The recent passing of Michael Novak prompted me to take up his masterpiece once again. I first read
The Spirit of Democratic Capitalism in the 1980s. At the time, I had no illusions about socialism. It was obviously a failure, economically, politically, and morally. But like so many of my peers, I assumed capitalism to be morally suspect as well. Michael’s book helped me, as it helped so many others, to see that a free market economy has distinctive moral and spiritual contributions to make to a healthy society. Rereading
The Spirit of Democratic Capitalism today, however, my reaction is different. Capitalism is not a choice, as it seemed to me and many others when Michael wrote his book. It is our fate—and our problem.
The leitmotif of the book is that capitalism promotes (and is promoted by) a democratic culture. Both, he argued, seek to limit the power of the state and “liberate the energies of individuals and independently organized communities.” As he put it, “the natural logic of capitalism leads to democracy,” because “citizens economically free soon demand political freedoms.” This mutual dynamism toward freedom is not sufficient, however, and Michael identifies the “moral-cultural base” or “moral ecology” (as he later described it) that undergirds, sustains, and guides economic and democratic freedom. He doesn’t denominate it as such, but we can call it “Judeo-Christian” as long as we remember that both religious terms include the classical inheritance of Greco-Roman philosophy, law, and civic engagement. A healthy society thus stands on three sturdy legs: a free economy; liberal, democratic political institutions; and a Judeo-Christian moral ecology that prizes human dignity and encourages self-discipline, social trust, and individual initiative.
This analysis is elegant. It influenced John Paul II’s important statement of Catholic social doctrine,
Centesimus Annus (1991), and played an important role in the outlook of First Things. We sought to keep the three legs in balance, which meant defending economic freedom and democratic institutions, while at the same time insisting on the importance of religious and moral substance in the public square. But we overestimated the stability of the three-legged system. We could not see how much it depended upon a historical moment that is now passing away.
The Spirit of Democratic Capitalism was gestated in the late 1970s. A classic of neoconservative thought, it is imbued with the sensibilities of the 1960s, a decade of liberation. Michael hymns the virtues of a less unitary and constrained conception of social life, which parallel those of a less regulated economic system. It was characteristic of Michael to frame the highest good as liberation from constraint. As he says at one point, “God did not make creation coercive, but designed it as an arena of liberty.” Thus, the great virtue of capitalism is not its ability to produce vast wealth, as so many have pointed out. Instead, he commends capitalism’s spiritual achievement. “The real world of democratic capitalism is demonstrably open.”
Michael emphasized “pluralism” as a key dimension of an open society, by which he meant social organisms without strong, commanding centers. Promoting pluralism is, he argued, one of the positive contributions that democratic capitalism makes to world history. It has a deconsolidating dynamic that weakens the old, unitary foci of social authority. In their place, Michael envisioned a new kind of organizing principle. “The order of democratic capitalism is not the order of a unitary society. It is not a commanded, overseen order.” The ideal society—Michael could never resist the lure of the ideal—will have a spontaneous order that “springs from a multiplicity of motives, incentives, presuppositions, and purposes.”
The Spirit of Democratic Capitalism is a multi-faceted book with many tensions. Toward the end, he warns that democratic capitalism requires “leadership which draws on the ideals of fraternity and community and inspires all to self-sacrifice for the common good.” That’s surely true, but there’s little in his analysis that helps to identify the consolidating dynamics that give focus and common purpose to the “open” system of democratic capitalism. More significantly, the ideal of a spontaneous, self-organizing social order works against formulations of the common good, for questions of the common good—what it is and how to promote it—shift attention away from individual freedom and initiative toward shared ends that entail obligations. In the end, and in spite of all his qualifications, the miracle of market coordination of supply and demand, and its dynamic openness to new initiatives, emerges as Michael’s dominant image of the flourishing society. The free market gives us a glimpse of the ideal society, one that features order without authority and purposeful freedom without the need for agreement about the common good beyond a procedural rule of law.
John Rawls thought that postwar political liberalism was the only way to govern a pluralistic society so as to guarantee liberty and guard human dignity. Although Michael does not engage Rawls explicitly, the genius of
The Spirit of Democratic Capitalism rests in the fact that he argues his case with the same attention to moral ideals. Democratic capitalism does a better job sustaining an open, pluralistic society than political liberalism, because capitalism, unlike political deliberation, guarantees freedom more jealously (and effectively).
In all likelihood, Michael was right, as the rise of an authoritarian liberalism keen to squelch dissent indicates. But therein rests the problem we face. The “new birth of freedom” that Michael championed largely came to pass. And it has tended to weaken the two other legs holding up society: democratic institutions and a vital religious and moral culture. Michael observes that “greater incentives will stimulate greater economic activism.” True, but he did not recognize that ever-greater economic activity can crowd out political engagement and sideline religious and moral authority. This is what has happened. Capitalism, now global in scope, is swallowing up more and more of civic life, so much so that in some contexts economists and policymakers present free market principles as ironclad laws about which we have no choice. Dwindling manufacturing jobs, technological displacement, global flows of labor and capital—we are told we have no alternative. This is a cruel reversal of what Michael commended as the source of freedom and openness.
