It has been a while since I made a post. My graduate studies have been keeping me very busy. I will be posting three papers I recently wrote on issues relating to social ethics. The first is on Capitalism and its ability to meet the needs of the poor (Avoiding the Bern, part One). I will follow that up with a post on socialism and the redistribution of wealth (Avoiding the Bern, part Two), and then one dealing with the issue of affirmative action (I’m still working on a catchy title for that one). I may sprinkle in a few other things along the way. Enjoy!
The title for this one was born out of the frustration I felt hearing about how some young Christians have decided to support Bernie Sanders. It seems that these Christians have come to think of capitalism as so evil, that our best recourse is to abandon it altogether and fully embrace socialism. Sanders has openly called himself a Democratic Socialist. The only difference between regular socialism and Sanders’s democratic version, is in how they achieve the re-distribution of wealth. I will talk more about that in part two. But before you go giving up on capitalism because you think it’s contrary to your Christian faith, you may want to read Austin Hill and Scott Rae’s book The Virtues of Capitalism. Below is a summary and evaluation of the book.
It may seem counter-intuitive to write a book calling for Christians to become advocates for the moral value of capitalism. After all, the moral values most often associated with capitalism are greed and selfishness. These are the kind of values Christians are traditionally known for condemning, not defending. The Church, rightfully so, has been quite vocal about the right to life, traditional marriage, stem cell research, and even the evils of gambling. When it comes to saying positive things about capitalism, she has largely been silent. Austin Hill and Scott Rae, authors of The Virtues of Capitalism, are convinced that this shouldn’t be the case. Economics touches upon every aspect of society and therefore has the power to impact every facet of an individual’s life. This means it has the ability to mold morality. If our overall end is a “good” society filled with morally good people (who love and serve Christ), then it stands to reason that Christians ought to be very concerned with the type of economic system in place in the country. Not all economic systems are created equal. Some are better suited for promoting good behavior, while others promoting the bad. According to Hill and Rae, capitalism (contrary to popular belief) is on the side of promoting good. While capitalism may not be a perfect economic system, for the authors, it is not only the best system available for generating wealth and diminishing poverty, it is the best system when it comes to championing the moral values most important to Christians.
The authors begin by looking at what the Bible has to say about economics. Of course, the Bible’s overall approach when speaking about economics is to treat it as a moral issue. In this sense, the Bible clearly supports one of the fundamental beliefs of the authors: Economics and morality are intimately connected. On the one hand, wealth and prosperity can lead to idolatry and the oppression of the poor. This was as much a problem in ancient Israel as it is today. The Old Testament prophets frequently condemned economic injustice and the exploitation of the disadvantaged amongst the Israelites. On the other hand, the scriptures encourage the use of one’s affluence as a source of blessing to the underprivileged. Proverbs 14:31 indicates that one shows honor to God when they are generous to the poor. Jeremiah 22:16 reveals a strong connection between helping the poor and knowing God. “[King Josiah] pled the cause of the afflicted and needy . . . is not that what it means to know me.?” How God’s people used their wealth was a direct reflection upon how well they knew him and manifested his righteousness. At no point does the Bible support the idea that wealth necessarily leads to greed and corruption. From God’s perspective, it all comes down to what his people choose to do with their treasure. Do they allow it to become an idol in their life, or do they use it as a tool for serving him and helping the less fortunate in society? In the New Testament, Paul tells Timothy that it is not money that is evil. “For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs.” Economics, more specifically how we relate to it, has the power to mold faith and morality.
The authors then move beyond this connection between economics and morality, to asserting that the most biblically consistent economic system is that of capitalism. This is not to say that the Bible specifically teaches capitalism, but rather that the Bible teaches general economic principles that are best embodied in a free market system. Christians should favor an economic system that provides the opportunity for all members of society to flourish (achieve economic well-being), and properly meets the needs of the poor in a manner consistent with the scripture’s emphasis on personal responsibility. For the authors, capitalism is that system. To be more specific, while a socialistic economic system seeks to care for the poor by simply redistributing wealth, a free market system seeks to care for the poor by providing the means for each individual to support themselves and their dependents. And when it is not possible for an individual to care for their own needs, Hill and Rae are quick to point out that capitalism provides the abundant resources to fuel charitable giving. Additionally, capitalism seems to promote the kind of personal qualities that the Bible holds as desirable. The entrepreneurial spirit so essential to the free market system personifies the characteristics of initiative, perseverance, and diligence so prominently encouraged throughout the Old and New Testaments. It also seems to encompass the creative implications of being made in the image of God.
