While attending a nominally Methodist university in the 1980s Jay W. Richards easily absorbed (from classes and assigned readings as well as TV and secular media) the anti-capitalistic bias of eminent academics such as John Kenneth Galbraith and “evangelicals” such as Jim Wallis. He rather enjoyed, he now realizes, the sophomoric “chance to rebel against authority and feel self-righteous doing it” (p. 10). In time, however, as he more carefully studied economics and observed the world, he changed his mind and has written Money, Greed, and God: Why Capitalism Is the Solution and Not the Problem (New York: HarperOne, c. 2009). He argues that “despite what you’ve been told, the essence of capitalism is not greed. It’s not even competition, private property, or the pursuit of rational self-interest. . . . . What we now know is that market economics work because they allow wealth to be created, rather than remaining a fixed pie. Economics need not be zero-sum games in which someone wins only if someone else loses. We have discovered an economic order that creates wealth in abundance—capitalism. And only the creation of wealth will reduce poverty in the long run” (pp. 7-8).
To demonstrate this truth Richards addresses nine prevalent anti-capitalist “myths” that often beguile Christians. First, there is “The Nirvana Myth (contrasting capitalism with an unrealizable ideal rather than with its live alternatives.” All of us imagine, at times, how to build a just society. Yet a brief glance at recent endeavors to actually do so in the USSR and China and Cambodia should quickly disabuse one of fantasies regarding social construction! Scholarly studies, such as The Black Book of Communism, detail the somber truth of utopian socialist experiments. Similarly scholarly studies reveal how first century Christians, unlike the dreamlike portraits of today’s social justice advocates, never made the brief communal life in Jerusalem “the norm for Christians everywhere” (p. 23) Nor have Christian communities, such as the Pilgrims in New England, found sharing all things in common a viable way to coexist.
Social justice devotees such as Jim Wallis and Ron Sider often want us to ignore history and just imagine “what would Jesus do?” when crafting public policies—championing a “living wage” as well as a “minimum wage,” favoring “fair trade” coffee, etc. Clearly Jesus, in accord with the prophetic tradition of Judaism, calls His disciples to care for the poor. Given this truth, however, Richards insists we must use our minds as well as our hearts, exercising the virtue of prudence. And when dealing with economics we must heed Henry Hazlitt’s admonition: “‘The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups’” (p. 36).
Government-run welfare programs, Richards says, illustrate a century’s failure to weigh the consequences of what’s been done. FDR’s New Deal sought to end the Great Depression but acerbated it instead, and the Great Society of LBJ, with its “War on Poverty,” actually turned into a “War on the Poor” (p. 47). Lots of well-intended endeavors, costing trillions of dollars, have wrought pernicious (if unintended) consequences. For example, throughout most of America’s “history, the federal government cost every citizen about twenty dollars a year (in current dollars, not the more valuable dollars of the past). Now it costs every one of us, on average, about ten thousand dollars” (p. 53). We’re paying the bills for politicians who relish redistributing the nation’s wealth. But, Richards insists: “We don’t have the right to take the property of one person and give it to another. Therefore, we can’t rightfully delegate that function to the state. Delegated theft is still theft” (p. 53).
Goods best circulate through society via free trade rather than government edicts and programs. Richards learned the power of free trade as a sixth grader, when his teacher facilitated a simple session demonstrating its positive sum or win-win nature. He learned that free enterprise capitalism doesn’t breed brutal competition. Rather it maximizes the opportunities one has to acquire what appeals to him. There is certainly a mystery to the market—it’s the “invisible hand” of Adam Smith, whose belief in God led him to see “this invisible hand as God’s providence over human affairs, since it creates a more harmonious order than any human being could contrive” (p. 75). No human being, however intelligent, no human institution, however sophisticated, could even begin to design the millions of transactions that make the marketplace work.
