Austin Hill and Scott Rae. The Virtues of Capitalism: A Moral Case for Free Markets. Northfield Publishing, 2010. 153 pages. $14.99.
Capitalism: Does it work? Is it immoral? The recent economic recession has led some to decry the free-market system and pronounce the failure of capitalism. A few prominent evangelicals have even deemed capitalism immoral, blaming it for the plight of the poor. But there is another side to the story. In The Virtues of Capitalism, columnist and radio host Austin Hill and Biola professor Scott Rae team up to defend capitalism against its critics. While noting its flaws, Hill and Rae argue that capitalism is not only the most productive system available but also the most moral.
Hill and Rae bemoan the neglect of economic issues among faith-based voters over the past 30 years. Christians have rightly been concerned with moral issues, but they have failed to recognize the moral implications of economic issues. Contending that economics should be at the heart of the faith-based movement, the authors set out to show that capitalism is the system that best aligns with the the Judeo-Christian worldview.
Hill and Rae survey the Bible’s take on economics. In the Garden of Eden, God commanded humanity to be good stewards of our natural urges and abilities to use natural resources productively and for the common good. The Old Testament law shows further alignment with capitalistic presuppositions. Though we no longer live in a theocracy that observes the details of the law, we find general principles in it. For instance, the law assumes both private property (implicit in “Thou shalt not steal”) and divine ownership of all things. Wisdom literature teaches that prosperity is generally a matter of individual responsibility. Jesus demonstrated great concern for the poor and marginalized. He also incorporated economic themes into many of his parables. Acts tells of the radical generosity and quasi-communalism of the early church. Yet Hill and Rae contend that the early chapters of Acts are not advocating any one economic system. Indeed, Scripture emphasizes general principles on these matters, not particular policies. A system that would align with Scripture should strive to do three things: first, to maximize opportunities for human creativity, initiative, and innovation; second, to provide means for individuals to support themselves and their dependents; third, to care for the helpless (36-37). Capitalism best accords with these biblical principles.
Indeed, capitalism brings out the best in people, giving them incentive to pursue excellence and harnessing self-interest to promote the common good. A free-market economy promotes five virtues in particular. First, it encourages creativity and innovation. Second, it promotes initiative and independence. Third, capitalism fosters cooperation as diverse people from across the socio-economic spectrum meet in the market to interact commercially. Fourth, it gives incentive for civility, a trait demanded by competition; sellers don’t have to love their consumers, but they had better respect them. Fifth, capitalism promotes responsibility; individuals have incentive for productive work since this is the path to compensation. Hill and Rae acknowledge that capitalism alone does not ensure the increase of such morals. The virtues promoted by capitalism must be protected by good public policy and wise individual behavior.
Hill and Rae squarely address some of the most common criticisms of capitalism:
- “Capitalism is all about greed.” But greed is a heart issue that exists in any economic system. Moreover, capitalism relies on self-interest, but this is not the same as unfettered greed.
- “The rich get richer at the expense of the poor.” This is an economic fallacy, assuming that the increase of wealth in one place is caused by its decrease somewhere else. Just because one piece of the economic pie gets bigger doesn’t mean the other pieces are shrinking; when wealth is created, the entire pie grows. Indeed, global capitalism is responsible for the 4 billion people who have avoided poverty.
- “Capitalism leads to overconsumption and materialism.” Like greed, materialism is a spiritual problem not unique to capitalism.
- “Capitalism leads to significant inequalities of wealth.” But contrary to the evangelical Left, God doesn’t hate inequality. Rather, Scripture shows that God reserves his hatred for injustice and oppression.
Much of the second half of the book examines recent economic events, from the “dot-com” craze to the housing crisis to TARP to corporate scandals. The authors conclude that, in many of these cases, a lack of regulation was not the problem. Indeed, in many instances government intervention helped to create the crisis. In nearly every situation, the government’s response brought unintended consequences, making the economy less free and less productive. Some policies even created “moral hazard,” giving individuals or corporations incentive to behave irresponsibly.
The Virtues of Capitalism is a thought-provoking challenge to anyone who would condemn capitalism as inherently unChristian. The writers skillfully address complex economic issues in a clear and simple manner, yet they also avoid simplistic diagnoses and solutions.
One caveat is in order. The authors rightly point out that the Bible focuses on desired ends, not on the particular means to meet these ends (36). Yet they also maintain that “an accurate view of capitalism” must be at the center of the faith-based voters movement (14). It seems wise, however, to allow more leeway for Christians to disagree on the best ways to bring about commonly desired ends. It is not surprising that evangelicals can find more immediate and widespread agreement over the evils of abortion or human trafficking than on economic policy. Economic issues are not amoral, but neither is a Christian position always clear. So while I may disagree with a Christian brother over the government’s involvement in health care, I would be very slow to deem his view unChristian. We would be wise to avoid confusing prudential arguments (which much of this book employs) with distinctly biblical ones.
That said, Hill and Ray provide a good example of Christians seeking to faithfully apply Scripture to all of life. They do not give in to mere proof-texting, giving heed instead to broad biblical themes. The authors also display a balanced approach to issues, critiquing both major political parties and acknowledging that the market alone cannot address all economic or social ills.
If you’re looking for a basic introduction to economics, check out Henry Hazlitt’s Economics in One Lesson. To see these economic principles defended from a Christian perspective and applied to recent events, pick up this short, clear book by Austin Hill and Scott Rae. The Virtues of Capitalism is an excellent resource for any Christian who wants to better understand economics in light of Scripture.