Is Capitalism the Problem?

Money_expression_of_cultureI received a very interesting e-mail from a gentleman who has bought the book, Return to Order, and raised a number of very intriguing questions and comments.

His concern is that the book misdiagnoses our modern problem by not going straight to the root of the problem – capitalism. To get results, he claims, one must have the courage to reject capitalism in all its forms. Capitalism is a spiritual problem that embodies materialism, scientific utopianism, and libertarianism. He affirms that a careful reading of Saint Thomas and papal encyclicals over the last century warns us about the materialism of our days that has its origins in capitalism.

Of course, I agree with the writer that materialism, scientific utopianism and libertarianism are all effects of the present crisis. Each of these and many other effects are dealt with extensively and condemned in Return to Order.


I would, however, disagree that we should call the cause of these errors “capitalism” for three reasons.

The first reason is because the word is ambiguous. It has many meanings. Some interpret it to mean a system that created all the evils mentioned by my correspondent. Many simply equate capitalism with a market economy which has always been defended by the Church. By condemning one meaning, we risk condemning the other unjustly.

That is why I avoid the word altogether. Because of the term’s misuses, it is wiser to follow the advice of Jesuit economist Fr. Bernard Dempsey, who claims that capitalism is a word incapable of scientific definition, and one that should only be used with great reluctance and care, commenting: “Only a very foolish general accepts battle on the terrain of his adversary’s choice.”1

I might further note this has been the prudent policy of the Church over the last century. The Church has often spoken out against the abuses of “capitalism” such as materialism, individualism and scientific utopianism. However, it has never roundly condemned “capitalism” as such, lest it condemn inadvertently the market economy and other legitimate ways of conducting business. This position is found perfectly laid out in John Paul II’s 1993 Encyclical Centesimus Annus, where the distinctions between the word’s diverse meanings are well noted.

There is another reason why I do not use the ambiguous term “capitalism.” It is the term of choice of the Church’s enemies. Communists and socialists have always employed the tactic of using the very ambiguity of the term to unite useful allies to their cause. The Church cannot make common cause with those who hate and actively work to destroy Her. Marxism in all its forms is responsible for far more crimes against humanity and Holy Mother Church than any other system conceived by man. It makes no sense to join with those who use the term for their own subversive purposes when we have all the doctrines and means at our disposal to deal with the problem.

Finally, the last reason why I do not use the word “capitalism” as the cause for the present ills is because it cannot be the root cause of any moral decay.

The cause must be found within man himself not inside a system. It is one of the errors of Marxist analysis that stipulates that it is social structures and economic systems that cause the evils of mankind and not the sins and defects of character of man exercising his free will. To affirm that a system determines the behavior of men is to say that he has no free will.

Systems can influence us and favor our defects. However, this is ultimately a spiritual problem. That is why we must look for a moral defect that explains the crisis we face. One cannot, for example, fault the restrictions of the institution of marriage to explain the rise of a permissive society. Rather the causes must be found in the moral defects of sensuality and selfishness which in turn bring about the abuses.

Subscription12That is why I chose to coin the term “frenetic intemperance” to explain the phenomena inside the human soul that gave rise to the economic imbalance and frenzy we see today. One may disagree with its exact formulation, but it is a term that describes a moral defect that can be observed in history as it creates the imbalance that has plagued modern economy. It helps explain the rise of materialism, scientific utopianism and libertarianism. In short, the term goes to the root of the problem deep inside the soul of modern man.

 

1 Bernard W. Dempsey, The Functional Economy: The Bases of Economic Organization (Englewood Cliffs, N.J.: Prentice-Hall, 1958), 162.

  • Rusty LaMotte

    Well said Mr. Horvat. Very enlightening.

  • rayschneider

    I prefer to use the term “free enterprise” rather than capitalism for just these reasons.

  • Albert Maslar

    Capitalism and Marxist socialism or communism are antithetical, and cannot coexist. Just attacking capitalism to extinguish it is to arbitrarily put in virtually the only two remaining options that are communist socialism, an anti-religion anti-God philosophy that is the cause of most of the world’s problems, and the only then-remaining religion that is no religion but a political system, another form of dictatorship, Islam, that succeeds in the US simply because it is antii-Christ, and therefore it is perhaps the antichrist, or one of them if there are more than one. Any human system is subject to human abuse but capitalism in a true democracy is perhaps the best human form of governance. Actually the best form of government is a King Solomon kingdom in which one wise compassionate and understanding ruler can immediately get to the crux of any problem, as Solomon did when awarding a baby to its true mother who was willing to give up her child rather than have it cut in half for each claimant..

  • Richard Pawley

    Some equate Capitalism with the four men (or 20 if you prefer) who basically control the money and economies of the world, the whole debt based system of banking that we call the Federal Reserve System. If that is Capitalism then of course it’s hurtful to the majority with the required inflation that eats away at everything but beneficial to those who own the Federal Reserve Banks of the world. When money was real (gold and silver) and income tax had not yet been made into an institution (1913) in this nation there was far less inflation and more stability. Today I believe the system is in it’s final years as everyone owes more than can ever be repaid. The world debt is many times the worth of the whole planet and the Bible clearly predicts some kind of electronic money in Revelation 13 (the mark of the beast that will be IN each one’s hand and without which no one can buy or sell. This situation may well be instituted after this present system collapses along with the use of the “ancient relic” so hated by socialists.

    We are living in interesting times and need to pray that God works HIS WILL in all our lives and in everything that is going on from the expanding war in the middle east to the host of problems that are besetting this and every nation as we ignore all that God have given us and like the ancient Israelites,each go our own way. I can see no other answer than prayer. It is not the end of the
    world but it may soon seem like it. I tried to cover some of this in my semi-fictional book, “The Last Days of the Late Great United States, and the Great Famine that Followed,” although perhaps I should have called it what is on the inside flap of the hardcover, “Beyond Repair, the Death of of the Dollar.” Millions have left the USA in the past five years but the problem is world wide. May God bless us all.

  • Ryan

    Nobody has mentioned the word “usury” yet. That gets to the heart of the issue. It’s immoral to charge interest – then you’re making money just because of time elapsed, not because of any work done. So, one definition of capitalism is state-sponsored usury allowing the rich to get richer and the poor to get poorer by enslaving them with debt. Many papal encyclicals have spoken against usury as well as other economic issues such as paying a just wage.

  • The watch dog

    Capitalism in it’s present structure is nothing more than pure greed. It is used by the 1% to stifle free will
    by the poor or the 99%. It robs the poor of their, God given soul, in order to render them spiritually helpless not permissive. That is the ultimate problem and the real crises that we face.