In this marketplace—a win-win forum—no one is impoverished when someone else prospers. Whenever filmmakers such as Oliver Stone or Michael Moore or liberation theologians such as Gustavo Gutierrez or Ron Sider lament the lot of the poor, blaming the rich for exploiting them, they distort the truth. Today’s “poor” hardly resemble the truly “poor” of a century ago. The evidence reveals that as the rich prosper so do the poor—a rising tide floats all boats. And even if the “gap” between rich and poor grows greater “The relevant issue is whether the lot of the poor improves over time, not how close they are to the richest member of their society” (p. 90). Wealth is not taken from a common store of natural resources! Rather it is created by free, innovative individuals (who design things such as e-mail and the I-Pod), and then circulated through the marketplace.
Entrepreneurs are driven not by greed but by the desire to offer their products to the public. Despite the stereotypes, celebrated in the novels of Ayn Rand (severely critiqued by Richards) and personified by the likes of Ivan Boesky (the businessman who declared that “I think greed is healthy.”), the driving impetus of capitalism is the desire to develop and offer things of value—goods—to others. To Christians, as well as ancient ethicists such as Aristotle, greed is indeed contemptible. But “capitalism is not based on greed” (p. 112). It takes for granted our limited self-interest, as well as our sinful nature. But, as Adam Smith saw, “in a free market, each of us can pursue ends within our narrow sphere of competence and concern—our ‘self-interest’—and yet an order will emerge that vastly exceeds anyone’s deliberations” (p. 122).
Many great Christian theologians, contrary to popular myths, have endorsed capitalism. Certainly “usury” was condemned—but it must be understood in the light of ancient, agricultural economies. During the High Middle Ages, as trade and technology began transforming Europe, Scholastic theologians thoroughly analyzed money and banking, discerning the difference (distinguished by Jewish theologians centuries earlier) between loaning to a person who needs a winter coat and loaning to a person who wants to start a carpentry business. “Usury isn’t charging interest on a loan to offset the risk of the loan and the cost of forgoing other uses for the money; it’s unjustly charging someone for a loan by exploiting them when they’re in dire straits. That’s the work of loan sharks, not banks” (p. 144). Similarly, though Christian thinkers soundly condemned gluttony, attributing “conspicuous consumption” to capitalism is fundamentally wrong. Saving (not spending) sustains capitalism. Wealth must first be created and then saved and reinvested. “Delaying gratification is restraint; it’s the opposite of gluttony. So consumerism is hostile to capitalist habits and institutions” (p. 165).
Richards closes his treatise with a chapter on natural resources, arguing that we’re not actually exhausting the earth. Indeed, various unexpected innovations seem to continually enable us to produce ever more food and energy. Wealth results from our ingenuity and innovation—and there’s an endless supply of this immaterial resource! As John Paul II said in 1991: “‘besides the earth, man’s principal resource is man himself. His intelligence enables him to discover the earth’s productive potential and the many different ways in which human needs can be satisfied’” (pp. 206-207). Clearly we’re to be good stewards of creation, but that doesn’t entail regressing to some imaginary “sustainable” state of equitably distributed poverty. Moreover, he says, “remember: every predicted global environmental catastrophe based on current trends has proved false. If we look at long-term historical trends, in contrast, the evidence of declining energy costs, increasing energy abundance, and growing prosperity provides no basis for such pessimism” (p. 202).
This is an eminently readable, persuasive treatise, making the case for a Christian capitalism which seems to be “just what we might expect of a God who, even in a fallen world, can still work all things together for good. Seen in its proper light, the market order is as awe inspiring as a sunset or a perfect eclipse. At the very least, it should settle the question we started with: Can a Christian be a capitalist? The answer is surely yes” (p. 215).
Gerard Reed is a retired professor of history and philosophy, most recently Point Loma Nazarene University in San Diego. He is the author of three books--The Liberating Law; C.S. Lewis and the Bright Shadow of Holiness; C.S. Lewis Explores Vice & Virtue--as well as a variety of articles and book reviews.