Capital Commentary is the weekly current-affairs publication of CPJ, written to encourage the pursuit of public justice.
The Moral Underpinnings of Capitalism
Michael J. Gerson
June 3, 2011
by Michael J. Gerson
This is a transcript of a radio address broadcast on KDCR
radio in Sioux Center, Iowa.
The last few weeks have brought disturbing economic news, renewing fears of long-term economic stagnation. Economic growth is weak. Unemployment remains high. Nearly 6 million Americans have been unemployed for more than 27 weeks. Nearly a million have given up looking for work entirely. Housing prices have fallen for the seventh straight month, diminishing the main form of wealth held by many Americans. Massive public debt unsettles the markets and clouds our economic future.
These challenges should serve as a reminder: there is a moral value to economic growth. In difficult economic times, it is important to pursue policies that serve the disadvantaged. It is also important to pursue policies that increase wealth more broadly—policies that encourage the creation of private sector jobs, which are a source of personal independence and dignity. Policies that reward effort, enterprise and investment.
Sometimes Christians view the creation of wealth as a second order concern. And there are many biblical warnings about the spiritual dangers of greed and materialism.
But a respect for facts requires another recognition. Capitalism—the economics system in which the means of production are privately owned—has been history’s greatest engine of economic growth, wealth creation and prosperity. And this should mean a great deal to anyone concerned about the poor and oppressed.
In our book, The City of Man, my coauthor and I argue that capitalism has produced two things that for much of history were regarded as inconceivable: a large middle class and intergenerational wealth-building. In doing so, it has lifted untold numbers of people out of poverty and misery. The medical, scientific and technological advancements associated with capitalism have brought greater health, longer lives and relief from backbreaking labor. By contrast, where capitalism has not yet taken root, we often find destitution, widespread misery, illiteracy and much early death.
Because of the wealth created by capitalism, charity and generosity are increased. The moral philosopher Adam Smith put it this way: “If our own misery pinches us very severely, we have no leisure to attend to that of our neighbor.”
And free markets go hand in hand with free societies. Both require government to be limited in its power and reach. Both depend on transparency and accountability. And both trust people to act in ways that advance their self-interests along with the interests of society.
No human system is perfect. Capitalism produces wealth more easily than it produces character. We are all too familiar with examples of financial fraud, with the manipulation of markets, with companies that cut corners to make a quick buck. Like democracy, capitalism depends on a citizenry characterized by certain habits of mind and heart: men and women who possess traits such as self-discipline, honesty and sympathy. Those attributes are created in strong families, communities and churches—the builders of human character.
But it is also a moral goal to build an economic system conducive to growth. In such a system, it is easy to raise capital, start a business and employ others. The tax code takes a limited and reasonable share of income and capital gains, instead of being used to equalized wealth and punish accomplishment. Social mobility and ownership are praised and encouraged.
The details of economic policy are subject to debate. But, especially at this time,
Christians need to recognize: While greed is a sin, honest enterprise is not. And by rewarding it, we bring benefit
—Michael Gerson is nationally syndicated columnist who appears twice weekly in The Washington Post and is the author of Heroic Conservatism (2007) and the co-author of City of Man: Religion and Politics in a New Era (2010).
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Capital Commentary is a weekly current-affairs publication of the Center for Public Justice. Published since 1996, it is written to encourage the pursuit of justice. Commentaries do not necessarily represent an official position of the Center for Public Justice but are intended to help advance discussion. Articles, with attribution, may be republished according to our publishing guidelines.”