Why the work of the late scholar on markets and religion still resonates five years after his death.
Why the work of the late scholar on markets and religion still resonates five years after his death.
F ive years ago on February 17, 2017, I received a phone call conveying the sad news that the theologian and economic thinker Michael Novak had died. A man with an astonishing range of interests who participated in events ranging from Vatican II to the Reagan Revolution, Novak was most famous for his book The Spirit of Democratic Capitalism, whose 40th anniversary occurs this year.
A bestseller that won enormous attention from religious and secular audiences at the time, Novak’s book changed the way that many religious believers — Jewish, Evangelical, and Catholic — thought about free markets. But it wasn’t only a major blow to the lazy assumption that being religious meant that you had to be on the economic left. It also challenged many free-marketers to look beyond their comfort zone of the utility calculus and to provide a richer normative case for economic freedom.
There was, however, another dimension of The Spirit that didn’t receive as much attention but that is especially relevant for our time: one in which some on the American right have become skeptical of free markets and enamored with alternatives such as corporatism, or even decided that they want to use the administrative state as a force for good. This concerns Novak’s conviction that a commitment to economic liberty was deeply woven into America’s identity in ways quite unlike what happened in any other nation.
In The Spirit, Novak noted that the French theologian, Jacques Maritain, had written about the American economy’s underlying spirit in his 1958 book, Reflections on America. Americans, Maritain saw, were nowhere near as avaricious as Europeans thought they were. 1950s America may have been a country in which the New Deal weighed heavily. Yet Maritain discerned that Americans continued to associate enterprise, commerce, and the pursuit of wealth with ideals Maritain considered reflective of the American mind.
Asking himself what Maritain meant by this, Novak argued that the moral and political structure underlying the American way of capitalism had been articulated by 18th-century Americans such as George Washington and James Madison, as well as by individuals such as Montesquieu and Adam Smith, whose ideas influenced key Founders.
It is not that these Founders developed a “theory,” as we understand that concept today. But they did articulate a vision of a commercial civilization that they hoped would arise in America. This ideal did not pretend that commercial society was unblemished. But Novak underscored that it identified serious deficiencies in “the civic orders of ancient Greece and Rome, in those of the Holy Roman Empire, and in the various ancien régimes of their experience.” Such societies, Novak wrote, appeared to these Americans as endowing
each man of high birth and inherited status with false notions of “self-sufficiency and absurd conceit of his own superiority” [quoting Adam Smith]. They sold too short the capacities of commoners to direct their own activities, to form their own practical judgments, and to make their own choices. Moreover, they overlooked the tremendous economic potential of practicality, inventiveness, and enterprise on the part of free individuals.
The Founders whom Novak invoked did not deploy terminology like “democratic capitalism” to describe their alternative vision. The civilization to which they referred was summed up, Novak wrote, by the social philosopher Ralph Lerner in a 1979 essay as “a commercial republic.”
The commercial republic envisaged by key Founders in seminal texts such as Washington’s “Farewell Address” and The Federalist Papers placed the habits crucial for a free and commercially driven economy at the center of social and political life. Such Founders did not, Lerner noted, regard commerce as the whole of life. They also recognized that commercial society’s sustainability depended on particular practices (courtesy, promise-keeping, courage, etc.) and institutions (intact families, the rule of law, etc.) whose roots were traceable to older customs, natural-law philosophies, and the Jewish and Christian faiths. They were also conscious of the potential pitfalls associated with wealth, ranging from hedonism to materialism.
Nevertheless, such Founders did want economic freedom, and the pursuit of the prosperity that ensues from it, to assume a far more central place in public rhetoric, practice, and institutions than was typical in pre-modern societies where birth counted for everything. That also meant keeping government firmly in its place by constraining and dispersing political power, including its operations in the economy.
Developing this theme in The Spirit, Novak maintained that the centrality of commerce encourages habits that have spillover effects in society. Commercial societies stress practicality, incentives, and the workings of self-interest, for example, thereby putting political tendencies to utopianism firmly in their place. Yet people in such societies also recognize that, through entrepreneurship, competition, and sheer hard work, they can aspire to things that were beyond their parents’ generation, albeit with no guarantee that this will be a matter of course.
Then there are the particular virtues associated with commercial orders, such as prudence, industriousness, thrift, creativity, and self-restraint. Certainly, the fullness of the virtues goes beyond these particular habits of action, but the prominence of such virtues in commercial societies is central to the type of polity that Novak believed crucial American founders were in the business of establishing.
To be sure, Novak didn’t claim that the founding generation had uniform views on economic topics. Jefferson’s dream of an America of yeoman farmers tilling the soil like Cincinnatus in retirement, Novak recognized, contrasted sharply with Hamilton’s America of bustling urban industries and dynamic financial markets. Nor did Novak think that a commercial society was heaven on earth. On the contrary, he stressed its demands on the human soul. “At one end of the market, a certain heroic boldness is required; at the other end, moderation is taught and realism is the necessary rule,” Novak wrote. “A commercial republic captures plenty of romantics, but is not easy on romanticism.”
But whatever the limitations, Novak had no doubt that a commercial republic was the ideal that drove America forward and led to some spectacular economic triumphs. As eminent historians of the Founding such as Forrest McDonald illustrated in books like We The People: The Economic Origins of the Constitution (1958) or his 1982 biography of Alexander Hamilton, it played a major role in allowing America to develop some of the world’s most sophisticated financial markets as early as 1800, and in the United States becoming the world’s biggest economy less than a century later.
The political economy that Novak identified as flowing from the American founding sits very uneasily with the proposals of those conservatives presently hankering after some type of corporatism; or who want to relegate free enterprise to a second-level concern; or who believe the state should pursue forms of economic activism not very different from measures proposed by Senator Elizabeth Warren; or who are anxious to “advise on the use of the administrative state” — something designed and built by people who regarded the Founding as a historical anachronism.
But if there is anything especially distinctive about American conservatism, it is the emphasis on the ongoing genius of the constellation of ideas that came together at the American founding — something that produced a political economy that emphasized free enterprise, dynamic competition, and trade at home and abroad. Michael Novak’s posthumous challenge to market-skeptic conservatives is to demonstrate how they reconcile their economic views with the broad economic ideal that emerged from the American founding, and what that means for their identity as American conservatives.
If only for clarity’s sake, it’s good to know where people really stand.