Modern democracies ask most citizens for only occasional participation during election season. This is one of its benefits, for it allows ordinary people get on with their lives rather than focusing on politics all the time. The downside, however, is that episodic popular participation means that modern democracy tends toward oligarchy, a system in which the well-placed few govern the largely docile and easily manipulated many. This tendency has become very powerful recently. The Republican party has become a donorocracy. Libertarianism and rigorous free market economic principles have a vanishingly small constituency, and yet these notions dominate think tanks and journalists on the right. The Democratic party’s captivity to identity politics indicates a similar tilt to the interests of the upper reaches of society. LGBT rights and environmentalism are of greater concern to rich people than to middling voters. By the time Barack Obama was elected in 2008, our politics was increasingly a tussle between two sides in the upper quintile of society: one that tends to think entrepreneurial get-things-done pragmatism is best, and the other that prizes expert management and credentials. When Mitt Romney warned of the freeloading “47 percent” and Hillary Clinton identified the “deplorables,” both ill-fated politicians were expressing a common view among the well-educated and successful, left and right; the future of our country depends upon their ability to dominate and suppress the political influence of vast swaths of the American electorate.
This has not come about simply because of rising income inequality or the decline of labor unions in private industry. Since 1989 and the fall of the Soviet Union, the governing consensus has held that America’s interests lie in ever-greater economic globalization. We will flourish to the extent that we position ourselves at the center of the global economic system. This turns out to be true—for some, but not for all. Today, we’re seeing a growing divide in America between those who participate in the global economy and those who don’t. With that divide comes a political trend away from democratic politics, which focuses on promoting the common good of a sovereign nation, and toward the imperative of sustaining the “rules-based international order,” which is largely technocratic rather than political in any true sense.
Neither domestic oligarchy nor the “rules-based international order” is congenial to democratic institutions. The former suborns them; the latter supersedes them. First Things has always been opposed to the former. The judicial usurpation of democratic politics is an expression of oligarchy, and we have fought against it. We have urged the renewal of mediating institutions to restore civic ballast and provide ordinary citizens with a place to stand. But in retrospect, we underestimated the flesh-eating character of our free market economy, which now markets “community” and uses “social justice” as a way to sell products. Buy TOMS® shoes, and help someone in need! Today, large-scale global companies scramble to position themselves as agents of social change. The result is a political placebo, one that substitutes social-therapeutic gestures for genuine solidarity and civic engagement. The market is becoming the dominant mode of our social engagement, with social media leading the way. This diminishes democratic culture.
And what about the third leg, the Judeo-Christian religious and moral tradition? Here First Things has a long record of vigorous and unstinting advocacy. I can’t think of another significant journal that has been as relentless during the past generation in its warnings about the dangers of a naked public square. Yet we’ve seen setback after setback, and the corporate tsunami that recently swept through Indiana after it passed a Religious Freedom Restoration Act made clear the link between global capitalism and progressive clear-cutting of traditional religious culture and morality. There are many business leaders, entrepreneurs, investors, and others who sympathize with our mission, of course. But they know they will be punished “by the market” if they speak up. “Bigotry is bad for business,” we’re told by management consultants and corporate gurus, and “diversity” brings greater innovation and success. As we know, “diversity” does not mean a richly textured and open society. It means agreeing with progressive cultural commitments to “openness,” which in turn means accepting the authority of a rigid, punitive ideological system.
Needless to say, Michael Novak did not foresee these outcomes when he wrote
The Spirit of Democratic Capitalism any more than I did when I thrilled to his insights more than three decades ago. This should not surprise us. As Yuval Levin outlines in
The Fractured Republic, America came out of the Great Depression and its mobilization for World War II with a consolidated economic, political, and social system. There was a closed, sealed quality to a great deal of social and economic life, which is why Michael and so many others were attracted to motifs of creativity and openness. Seventy years on, however, the project of deconsolidation has done its work. We now live in a fluid world in which the very idea of borders—between nations as well as between the sexes—seems more and more tenuous. In this context, which is our context, the genius of capitalism as Michael described it—creative, open, innovative, and dynamic—seems less benign. Those qualities liquefy our social relations, and even our sense of self.
