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Friday, June 22, 2012

Capitalism And Christianity - Part Two

By Dan

What does Christianity have to do with capitalism? The system of capitalism finds its relationship with the Church in that it stems from a shared core principle concerning man's condition. Capitalism is based on the premise that Man is not basically good but quite the opposite. The so-called father of capitalism, Adam Smith, illustrates this in his treatise The Wealth Of Nations:
A puppy fawns upon its dam, and a spaniel endeavours by a thousand attractions to engage the attention of its master who is at dinner, when it wants to be fed by him. Man sometimes uses the same arts with his brethren, and when he has no other means of engaging them to act according to his inclinations, endeavours by every servile and fawning attention to obtain their good will. He has not time, however, to do this upon every occasion. In civilised society he stands at all times in need of the cooperation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons. ... [M]an has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages".
By adopting Smith’s prescription, the founding fathers aligned our economic system with reality through the assumption that man would be much more productive, innovative and industrious if doing so would be beneficial to himself. Thus was born what would become one of the freest and wealthiest societies ever enjoyed by Man.

The ideas that formed American capitalism however were not instituted in a vacuum, but in the bosom of a predominately Christian culture. In such a culture in which the individual held himself eternally liable before a Holy and Righteous God, he was more inclined to exercise self-governance and restraint according to an objective standard. These standards then guided his decisions, not only as they pertained to his own life and his interaction with resources, but also as they pertained to every sphere of his influence, including the selection of his leaders. This predominate mindset of the populace, which was subjugated to a higher order, made for fertile soil for capitalism's seed to be planted and flourish. However, as it turns out, equal opportunity and economic freedom naturally produce unequal ends. In a a society with a sense of moral bearings this is generally attributed to providence and so does not present a problem, but it is not suffered well in a society that is not only disparaging of honor, but that also is burdened by a perverse sense of entitlement, envy and covetousness ... and which has no suspicion of those seeking power through promises of a Utopian society.

Central to the health of capitalism is the Church's teaching on the truths regarding man's sinful condition. Never mind, for the moment, that this teaching is key to understanding the Gospel, and as such, key to the health of the Church and its Kingdom mandate, for I am attempting here to answer an economic question. The fact remains that the modern Western "Church" has become either unable or loath to make man’s depravity a focal part of her doctrine. This transformation of focus in central doctrines taught by the Church has had a destructive effect on capitalism for a couple of reasons.

First, capitalism is dependent on fidelity. As I pointed out earlier, capitalism produces a few fabulously-well-to-do individuals. But just as important is that it also produces comfortable masses with relatively modest excesses in resources. Fidelity allows for the masses to pool their resources to create an almost unfathomable concentration of wealth.  This wealth then plays an important role in the economy. For one, it doesn't lie dormant, hidden in post holes and mattresses, but rather it becomes productive through investment. Also, its productivity produces a return which not only fuels the economy but also helps to sustain people when they become too old to work. These principles can be seen in current 401-k retirement plans, though this principle was in place long before tax deferment laws were enacted.

It is these massive concentrations of wealth that has been responsible for many advancements through research that would have otherwise been unachievable due to insurmountable expenses. Such advancements include the development of drugs and medical procedures, the willing slave of affordable energy and advances in technologies, to name a few. But the same wealth also awakens the greed and envy resident in the heart of man. If there is no objective truth by which to judge all things, then we are left with a syllogism that looks kind of like this:
1. Men are good
2. I am man.
3. What I do is good.
With this view man can rationalize the greed in his own heart while, incidentally, retaining his right to judge greed in others. The system breaks down as the wealthy are judged as greedy simply because they were successful at accomplishing what those who judge them could not. In addition to this the wealthy begin to judge each other also. You have millionaire politicians judging millionaire businessmen, and millionaire businessmen judging millionaire politicians. In addition, you have millionaire Hollywood stars, who seem to somehow be above judgment, judging them all. All of this judgmentalism revolving around the greed of others while justifying the greed in one's own heart is not confronted from within with any sense of providence, honor, or a accurate understanding of the true condition of the heart of man; not to mention a sound understanding of the economic system in which it is all taking place.

In such a fidelity-starved environment the idea of pooling one's wealth becomes a fool's errand as increasing numbers feel justified in their own actions. Contracts are broken, loans are forsaken, capital is siphoned off by currency printing, onerous regulations, corruption, ponzi schemes, fraud, theft, bribes and so on. Worse, many who justify their own participation in these destructive actions have their own meager resources invested in the system their actions are playing a part to destroy. This is like a snake biting off its own tail for spite. Those with modest means will eventually have no option but to withdraw them, convert them to an historically stable currency such as scarce metals, then remove them from the economy by burying them, so to speak. This is one reason a rise in the price of gold can be a negative indicator of the health of an economy. As resources are withdrawn there is a corresponding reduction in new resources which results in a domino effect toward a reduced standard of living for the masses.

