Editor’s note: This essay appeared in Capitalism and the Common Good According Michael Novak: A Law and Liberty Symposium on First Things
Like R.R. Reno, Michael Novak’s passing earlier this year prompted me to reread some of his writings. I served as Michael’s research assistant at the American Enterprise Institute from 2001 to 2004, admired his work, enjoyed his friendship, and with many others, including Reno, remembered him fondly. Unlike Reno, I think, my rereading led me to a deeper appreciation of Novak’s arguments and to the conviction that they should be developed, not set aside. His sophisticated analysis of the political economies of our age probe human good and evil as they manifest themselves in the social systems we inhabit.
Novak showed that capitalism has distinctive moral, spiritual, and social contributions to make to a society composed of good but also fallen people and of relatively few saints and few wicked. As Reno observes, Novak wrote during a time when societies emerging from colonialism and later from communism had the opportunity to establish capitalist economies. Novak demonstrated the fatal philosophical flaws of communism, the disadvantages of democratic socialism, and the relative advantages of capitalism, or, as some prefer to say, a business economy. A business economy not only generates wealth more abundantly than its socialist counterpart but tends to promote broad political participation and cultivates the practical reasoning and relational habits needed for meaningful, effective work and the sensible use of property.
The spread of global capitalism bears out at least some of these arguments and leaves us two overarching questions:
1) How do we sustain and improve a business economy or perhaps develop a better economic system? (Novak frequently said that capitalism is the worst system except for all the rest.)
2) How do we prevent the culture of a business economy from eroding its own moral-cultural and political supports?
Whether sustained and improved or replaced with something better, the preferred economic system would motivate people to work, to exercise creativity and responsibility in marshalling resources and meeting needs, and to accumulate and share wealth. Thus, it would enable people to provide for themselves and others across the entire population. It would also preserve, as Reno put it, “capitalism’s spiritual achievement.” In Reno’s analysis, Novak defined capitalism’s spiritual achievement in terms of liberation from constraint, openness in social relationships, and dynamism in human creativity. As Reno observes, this language reflects the sensibilities of the 1960s. Novak, a master writer, developed this language as a rhetorical strategy across five decades to persuade the widest possible audience of why communism would, and then did, fail and why a business economy within a democracy proves to be a better economic system than democratic socialism. While many may interpret the language of openness and dynamism in a materialistic way, Novak’s arguments militate against it.
This five-decades long argument was based on economic, sociological, philosophical and theological principles that, taken together, help illuminate the abiding goods of soul and of society that Reno seeks to protect and promote: “marital stability, democratic institutions, and . . . the dynamism and openness that seek higher things than can be had in any market.” In Spirit (1982, 1991) and again in The Universal Hunger for Liberty (2004), Novak proposed that we evaluate any system of political economy by investigating the following questions:
1) How does it compare with other known systems?
2) How do its particular institutions function?
3) How does it handle universal economic realities such as scarcity, risk, possession of productive goods?
With this framework, Novak tried to disentangle some complex economic causes of poverty under communism and wealth-generation in a business economy. Moreover he avoided the mistake of using failures in particular market economies as an argument for replacing an entire capitalist system with a socialist one, as some activists still energetically propose (using arguments that Novak confuted decades ago).
Similarly, Novak proposed cultural principles capable of holding the moral-cultural system of democratic capitalism to a viable standard. Novak used secular theorists and Catholic philosophy and theology to argue for a political economy of wealth-creation and the cultivation of virtue, emphasis on the latter. He injected realism into the high socialist ideals of some fellow Christians using their own language:
The point of the Incarnation is to respect the world as it is, to acknowledge its limits, to recognize its weaknesses, irrationalities, and evil forces, and to disbelieve any promises that the world is now or ever will be transformed into the City of God.
Nonetheless, at crucial points in his analysis of democratic capitalism, he tried to make economic laws and analysis support the human desire to love and be loved:
The highest goal of . . . democratic capitalism is to be suffused by caritas. Within such a system, each person is regarded as an originating source of insight, choice, action, and love. Yet each is also a part of all the others.
To Novak’s Western and Christian way of thinking, virtue translates personal insight into acts of caritas, but not only for Westerners or Christians. In The Universal Hunger for Liberty, Novak advocated “new habits of cross-civilizational respect,” built on respect for the regulative ideal of truth, cultural humility, the dignity of the individual person, and human solidarity” and for an expanded set of political, economic, and cultural virtues capable of animating the institutions of a free society, including but not primarily the state.
Novak’s argument for democratic capitalism rested upon distinguishable sets of cultural, economic, and political principles more than on his rhetoric of openness and dynamism. These principles seem essential today for disentangling complex social problems in a global economy. Reno seems to think that global market activity has brought global moral corruption all the way down through culture. This corruption of culture has led to “dwindling manufacturing jobs, technological displacement, and global flows of labor and capital” and has tended to render “the very idea of borders—between nations . . . [and] the sexes—. . . more and more tenuous,” and to “liquefy our social relations and even our sense of self.”
But surely we should first try to understand labor and capital fluctuations in economic terms, territorial issues in political terms, and social and sexual relations in cultural terms. If an economic institution such as a market strains the capacity of its current culture, the culture has to develop.
One might craft a better framework than Novak’s, but to dismiss his principled arguments will probably leave many people—with good intentions but insufficient reflection—receptive to socialism or movements that tend in a similar direction, such as agrarianism or distributism. Having rejected the “dead end” of retro-socialism, does Reno nonetheless see a cultural remedy primarily in a more regulated economy, even a heavily regulated and protectionist one?
Novak recognized that his own arguments would need development: “To know [democratic capitalism’s] ideals is to be restless under the status quo and to wish to do better in the future.” Novak also recognized that the restless might pale before the difficulty of sustaining a free society and shift responsibility back to the state. First Things has consistently found true guiding lights for building free economies. Let us hope it continues to do so.