In his last article for First Things (“
The Future of Democratic Capitalism,” June/July 2015), Michael summed up his spiritual endorsement of capitalism: “Free markets are dynamic and creative because they are open to the dynamism and creativity intrinsic to our humanity.” This anthropological assessment of capitalism follows the lead of John Paul II, and it’s a profound reason to cherish economic liberty. But Michael did not give due emphasis to an equally important aspect of our humanity, which is our desire to give ourselves in loyalty to permanent things. As a man of faith, he certainly knew and affirmed this dimension: You shall love the Lord your God with all your heart, soul, and mind, and you shall love your neighbor as yourself. But in his enthusiasm for open, upward transcendence—a constant theme in his work—he lost sight of our need for anchors. As a consequence, he described the anthropology of capitalism in a one-sided way. Its fearsome dynamism speaks to part of our soul, but it neglects and even works against the part that cherishes permanence.
This one-sidedness needs to be corrected, for our challenges are quite different from the legacy of postwar consolidation that Michael responded to with such élan. We do not live in a closed, regulated, regimented world. Political correctness is a serious problem, and it has an authoritarian tendency. But it is not born of loyalty to permanent things. As an outgrowth of liberalism itself, this rigid ideology comes under the sign of choice. It is an obligatory, enforced participation in a fluid, liquefied moral world. We are told that we are not required to think or live in any particular way—except that we can’t think or live in ways that constrain, compromise, or even throw doubt on anyone else’s free decision to think or live differently. Taken to its logical extreme—everything is permitted as long as it permits everything—this becomes a paradoxical totalitarian toleration that is all the more dangerous because it deludes those who promote it into thinking that when they drive all dissent from the public square, they are “including.”
All of this dovetails frighteningly well with the dynamism and openness of capitalism, which is also presented as obligatory. And its partial anthropological resonance means that a part of our soul—the dimension that, taken in isolation, thrills to today’s gnosticism and its promise of freedom from all constraints, even those imposed by nature and our bodies—is given great encouragement. This antinomianism—which, again, is presented as “history’s” obligatory verdict—casts a dark shadow on the West in the twenty-first century, not the Soviet Union or older forms of centralized, totalitarian control.
Retro figures such as Bernie Sanders and Jeremy Corbyn gain traction, not because voters believe in socialism, but because they intuit that they cannot live in a world of pure dynamism and openness. We are drowning in freedom. To a degree unprecedented in human history, super-majorities in the West experience few impediments to earning and accumulating wealth—other than those they (or their parents) impose by ill-considered uses of their freedom (which turn out to be significant, often insuperable impediments). Age-old expectations of marriage and children have become choices. We can even choose to become male or female. In this context, voting for a “socialist” does not mean signaling a return of Marxism. It reflects the fact that, thirty years after the end of communism, some voters haltingly recognize that our freedom must be directed toward enduring ends if it is to serve something higher than itself. And in our age, which has taken economics to be the key to almost everything, that intuition naturally comes into focus with calls for limits on economic freedom.
Retro-socialism is a dead end. But in the absence of alternatives that promise stability and relief from the existential exhaustion of perpetual dynamism, Sanders, Corbyn, and others on the left are likely to garner support. The same can be said for populist sentiments that endorse nationalist economic policies of protectionism and subsidies that fly in the face of free market principles.
Michael was right in his time, but times have changed. The truth about the human person has a side other than the one that seeks dynamism and openness. This side requires permanence, not in the superficial form of a frozen status quo, but rather in ends, purposes, and projects to which we can entrust our loyalty. This side of the human person has gone unfulfilled in recent decades. Today’s crisis is one of reliable loves.
It is time, therefore, to set aside the notion that the problems we face in the West can be solved by stiffer doses of economic freedom. In parts of Asia, Africa, and other areas of the world, this prescription has merit. But here it’s pure homeopathy. What we need is quite different.
The Spirit of Democratic Capitalism was extraordinarily influential because Michael recognized that economic freedom is not an end in itself. It is to be prized because it promotes the cultural conditions that allow for greater human flourishing. Today we need clarity about the ends economic freedom should serve: the renewal of marital stability and fruitfulness, the restoration of democratic institutions, and the encouragement of the dynamism and openness that really counts—that which seeks higher things than can be had in any market.
We are created in the image of God. Our desire for dynamism and openness reflects the fact that we are made for something more, something greater. As St. Augustine put it, our hearts are restless until they find their rest in God. Our civic life and economic system should give room and scope for that restlessness, as Michael so winsomely argued. But we are not made for endless seeking and striving. Our end is rest in God. In this life, we rightly cherish that which foreshadows this final rest: belonging to a family with its own home and heritage; being from a particular place and participating in a civic culture that has a noble inheritance to be cherished and sustained; being in solidarity as a distinct people that shares a common future, the most important of which is the Church, the people of God who seek to abide in him. What Michael Novak failed to recognize—what we must acknowledge—is that the dynamism of free market capitalism invades, overturns, refashions, and sometimes destroys these places of rest.
It is inhumane to forsake the dynamism of capitalism. But it is also inhumane to think that quality sufficient. In 2017, we need to think about how to direct economic freedom toward service of the common good.