In chapter three, the authors look at what kind of moral virtues are required in order for capitalism to exist and thrive. At a foundational level, capitalism needs social stability, particularly in the form of a democracy upholding a true sense of human rights and dignity. The authors later maintain that where this does not exist, capitalism should not be attempted. While the authors go on to list creativity, initiative, cooperation, civility, and personal responsibility as additional values required for capitalism to function effectively, they also seem to be arguing that a free market economy will gives rise to these attributes. This is not as contradictory as it seems. There exists a symbiotic relationship between these virtues and capitalism. On the one hand, if these virtues are not initially present within a society, at least in a nascent form, capitalism will likely fail to fully develop. On the other hand, capitalism necessarily generates these virtues. Of course, it is important to distinguish that capitalism itself is not moral. The system does not guarantee that all those working within will be morally virtuous. However, it is not entirely appropriate to say that capitalism is morally neutral. To be sure, the prospect of increased wealth can fuel greed, as noted above. But by virtue of how it is designed (being based on competition, the division of labor, and the production of wealth), it more often than not leads to the cultivation of virtue and the common good.
Capitalism gives people an incentive to pursue excellence . . . [it] creates an environment that, as philosopher Adam Smith envisioned, allows self-interest to be harnessed in such a way that it promotes the common good.
While it seems odd to talk of a system based upon self-interest resulting in moral virtue and human flourishing for all members of society, this is exactly what Smith had in mind when writing The Wealth of Nations. Smith believed that the self-interest of the individual, and ultimately her well-being, was best served by a society where the “greater part” benefited.
But what improves the circumstances of the greater part can never be regarded as an inconvenience to the whole. No society can surely be flourishing and happy, of which the far greater part [servants, labourers, and workmen of different kinds] of the members are poor and miserable.
So it would seem that Hill and Rae are arguing for the value of Capitalism purely on utilitarian grounds. The authors are not claiming that capitalism is an end in and of itself, or that it is even a perfect system. They are simply stating that it is the best possible means toward an end to which all Christians should strive: moral virtue and human flourishing.
Up until this point, the authors have attempted to provide a largely positive apologetic defense for capitalism. Chapter four presents a negative apologetic, attempting to refute the common criticisms leveled against a free market economy. This is a significant challenge in that the perceived faults of capitalism are well known, if not axiomatic in the minds of most. First and foremost is the idea that capitalism is based upon greed and necessarily results in materialism and overconsumption. Hill and Rae are quick to make the distinction between the sin of greed and Adam Smith’s notion of self-interest. They believe, it is a misunderstanding to equate the two. Greed is a problem of the heart and not a necessary by-product, or foundational principle, of capitalism. Nowhere in the writings of Smith is “greed” cited as something good. Instead, he talks a great deal about self-interest.
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 advantage.
Of course, it is important to view Smith’s understanding of self-interest within the context of his moral philosophy. As a moral philosopher, Smith balanced his notion of self-interest with sympathy, prudence, cooperation, benevolence, and justice, all of which were equally as influential. It would be better to characterize Smith’s foundational economic principle as an enlightened form of egoism, “in which a person possessed the internal resources necessary to provide checks and balances on his or her self-interest.” The opening line from Smith’s The Theory of Moral Sentiments (his work published prior to Wealth of Nations) says it best:
How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.
For Smith, egoism and altruism are balanced within human nature, both for the benefit of the individual and society. The point the authors are trying to make is that Smith’s concept of self-interest is not the same thing as selfishness. In fact, they argue that philanthropy is far more identifiable as a characteristic of capitalism than is greed. While greed, materialism and overconsumption may be more of a temptation in a capitalist nation, it also generates greater opportunity for charity. Hill and Rae rightly point out that the U.S. is more than twice as charitable as any other nation.
Even if capitalism is not based upon greed, is self-interest a value that Christians can legitimately champion? After all, isn’t Christianity more about self-sacrifice? The authors utilize Philippians 2:4 to argue that scripture unambiguously supports both self-sacrifice and self-interest. “Do not merely look out for your own personal interests . . .” This verse seems to imply that we are to look out for our own self-interests. Of course, it challenges us to go beyond this, and also look out for the interests of others. One might even argue that if we are going to properly look out for the interests of others, we must first have a clear understanding of what it means to look after ourselves. Did not Jesus challenge us to love others as we love ourselves? Is not the essence of the Golden Rule to treat others as we would want them to treat us? Looking out for the interests of others is not contrary to capitalism, at least not the idea of it articulated by Adam Smith. Likewise, self-interest is not contrary to Christianity. Christians ought to be concerned with looking out for their own interests, having the desire to better themselves, and taking care of the needs of their family. To the authors, this is not a bad thing.
