Magazine May 20, 2019, Issue

Michael Novak’s Christian Capitalism

(Permission of Novak Family)
The Spirit of Democratic Capitalism offers important insights today

In my last conversation with Michael Novak, shortly before his death in 2017, he expressed his regret that socialism was undergoing a revival in America. “Well,” Novak said wearily, “I guess you’re going to have to re-explain — yet again — all the problems with socialism. Apparently, someone has to do it [pause] every [pause] single [pause] generation.”

Novak was a natural optimist. Yet he knew that once people become enamored of whatever is being called “socialism” at any given time, changing their views becomes extremely difficult. In the mid 1960s, Novak saw most of his academic contemporaries embrace economic positions far to the left of what their parents had endorsed when voting for Franklin Roosevelt in the 1930s.

Novak himself wandered down that path. He once confessed that as a young man he had been “moved by the socialism of Charles Péguy, the French Catholic poet who saw in socialism not so much a doctrine as a way of life.”

That Novak was once “one of them” is one reason I’d suggest to the 51 percent of Americans aged 18 to 29 who, according to a 2018 Gallup poll, favor socialism that they read Novak’s 1982 classic The Spirit of Democratic Capitalism. That’s especially true if they are of Jewish or Christian faith. Yes, some of the book is dated. But its insights into socialism and capitalism are as powerful as they were 37 years ago.

Part Two of the book, “The Twilight of Socialism,” is particularly instructive. Here Novak detailed the economic problems bedeviling socialism, whether of the command-economy type or contemporary social democracy. Novak never claimed that economics should be decisive in political choices. But he did think that the basic insights into reality provided by economics — the workings of incentives and self-interest, comparative advantage, trade-offs, the necessity of free prices as carriers of information, attentiveness to the known side effects of particular choices, etc. — should no more be ignored than any other empirically validated observation arising from the social sciences.

The lessons of economics, however, weren’t the primary point of departure for Novak’s critique of socialism. He genuinely wanted to understand why people embrace socialism, and he concluded that it wasn’t simply economic ignorance.

By the early 1980s, Novak argued, socialism had become less about practical economic programs than about (1) certain ideals regarding equality and poverty and (2) deep hostility to capitalism per se. The single-minded pursuit of these beliefs, combined with the tendency to view capitalism in almost demonic terms, meant that socialism assumed the form of what Novak called a “political religion.” This, he believed, was what made socialism erroneous — and very dangerous.

Being a political faith, socialism could never fulfill the expectations associated with true religion. But its ersatz religious nature meant that socialism’s economic and political failures would inevitably generate a very particular type of fury.

Socialism’s record of failure, Novak pointed out, was clear. Instead of growing wealth across society, it gradually impoverished all. Far from producing greater equality, it facilitated its own inequities, the most glaring being those between the planners and everyone else.

Faced with these disappointments, socialism-as-a-faith needed scapegoats to affirm its own righteousness and that of its practitioners. Such culprits have included businessmen, foreigners, America, and the Jews. The anti-Semitic rantings of Maduro-regime officials in Venezuela are no more incidental to “21st-Century Socialism” than the “anti-Zionist” campaigns pursued in Eastern European Communist states in the late 1960s were to those regimes.

These insights, I’d suggest, highlight a point underscored by Novak that might encourage today’s socialists to reconsider their animus against capitalism.

Throughout The Spirit of Democratic Capitalism, Novak was relentless in stressing that any serious theory of political economy must pay attention to the human condition. Humans are good yet capable of evil. Our reason is powerful but not all-powerful. Men are not angels, but neither are they beasts. The genius of market economies, Novak held, is that they recognize humanity’s capacities and limitations and help direct them to the realization of some important goods.

This argument first achieved mature form during the Scottish Enlighten-ment. Novak, however, had a way of explaining it to late-20th-century audiences and investing it with distinctly American experiences.

Commercial republics such as America, Novak argued, had shown how allowing people to pursue their self-interest within a particular political and legal context indirectly helped to establish important material and political conditions of the common good. What’s more, they showed that you didn’t need a planner with pretensions to omnipotence — the “man of system” of whom Adam Smith spoke — to engineer such outcomes.

