The Spirit of Democratic Capitalism

Rating:
Summary: A Prayer of Capitalism
Review: ...

This is an important book. It links the liberal democratic order of capitalism with the Judeo-Christian moral tradition and thus at once removes capitalism from being a secular, non-discriminatory form of free market exchange to a human set of relationships between individuals based on a moral code.

Whether or not all philosophers would agree with that thesis is another issue. Since the enlightenment when religious authority was usurped and the secular society emerged, religion has been under attack in developed societies and today many in organized religions decry the relatavistic nature of our behaviour.

That said this is a book that should be read by anyone interested in the concept of the ethical corporate governance. It is a difficult book to read due to the densely written arguemnts which require close reading. It is a challenging book in many ways, especially to those who have strong personal belief systems. Nevertheless, Novak makes a strong case and his exposition deserves to be taken to a wider audience

My thoughts upon rereading this book again recently were that there is a need for a similar book to relate Capatilism to other major religions in a way which transcends any one religion in particular. In the light of recent events too there is a case for a treatise which relates Capitalism to the Moslem world to show that it is an inclusive rather than an exclusive social system.

Rating:
Summary: Brilliant, provocative, learned, faithful
Review: Michael Novak is probably the foremost Christian thinker on the economy. Any of his books reward study, but "The Spirit of Democratic Capitalism" is undoubtedly his magnum opus. In this classic text, which has now been updated and revised, Novak joins issue with theologians like Paul Tillich who contend that "any serious Christian must be a socialist." It appeared in a samizdat (underground) edition in Poland during the 1980s and had an obvious impact on the Solidarity movement. Its reasoned defense of democratic capitalism as being grounded in the humane values of the Judeo-Christian tradition also helped give a moral center to the neo-conservative movement.

In "Democratic Capitalism," Novak addresses the consistency of capitalism with church teachings on wealth. Novak recognizes that church teaching has been hostile to capitalism, as with much else of modernity. Yet, Novak contends that arguments against capitalism serve mainly to give aid and comfort to the Leviathan state. Indeed, Novak persuasively (if controversially) attributes Christian opposition to capitalism to two main sources: ignorance and antique world views. Church leaders and theologians tend to have either a pre-capitalist or a frankly socialist set of ideals about political economy.

To be clear, Novak does not believe that faith should be subordinated to capitalism. To the contrary, he recognizes that the divine plan was that we should enjoy the fruits of the earth and of our own industry. He simply contends that capitalism is the best way Fallen humans have yet devised to obey the Biblical command that we are to be stewards of God's world. Novak never loses sight of the basic proposition that it was equally the divine plan that God should be worshiped, obeyed, and feared. The fear of the Lord, he would argue, is the beginning of capitalist wisdom, just as it is of any other kind of wisdom. Not surprisingly, therefore, Novak's analysis has begun to impact the way the church thinks about capitalism. Pope John Paul II's most recent encyclicals on work and the economy, for example, such as Centesimus Annus, contain obvious marks of Novak's influence. In sum, very highly recommended.

Rating:
Summary: Breaking new ground
Review: The American theologian Michael Novak converted from socialism to capitalism in the 1970s, somewhat against the trend of the times. It might be said that he got in early to beat the rush to the neoconservative right. He has written that his liberal humanist education, mostly in philosophy and theology, was anti-capitalist 'as was common'. At the age of 40 he recognized a need to question his presuppositions about political economy and especially economics. This led him to discover and eventually to celebrate democratic capitalist traditions and institutions, especially in their North American form. He is especially proud of the achievements of the founding fathers of the Constitution with their appreciation of the need to separate the powers of church and state, and to take precautions against the predatory activities of political factions.

In his capacity as a Catholic theologian he has been especially concerned to reply to the moral critics of capitalism who typically argue that the system abandons the public interest and the welfare of the community to self-interest and the pursuit of individual gain. In one of his other books, Free Persons and the Common Good, he attempted to retrieve from the Catholic literature a conception of the common good that is consistent with capitalism and the market order. Novak taook up this challenge with a tortuous excursion into the works of Catholic thinkers, among them Aquinas who Lord Acton described as 'the first Whig'.

His account of the American experience as an adventure of classical (non socialist) liberalism is more convincing. He identifies several valuable moral traditions which were called forth by democratic capitalist institutions in the early American colonies. These include civic responsibility, personal economic enterprise, creativity and a special kind of communitarian living. He also offers a cogent rejoinder to the critics who accuse capitalism of lacking moral or spiritual depth. He explains that statements on the 'spiritual deficiency' of democratic capitalism spring from a "horrific" category mistake. Democratic capitalism is not a church, a philosophy or a way of life, instead it promises three liberations; from tyranny and torture; from the oppression of conscience, information and ideas; and from poverty. The resulting social order provides space "within which the soul may make its own choices, and within which spiritual leaders and spiritual associations may do their own necessary and creative work". He suggests that Democratic capitalism has done rather well on the score of promoting spiritual and cultural life, in contrast with Fascism and Communism which aspired to cater for higher human needs.

The most significant achievement of the book is to explain how the common good can be served by the blend of individualism and free-market institutionalism (under the rule of law) that is advocated by von Mises and Hayek. Both these writers and other classical liberals dismiss the notion that there is anything identifiable as the common (collectivist) good. But the kind of 'common good' that Novak identifies is not of the collectivist variety, instead it is a framework of institutions and traditions which maximises the chance for all individuals to enjoy life, liberty and the pursuit of happiness. This particular kind of common good is promoted by the extended order of morals and markets, provided that the markets and other vital parts of the system of law and government are working properly. Here the notion of the rule of law is crucial because it defines an essential function for strong (but limited) government.

Novak supports the market liberal thrust for free trade and he also endorses the traditional, conservative notion of the rule of law against certain types of social engineers and judicial activists. However he does not object to the welfare state because he thinks that it is necessary in these days of fragmented communities and highly mobile people. Those who like their ideology strong and pure will deplore this lapse from grace but it shows Novak's willingness to get the best of both worlds, if this is at all possible. In the same way that he is determined to retrieve the best of Catholic theology he is prepared to take whatever he finds acceptable from the diverse strands of liberalism, ranging from the laissez-faire of von Mises and the deregulators to the left-liberalism of the American democrats. Novak challenges libertarians who have no time for religious traditions and he challenges religious conservatives who regard the liberal tradition as self-centred. This book maintains his reputation for breaking new ground and making connections between apparantly antagonistic modes of thought.