Is “free enterprise capitalism” the only way?

That’s the question roughly posed at The Banner.

Is it true that the Bible endorses free enterprise capitalism? I read that this is because it assumes private property and rewards a good work ethic.

Editor Shiao Chong defers in his answer, pointing to a “perfect economic system” as a sort of goal. All rather Platonic, when you think about it.

The correct answer is that God does not “endorse” any human social arrangement, let alone envision some “perfect economic system.” Instead, what God asks for is that these arrangements in their particularlity be just. In large measure we do not get to choose the sort of system we live under, be it a parliamentary democracy, a republic or for that matter a kingdom. God can and has worked through all of these. In the same manner, the economic arrangement in society can have a wide variation.

On the specific question, “free enterprise capitalism” is a rather flexible term, meaning different things in say the sociology, the political science, and economics department. What we do know is that however defined, the result of the system must still safeguard the poor and the weak from the all too easy actions of the wealthy and powerful. This caution is spelled out over and over again in the Psalms and Prophets.

We do not pursue a perfect system, or even a perfected system, but rather a perfect, a complete obedience on our side. That at least seems more doable.


A Great American Tradition

Far from the blowhard, Donald Trump represents something of a throwback to older, Protestant ideas. At least so says Carmen Fowler DeFarge. She’s no conservative but she’s on to something here.  Trump’s appeal lies somewhere other than in the ideological, it’s more American — it’s the gospel of positive thinking that has been knitted into our cultural fabric, from the Transcendentalists forward.

Still, DeFarge notes, Evangelicals don’t seem to care.

Trump’s “Evangelical” supporters are the Christmas-church-going, Protestant work-ethic, Manifest Destiny believing, can-do capitalists. They are in every denomination and none. They think of themselves as Christians but they see no real need to have every aspect of their lives aligned with an arcane morality. Trump is tapping into the spirit and power of positive thinking that pervades the teachings of modern cultural evangelists like Oprah Winfrey and Joel Osteen.

Trump never comes right out and says that he’s running on a “Protestant work ethic/Spirit of Capitalism” platform, but that’s the infrastructure undergirding his mammoth personality. … The reason he gets away with so many things that are considered non-politically correct is that he’s saying so many other things that ring the deeply ingrained “Protestant work ethic/Spirit of Capitalism” bell that Max Weber identified more than 100 years ago.


Greed and Capitalism, Part 2

[This is the second of two essay-notes on Greg Foster’s article  at The Gospel Coalition}

Paul VanderKlay highlights the same paragraph noted in the previous post:

Capitalism has not flourished most where there was a spirit of greed. It has flourished most where there was a spirit of stewardship—a sense that we are responsible to make the world a better place. That—not greed—is what produces a capitalism that thrives.

As far as I can tell, Foster  is actually arguing for something close to an “Optimal Capitalism”, a capitalism that works best. From his viewpoint, when capitalism has worked best it has done so by being grounded in a moral viewpoint. The utilitarianism that governs the transactional side (that is, the self-interest of the actors) rests on pre-existing moral assumptions. This is obviously not a stable relationship. Indeed, the historical difficulty is that the very nature of utilitarianism tends to erode this set of moral assumptions (religious or otherwise), as one can read in the hesitation of Christians throughout the 19th Century on the role of money and enterprise, Christians both leading enterprises and those in the Church.

But if the author is arguing for an Optimal Capitalism then he is likewise advancing a moral critique of current practices, assuming that present work is not especially optimal. Now an interesting question underway would be what determines this optimal outcome. What well-being are we striving for? Again, the business of utilitarianism and the “doctrinal” neutrality of business practices seems to recreate the conflict. Can moral precepts function as a boundary to capitalist endeavors? Is there some set of moral bright lines that ought not be crossed?

That is, if we assume the following, what then is our critique? How do we put boundaries on this behavior? What cultural or moral truths are evading?

Our political system has adopted many policies and practices that incentivize materialism, exploitation, and crony capitalism.

Lastly, I found that there was a certain drift to optimism that would be experientially unwarranted. The underlying notion of most market economies is that they are self regulating through competition. Yet at the same time we also find two sets of easily observed phenomena: the regular collusion among the actors led by their own self interest; and secondly the distribution of success along Pareto’s lines (the so-called 80-20 rule, where 20 percent do 80 percent of the business). Both limit the effective role of competition as self-regulation. Cooperation and co-option seem more the order of the day.

Greed and Capitalism, Part 1

[This is the first of two articles considering Greed Is Not Good for Capitalism]


Over at The Gospel Coalition, Greg Foster takes on Max Weber, and importantly sees capitalism does not so much thrive on greed as on stewardship,

Capitalism has not flourished most where there was a spirit of greed. It has flourished most where there was a spirit of stewardship—a sense that we are responsible to make the world a better place. That—not greed—is what produces a capitalism that thrives.

Of course there are problems:

Capitalism creates wealth, and there’s no denying wealth creates special temptations. You don’t have to accept Weber’s economic charlatanry to see that!
There are other factors. In a society with religious freedom, it is especially challenging to maintain a robust public moral culture. The academic discipline of economics has adopted a materialistic anthropology and utilitarian ethical assumptions. Our political system has adopted many policies and practices that incentivize materialism, exploitation, and crony capitalism.

But are these flaws, or inherent to the practice of capitalism itself? Some thoughts.s

The notion that capitalism thrives in moral or Christian framework implicitly creates the tension that Weber observed. That idea means at the very least that there are certain values that precede and govern the economic enterprise. The very role of self-interest in transactions pushes players to test these moral boundaries. Indeed, the historical experience has been to validate game theory: violation reaps the rewards, thus the bitter outcomes of so many extractive industries. The corollary to this would be a degradation of standards, unsurprising since the observance of moral precepts, that is of self-limitation, is itself a cost. So utilitarianism, the role of self-interest (aka “greed” or in polite circles perhaps “fiduciary duty”) gets validated, and indeed becomes normative.

This conflict between the moral sentiment and religious grounding and the imperatives of the emerging market or capitalist economies is well attested to in the literature and journals of the 19th Century, or for that matter in the family practices of the great capitalists themselves (thinking here of Ron Chernow’s portrait of John Rockefeller in Titan). In short, it’s real.

Second, the article assumes in good business school optimism, that companies in fact act for the best interest (“humanizes work, builds trust with customers, and orients workers toward creating value and serving the customer with excellence”). Greater honesty would admit that realizing this view is more a matter of privilege, that many work only to survive, seeking a satisfice role rather than one of pursuing excellence. Where one does not have a market dominant position the force of competition at the least creates the sense that one cannot afford such a move to excellence, no matter how personally desirable.

And that brings the other issue left out here, the nature of internal policies. The question of greed is often as much expressed in how one understands the varying claims on revenue: what portion properly belongs to the investor, what to the worker, what to benefits, what to reinvestment, what to improved processes and the like. Again, there is a societal or group dynamic at work here that limits the view of the participants themselves as to what they may consider to be even feasible. (Case: in the 70s the Fortune 500 firm, Herman Miller, limited CEO pay to a multiple of 35x the wage on the floor; current practices would find that decision to be fiscally irresponsible. Or read Dickens to see what could be tolerated).

To sum, while the idea that capitalism rests properly on moral precepts and Christian teaching may offer an explanation of where and how capitalism works best, it is a notion that is limited. And indeed, were we to admit it, by putting (biblical) ethics before business, it functions as an implicit critique of current practice. And ironically, that is not so far from where social justice begins.