But while Novak’s political economy was partly derived from a hard-headed assessment of human nature, he was as focused on ideals as any dedicated socialist. His vision was one of a market economy enmeshed in a political system that took equity and freedom seriously, with everything ultimately grounded in the particular moral culture derived from the best of Jewish and Christian thought and practice.

Novak was always a culture-first man, long before Rod Dreher proposed his “Benedict option” of the formation of monastic-like communities dedicated to Christian living in a secularizing world. As much as he admired the great explanatory power of free-market economics, particularly Friedrich von Hayek’s version, Novak understood that the preservation of freedom and justice depends less upon economics than it does on the vision of man at the heart of any culture.

Here Novak’s ideas about morality and markets were close to those of the German economist, devout Christian, and intellectual architect of West Germany’s market-driven economic miracle, Wilhelm Röpke. Both Röpke and Novak understood the civilizational imperative of grounding markets in a particular culture that shapes people’s choices towards non-libertine ends.

This was why Novak would have pushed back against some contemporary conservatives’ lazy association of free markets with ethical hedonism or my-body-is-my-property arguments. He certainly recognized that some free-market advocates do think in such terms. Novak, however, held that you can have a dynamic market and a culture in which millions can pursue a plurality of different but compatible goods rooted in the truth about man. To be sure, Novak acknowledged that there would always be tensions. That, however, is the price of giving people the space to pursue the higher freedom to which reason and the Jewish and Christian faiths point as the telos of liberty.

Of course, there are many contemporary economic, cultural, and political issues that Novak didn’t address. The cronyism infecting places such as New York City, Washington, D.C., and Chicago isn’t given much attention in his writings. Nor did Novak anticipate the extent to which corporate America would embrace an infantile leftism to prove how “woke” it is.

I’ve no doubt, however, that Novak would have had ready responses to these problems. He would have pointed out, for instance, that the temptation for business to wander down the crony path grows whenever the state starts assuming a larger role in the economy. This wasn’t simply because Novak knew his Adam Smith, including the Scot’s attention to the phenomenon of privilege-seeking businesses’ and privilege-dispensing legislators’ enriching each other at everyone else’s expense. Novak also took the biblical idea of sin very seriously — far more seriously, I think, than some of capitalism’s contemporary religious critics. This led Novak to a deep realism about humans and power.

Politics was important to Novak. It mattered, he believed, who held political power. Nor was he a knee-jerk anti-government type. But politicians, Novak knew, were as affected by sin as anyone else. And sins such as pride often encouraged hubris about what governments could do. The results were often disastrous.

This didn’t mean that Novak thought liberty and markets would eventually take care of everything. He didn’t. Many of the social dysfunctionalities that worry socialism’s advocates and capitalism’s critics don’t have market solutions because, Novak understood, their causes often have little to do with economics. Nor, however, did he think that politics always provided answers.

Novak never tired of observing that two of his heroes, Alexis de Tocqueville and Jacques Maritain, had highlighted America’s long history of civil-society-first solutions to social challenges. This, Novak believed, had enabled much of America to avoid some of the mistakes associated with the state-first policies pursued by the European Left and Right. America’s approach might be “messier,” yet Novak was convinced it was more effective than the top-down approaches that enamor intellectuals.

Herein, I’d argue, lies Novak’s ultimate importance for America’s contemporary economic debates. Capitalism isn’t the kingdom of heaven. Then again, Novak never claimed it was. He reminds us, however, that some humility can help us to see the underlying errors of an economic system that has produced mass death or, in its milder forms, the slow bureaucratization of life that is evident in much of Western Europe. As Novak often said, hell is what happens when you pursue heaven-on-earth. That’s a truth that today’s socialists and critics of capitalism should — assuming they’re interested in doing more than just signaling their virtue — really take to heart.

This article appears as “Michael Novak Now” in the May 20, 2019, print edition of National Review.

Samuel GreggMr. Gregg is the research director of the Acton Institute.

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