Next, the authors dismiss the criticism that capitalism necessarily leads to the rich getting richer, and the poor getting poorer. Contrary to this belief, they argue that capitalism is the most productive way of generating wealth and lifting the majority of people out of poverty. The mistaken idea that the prosperity of the wealthy causes the poverty of the poor is rooted in a zero-sum game model of economics. While from a global perspective it’s certainly true that the world has a fixed pool of resources (which fuels the notion that when one gets more, someone else gets less), the reality is that the creative spirit that drives a free market economy finds ways of utilizing previously unused resources. In this way, wealth in a capitalistic economy is not static; new ways are constantly being developed to create it.
Somewhat related is the criticism that capitalism leads to significant inequities in wealth. Politicians often talk about the shrinking middle class and the widening disparity between the very rich and the very poor. Hill and Rae cite various statistics that poverty in America, and the world for that matter, is shrinking. Additionally, they argue that those at the bottom of the economic spectrum, at least in America, are far better off than the poor in other countries. They maintain that this is all due to capitalism. Seen through this lens, inequities between the most and least wealthy do not necessarily mean an injustice has occurred. In a free market economy, inequities of outcome will exist, even if everyone is ensured equality of opportunity. Some inequalities “are the result of a difference in effort, hard work, and diligence.” Still other inequities are the result of differences in natural abilities, or are simply the result of poor choices. Some are simply smarter, more creative, have higher energy, or are more competitive by nature. Some desire to pursue a career writing poetry, while others desire to start a business. All these factors will necessarily result in inequities of wealth, but should not be considered unjust. Hill and Rae assert that nowhere does the Bible condemn inequity of wealth. What is condemned in scripture is the exploitation of others and the failure to address the needs of the poor. Again, the authors maintain that capitalism provides the best means of addressing the needs of those at the bottom.
Perhaps the greatest criticism of capitalism is the growing belief that it has failed. Chapters five through seven confront this idea, especially in light of recent economic failures. An overview is provided of the dotcom bubble bust in 2001, the housing market collapse post 2008, and the corporate corruption of Enron, Peregrine Systems and Countrywide Financial. The authors’ goal is to illustrate that contrary to growing public opinion, these failures are more the result of too much government involvement (or in the case of the Enron scandal, government overreaction to bad behavior), and less a byproduct of capitalism itself. For example, the authors do an exceptional job of illustrating exactly how government involvement in pushing for increased home ownership and the issuance of risky, sub-prime mortgage loans specifically led to the housing market crash. Hill and Rae go on to argue that the government bailouts that followed simply magnified the problem, by creating an atmosphere of moral hazard.
As a general principle that influences our evaluation, we regard it as a destructive thing when the government intervenes in the economy and tries to “protect” individuals and businesses from experiencing the effects of their own behavior.
Moral hazard occurs when people are shielded from the negative consequences that they would normally suffer from bad behavior. While this might seem compassionate, the authors believe that “rewarding bad behavior generally ensures more bad behavior, not good behavior, in the future.”
Of course, Hill and Rae are not arguing against all government involvement in the economy. They do not believe that the market is self-regulating. In fact, the final chapter of the book delineates several essential, albeit limited, elements that government needs to provide. These include setting policies that regulate commerce, ensuring that some goods and services remain “off the market,” and protecting individual and corporate rights. The most significant role of government is in how it contributes to the overall moral climate of society. Certain social structures are needed in order for capitalism to be successful (as discussed earlier in the book), and government cannot supply these on its own. Government involvement necessarily needs to be augmented by religious and voluntary organizations that nurture the values and virtues that capitalism needs to prosper. This closing chapter harkens back to Michael Novak’s Spirit of Democratic Capitalism, in which Novak emphasizes the importance of the “moral-cultural system” of the country to “create the proper context in which the economic system operates.” Unfortunately, just as government can over-regulate the market, it can also over-regulate religious and voluntary organizations, ultimately limiting their ability to provide support and incentives for virtuous behavior, and checks and balances for bad behavior.
Novak would argue that it is no coincidence that democratic capitalism has thrived in Jewish-Christian lands. The doctrines and values of the Christian faith have “helped to supply the ideas through which democratic capitalism has emerged in history.” Therefore, Hill and Rae are not arguing that Christians stop advocating for the moral causes that they have become known for, focusing instead on defending a free market economy. That would be counter-productive. They maintain that the church simply needs to include a defense of capitalism to what they are already championing.
