text you mocked. And you can’t get away from “the bigger quote is fine.” You mocked what the quote says.

    People can see. You have been shown for what you are. Spin as you want, the words of the Pope were ridiculed.

  • “Actually, I would agree with the more full Benedict quote (though perhaps Henry would not) and indeed would go further and say that no economic system will create just structures by itself and without prior individual morality by promoting communal morality.”

    Then why did you attack a post which said just that?

  • Henry,

    You quoted one line of Benedict’s out of context in a way that suggested:

    - They were your own words written specifically to respond to the post
    - That you were attempting to argue by assertion that capitalism did, in and of itself, as a system, make the promise that it would create just structures

    Given that you had provided no back-up for this assertion, this was rather mockable. and the whole gambit becomes more so when you fall into this whole “you mock Benedict” line. Now, if you want to say any thing in response to the actual post, that would be most welcome. Conversations are best when they are two way. For instance, perhaps you have an importanit source or thinker you would like to cite which you believe demonstrates that capitalism is widely believed or represented to create just structures on it’s own and irrespective of individual morality.

    However if your going to continue this silly “you mock the pope” line without bothering to address the topic at hand, I’ll simply leave your comments inthe moderation queue, as further travel down that road would go well past silly and into pathetic.

  • RL says:

    Actually we already passed pathetic in the Political Miscellania thread where mocking the selfish, gravely slothful and exploitive was turned into mocking the tradional family.

    Plagiarizing is a new low. It doesn’t matter if the intent was to decieve the readers into thinking the plagiarist was more insightful than he actually is or if it was a shallow and immature attempt to win a self-serving gotcha point. It’s just a shameful new low. I’ve seen a lot of silliness on the internet and regretably contributed to it, but I have never witnessed a thing such as this.

  • Henry apparently has gotten into one of his fits where he alone discerns that his opponent has betrayed their true wickedness, and will spend the rest of the thread denouncing the opponent as revealing their darkness, while every other onlooker is bewildered at what he’s talking about. It won’t matter if you explicitly tell him you don’t think what he ascribes to you, for he has secret knowledge about your views that not even you know. Quite sad, really.

  • c matt says:

    The neo-Calvinists at Vox Nova, though, holding to their view of the depravity of man, believe that a large managerial state is the necessary requisite of charity and justice.

    But even a large managerial state is made up of depraved men, so it does not seem to be a solution to the depravity of man.

  • Pinky says:

    “Capitalism is based on greed or takes greed to be a virtue.”

    This is asserted by people on the right and left who lack an understanding of virtue as the golden mean. A proportionate interest in profit isn’t greed. It’s appropriate. Profit is a means to an end; the goal is freedom from want. Greed is an excess; animosity towards the flesh is the corresponding absence.

    The Randers get a kick out of saying that greed or selfishness is a virtue. It’s kind of sad, because they’re doing it to “shock the squares”, even though no one’s been shocked by a Rander in decades. As ideologues, they are attracted to extremes, so they err toward an excess of desire for wealth.

    The left sees the capitalist embrace of wealth and assumes it’s an excess. They point to the Trumps of the world and believe that the capitalist sees him as a role model. It’s possible to see the profit motive as virtuous and still recognize Trump as the embodiment of every embarrassing vice.

  • T. Shaw says:

    I believe the Pope is infallible in matters of Faith and Morals. I do not think that quote infers that a person who kept himself sane and sober and worked hard for a livin to support his wife and children as best he could AND does not believe that the overnment is a solution, but a problem is an evil person.

    If so, I imaine the vatican has unli9mited funds.

  • Zach says:

    And then, Henry was silent.

    You write with clarity and truth Darwin. It would be nice if your critics responded to the actual words and ideas written in these excellent posts.

  • sal says:

    Well, I think Spengler had already caught on to the idea that capitalism and socialism/marxism/communism are but two sides to the same coin. Of course in practice it’s a continuum. But what I’m trying to say is that it’s all people’s attempts to cope and hopefully thrive in a post-Fall context–and they aren’t aware that a fall occured. Economic and political systems have a tendency to dispense with God and to rival his kingdom’s claims.

  • Elaine Krewer says:

    “Labeling this tendency to respond better to perceivable benefits as “greed” seems rather harsh — one might as well say that cooking is motivated entirely by gluttony.”

    Or that marriage is motivated entirely by lust, or that asking for days off from work is motivated entirely by sloth. Or that the invention/discovery of fire was motivated by a desire to commit serial arson. ANY human desire or tendency can become sinful if indulged to excess; that doesn’t negate the fact that there is usually a legitimate and beneficial way to exercise that desire.

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