Dr. Douglass is assistant professor of government at Georgetown University, Washington, D.C.
This article appeared in the Christian Century, December 1, 1976, pp. 1072-1076. Copyright by The Christian Century Foundation; used by permission. Current articles and subscription information can be found at www.christiancentury.org. This material was prepared for Religion Online by Ted and Winnie Brock.
Socialists believe that there is a fundamental moral distinction to be drawn between a system that encourages people to be greedy and one that instead encourages them to acquire only what they truly need. Capitalism is designed primarily to prevent the objectives which socialists seek, and its adherents will strongly resist the measures necessary to adapt private enterprise to anything seriously approaching a socialist program.
Much of the political comment coming from theologians these days has a socialist flavor. I was surprised, therefore, to find a theologian arguing the case for capitalism in the editorial pages of the Washington Post ("A Closet Capitalist Confesses," March 14, 1976). Especially was it surprising to find Michael Novak in this role, for in a previous incarnation he was one of the early proponents of a theology for radical politics. Not only does Novak admit to being a "closet capitalist" (acknowledging the truth of Michael Harrington’s charge about liberals in the United States), but he also sets forth elements of a theological argument for the superiority of capitalism over socialism.
Making the World Free for Sinners
Actually Novak makes two cases -- one political, the other theological. The former calls into service two time-tested claims of capitalism’s defenders: (1) that the free market yields greater efficiency and productivity than socialist economies, and (2) that it results in greater freedom. Novak raises the specter of a whole economy run with the well-known efficiency of the U.S. Postal Service, and then attributes to capitalism most of the world’s productivity:
Millions are alive, and living longer, because of medicine developed under capitalism. Without our enormous psychic energy, productivity and inventions, oil would still be lying under Saudi Arabia, undiscovered, unpumped and useless. Coffee, bananas, tin, sugar and other items of trade would have no markets. Capitalism has made the world rich, inventing riches other populations didn’t know they had. And yielding sinful pleasures for the millions.
The only way socialism can possibly work at all, we are told, is by being authoritarian. Lacking the incentive of greed, people have to be coerced into producing. At the same time great power is concentrated in the hands of politicians, bureaucrats and experts. They make the momentous decisions that determine the fate of millions. The result is a command society -- a result which, Novak suggests, no self-respecting liberal would want. Democratic socialists are hard put to cite an example, he notes, of a model socialist society. Everywhere we look -- China, Cuba, Tanzania, eastern Europe -- socialism means the same thing: the domination of society by huge, ponderous government bureaucracies.
Why is this the case? The theological part of Novak’s analysis provides the answer: capitalism is more congruent with human nature -- i.e., with humanity’s sinful nature. It accepts selfishness as a fact of life; it doesn’t require any illusions about the innate goodness of people. "God’s heart may have been socialist; his design was capitalist as hell." Given the freedom to sin, human beings have of course taken abundant advantage of the opportunity, and the only way to create a productive and free society is to cater to selfishness. Socialism, presuming goodness, "‘never works," whereas capitalism, building upon greed, "is nearly always a smashing success."
Sin thus accounts for the greater productivity of capitalism; it also accounts for the greater freedom it allows. Capitalism "makes the world free for sinners"; it tolerates people’s doing what they will. Socialism, dedicated to the cultivation of benevolence, can’t leave people alone. Human beings have to be made over; sin has to be eliminated. All the while, of course, socialists place great faith in the goodness and wisdom of the politicians and social planners.
In short, capitalism is realistic while socialism is naïve. For this reason, the future belongs to capitalism. A social system built on illusion simply cannot succeed -- not in the long run.
But such arguments make little headway with socialists, says Novak, because, contrary to appearances, socialism is not really a practical political proposal at all. It is a faith, a secular religion, "the residue of Judaeo-Christian faith" minus the theistic component and minus the idea of sin. It is a belief that paradise can be brought to earth here and now by human action. In the face of such a belief, practical considerations are "beside the point."
A Fixation with Profits
When I first read this "confession," I suspected that Novak was putting us on -- that it was all tongue-in-cheek. The mid-1970s are not, after all, the most auspicious time for a spirited defense of capitalism. Devaluations, unemployment, inflation, problems with OPEC -- the catalogue of serious economic problems suffered by capitalist societies in the past few years does not inspire confidence. The more I thought about it, however, the more I concluded that he was serious and the more I felt that his argument called for a reply.
