Michael Novak - The Spirit of Democratic Capitalism

ALSO BY MICHAEL NOVAK:

The Open Church 1964

Belief and Unbelief 1965

The Experience of Nothingness 1970

The Rise of the Unmeltable Ethnics 1972

Choosing Our King 1974

The Joy of Sports 1976

The Guns of Lattimer 1978

Freedom with Justice 1984

(Revised as

Catholic Social Thought and Liberal Institutions 1989)

Will it Liberate? 1986

Free Persons and the Common Good 1989

This Hemisphere of Liberty 1990

Fiction

The Tiber Was Silver 1961

Naked I Leave 1970

Michael Novak

Copyright 1982, 1991 by Michael Novak

All rights reserved.

No part of this book may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without written permission from the publisher, except by a reviewer who may quote passages in a review.

Hardback edition published by Simon & Schuster in 1982.

Distributed by National Book Network

Library of Congress cataloging-in-Pubtication Data

The spirit of democratic capitalism / Michael Novak.

p. cm.

Includes bibliographical references and index.

1. EconomicsMoral and ethical aspects.

2. CapitalismMoral and ethical aspects.

3. DemocracyMoral and ethical aspects. I. Title.

HB72.N68 1991

330.122dc20 90-48169 CIP

ISBN: 978-0-8191-7823-7

The author is grateful for permission to reprint excerpts from the following works:

The Breakdown, volume 3 of Main Currents of Marxism, by Leszek Kolakowski, translated by P.S. Falla. Copyright 1978 by Oxford University Press and reprinted by their permission.

The Wealth of Nations, by Adam Smith. Copyright 1937 by The Modern Library. Copyright renewed in 1965 by Random House and reprinted by their permission.

The Protestant Ethic and the Spirit of Capitalism, by Max Weber, translated by Talcott Parsons. Copyright 1958 by Charles Scribners Sons and reprinted by their permission.

The Church in the Power of the Holy Spirit, by Juergen Moltmann, translated by Margaret Kohl. English Translation copyright 1977 by SCM Press, Ltd. Reprinted by permission of Harper & Row.

The Crucified God, by Juergen Moltmann, translated by R. A. Wilson and John Bowden. Copyright 1974 by SCM Press, Ltd. Reprinted by permission of Harper & Row.

Religion, the Reformation and Social Change in The European Witch Craze of the Sixteenth and Seventeenth Centuries and Other Essays by H. R. Trevor-Roper. Copyright 1969 by Harper & Row and reprinted by their permission.

Reflections on America by Jacques Maritain. Copyright 1958 by Jacques Maritain. Reprinted by permission of Charles Scribners Sons.

Biblical Faith and Socialism: A Critical Appraisal by Reinhold Niebuhr, in Religion and Culture: Essays in Honor of Paul Tillich, edited by Walter Leibrecht. Copyright 1959 by Walter Leibrecht. Reprinted by permission of Harper & Row.

The Passing of the Modern Age by John Lukacs. Copyright 1970 by John Lukacs. Reprinted by permission of Harper & Row.

Quadragesimo Anno by Pius XI, in Seven Great Encyclicals. Copyright 1939, 1963 by Missionary Society of St. Paul the Apostle in the State of New York and reprinted by their permission.

In memory of

William J. Baroody, Sr.

and

In homage to

Pope John Paul II

Many things, having full reference

To one consent, may work contrariously;

As many arrows, loosed several ways,

Fly to one mark; as many ways meet in one town;

As many fresh streams meet in one salt sea;

As many lines close in the dials center;

So may a thousand actions, once afoot,

End in one purpose, and be all well borne

Without defeat.

King Henry V, act I, sc. 2

The many favourable comments that I have read about this book made me apprehensive in case, in having committed myself to writing this Foreword, I would be falling out of step. This was not a fear that I might be critical of its contents, but that I might have to conclude that yet another book about capitalism, however authoritative, might be one too many. It was soon apparent to me that I did not need to worry. Michael Novak has written a testament for capitalism which it would be hard to emulate and, in doing so, has clearly demonstrated that the economic benefits of capitalism need not be bought at the cost of adherence to spiritual values. The Spirit of Democratic Capitalism is more than an intellectual tour de force embracing deep understanding of political economy and theology. It is a personal but not an egocentric account of how the author has come to reject the socialist teachings which have encumbered the political philosophy of theologians for whom he has clearly a profound respect.

Two particular aspects of the work have struck me forcibly. The familiar Polish joke that Capitalism is the exploitation of man by man, whereas Socialism is the opposite, however much it amuses us, misleads us into believing that we are contrasting two political systems imposed from above. That may be true of socialism, which entails a large measure of state control and consequently compulsion exercised by the few over the many. It is not true of democratic capitalism. Democratic capitalism rests on the supposition that public enforcement of virtue is neither desirable nor possible. Diffused power and liberty of conscience may be conferred in a capitalist system on mean-minded individuals with what David Hume called a narrowness of soul, but as Novak points out: it is the structure of business activities, and not the intentions of businessmen, that are favourable to rule by law, to liberty, to habits of regularity and moderation, to a healthy realism and to demonstrated social progress-demonstrably more favourable than the structures of churchly, aristocratic, or military activities. In contrast, as Novak tellingly demonstrates, high-minded socialism can hardly be morally acceptable if it embodies unworkable ideals, and once it allows itself to be judged by realistic criteria, it has no special standing as a moral force. One need hardly add that the realistic criteria have recently passed a severe judgement on socialism as an economic system!