The fact that capitalism vanquished an even worse rival should not blind us to its manifold defects.
We have asked several of our contributors to respond to a question in
our occasional series of forums. This time the question is: What is the
world’s most dangerous idea? We expect that the answers will be quite
controversial. Please add your comments.
When faced with the even worse options of the
20th century, totalitarian communism and fascism, there is a danger that
well-intentioned people defend capitalism without being aware of the real
injustices that are part of its foundation, history, principles, and ethos.
Bad ideas usually come in pairs, one being
subtly evil, the other being grotesquely and openly evil. Ironically, the
grotesquely evil idea is usually the result of a backlash against the real
injustices caused by the subtly dangerous idea. We can see this reality in the
relationship between capitalism (subtly dangerous materialism) and communism (openly
evil materialism). Both systems are materialistic at heart, feed off of vice,
and deflate the human spirit. Of the two, capitalism does this in a subtle way.
In the story of Faust, Faustus makes a pact
with the Devil. At first, Faust gets to enjoy all the comforts and pleasures of
life, but eventually, the devil comes to require his due. This story, which emerged
in Europe as a popular story at the same time that the instruments of
capitalism developed, provides us the warning we need to heed in our own day if
we were to be tempted to think that capitalism is good.
First, let’s look at history. Most, if not
all, of the mechanisms for capitalism were developed in the 15th century.
However, capitalism requires capital formation, so that capitalists can acquire
land, money, and the tools of production. The greatest period of capital
formation began in 1531. The place where it happened: England. The instigator:
Henry VIII, his advisors and their successors for the next century. His action:
the theft of Church property. In short, theft and looting of Church property
created the capital necessary for building capitalism as an economic system.
Over centuries, as the English Empire grew, the English were able to use
ruthless and Machiavellian tactics to spread the system over the entire globe.
Second, we should focus on principles.
Eventually, someone had to come up with a rationalization of the theft,
looting, greed, avarice, and fraud that are all part of the capitalist order.
And so, theorists in the 18th and 19th centuries developed the idea of
self-interest as the fundamental human motivation. Capitalism became the
economic science built on the principle of self-interest, a code word for
avarice, as if this vice could constitute the basis for a science independent
of the moral order.
But, of course, the principle of
self-interest and the capitalist system upon which it was based, was nothing
more than a return to a very traditional and pagan system, the system in which
the stronger could determine the “justice” of an economic contract, and the
weaker had to suffer what they will. The principles of capitalism, consistently
applied, allow individuals and countries to suffer under usurious financial
systems in which the strong can exploit the weak. It has enabled usury to
return as one of the scourges of modern times.
In the interest of profit alone, the owners
of capital could drive down the wages of workers to subsistence level. In
short, those who control capital can use their wealth as a gun to coerce the
rest of society to accede to their demands. The “iron law of wages”, we are
told, requires that a worker can no longer obtain a family wage, enough to own
some land, take care of his wife, educate his children, and leave them a little
While GDPs increase, real wages decline.
Capitalist private equity schemes are little more than sophisticated and thinly
disguised forms of looting. Bankers can take risks, knowing they will get
bailed out, as they were in 2008. Workers and immigrants cannot. Corporations
work with government officials instigate raids on immigrants working in their
own companies, selecting the undocumented immigrants who have been around the
longest (and, therefore, have the highest wages), so they can be replaced with
new workers for half the cost.
We also cannot forget the evils that
capitalism fosters for families and children. The excessive concern for profits
and the materialist ethos that accompanies it helps promote the widespread use
of birth control, abortion, easy divorce, and now gay marriage. Children in
proudly capitalist families are frequently beset with alcohol, drug and sex
addictions. This should come as no surprise. If their parents have given in to
avarice in an unrestrained way, why not, the children might reason, give in to
other vices in an unrestrained way as well?
Capitalism is not compatible with the principles
of equitable human development: the necessary connection between the laws of
economics and the moral order, subordinating profit to the moral order, the
common good, cultural development and the requirements of solidarity; a spirit
of solidarity that avoids self-centered localism, allowing the possibility of
state intervention to prevent disasters, allowing the state to determine a
strong juridical framework within which the economy functions, the possibility
of limiting profits for individuals and businesses in the interest of the
common good, state intervention in the market, the right to treat the improper
accumulation of wealth as immoral, seeing economic activity as an occasion to
live solidarity and the communion with others to which God has called us.
With all the historical, philosophical, and
contemporary baggage connected with capitalism, we are better off not using the
Jefrrey Langan is
the chairman of the Liberal Studies Department, Holy Cross College at Notre Dame
Footnotes are available upon request.