Is There a Moral Basis for Capitalism; C. Dykes

The claim that capitalism pro vides the best economic structure for man's moral development, long a virtual article of faith in American Mr. Dykes is a businessman, freelance writer and enthusiastic advocate of the free market. 474 life, is met with derision these days by politicians, journalists, univer sity professors, and theologians. Clergymen daily rage with indigna tion against the "evils" and "injus tice" of the competitive market. Capitalism is, so we are told, "in trinsically immoral." "Soul dead, stomach well alive," was Thomas Carlyle's estimate of the market system, and all the cultured despis ers of commercial civilization are in hearty agreement. The market order, we are in formed, promotes a materialistic view of life. "Things," Emerson once said bitterly, "are in the saddle and ride mankind." The capitalistic form of economic organization is said to be dehumanizing. Owen Chadwick has brilliantly summarized the thought of Karl Marx for us on this point: "The structure of society derives from IS THERE A MORAL BASIS FOR CAPITALISM? 475 the work which men do. In bour geois society the worker provides goods, to serve not the needs of men but the needs of the market. Then, instead of men controlling goods, goods control men; so that, the more workers produce, the wider the gap between rich and poor. This ill-ar rangement may be called the 'alien ation' of man's work. A man's work is 'natural,' part of the structure of living. Therefore the alienation of his work creates an alienation of man from nature, from his fellow-worker, even from himself. Economic non sense pushed all relations awry. Men and women become things and treat each other like things."l Hostility Against Capitalism The animus of many theologians against capitalism is especially bit ter. Michael Novak gives a not un common example: "Jurgen Molt mann portrays capitalism as though it were outside the law, destructive of true community, reducing all re lations to impersonal monetary re lations, inspiring wolflike animosity between man and man and irratio nal in its pursuit of growth for the sake of growth and work for the sake ofwork."2 Writing in The Christian Century in 1976, Bruce Douglass admits that most of the political and economic comment coming from theologians has a socialist flavor. He then goes on to insist that defenders of capitalism are engaged in what amounts to a justification of injustice, selfish ness, and other forms of sin. The case for socialism, we are given to under stand, is primarily concerned with justice, and is thus exactly the op posite.

What of these charges? Does cap italism "make the world free for sin ners," at the same time relentlessly alienating Inan from his fellows and himself, even as it dehumanizes him? Does it unleash, and then callously celebrate as virtue, a rampant and rapacious selfishness? Is it oblivious to, indeed destructive of, the de mands of justice in human rela tions? Is it, in sum, without moral justification, and thus guilty as charged of being "intrinsically im moral"? It is our conviction that these charges are entirely fallacious. Not only that: We are soundly convinced the market economy is securely an chored to the Judeo-Christian reve lation. Neither the caricatures of its enemies, "nor the perversions of its friends, can alter this fact. A System of Relationships The critics are right when they demand that our economic system rest on a firm moral basis. If it can be shown that it does not, then we should abandon it immediately and seek to establish a more just order.

At the outset, however, important distinctions and clarifications must 476 THE FREEMAN August be made. Arthur Shenfield calls at tention to one of the most vital, viz., "the economic system called capital,ism is a system of relationships. It is a composition of markets, and mar kets are by definition systems of re lationships, not purposive bodies. It follows that we can apply the tests of morality to capitalism only by considering the behavior of individ uals who operate within it, not as a system capable in itself of being moral or immoral." It is Shenfield's contention that since capitalism is "a system of re lationships it cannot be moral or im moral in the sense that a purposive group can be.... " He denies, how ever, that such a system is morally neutral. "If its essential character istics on balance positively nurture or reinforce moral or immoral indi vidual behavior, it is a moral or im moral system in its effects."3 Furthermore, we must repudiate the erroneous tendency of many critics to attribute to capitalistic economic phenomena, human be havior, social ills, or political crimes to which history bore witness before the birth of the capitalist system. And again, enemies of capitalism are prone to identify the market econ omy with society as a whole. For them, capitalism forms and per meates the whole of society, and in so doing destroys and corrupts hu man relationships other than those contracted for strictly economic purposes. But the truth is, the competi tivemarket is only a part or aspect of any society.