Overall, I find myself agreeing with the basic premise of the book. Christians cannot remain silent at a time when the economic future of our country is being heavily debated in the current presidential campaign. A greater shift toward socialism would be detrimental to the values and virtues that we Christians find most important. The time has come for Christians to include a defense of the free market in their apologetics courses and bible studies. While it may be hard to see economic issues as just as important as defending the veracity of scripture or the historicity of the resurrection, we must keep in mind that we are not defending capitalism, per se. We are defending the positive moral values and virtues that capitalism necessarily nurtures. We are also taking seriously our call to take care of the needs of the less fortunate in our society. History has clearly demonstrated that capitalism is the best way to bring economic flourishing to the largest number of people in a society.
Having said that, I am reminded of a quote by Ronald Sider in Rich Christians in an Age of Hunger, where he comments on Christian efforts to speak favorably of capitalism. “We must end the outrage of Christians celebrating the market economy.” While I believe that Sider’s sentiment is rooted in a mistaken notion of capitalism, it represents genuine hostility that exists in the minds and hearts of many. The baggage that capitalism carries is real. Regardless of whether such hostility is justified, Christians defending capitalism have the potential of appearing celebratory of riches and insensitive to poverty. This unfortunately seems evident in this volume in two specific ways.
First, Hill and Rae exhibit a bit too much confidence in capitalism’s ability. While the authors do at times include token reference to Christian compassion for the poor, that message is largely drowned out by their exuberance for capitalism. At times they convey the notion that the needs of the poor will best be met by market forces. The final words of the book sum up this sentiment: “. . . we insist that capitalism is indeed the best hope for the poor around the world.” From an economic standpoint, this is certainly the case. But without any other qualification to this statement, it comes across as simply echoing an enormous amount of faith in the “invisible hand” of the free market economy. Smith discusses this briefly in both The Wealth of Nations and Moral Sentiments.
… every individual necessarily labors to render the annual revenue of the society, as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it… he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.
Smith is saying that the common good that results in a free market economy is not the result of intentional effort on the part of individuals. The distribution of wealth to all levels of society is simply the happy by-product of pursuing one’s own gain. Put self-love first and everything else magically works itself out. Perhaps, it is unfair to characterize Hill and Rae as embracing a laissez-faire approach to helping the poor. However, the book clearly does not include an emphatic call for Christians to be more engaged in voluntary efforts to reach out to the poor, or to support public policies that help those at the bottom. In other words, the book comes across as declaring capitalism, and not Christ or the Church, as the poor’s only and best hope. From a Christian perspective, this seems incongruent with the very scriptures the authors survey. The authors’ handling of Philippians 2 is a perfect example of this. While they are certainly right that it is acceptable for the Christian to have a level of self-interest, using this passage to primarily defend Christian self-interest diminishes the true meaning and emphasis of Paul’s words. Christians are called to put the needs and interests of others ahead of their own. The emphasis of the Bible is not upon an economic system working out the status of the poor, but rather on the behavior of believers proactively engaging the problem of poverty. Hill and Rae come across as putting more trust in the “invisible hand” of market forces, rather than the active responsibility that God’s people have to be agents of change. It is not an option for the responsible Christian to simply let market forces work things out. That being said, Christians working under the umbrella of a capitalistic system, taking full advantage of its strengths and benefits, have an even greater ability to combat poverty.
The second way that Hill and Rae come across as insensitive to the needs of the poor is in their discussion of the issue of moral hazard. The authors are correct that shielding people from the consequences of bad choices can lead to increased bad behavior and even more bad choices. The Bible is clear that God disciplines those whom he loves, and that the purpose of such discipline is to train us to do the right things. However, the Bible also talks about restoration and redemption, even for those who make bad choices. While the authors touch briefly on the issue of Jubilee, they fail to distinguish in what sense this law wouldn’t also count as moral hazard, according to their own definition. Jubilee required land to be returned to the original owners regardless of what originally led to them having to sell it in the first place. Might this somehow be construed as the kind of policy that contributes to moral hazard? Unlikely, as the potential existed for the individual or family to lose the use of the land for as much as 49 years. Consequences were undoubtedly felt, as often those selling the land would have to hire themselves out as indentured servants to make ends meet. However, through this law God also provided a way of redemption, the possibility for them to regain their land and the means of economic prosperity. The year of Jubilee, clearly represents a safety net policy. The authors acknowledge as much. Unfortunately, they refuse to discuss how something like this might be applicable to modern society. It comes across as insensitive and judgmental to cite moral hazard as the reason for not wanting to help people in times of financial crises. As Christians, we shouldn’t be hiding behind such flimsy justifications for sitting back and allowing people to remain in poverty. Instead, we should be proactively seeking out ways to elevate the economic status of the poor.
