Societies and souls need more than the freedom of the market

Ever since Pope Leo XIII issued Rerum Novarum in 1891, the Church’s social teaching has commonly been seen as favouring a carefully qualified form of capitalism, of sorts perhaps best expressed in the Rhenish capitalisms of Christian democrat Germany and Holland, or even in social democrat societies.

Catholic advocates of less restrained capitalist models, however, have long maintained that the freedom that’s essential to free-market capitalism is itself necessary for the flourishing of other freedoms, including religious and civic life. This thesis underpinned Michael Novak’s 1982 book The Spirit of Democratic Capitalism, and long influenced the religious journal First Things, to which Novak, who died this February, was a frequent contributor.

All of which has made startling a lengthy piece on firstthings.com by First Things editor R.R. ‘Rusty’ Reno which admits that this thesis is – at least now – highly problematic.

‘The Spirit of Democratic Capitalism’ revisits Novak’s book of the same name and observes that “Capitalism is not a choice, as it seemed to me and many others when Michael wrote his book. It is our fate – and our problem.”

Analysis

Novak’s analysis, he says, recognised that healthy societies need “a free economy; liberal, democratic political institutions; and a Judeo-Christian moral ecology that prizes human dignity and encourages self-discipline, social trust, and individual initiative”, but, he says, the stability of such systems have depended very much on a historical moment that is passing away.

The 1970s against which Novak wrote were an era when liberation was seen as the highest of goods. Reno argues that the “new birth of freedom” Novak championed largely came to pass, but did so in a way that has weakened democratic institutions and a vital religious and moral culture. Similar and related points have been made in recent years by such diverse thinkers as Jonathan Haidt, Phillip Blond and Rabbi Jonathan Sacks.

“Michael observes that ‘greater incentives will stimulate greater economic activism,’” Reno writes, before continuing: “True, but he did not recognise that ever-greater economic activity can crowd out political engagement and sideline religious and moral authority. This is what has happened.

“Capitalism, now global in scope, is swallowing up more and more of civic life, so much so that in some contexts economists and policymakers present free market principles as ironclad laws about which we have no choice.

“Dwindling manufacturing jobs, technological displacement, global flows of labour and capital – we are told we have no alternative. This is a cruel reversal of what Michael commended as the source of freedom and openness.”

Warning against tendencies towards oligarchic systems where “the well-placed few” – whatever their political outlooks – “govern the largely docile and easily manipulated many”, Reno says that First Things has, in retrospect, “underestimated the flesh-eating character of our free market economy, which now markets ‘community’ and uses ‘social justice’ as a way to sell products”.

The effect of multinational companies positioning themselves as agents of social change is, Reno argues, “a political placebo, one that substitutes social-therapeutic gestures for genuine solidarity and civic engagement. The market is becoming the dominant mode of our social engagement, with social media leading the way.”

This diminishes democratic culture, he says, and undercuts traditional religious moral attitudes, with companies that believe in religious freedom knowing they will be punished by the market if they speak up.

Diversity may bring innovation and success, but Reno laments that modern diversity too often entails signing up to certain progressive cultural commitments, “which in turn means accepting the authority of a rigid, punitive ideological system”.

In our world, Reno argues, the very virtues of free-market capitalism work against any kind of permanence – even those for which our hearts cry loudest – and help to foster the notion of a world where constraints seem arbitrary.

“It is inhumane to forsake the dynamism of capitalism,“ he says, “But it is also inhumane to think that quality sufficient. In 2017, we need to think about how to direct economic freedom toward service of the common good.”