Second, capitalism is dependent on a productive society. Since man's banishment from Eden he has worked tirelessly to reenter. One way man goes about this is to make his way in life off the sweat of his neighbor's brow. The capitalistic system is a system that is dependent on the pooled resources gained by the sweat of one's own brow. The necessary relationship between work and provision has been thwarted in the past by the outright enslavement of man by his fellow man. Contrary to popular belief, this act hasn't ended, the methods have changed. Now rather than enslaving a few men and making an ugly spectacle, masses are partially enslaved for the benefit of a few through what has become euphemistically known as wealth redistribution.

Liberty and it's cousin capitalism are not hardy social or economic systems. They can exist only in environments in which the ideas on which they stand tenaciously cling to objective reality. Once man's true condition is rejected by the society at large, it no longer accepts reality but rather an alternate reality based more on how man thinks things ought to be than how they actually are. This then releases man to embrace the folly that some men can be trusted to siphon wealth from others and redistribute it more fairly, and all will be just fine with the idea as Utopia looms on the horizon. Suppressed and maligned become the healthy suspicions that once met those who promised such a Utopian society.1, 2, 3 Instead schemes are invented that are designed to exchange votes and campaign donations for largess. We saw a battle along these lines recently in Wisconsin as out of control state liabilities consisting of promised largess to government union members threatened the state’s fiscal health. However, as larger numbers of people become unproductive by living off the confiscated wealth of their neighbors, ever more amounts of siphoned resources are required. These resources are then withdrawn from productivity to non-productivity. This is like the snake eating the tail that it bit off assuming it will provide nourishment. It is counter to capitalism, it is counter to a Biblical view of the world, and in a more sane society it would be counter to common sense.

So, in conclusion, what has the Church to do with capitalism? In a word: “nothing”. In summing up the answer however we would do well to rearrange the question and ask, rather, "What has capitalism to do with the Church?” And like every other question that man asks along these lines, the answer is "everything". Many who worship at the altar of capitalism have not asked this question and their beloved system is crumbling as a result ... and they provide a thousand reasons why ... and it continues to crumble. Ditto for family, marriages, joy, happiness, and every other thing that man endeavors to do without God in his few short hours in this life.


1 In Democracy in America Alexis de Tocqueville had this to say in the 1830's concerning concerning America's constitution:
The Constitution of the United States is like those exquisite productions of human industry which ensure wealth and renown to their inventors, but which are profitless in any other hands. This truth is exemplified by the condition of Mexico at the present time, The Mexicans were desirous of establishing a federal system, and they took the Federal Constitution of their neighbors, the Anglo-American, as their model, and copied it with considerable accuracy! But although they had borrowed the letter of the law, they were unable to create or to introduce the spirit and the sense which give it life. They were involved in ceaseless embarrassments between the mechanism of their double government; the sovereignty of the States and that of the Union perpetually exceeded their respective privileges, and entered into collision; and to the present day Mexico is alternately the victim of anarchy and the slave of military despotism. (page 189)
2John Adams: "Because we have no government, armed with power, capable of contending with human passions, unbridled by morality and religion. Avarice, ambition, revenge and licentiousness would break the strongest cords of our Constitution, as a whale goes through a net. Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other. Oaths in this country are as yet universally considered as sacred obligations. That which you have taken, and so solemnly repeated on that venerable ground, is an ample pledge of your sincerity and devotion to your country and its government."

3F. A Hayek in "The Road To Serfdom" (written during WWII) had an interesting comment in the introduction of his book on page 57 (in my copy) that I think applies here as well:
... [H]istory never quite repeats itself, and just because no development is inevitable, we can in measure learn from the past to avoid repetition of the same process. One need not be a prophet to be aware of impending dangers. 'And accidental combination of experience and interest will often reveal events to one man under aspects which few yet see. The following pages are the product of an experience as near as possible to twice living though the same period... While this is an experience one is not likely to gain in one country, it may in certain circumstances be acquired by living in turn for long periods in different countries. ...Thus, by moving from one country to another, one may sometimes twice watch similar phases of intellectual development. The senses have then become peculiarly acute. When one hears for a second time opinions expressed or measures advocated which one has first met twenty or twenty-five years ago they assume a new meaning as symptoms of a definite trend. It is necessary now to state the unpalatable truth that it is Germany whose fate we are in some danger of repeating... It is not to the Germany of Hitler; the Germany of the present war, that England and the United states bear yet any resemblance, But students of the currents of ideas can hardly fail to see that there is more than a superficial similarity between the trend of thought in Germany during and after the last war and the present current of ideas in the democracies.


Marshal Art said...

Really, really good posts (parts 1 & 2).

Danny Wright said...

Thank you Marshall.