At the risk of being dismissed as a naïve visionary who can’t face up to reality, I want to suggest that the choice between capitalism and socialism is considerably more complex than Novak would have Washington Post readers believe. I have come to take his argument seriously, both because there is some truth in what he says and because he articulates sentiments widely held in this country. The problem is that his view expresses only half the truth. He conveniently overlooks certain other considerations favorable to socialism; when these considerations are given their due, even some practical people unafflicted by the need for a secular religion will find the alleged superiority of capitalism something less than obvious.
The socialist case against capitalism has never, to my knowledge, challenged the productivity of the free market. That has not been the issue. There is no better hymn of praise, after all, to the achievements of capitalism than the Communist Manifesto. The socialist critique has been based on other grounds -- specifically, the use of the productive resources which capitalism generates. Because of the fixation with profits, capitalist use of this productivity necessarily is far less rational and humane than it could be.
Examples abound, but to my mind the most graphic case in point is the American automobile industry. Year after year, decade after decade, we witness the spectacle of Detroit’s efforts to sell ever-increasing numbers of cars designed for quick obsolescence, though it has been clear for some time now that considerations of both space and air quality dictate that we move toward some alternative transportation system. Both transportation and ecology experts tell us that we cannot go on indefinitely multiplying the number of cars on our streets and highways without serious costs to our physical and psychological well-being. Yet this is precisely what the health of the economy is said to require.
Food production offers other illustrations. Chemical additives in our food, possibly harmful, are justified as a convenience to the producer and seller. Short of unequivocal prohibition by the government (which the industry strongly resists), these additives continue to be used because they enhance the appeal and durability of food products. The meat looks pinker; the baked goods last longer on the shelves -- even if they actually may be less healthful! Then there is the irony of underproduction. For many years now the federal government has been paying farmers not to produce foodstuffs, while millions, in this country and abroad, go hungry, The rationale, once again, is economic necessity: prices and profits must be maintained at a level sufficient to stimulate production.
The energy crisis is another case in point. Now that there are no lines at the gas pumps and the scare has faded, consumers are once again being encouraged to use energy in all kinds of ways, many of them patently frivolous. The crisis is hardly over, of course, but the imperatives of the market require that we stop worrying about energy conservation.
Underlying the whole system is, of course, a consumption ethic, which John Kenneth Galbraith and others have analyzed. Vast sums of money and resources are invested in the creation, mainly through the mass media, of "needs" which otherwise would not exist. To make the system go, to keep sales and profits moving, people must be encouraged not to acquire only what they sensibly need but, in the words of the beer commercial, to "grab for all they can get." Whether these acquisitions will really benefit them and whether this style of consumption represents the best use of available resources are questions not seriously considered.
The other side of the story is what David Broder aptly characterizes as "public penury." Vital public services, which do not easily lend themselves to profit-making, are underfunded and inadequately developed: public transportation, health care, education, criminal justice. Alongside Novak’s picture of the abundance which capitalism produces there needs to be placed another equally significant image -- that of decaying, broken-down bus and railway systems; underpaid teachers, policemen, firemen and social workers; overcrowded and understaffed public hospitals; jails and rehabilitation facilities extended far beyond their reasonable capacities. In America at least, capitalism has resulted in a situation in which, as Broder has written in (The Party’s Over), "every single essential service we depend on some public agency to provide is seriously underfinanced."
The case for socialism derives from the irrationality of this state of affairs. Would it not be a more intelligent use of resources, asks the socialist, to focus our productive capabilities on those things that are conducive to human well-being? Would it not be more rational (and humane) to invest more of our resources in such things as health care and education and less in providing 17 brands of breakfast cereal or dream cars with Moroccan leather upholstery? Would it not be more intelligent to seek to liberate ourselves from the tyranny of profits? Would it not be preferable to develop and utilize our productive capacities on the basis of a rational plan rather than the whims of investors? Would it not be more intelligent, in short, to try to transcend the anarchy of capitalism?
To speak of planning, of course, raises the other issue on which Novak makes his case for capitalism. For many people, any mention of social planning suggests dictatorship, and socialism becomes therefore almost by definition a recipe for tyranny. I have no intention of making light of this problem. It is the central problem of socialism today. But the notion that socialism need be tyrannical can be dismissed as an exaggeration. Democratic socialism as it has been practiced in western Europe and elsewhere demonstrates clearly that this is not the case. Democratic socialist regimes have tended, however, either to be coalition governments or to be short-lived, and they have had considerable difficulty with the problem of reconciling parliamentary, bureaucratic and managerial authority. Democratic socialism still remains, therefore, much more a vision than a demonstrated possibility.
The Problem of Freedom
But to admit that freedom is a problem for socialists is one thing, and to say that capitalism solves the problem of freedom is quite another. It all depends, of course, on how you define the term. Novak defines it in negative terms -- freedom means being left alone, being uncoerced by other people. That is an important part of freedom, no doubt; in this respect it must be admitted that the liberties of bourgeois capitalist society are no small achievement, and that they are not to be casually forsaken.