"The market," as John Davenport correctly observes, "is not an end in itself, but the means to higher ends." The market is merely an element in a society which transcends and ex tends far beyond it. The market is but a method of recording consumer preferences and allocating re sources, an information system which transmits knowledge spontaneously through the signals sent out by prices. Allocationof Scarce Resources All economic goods are, by defini tion, scarce, while the hunger of man for these goods is nearly infinite. Thus a workable economic system concerns the allocation of scarce re sources-e.g., labor, materials, or capital-to human wants. Socialism assigns to a supposed omnicompe tent state the task of deciding what people need, and then the develop ment of a master plan as to what goods will be produced in what amounts. In the market economy, on the other hand, consumers bid on what they want via the price mech anism.

No matter what system a society employs for organizing its economic life, certain common decisions must be made. For example, all economies must decide what goods will be produced, and how the fruits of this 1983 IS THERE A MORAL BASIS FOR CAPITALISM? 477 production will be distributed. All economic systems coordinate men and materials in making these de cisions in some way. The market system makes these decisions and achieves this coordination. through an institution of private property rights and voluntary exchange. From the days of Adam Smith, ad vocates of the free market have ar gued that market processes have a strong tendency to equate public benefits and private profits. Follow ing the argument of Bernard Mandeville's Fable of the Bees, Smith held that private vices-e.g., greed are converted into public benefits. A Harmony of Interests There is, in a free market, a har mony of interests between the pub lic and the private. Does this imply, then, that the free market, in some way, nurtures or reinforces unjust rather than just behavior? Not at all.

The free market economy is the most productive form of economic organi zation just because it is most consis tent with eternal moral principles. The economy of any society is inte grally related to the moral princi ples and consequent values to which the society is committed and sub stantially adheres. Or, as Paul Johnson puts it, "The level of social morality is directly linked to the performance of the economy."4 Consider the testimony of Wil helm Roepke, one of the greatest economists of the twentieth century. He wrote: "One of the most danger ous errors of.our time is to believe that economic freedom and the soci ety which is based upon it are hardly compatible with the moral stan dards of a strictly Christian atti tude." In Roepke's view, "the very opposite of this popular belief is true: the strongest reasons to defend eco nomic freedom and the market econ omy are precisely of a moral char acter. It is economic freedom and the market economy which the moral standards of Christianity require, not the opposite economic system. At the same time, however, we have to say with equal force that economic free dom and the market economy re quire these moral standards. One conditions the other."

Roepke understood that "Social ists and non-socialists are divided by fundamentally different concepts of life and life's meaning. What we judge man's position in the universe to be will in the end decide whether we believe our highest values to be realized in man or in society, and our decision for either the former or the latter will also be the watershed of our political thinking. Once more we find Cardinal Manning's famous statement to be true: 'All human differences are ultimately religious ones.'" The conclusion: "we should stand for a free economic order even if it implied material sacrifice and if socialism gave the certain prospect 478 THE FREEMAN August of material increase. It is our unde served luck that the exact opposite is true."5 The Family Unit While keeping in mind that the market economy is only a part or as pect of society, we do contend that capitalism is more than just an eco nomic system of voluntary relation ships. Specifically, it is an economic system based on the right of private ownership of property and a free market for goods and services, con sistent with the second table of the moral law.

The fifth commandment of the Decalogue, "honor thy father and thy mother," implies that the family, not the state, is the basic social and eco nomic unit of society and should be the strongest. R. J. Rushdoony has noted that "throughout history the basic welfare agency has been the family. The family, in providing for its sick and needy members, in edu cating children, caring for parents, and in coping with emergencies and disasters, has done and is doing more than the state has ever done or can ' do."6 A society characterized by a significant degree of economic free dom is always a society dominated by strong family units who provide for their own. This contrasts with socialism, whose basic goals, if real ized, would destroy the family in the interests of the larger collective. The sixth commandment, "Thou shalt not kill," is, according to John Chamberlain "simply the other face of Locke's and Jefferson's 'unalien able' right to life."7 John Calvin ex plained it this way: "The sum of this commandment is, that we should not unjustly do violence to anyone."

