It is not surprising that for some people it should have survived its intellectual demolition for a century or more. It is not so easy to exculpate those who still hold to the superstitions of socialism. Whatever can be said of the status of Marxist theory, the failure—utter, consistent, and continuing—of Marxist practice is apparent to anyone with eyes to see.
The most recent example comes from Poland, where four decades after the liberation of the workers from capitalist oppression and the end of their exploitation by the bosses, the workers are worse off than their comrades in even the least developed capitalist states. And yet many intellectuals—one is tempted to say most intellectuals excluding, of course, those in socialist countries, where probably no one believes in socialism except as a means of maintaining ruling-class privileges —continue to think socialism a form of economic organization superior to any other.
This is a faith in the Tightness of the old order as wrong-headedly pious as that of the Cassinis, but not nearly so harmless. It has not been clear why socialism should be so esteemed despite its failure and—the inevitable corollary—capitalism so despised despite its success; most observers who have found the situation troubling enough to warrant attention have confined themselves to vague speculations about the contrariness of intellectuals.
Now, Michael Novak has made some progress in clearing this matter up for us, but this is only a fringe benefit of his remarkable book.
The Spirit of Democratic Capitalism, by Michael Novak - Commentary
For The Spirit of Democratic Capitalism is perhaps the first serious attempt to construct a theology of capitalism. That this very phrase rings a little strange in the ears even of sympathetic hearers testifies to the compromised reputation of democratic capitalism even among many of its friends. Yet no one would be surprised to hear of a theology of socialism, for such things are three-a-penny. Novak rehabilitates the moral stature of democratic capitalism by showing how little it resembles the caricatures of it which pass almost everywhere as analytic descriptions. He uses the cooperative institution of the corporation to show that the spirit of democratic capitalism is far from the anarchic individualism that has attracted criticism from several directions, and refutes the common claim that the capitalist states comprise a center that exploits a dependent periphery.
As he points out, the economic positions of the two hemispheres were roughly similar during their struggles for independence in the last quarter of the 18th century and the first quarter of the 19th. Indeed, the riches of the Southern Hemisphere had originally been regarded as greater.
The dream of the easy money available in the Seven Cities of Cibola animated much of the Spanish movement to the New World, but no one went to New England looking for gold. The nearest approach to Eldorado in the north were rich fisheries exploitable only by hard work and at great risk. The orthodox explanation for the fact that North America is now rich and Latin America poor, enshrined in Marxist and liberal analysis alike, as well as in liberation theology, is that North America waxed fat by exploiting Latin America.
The Spirit of Democratic Capitalism, by Michael Novak
Following the work of P. Bauer, Novak points out that, considered both as a fraction of U. Moreover, U. Even if these facts did not obtain, there is a more serious difficulty in that Latin American poverty existed well before there was any U. The causes of Latin American poverty are in fact much more complex and less satisfying to socialist analysis and Latin American pride. One of these is narrowly technical: Latin Americans have more children than North Americans, and consequently even equal amounts of economic activity per worker would yield lower rates of income per capita.
While Novak is inclined to find the practice of having large families admirable, he insists that the statistical consequences of the practice must not be charged off to Yanqui imperialism. But there are more important reasons for Latin American poverty, and these are embedded in the history of Latin America.
Novak points out that Spain held a narrowly mercantilist economic theory contrasting sharply with the untrammelled individualism practiced in the north, where the founding fathers wrote a constitution favoring small merchants and traders precisely because such people were seen to be committed by the nature of their economic activity to the very freedom the constitution was trying to protect. To the south, Latin America did not develop largely because it did not adopt an economic system that allowed development. Ironically, the liberation theologians, opposed to the traditional hierarchy in everything else, agree with it in despising capitalism and seeing it as the author of much woe for Latin America.
And so the Church, by opposing capitalism, appears to Novak as a major cause of poverty in Latin America. This is not an isolated instance for Novak: following a seminal study by H.
Trevor-Roper, he traces the comparative affluence of Catholic and Protestant Europe, nearly always to the embarrassment of the former. A biblical vade mecum popular during my youth among evangelicals and fundamentalists contained a remark to the effect that Protestantism had made the United States what it is, and Catholicism had made Spain, Italy, and Latin America what they were. The facts, the author concluded, spoke for themselves and spoke loudly. Allowing for his much greater sophistication and lack of animus against Catholicism, Novak seems of similar mind.
In making this argument, he is doing more than refurbishing the work of Max Weber and R. Novak rejects this idea since persons should have primacy. In undifferentiated premodern societies care for the common good was vested in the paternalistic authorities of church and state; however, in today's free and differentiated societies individuals tend to have different aims.
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If free persons do have primacy, then the common good can be something that emerges from acts taken as free persons. The purpose of every human person is to be with God in an eternal communion of insight and love.
The Spirit of Democratic Capitalism
It follows that communion in perfect insight and love with God is both the common good of humankind and the personal good of each. For God, an absolute person, there is an absolute coincidence of common and personal good. Analogously, to the degree that a created person acts with reflection and choice the greater the tendency for the personal good and the common good to coincide. It follows that on earth the common good of persons is to live in as close an approximation of unity in insight and love as humans might attain. To learn and achieve the common good, persons need institutions suitable to the task.
American liberalism makes the protection of individual rights central to the idea of the common good and allows for the development of institutions that nourish cooperation without requiring prior agreement with respect to final ends or personal motivations.
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In order to achieve both personal rights and the public good, the framers of the constitution chose not to impose a moral-cultural system. Rather, they left the construction of such a system to institutions distinct from government. The Founders' idea of a limited state, whose power is restricted by a written constitution, is based on the idea of the inviolability of personal rights.
The result is the separation of the powers of the state from the powers of society. The common good is not attained solely nor primarily by the government but by social institutions beyond the scope of the state. The purpose of government is to provide opportunities for individuals to exercise their own freedoms. The common good consists of mutual cooperation many times apart from common intentions, aims and purposes. Things can be done publicly without being done governmentally.
The common good is far greater than the political good. The main and most able instrument of attaining the common good is not the state but society at large in its full range of social institutions, and not the atomistic individual but the communitarian individual. This causes economic progress. If people create more than they consume, the world will be better off because of each life.