Our real conflict is not between capitalism and socialism, but between free, virtuous markets and a corrupt political-economic regime.
Editor’s note: This essay appeared in Capitalism and the Common Good According Michael Novak: A Law and Liberty Symposium on First Things
In his recent essay on the legacy of Michael Novak, First Things editor Rusty Reno has explained to longtime subscribers to Richard John Neuhaus’ old magazine where Reno is going with it and why. Observers such as John Zmirak and Joe Carter have wondered at several First Things pieces that shyly or openly make defenses of socialism.
Reno’s piece makes it clear that he disagrees with Michael Novak, and perhaps by implication Father Neuhaus, on the viability of a dynamic, open society—and the economic system that underpins such a system. He is looking for some alternative to the market economy. For him, that involves a number things including succumbing to the allure of what I’ll call “managerial capitalism.”
The merit of Reno’s piece is to provoke discussion about complex issues and to highlight some of the problems we face in the current system of global capitalism. I share some of his worries. Unfortunately, he seems to have let his desire to be provocative overcome a fair and reasonable assessment of Novak, and his analysis of the current state of affairs reveals less about Novak’s flaws than his own.
Reno’s reading of Novak is a caricature. He attributes positions to Novak that anyone who has read his work or spent any time with him knows are not accurate.
“It was characteristic of Michael,” according to Reno, “to frame the highest good as liberation from constraint.” He quotes Novak from The Spirit of Democratic Capitalism (1982), where he says that “God did not make creation coercive, but designed it as an arena of liberty.” But the highest good for Novak was not liberation, but love of God and neighbor. In the sentence immediately following the one Reno quotes, Novak writes: “Within that arena, God has called for individuals and peoples to live according to His law and inspiration.”
In other words, it is quite clear in The Spirit of Democratic Capitalism and elsewhere in Novak’s thought that the purpose of freedom and the spiritual ideal of capitalism is caritas and that the betrayal of this “injures the system in its every part.” Reno’s is a provincial reading, for what precipitated Novak’s insistence on liberty was not, as Reno suggests, the 1960s “decade of liberation,” but the image of the men and women of Poland, Slovakia, and the Soviet Union, where millions of lives and families were crushed by oppressive socialism.
Reno argues that Novak appreciated liberty but undervalued culture and failed to give “due emphasis” to “our desire to give ourselves in loyalty to permanent things. . . . He lost sight of the need for anchors.” While conceding that Novak’s explanation of the relationship between economic liberty, democratic institutions, and culture was “elegant,” Reno argues that “we overestimated the stability of the three-legged system.”
But Novak did not. As he wrote in Awakening from Nihilism (1995):
To maintain free societies in any of their three parts—economic, political, or cultural—is a constant struggle.
Of these three, the cultural struggle, long neglected, is the one on whose outcome the fate of free societies in the twenty-first century will most depend . . . .
No one ever promised us that free societies will endure forever. Indeed, a cold view of history shows that submission to tyranny is the more frequent condition of the human race, and that free societies have been few in number and not often long-lived.
I had the privilege to be one of Novak’s students in the first Slovakia seminar in 2001 where he spoke of his Slovakian and Pennsylvania roots. It was abundantly clear that his defense of economic and political liberty was grounded not in radical individualism but in loyalty and the permanent things.
Finally, Reno’s critique of Michael’s optimism about the dynamism of capitalism misses the point. It is true that Michael was optimistic and looked on the bright side. He had a strong belief in the capacity of ordinary people to rise up and accomplish great things. But at its core, what drove Michael was not expanding capitalism, or choice, or liberation, but the Christian virtue of hope. Reno takes a familiar tone yet he somehow misses the essence of Novak both as a thinker and a man.
It has been a theme of Reno’s for several years that capitalism is no longer a choice but is our fate. The valuable insight here is that we have to address the current model of capitalism as it exists; simply claiming we need more markets or that this is not “real capitalism” is insufficient. Reno rightly notes several pressing problems, such as the situation of American manufacturing workers who have not fared well in the global economy. I agree. While a free and competitive market economy makes everyone better in the long run, in the short run some people lose, and the short run is not always so short. For some, it can be two or three generations. To simply extol the virtues of the market or tell people to get trained in another field and relocate is not sufficient. We have a social responsibility to those who took a hit for the team.