"Thou shalt not kill" is thus a ge neric expression which also forbids wounding, violent threatening, and any unjust coercion by an individ ual, group, or state that would re strain legitimate liberty. Economic freedom is born and thrives only in nations or communi ties where reverence for all human life is widely held to be a supreme value, where the personal safety of the neighbor and his family is gen erally regarded as inviolably sacred, and where compassionate individu als, acting either alone or through voluntary associations, are encour aged to offer substantial assistance to the poor and needy. This differs radically from the command society of socialism, whose adherents are frequently found not only approving but actively promoting violence, ter rorism, and the destruction of the middle class. In such societies (and this would include the Welfare State) "compassion" is institutionalized, and becomes a monopoly of the state.

The seventh commandment, "Thou shalt not commit adultery," teaches us, as does the ninth commandment, that contracts must be honored and double-dealing scorned. "The his1983 IS THERE A MORAL BASIS. FOR CAPITALISM? 479 toric link between the biblical. idea of binding covenants and the West ern idea of binding contracts," writes Gary North, "is obvious enough."8 The very idea of contracting for joint benefit presupposes a high level of moral integrity and faithfulness on the part of all the parties engaged in the transaction. In socialism the paternal state seeks to vitiate the necessity for the sanctity of contracts by substituting its omnipotent controls and decrees. Opportunity for moral development and the growth of trust between free men is thereby suppressed. The so cialist ethic in this area is readily illustrated in the attitude of con temporary socialist bloc nations to ward the fulfillment of treaty obli gations. The Soviet Union, for example, has violated every treaty it has ever made. Lacking an un changing moral foundation, there is nothing in the socialist ethic to con demn such action.

Private Ownership The right of private ownership is based on the eighth commandment, "Thou shalt not steal." According to the Westminster Shorter Cate chism, this commandment requires "the lawful procuring and further ing the wealth and outward estate of ourselves and others." The com mandment forbids "whatsoever doth or may unjustly hinder our own or our neighbor's wealth or outward estate." The eighth commandment "means that the Bible countenances private property-for if a thing is not owned in the first place it can hardly be stolen."9 Harold Lindsell, in the course of explicating the hatred of socialist intellectuals for private property, unmasks the latent hypocrisy usu ally present. He observes that "ideas are property too. Professors who write books to expound their ideas secure copyrights which protect their words against plagiarism. Das Kapital by Karl Marx was protected by copy right. Just try to find a new book published by a socialist which is not protected by a copyright! The simple truth is that socialists consistently violate their basic premise about private property in areas such as this so that they may profit from their.

labors!"lO The ninth commandment forbids lying. The whole idea of a free mar ket implies that the parties to this voluntary exchange will not deceive each other. The doctrine of the har mony of interests in freedom largely depends for its working upon sub stantial voluntary compliance with this command. Lying is an inescapable concomi tant of socialism. The socialists must forever condemn profits, for in stance, and the profit motive. But the truth is, socialist nations are just as profit-minded as are capitalist na tions. The difference: In capitalist 480 THE FREEMAN August nations the individual reaps the profits and decides how they will be used; in Socialist nations the state reaps the profits and determines what to do with them. So lying, even about its basic tenets, is crucial to socialism. The tenth commandment, "Thou shalt not covet," "means that it is sinful even to contemplate the sei zure of another man's goods-which is something which Socialists, whether Christians or otherwise, have never managed to explain away."Il Coveting is a root of all so cial evil.

How Envy Destroys Envy, a central aspect of covet ousness, involves not only the desire to possess another's property, but Jllso-and perhaps more heinous the desire to see another's wealth or station reduced to the level of one's own. "Envy is ineluctable, implaca ble and irreconcilable, is irritated by the slightest differences, is indepen dent of the degree of inequality, ap pears in its worst form in social proximity or among near relations, provides the dynamic for every so cial revolution, yet cannot of itself produce any kind of coherent revo lutionary programme."12 Rushdoony points out that the tenth commandment "forbids the expropriation by fraud or deceit of that which belongs to our neighbor. The tenth commandment therefore does sum up commandments six through nine and gives them an ad ditional perspective. The other com mandments deal with obviously il legal acts, i.e., clear cut violations of law. The tenth commandment can be broken within these laws." This law forbidding dishonest gain "is di rected by God, not merely to the in dividual, but to the state and all in stitutions. The state can be and often is as guilty as are any individuals, and the state is often used as the legal means whereby others are de frauded of their possessions."13 So cialism, through its employment of the police powers of the state for the purpose of expropriating the wealth .