Capitalism & The Common Good

Bonchamps - Capitalism

\"Bonchamps

One of the primary claims made by anti-capitalists, Catholic and non-Catholic alike, is that capitalism is somehow opposed to \”the common good.\” Those who don\’t go quite so far will argue that capitalism can serve the common good, but only if it is strictly regulated and monitored by the state.

I\’ve been trying to find a definition of \”the common good\” that really works for the purposes of a serious political analysis of these common arguments. The most recent Catechism defines it in the following way:

The sum total of social conditions which allow people, either as groups or as individuals, to reach their fulfillment more fully and more easily. (1906)

The pursuit of the common good, in turn, requires three basic things:

Respect for and promotion of the fundamental rights of the person; prosperity, or the development of the spiritual and temporal goods of society; the peace and security of the group and of its members. (1925)

Call me crazy, but I don\’t see in any of this a radical proposal for a confiscatory welfare state or a fascist or socialist regulatory regime, as various anti-capitalist partisans of the common good have often informed me. In fact, this is precisely what laissez-faire capitalism provides. Here\’s how.

1. Respect for the fundamental rights of the person

Capitalism is premised on one of the most important rights that individual men and women possess under the natural law: the right to acquire private property through one\’s individual efforts. Pope Leo XIII explicitly defended this right in the encyclical Rerum Novarum when he declared:

Now, when man thus turns the activity of his mind and the strength of his body toward procuring the fruits of nature, by such act he makes his own that portion of nature\’s field which he cultivates… and it cannot but be just that he should possess that portion as his very own, and have a right to hold it without any one being justified in violating that right. (9)

It is often said in response that the right to private property is not \”absolute.\” But this language is fairly strong, isn\’t it? No one is justified in violating the individual right to private property. Not even to help the poor, in fact, except in cases of immediate life and death. Here is Leo again, from the same encyclical:

But, when what necessity demands has been supplied, and one\’s standing fairly taken thought for, it becomes a duty to give to the indigent out of what remains over. \”Of that which remaineth, give alms.\”(14) It is a duty, not of justice (save in extreme cases), but of Christian charity – a duty not enforced by human law. (22)

Not of justice. Not enforced by human law. It is clear, then, that \”the rights of the human person\” does not include a right to property confiscated by force from others, which is precisely what the welfare state provides. To the contrary, respect for basic rights means the protection of our natural rights, such as the right to private property.

2. Prosperity, the development of temporal and spiritual goods

Is there even a serious debate on this point? With respect to temporal goods, even capitalism\’s critics, by and large, don\’t deny that it has been a much more effective economic system than socialism. Economic freedom and prosperity are strongly correlated. Where private property rights are respected and the free exchange of property is facilitated, the great masses of people enjoy much higher standards of living. The average American has access to a dearth of goods and services that people in less economically free countries can only dream of.

Of course it is legitimate to question whether or not everyone in the world could enjoy the living standard of the average American, the extent to which this would collide with environmental sustainability, etc. But it seems clear that as societies move towards a more fully developed capitalist economy, the problem of poverty undergoes a gradual transition from a permanent and widespread phenomenon to a temporary and increasingly isolated phenomenon. While poverty still exists, even in America, it simply can\’t be denied that there is far less of it now than there ever has been in human history.

With respect to spiritual goods, the 20th and 21st centuries have borne witness to the correlation between economic and religious freedom. A government that doesn\’t trust its citizens with private property and constantly infringes upon it will likely infringe upon their religious views as well. It is arguable that capitalism is utterly indifferent to the Church. But it is incontestable that the secular socialist regimes of the past century and a half, whenever and wherever they are to be found, have been rabidly hostile towards her, stripping away her rights and sometimes violently persecuting her members.

3. Peace and security

An economy that depends upon private property and free exchange is one that will also depend upon the rule of law and its efficient enforcement. Contrary to the notion that capitalism is basically individualist anarchy and a struggle for survival in a ruthless economic jungle, the truth is that capitalism can hardly exist without a strong legal framework that defends fundamental human rights. The Bill of Rights is the cornerstone of America\’s legal framework and it facilitated the most advanced economy the world has ever known.

Just as religious freedom and the elimination of poverty are correlated with capitalist development, so is the peace and security of a society. You can\’t really do good business in a jungle, in which you are constantly looking over your shoulder and fighting for your life in a struggle of each against all, and in which rights are foreign concepts let alone respect for said rights. Peaceful economic competition is what drives economies forward.

Conclusion

I often hear from anti-capitalists that even if it can be said that capitalism provides great material prosperity and at least allows – if not directly promotes – spiritual development, it still results in massive income inequalities that have to be addressed. And yet the Church\’s definition of the common good, at least in the Catechism, is not an egalitarian one.

I will close with the following thought: the greatest inequalities in the Western world developed not during the period of laissez-faire of the 19th and early 20th centuries, but rather with the development of the global financial system towards the end of the 20th. It was during this time that the United States rejected the gold standard in favor of fiat currency, when inflation skyrocketed to new plateuas, and a sense of total recklessness followed from the new regime of unlimited cash and credit available to the largest banks and companies.

None of these policies are necessary for capitalism to operate and are in fact antithetical to capitalism. At the same time, even with these policies in place, the relatively free market has still been able to continue raising living standards around the globe. So it seems to me that while some modifications may well be necessary – most of which would consist of eliminating rather than adding government to the mix – there is no better thing one can do for the world\’s poor than to promote and defend capitalism, and no worse thing one can do than to attack it or refuse to understand it on its own terms.

© 2013. Bonchamps. All Rights Reserved.

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8 thoughts on “Capitalism & The Common Good”

  1. John,

    Advocates of laissez-faire capitalism are opposed to bailouts. There doesn’t “have to be” a bailout; we’re fine allowing these bloated, corrupt, artificial monopolies to fail. This would cause immediate short-term pain, but the long-term benefits would be immeasurable.

    This is not done for political reasons.

  2. Whether your approach to capitalism is contradicted by Medaille’s approach may best be judged by you. I urge you to read his book carefully. You may change some of your starting points.

    Medaille’s insights into why capitalism continues to fail the common good and must be bailed out by the government, which you say you are familiar with, are tightly aligned with Catholic teachings on social justice.

    By distinguishing distributism from other approaches to political economy, Medaille provides a set of proposals more in keeping with the Catholic worldview. See another of his books: “Toward a Truly Free Market: A Distributist Perspective on the Role of Government, Taxes, Health Care, Deficits, and More (Culture of Enterprise)” found at http://www.amazon.com/Toward-Truly-Free-Market-Distributist/dp/161017027X/ref=sr_1_1?ie=UTF8&qid=1362669206&sr=8-1&keywords=towards+a+truly+free+market

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  4. John,

    I haven’t read the book, but I am familiar with Medaille’s work overall.

    Is there something in the book you think contradicts what I have argued here? If so, please share it. I am genuinely interested.

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  7. To your conclusion ” it seems to me that while some modifications may well be necessary – most of which would consist of eliminating rather than adding government to the mix – there is no better thing one can do for the world’s poor than to promote and defend capitalism, and no worse thing one can do than to attack it or refuse to understand it on its own terms,” I ask one question:

    Have you read “The Vocation of Business: Social Justice in the Marketplace” [http://www.amazon.com/The-Vocation-Business-Justice-Marketplace/dp/0826428096/ref=sr_1_1?ie=UTF8&qid=1362587344&sr=8-1&keywords=the+vocation+of+business ]?

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