Yet it is naïve to think that capitalism is simply a given. As nature tends toward entropy, so too does a market economy tend toward cronyism and mercantilism unless intentionally and continually made free and fair. The world was highly globalized before World War I as John Maynard Keynes and others have noted, and few imagined the quick descent into autarky and conflict that ensued. In the early 20th century, Argentina was a prosperous society similar to Australia. Today it is one of the least free economies in the world and suffers from high levels of poverty and inequality.
Economic freedom does not simply happen. It is always difficult of achievement, requiring a moral commitment by those in power to choose against their own economic incentives for the common good.
Reno seems to generally misunderstand the economic state we are in. He argues in the present essay and elsewhere that our economy is freer than it has ever been. This ignores the tremendous increase in regulation over the last 30 years, as Robert Miller and Samuel Gregg have pointed out. People tend to think of regulation as mending an economy for fairness. More often than not, it is a tool used to create special advantages—just look at U.S. agricultural policy, or ask the hundreds of millions of poor people throughout the developing world who are excluded from markets by a complex system of tariffs and protectionism that only the rich and well-connected can navigate. Global capitalism is not their fate. Cronyism and exclusion are their bane.
The biggest weakness of Reno’s analysis, however, is his assertion that capitalism is the driving force behind cultural and moral disintegration and his corollary argument that it is “patently absurd” for conservatives to worry about socialism. Here he makes two related but distinct points.
First, he suggests that the market economy, by providing so much choice, has led people to become unhinged to such a degree that we think we can choose our own gender like we do shoes. Second, he argues that there is a “clear . . . link between global capitalism and progressive clear-cutting of traditional religious culture and morality.”
Indeed, capitalism and a global market create lot of choice. This can have negative cultural effects; it can even, as some studies argue, make people less happy. It’s also true that a market entrepreneurial and business culture can lead to a kind of crass utilitarianism, and that consumerism can lead to pollution and waste. But as others have noted, the idea that consumer choice is the source of people’s perceptions about their gender is a bizarre argument. Gluttony and intemperance in consumerism clearly have ramifications in the sexual realm. If Reno had said that, I would have nodded in agreement. But to make consumer choice the main culprit while at the same time minimizing the influence of socialist thought reflects a type of economistic reductionism which Reno supposedly laments.
Here Peter Berger’s distinction between what is intrinsic to capitalism and what goes along with it, or can exacerbate it, would be helpful. John Zmirak has pointed out that many of the actual insights in Reno’s essay are not controversial among free market conservatives. Wilhelm Röpke made most of them in the early 1940s. The irony is that for all his critiques of Novak, Reno seems to make the same mistake that he rightly accused some free marketers and conservatives of making when the Soviet Union fell: reducing socialism to its economic form alone.
Yes, some corporations fought against the Indiana religious liberty act. But while corporations’ buying into this authoritarianism is a problem, what it represents is not so much the influence of capitalism on society, as the “long march through the institutions” by the socialists that Reno tells us not to worry about. Would Reno really credit U.S. corporations with the Obergefell decision or with theories that identify sexual predilection with ontology—theories that have made their way into U.S. and European law and United Nations Yogyakarta Principles, and that will increasingly restrict both religious and commercial liberty?
Can markets exacerbate such developments? Of course. But to suggest they are their primary cause is to not only describe the problem inaccurately, but to let the real perpetrators get away.
Obviously, much depends here on what one means by socialism. If one means state ownership of the means of production and abolition of all private property, then Reno is right. But what if one means by socialism what most socialists living today mean by it? That is, a broad vision of social change that includes radical autonomy, egalitarianism, technocracy, relativism, and plastic anthropology. Then it becomes clear that the driving force behind the propagation of gender theory is in fact cultural socialism, which is definitely something to worry about.
So how does Reno suggest we solve the problems wrought by capitalism? He writes:
It is inhumane to forsake the dynamism of capitalism, but it also inhumane to think that quality is sufficient. In 2017 we need to direct economic freedom toward the service of the common good.
What Reno is suggesting here is effectively “managerial capitalism”—the same thing that Tony Blair and Bill Clinton, George Bush and Barack Obama, Alan Greenspan, Robert Rubin, Hank Paulson, Joseph Stiglitz, the World Economic Forum, Matt Damon, Bono, Vox, George Clooney, the World Bank, and the International Monetary Fund have been advocating and practicing for decades. And what has managerial capitalism given us? “Irrational exuberance,” financial crises, exclusion of the poor, and crony capitalism.
After all his meandering reflections on the global economy Reno ends by telling us that First Things has decided to join the establishment, and promote the status quo. Aaahh . . . It’s good to be in New York. Maybe he’ll even get an invite to Davos.