In my last two columns, I made the claim that there is an irreconcilable conflict between capitalism on one hand and the teachings and practices of the Church on the other. I also made clear that Church teaching firmly rejects socialism, whether in its more moderate or more extreme forms. I’d like to circle back now to my position on capitalism and start to unpack why capitalism cannot be reconciled with sound Christian witness. In doing so, the first thing I need to do is to clarify what I’m talking about when I talk about capitalism.
First, it’s crucial to recognize that capitalism is not identical with the free market or a market economy. By a free market, I mean any social institution in which many willing buyers and willing sellers are legally free to come together for the sale and purchase of goods and services at prices agreed to by the parties. These kinds of markets existed in the empires of the ancient world and in the semi-anarchy of medieval Europe, although those markets existed alongside other, predominant forms of allocating goods and services, like slavery, serfdom, pillage and self-supporting agricultural labor. A market economy, in turn, is one in which the free exchange of goods and services through mutually agreed-to transactions between many buyers and sellers has become the primary means of allocating goods and services, although other ways of satisfying needs and wants persist. From the 17th century to the early 19th century, this kind of economy first arose in England and, to a lesser extent, the Netherlands, before spreading to other parts of Europe and North America and eventually to most of the rest of the world.
So far, so good. The Church sees no inherent problem with either free markets or a market economy, so long as transactions are conducted honestly and the sale or purchase of goods and services that undermine human dignity—for example, illicit drugs or prostitution—are prohibited. Indeed, the Church wisely celebrates both free markets and a market economy, given that both can provide human beings with opportunities to develop their God-given talents, reward work and creativity, allow people to support themselves and their families, and supply customers with the means of both living and living well. The most salient statement of this approval can be found in Pope St. John Paul II’s encyclicals Centesimus Annus.
What’s more, genuinely free markets and market economies — that is, those with many buyers and sellers in competition with each other — do a very effective job of setting prices for goods and services and rewarding sellers who provide good value to their customers. Indeed, advocates of capitalism invariably point to these aspects of the market when they celebrate capitalism. What they fail either to recognize or acknowledge, however, is that in some vitally important ways, capitalism is a different kind of cat.
To be fair, capitalism emerged out of the market economy of England, and markets have continued to serve as the primary forum in which economic transactions take place under capitalism. Nevertheless, once industrialization began in England in the mid-18th century — ignited by competition in textile manufacturing — the high cost of machinery significantly raised the capital requirements for manufacturing, which reduced the number of potential producers capable of bearing the cost of entry into a market. Consequently, control over the means of production became increasingly concentrated in fewer and fewer hands, a trend that has only continued to the present.
There is also a flipside to this concentrated control of productive powers. In capitalism, most work is not performed by the self-sufficient producers of the pre-capitalist market economy, but by a supply of workers, from the unskilled to the highly educated, who sell their labor to secure their means of survival. In this way, capitalism is not merely a system of resource allocation, as a market economy is; it is also a system based on a very particular mode of production, one that relies on a laboring population that is beholden to those with greater wealth. These two features of capitalism—concentrated control over production and a large market of people selling their labor power—has marked a massive social transformation over the last two centuries.
Another feature of capitalism that we’re all familiar with is its constant technological innovation, as businesses seek to maximize profits. From the spinning jenny of the mid-18th century to the large learning models of today, the logic of capitalism is constantly giving birth to new technologies, leaving humanity very little if any time to respond. While there are, no question, many positive aspects to the technological change the past few centuries have witnessed, these changes have not been without their victims, whether workers who’ve found their skills no longer needed to hundreds of millions of people distracted by their screens and alienated from one another.
There’s one final aspect of capitalism that bears notice: In capitalist societies, the logic of capitalism — the perceived need for greater capital accumulation and, by extension, perpetual revolutions in technology — dominates not just our economy but our social relations, our political system, our culture and our entertainment. Capitalism has become a total system, an ideology that leads us to assume that the system we inhabit was inevitable and that concentrations of wealth, the maintenance and extension of profit margins and helplessness before unending technological change is the best to which the human race can ever hope to aspire.
Fortunately, that need not be the case. Capitalism, as I’ve argued above, has not always existed: There was a time in human history when its logic would have struck people as odd and outlandish. From the mid-18th to the late 19th century, however, that changed, and capitalism became the dominant mode of thought and practice across the world.
If that kind of change can happen once, it can happen again, and such a change could lead to forms of social life that are far more distinctly Christian. Christians, however, should not fall prey to the temptation to seek such transformation through revolution, or statist pseudo-solutions, or political posturing about systemic injustice. Instead, as followers of Christ, we’re called to the prayerful and patient work of witnessing to the truth of the Gospel and showing the world what genuinely Christian alternatives to capitalism look like.
In the next few columns, I’ll discuss in more detail why Catholic Social Doctrine finds capitalism is so problematic, and then move on to discuss what kinds of alternatives we should seek to build. In the meantime, if you have questions about the argument I’m developing here, please feel free to e-mail me at dlyons@columbuscatholic.org.