The Spirit of Democratic Capitalism - 1

I think that it is fair to say that you don’t often hear people praising the virtues of our economic system, capitalism. People will argue that capitalism is selfish and appeals to crude competitive desires, that it makes the rich richer and the poor poorer, that it creates class conflict – the list of criticisms goes on and on. Michael Novak is a man who sees things differently. In late 1978 he published The Spirit of Democratic Capitalism, a seminal work that engages some of these opinions and finds them to be wanting. His argument is many-faceted, profound and nuanced. I want to reprint and highlight some of the key parts of his argument for discussion, and so I don’t forget what he was talking about! Perhaps needless to say, the book provided plenty of food for thought.

I thought a good place to start would be Novak’s own summary of his work. Speaking of democratic capitalism, he writes

“…my fundamental conviction has only been deepened by experience: no other system is as capable of raising the world’s poor out of poverty. The traditional agrarian economy is bankrupt; to escape from rural misery scores of millions are already fleeing from the backward countryside to the sprawling cities. The suddenly exposed grimness of socialism in Eastern Europe has dashed many illusions about socialism as a hope for the world’s poor. Meanwhile, the poor of the world, seeking opportunity, stream toward democratic capitalist lands. Thus, the strongest moral claim for democratic capitalism is that it is the most practical hope of the world’s poor: no magic wand, but the best hope. Its task will not be complete until a firm material base has been placed under every family in the planet.”(pg. 421)

Thus he ultimately stakes the argument on results, not theory. Thus, the argument overall should be empirically verifiable. A good thing for those who prefer a scientific mode of inquiry!