Capitalism and the Pope

Recent remarks by Pope Francis have revived an age-old discussion about capitalism: what it is, how it works, the role it plays in our lives and the role it ought to play. I’ve read quite a few of these op-ed-type pieces, and it seems to me they all have one thing in common. They all misconstrue what capitalism is, and therefore misjudge its value.

It’s common to associate “capitalist” with words such as greedy, rapacious, and ruthless. None of these qualities are intrinsic to capitalism, of course. A capitalist enterprise is one in which individuals finance an activity through which they hope to profit in the future. Many things can go wrong with such an arrangement, of course—as Antonio in Shakespeare’s The Merchant of Venice finds out, to take an example at random.

Investors can be swindled, ships can sink, a market can evaporate, anticipated profits might not pan out. The future is always uncertain, which suggests that two qualities intrinsic to capitalism are faith and trust.

I love capitalism, and I marvel at it sometimes when watching a freight train boom across the countryside (building a network of rail lines isn’t cheap or easy) or reflecting on a medical device that required years of expensive research but, once perfected, now saves the lives of many. Though our notions of capitalism, both good and bad, tend to focus on the industrial age in which we live, we shouldn’t forget that the silk merchants we read about in the Arabian Nights were also capitalists.

I would even go so far as to suggest that all economic activity is capitalistic. Even a homesteader needs capital in the form of land, seeds, and livestock, in order to prosper. And this farmer, like any capitalist, needs to increase his capital—he needs to have something left over—because that’s what he and his family are going to be living on.

But there’s a lot more to life than economics. And capitalist enterprises tend to disproportionally benefit those who already have quite a bit of capital. This may have been what Pope Francis was talking about when he remarked recently: “Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacra­lized workings of the prevailing economic system.”

Religious institutions have traditionally made an attempt to redress the balance. In modern times this same role has largely been taken up by government agencies. And more power to them.

I love big government. Call me a socialist if you want, why not? But it seems to me that in the same way all economic life is capitalistic, all government functions are socialistic. The local fire department is financed by the entire community, after all, though only a few households benefit. Come to think of it, Hilary and I have been financing the local schools for decades though we don’t have kids. That’s how government is supposed to work and I’m all in favor of it.

Another thing government does, or is supposed to do, is regulate economic activity in an effort to minimize fraud, reckless leveraging of assets, exploitative labor practices, and environmental degradation. They should do more. Their efforts are blunted somewhat by the fact that the interests they’re fighting against have loads of cash and an individualistic, “me first” ideology that appeals to many voters. 

But when Pope Francis casts aspersions on “the prevailing economic system,” it makes me nervous. Foremost in his mind, I imagine, are the staggering levels of youth unemployment in Europe today. But surely capitalism itself isn’t at fault. The economic system of which the Pope speaks is shaped by laws and institutions that have failed to live up to their regulatory duties, blinded by glib economists and fearful of precipitating a “slow-down.”

I suppose it's a little more complicated than that. Meanwhile, there’s a lot to be said for stepping off the consumerist merry-go-round of snowmobiles and personal devices altogether. The romance of the next new product leads nowhere in the end...

It’s snowing. Time to get out those cross-country skis! And tonight?  How about streaming Al Pacino and Jeremy Irons in The Merchant of Venice?