There remains, however, another side to the story, which people who take Novak’s line characteristically neglect. Freedom has a positive aspect as well. The free person is not only free of external coercion but also has the ability to control the direction of his or her life and to develop his or her potential. In this respect I would argue that the difference which capitalism makes has been greatly exaggerated by its proponents. Perhaps in the 18th or early 19th century the simplicities of the free market made it possible for anybody with gumption to become a "rugged individualist" and shape his or her own destiny. But we are far removed from that era today. We are now confronted with a form of capitalism which concentrates economic power in vast, impersonal institutions, with the result that decisions vitally affecting the livelihood of average citizens are made in places far removed from their capacity to have any influence at all. What kinds of jobs will be available, where they will be available, how much salary they will provide, what products will be sold, how much they will sell for -- these matters are settled for most of us by people who remain faceless.
It is therefore a misleading half-truth to say, as Novak does, that capitalism "allows human beings to do pretty much what they will." It all depends on what you choose. If you opt for selling insurance or making automobiles or fixing plumbing, the system will probably find a place for you. It will also tolerate your whim if you choose to "drop out" in a commune somewhere. But if you choose to do something which does not lead to profits and which requires substantial financial support, your chances of being frustrated are fairly high. If you choose, for example, to be an educator or a social worker or an artist, realism demands that you prepare for the possibility that a shrunken job market or the impossibility of making a decent living will force you to abandon your career aspirations in favor of something more "practical."
The same holds true for consumption. Strictly speaking, we are not forced to buy anything. And if we happen to like what is offered in the marketplace, then indeed capitalism does allow us to do what we wish. But what if we do not like what is being offered? What if, for example, an individual does not want to pay the price being asked for automobiles? What if he thinks the price unnecessarily high and the product undesirable in important respects? He needs transportation, and public transportation in his particular area is either inadequate or nonexistent. Such a person, I would submit, has his freedom of choice restricted precisely because of the way the free market operates. He will probably end up buying one of Detroit’s latest models not because he really wants to but rather because it represents the only available practical answer to his needs.
The same argument applies to the life and medical insurance premiums people pay because there is no cheaper, more efficient public program for dealing with the costs of medical care and old-age security. It also applies to our food, much of which comes to us in the supermarkets overpriced and laced with chemicals of dubious value. Theoretically it is possible to grow one’s own crops and bake one’s own bread, but as a practical matter that is not a serious possibility for most people. So they end up "choosing" products about which they have serious reservations. Short of transforming their whole way of life, they are stuck with what A&P and Safeway make available -- and at the prices A&P and Safeway charge.
I do not mean to imply that things will be radically different under socialism. Only anarchism makes sense as a formula for the full restoration of positive freedom, and anarchism is incompatible with industrial society. If we are going to live in an industrialized world, with its economic complexity and population density, a substantial diminution of the freedom of the individual (as compared with simpler times) is probably inevitable. Concentrated economic and political power is going to be a fact of life, regardless of the economic arrangements under which we live.
Socialists have argued that it makes a considerable difference where this concentration occurs. They contend that freedom is enhanced when economic power is vested in public rather than private hands because the people who wield that power are made publicly accountable. As R. H. Tawney, a British socialist of an earlier generation, wrote: "It is the condition of economic freedom that men should not be ruled by an authority which they cannot control" (The Acquisitive Society). The virtue of socialism, it is argued, is that it does away with such irresponsible authority, and forces those who make economic policy to appeal to the electorate and to justify their decisions in terms of the public good. Through political action, in turn, there is something average citizens can do about their fate. No longer need they be the victims of faceless, powerful people over whom they have no control.
I subscribe to this argument, but it can be confidently asserted only insofar as socialism is democratic. And by "democratic" I mean liberal democracy -- i.e., a multiparty system, regular competitive elections, and civil liberties. Without these, there is no reliable check on the policies laid down by government officials, and there is a strong likelihood that the ruling elite will become just as exploitative as any capitalist (perhaps even more so).
Sinfulness and Justice
The other element in the case for socialism is, of course, justice. Down through the socialist tradition, the argument repeatedly has been made that capitalism results in gross inequities, and that socialism can do away with such foolishness. Under socialism no one goes hungry; everyone who is able works; those who work receive benefits commensurate with their social contribution; and there are not the radical disparities in wealth and opportunities characteristic of capitalism.
Curiously, Novak makes no mention of the issue of justice. But it is of critical importance to the choice between capitalism and socialism, and it is directly relevant to what he has to say about sin.
