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Book Review: The Spirit of Democratic Capitalism by Michael Novak

JANUARY 01, 1983 by TOMMY W. ROGERS

(An American Enterprise Institute/Simon & Schuster Publication, 1230 Ave. of the Americas, New York, New York 10020, 1982)
434 pages • $17.50 cloth

If this book does not become a classic catalytic agent on behalf of the natural system of liberty—as opposed to the command society of socialism—as the desirable political economy on the basis of theological reason, it will not be due to any fault of Mr. Novak. The author must be credited with a major achievement. He set for himself the task of articulating a moral theory and a theological base for the implicit ideals of democratic capitalism. His success is to have made a credible, compelling, intellectually solid and theoretically sound presentation of the political economy of the free society. He shows it to be the spiritually and morally commendable alternative to the collective and compulsive ethic of socialism.

If, as Novak asserts, social forms are constructs of the human spirit, the first of all moral obligations is to think clearly. This is an objective wherein the theological proponents of socialism, whether in the form of Catholic “liberation theology” or the collectivism of Protestant theologians, are neither totally honest nor innocent. Novak feels it a sad commentary that


. . . few theologians or religious leaders understand economics, industry, manufacturing, trade and finance. Many seem trapped in pre-capitalist modes of thought . . . Many swiftly reduce all morality to the morality of distribution. They demand jobs without comprehending how jobs are created. They demand the distribution of the world’s goods without insight into how the store of the world’s goods may be expanded . . . They claim to be leaders without having mastered the techniques of human progress.

Novak first inquires into the structural dynamics which are requisite for and, in turn, give nurture to the economic order which expresses itself in a noncoercive society, a social order within which individuals and peoples may realize, through the vocations to which they believe they have been called, the greatest degree of personal dignity, human freedom and personhood. The free economy requires in practice a moral-cultural ethos, and it is a failure of democratic capitalism not to have made a moral presentation of itself to the world. The result, as Novak sets it forth, is that capitalism

. . . discusses itself and allows itself to be discussed, in sheerly material and procedural terms. The intellectuals of those incredibly varied nations ideologically tied together as the “Third World” heap upon it a burden of guilt they do not consider attributing to themselves. There has grown up, as P. T. Bauer observes, a dishonorable international politics. It is morally wrong, not only intellectually dishonest, to cooperate with such ideas and values, and to deny before the world those moral-cultural qualities without which neither economic development nor democratic governance can be achieved.

Novak next examines the socialist idea and displays its hollowness against the backdrop of the realities and the promise of democratic capitalism. The genius of the free society is its recognition that the most precious of all common goods is the individuality of each person, and that the best way to increase the common good is to empower people through differentiated systems.

Collectivism, by contrast, pits man against man. It narrows the circles of trust and goodwill as groups competing for the same allocations run afoul of each other’s interests. The end result is a zero-sum society which promotes the Hobbesian “war of all against all.” Economic growth, liberty, and opportunity for social mobility on the other hand promotes charity, trust, and cooperation.

The third section of Novak’s inquiry into the spiritual wealth of nations, and the practical import and manifestations of this wealth in quality-of-life, is devoted to an attempt to set forth a religious perspective on democratic capitalism. Not even a society free politically, economically and culturally holds out the promise of perfectionism or utopia; it does not claim to represent the Kingdom realized. The finest social order conceivable has to be practiced by men as they are, with all the foibles and propensities for evil by which men, in reality, are characterized. Thus, constant assessment, evaluation, modification, in the light of democratic capitalism’s own ideals is desirable, possible, and necessary.

There has been, as Novak recognizes, a failure of the moral-cultural leaders of democratic capitalism to sow widely a moral vision promotive of the system of natural liberty. While, under the capitalistic political economy bread is more abundant, more equitably distributed, and less scarce and dear, even here human beings do not live by bread alone. In no major sphere of life have the traditions of theology fallen further behind. Many contemporary theologians and other intellectuals seek a return to the unitary society from which democratic capitalism provided liberation. Novak has addressed attention to the life of the spirit of democratic capitalism with a solidity and insight which deserves to have a crucial and long-lasting impact.

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January 1983

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Unfortunately, educating people about phenomena that are counterintuitive, not-so-easy to remember, and suggest our individual lack of human control (for starters) can seem like an uphill battle in the war of ideas. So we sally forth into a kind of wilderness, an economic fairyland. We are myth busters in a world where people crave myths more than reality. Why do they so readily embrace untruth? Primarily because the immediate costs of doing so are so low and the psychic benefits are so high.
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