So given these concerns, how can Christians legitimately defend capitalism? They can do so by honestly pointing out the weaknesses of capitalism, by coupling their defense of a market economy with an emphatic call for radical generosity and outreach to the poor, and by offering practical proposals to help the financially challenged find economic redemption and restoration.
I end this first part by letting God’s word challenge us to greater generosity:
If there is a poor man with you, one of your brothers, in any of your towns in your land which the Lord your God is giving you, you shall not harden your heart, nor close your hand from your poor brother; but you shall freely open your hand to him, and shall generously lend him sufficient for his need in whatever he lacks. Beware that there is no base thought in your heart, saying, ‘The seventh year, the year of remission, is near,’ and your eye is hostile toward your poor brother, and you give him nothing; then he may cry to the Lord against you, and it will be a sin in you. You shall generously give to him, and your heart shall not be grieved when you give to him, because for this thing the Lord your God will bless you in all your work and in all your undertakings. For the poor will never cease to be in the land; therefore I command you, saying, ‘You shall freely open your hand to your brother, to your needy and poor in your land.’
 Austin Hill and Scott Rae, The Virtues of Capitalism: A Moral Case for Free Markets (Chicago: Northfield Publishing, 2010), 18, iBooks.
 Ibid., 47.
 Prov. 14:31 (English Standard Version). Emphases mine.
 Jer. 22:16 (New American Standard Bible).
 1 Tim. 6:10 (English Standard Version).
 Deut. 15:4 states, “There shall be no poor among you.” Prov. 10:4 says, “Lazy hands make a man poor, but diligent hands bring wealth.”
 2 Thess. 3:10 states, “If anyone will not work, neither let him eat.” Prov. 14:23 says, “In all labor there is profit, but mere talk leads only to poverty.”
 Hill and Rae, Virtues of Capitalism, 138.
 Robert A. Sirico, “The Moral Potential of the Free Economy,” in For the Least of These: A Biblical Answer to Poverty, ed. Anne Bradley and Art Lindsley (Grand Rapids, MI: Zondervan, 2014), 160, iBooks.
 Hill and Rae, Virtues of Capitalism, 45.
 Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations (New York: The Modern Library, 1937), 78-79.
 This reflects the utilitarian argument that Smith himself is making, by arguing that the market alone ensures the greatest amount of prosperity for the greatest number of citizens. Robert Solomon and Mark C. Murphy, eds., What is Justice? Classic and Contemporary Readings (New York: Oxford University Press, 2000), 143-144.
 Hill and Rae, Virtues of Capitalism, 63.
 Smith, Wealth of Nations, 14.
 Hill and Rae, Virtues of Capitalism, 65.
 Adam Smith, The Theory of Moral Sentiments (New York: Penguin Books, 2009), 34.
 Sherwin Klein, “The Natural Roots of Capitalism and Its Virtues and Values,” Journal of Business Ethics 45, no. 4 (July 2003): 390.
 Hill and Rae, Virtues of Capitalism, 63
 Phil. 2:4 (New American Standard Bible).
 Klein, 391. Klein specifically makes this connection with Puritanism and the Protestant ethic.
 Hill and Rae, Virtues of Capitalism, 65-66.
 Ibid., 70.
 Ibid., 102.
 Ibid., 110.
 Ibid., 139.
 Michael Novak, The Spirit of Democratic Capitalism (Lanham, Maryland: Madison Books, 1991), 334, Kindle.
 Novak spectacularly makes this case in The Spirit of Democratic Capitalism.
 Ronald J. Sider, Rich Christians in an Age of Hunger: Moving from Affluence to Generosity (Nashville: Thomas Nelson, 2005), 230.
 Hill and Rae, Virtues of Capitalism, 122.
 Smith, Wealth of Nations, 423.
 Heb. 12:6-11 (New American Standard Bible).
 Michael A. Harbin, “Jubilee and Social Justice,” Journal of the Evangelical Theological Society 54, no. 4 (December 2011): 695.
 Hill and Rae, Virtues of Capitalism, 30.
 Deut. 15:7-11 (New American Standard Bible).