I have no quarrel with an emphasis on sin per se. The inevitability of selfishness in political and economic affairs is something which I have taken for granted ever since reading Reinhold Niebuhr. Niebuhr’s arguments are thoroughly persuasive that sin is simply a fact of the human condition which no amount of education, preaching or social engineering will eliminate. I take this to be one of the principal contributions which Christian thought has to offer in the realm of social and political theory.
For Niebuhr, however, an emphasis on sin was not the whole story of human nature. It was equally important to recognize humanity’s capacity for justice. If I read Niebuhr correctly, the two are roughly equal their strength and influence in human affairs. It is for this reason that Niebuhr could be moderately optimistic about the course of history and make comparatively high demands on social institutions (unlike, e.g., St. Augustine).
The neglect of the issue of justice is what makes Novak’s case as plausible as it is. There is no question that capitalism builds upon and in fact encourages selfishness; a capitalist environment naturally inclines us to believe that people must be addicted to a greedy, competitive individualism. But the socialist argument is that a different environment will elicit a significantly different kind of behavior.
Socialism’s Moral Appeal
"Different," I emphasize, but not sinless. There are socialists, of course, who harbor fantasies about completely rooting out selfishness. But they hardly represent the whole of the socialist tradition, and there is no reason to believe that the socialist idea requires such a belief. Many socialists have been and continue to be more modest and pragmatic. They identify socialism not with heaven on earth but simply with a better, morally superior way of life. They have no intention of remaking the soul of humanity -- only of harnessing human egoism and cultivating a better human nature. They know that selfishness is a given, but they also know that its force and consequences vary enormously with the context. They believe that there is a fundamental moral distinction to be drawn between a system that encourages people to be greedy and one that instead encourages them to acquire only what they truly need.
For much the same reasons, it is simply fallacious, I think, to say that socialism must take the form of a secular religion. Socialism no more than capitalism need be a substitute for theistic religion, and it is worth noting that capitalist ideology, for all its alleged "realism," just as easily succumbs to this danger. (For every socialist who believes that socialism is The Answer to the problems of the human condition, there are at least as many capitalist "true believers," the preponderance located in the business world.) Admittedly, socialism does make a strong moral appeal, and in the past this appeal has often been associated with a heavy dose of secularism. But to suggest that this is a necessary connection is to mistake history for logic. Socialism no more requires a secularist foundation than does modern science.
Logic is probably beside the point, however, in dealing with this charge, because it is mainly a polemical device. Its main purpose, as Novak shows, is to dismiss socialists as impractical visionaries and thereby to protect capitalism against moral criticism. It enables the defenders of capitalism to deflect the socialist critique without having directly to address it. The argument of socialism’s impracticality is nonsense which can be sustained only so long as one is ignorant of the variety and complexity of the socialist tradition.
A standard reply to this kind of critique is to praise capitalism’s flexibility. According to capitalism’s revisionist defenders, collaboration between government and private industry can curtail the anarchy of the market, and the various devices of the welfare state can be used to resolve inequities. Socialism is therefore unnecessary because welfare capitalism answers the principal objections of socialists. Such an approach is apparently what Novak has in mind when he speaks of a capitalism "made intelligent and public-spirited."
Capitalism is indeed flexible. Capitalist economies have shown a remarkable resilience that has defeated the pessimistic prophecies of socialists again and again. So one would be foolish to speak dogmatically about what is possible. Still, there is ample reason for skepticism that any version of capitalism can adequately resolve the problems that agitate socialists. Where the genuinely mixed economy becomes a reality (as, for example, in Sweden), capitalism clearly becomes much more like socialism, and is therefore more palatable. But "capitalism with a human face" still is not socialism. As Michael Harrington keeps insisting, as long as the means of production remain in private ownership, there is a fundamental structural obstacle to the realization of socialist objectives.
It is here that the realism of socialists and the naivete of democratic capitalists become apparent. The democratic capitalist wants to believe that we can have most of the dividends of socialism without actually moving to public ownership of the major industries. The socialist says in reply that we cannot have it both ways. Capitalism is designed primarily to prevent the objectives which socialists seek, and its adherents will strongly resist the measures necessary to adapt private enterprise to anything seriously approaching a socialist program. They may allow "national planning" of a sort (as in France); they may allow welfare programs; they may allow some progressive taxation; but what they will not allow is an invasion of the autonomy of the private corporation so that economic decisions can be coordinated and made on a basis other than profits. That is where the line must be drawn if capitalism is to remain capitalist. And this in turn means that real national planning, oriented primarily toward social needs, will be impossible.