Is free market capitalism good and just? Our views of the best political and economic systems depend in large measure on the way in which we understand human nature in the first place. The authors of Wealth and Justice begin by examining three different views of human nature and the three different political theories they inspire. The founding fathers of the United States erected the architecture of democratic capitalism on a theory of human nature that acknowledged on the one hand the tendency to abuse power—and therefore the need for constraints and accountability and checks and balances—and on the other hand the God-given rights and dignity of the human person and the potential to use liberty for good. Capitalism does not seek to persuade the individual to forget about self-interest, but to align the self-interest of the individual with the interest of society as a whole. Prior to the rise of capitalism, very few enjoyed the benefits of prosperity, such as health, literacy, and security. Capitalism in the early years of the Industrial Revolution ignited historically unprecedented economic growth, largely due to technological advances and an influx of labor and entrepreneurialism. Yet the benefits of this growth were not always widely available, and such swift social change led to problems such as increased child labor, environmental damage, and brutal factory conditions. It was during this time of transition that Marx and Engels argued that capitalism itself was to blame for the social dislocations of the nineteenth century. Their Communist Manifesto suggested that the way to a better future was through revolution and the overthrow of all social structures so that a classless society could enjoy the benefits of their labor. Communism, however, was constructed on a flawed understanding of human nature, and the implementation of its ideas in the twentieth century—under Lenin, Stalin, Pol Pot, Mao, and others—led to horrific suffering. Once the state assumed control over

economic structures, it became increasingly invasive, controlling, and totalitarian. The elites who controlled the levers of society set the parameters of life for everyone, creating forced-labor requirements, vast relocation plans, and the elimination of protections for privacy and rights. The state and the political elite gained power at the expense of millions of citizens, many of whom—especially agricultural workers—lost their lives. While some of the concerns of the early socialists and communists were valid, their solutions were misdirected. As capitalist structures continued to develop through the nineteenth and twentieth centuries, markets tackled their own problems and rectified them with a variety of systems designed to protect the wellbeing of citizens. In doing so, capitalism made possible a flourishing free enterprise economy in which more and more people thrived. Whether measured by human freedoms and rights, by governments’ capacities to address natural disasters, infant mortality and lifespan, or by technological advances, capitalism has vastly outperformed every other form of economic organization and has brought extraordinary advantages to countries all over the world. Some criticisms leveled against capitalism are less economic than moral. Some feel that capitalism fans the flames of greed, materialism, and consumerism; others argue that it drives society to increasingly bankrupt ethical norms and cultural expressions. Greed, corruption, and insipid materialism, however, are not unique or even especially endemic to capitalist societies. They are human tendencies, and capitalism can constrain them better than the alternatives if it cultivates social mechanisms of transparency and accountability. Recent stories of fraud and “crony capitalism” are not examples of capitalism corrupting moral character so much as they are examples of bad moral character corrupting capitalism. Moreover, capitalism’s moral accomplishments are significant. Capitalism has done more to lift people out of poverty than any other economic system in human history. As economic freedom creates powerful pressures toward political freedom, it empowers individuals to make free choices and take responsibility for their lives. Capitalism protects the rights and liberties of the individual and thereby creates the conditions for morally meaningful choices. Capitalism seeks equality of opportunity, and thus preserves the space for liberty and creativity, compared to other economic systems that strive for equality of outcomes, but actually end up suppressing freedom and ingenuity and privileging the political elites who control an increasingly invasive state. For all these reasons and more, the authors argue, capitalism is the form of economic organization that best expresses Judeo-Christian values.

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Peter Wehner is a senior fellow at the Ethics and Public Policy Center and former Deputy Assistant to the President and Director of the White House Office of Strategic Initiatives.

Arthur C. Brooks is president of the American Enterprise Institute. Previously, he was the Lois A. Bantle Professor of Business and Government Policy at Syracuse University.

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Question Bank and Other Resources Short-Answer Questions Chapter 1: Human Nature and Capitalism 1. Name the three views of human nature and a representative of each. Which did the founders adopt and why? 2. The authors link a successful political and economic order based on capitalism and democracy to a morality derived from Judeo-Christian teachings. What teachings are pivotal to democratic capitalism? Why are they important? 3. What’s the difference between self-interest and selfishness? How can the former contribute to the common good? Why does this distinction matter?

Chapter 2: The Economic Achievements of Capitalism 1. What were the results, both positive and negative, of the rise of a capitalist society? 2. What were the results of a communist society? Give examples. 3. In what ways did early capitalism adjust to the system’s flaws?

Chapter 3: Capitalism, Ethics, and Religious Faith 1. How are free markets and human freedoms linked? 2. Why do the authors believe that widespread economic and political freedom would create global peace? 3. The authors point out several examples of dishonesty within capitalism. Wh at is their solution to such situations of greed, selfishness, and dishonesty? What are the antidotes to corruption?

Chapter 4: Is Capitalism Unjust?

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1. Many contemporary critics argue that inequality is morally unjust. How do the authors use Israeli kibbutzim to demonstrate the futility of government intervention to create equality? 2. What are the problems inherent in systems of income redistribution? 3. What is the difference between equality of opportunity and equality of outcomes?

Multiple Choice Questions 1) Enlightenment philosophers who focused on the perfectibility of human nature include: a. Thomas Hobbes and Bernard Mandeville b. Robert Owen and Charles Fourier c. James Madison and Thomas Jefferson d. Adam Smith and David Hume

2) Which of the following is not a tenet of communism? a. The product of labor belongs to the laborers. b. A proletarian revolution would lead to an abundance of goods and products. c. A violent revolution is necessary. d. Private ownership should be protected.

3) Early capitalist societies corrected some of the problems it created through which of the following measures? a. Labor laws, unemployment insurance, restrictions against monopolies b. Revolution and state appropriation of property c. Government-managed redistribution of income d. The creation of small communal societies

4) The problems of redistribution include all of the following except: a. The encouragement of non-cooperation or laziness b. An increase in corporate corruption c. An increase in state power and centralization d. A lack of recognition of gifts, talents, and ingenuity

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5) Communist regimes tend to erode key contributions to a stable society. These include which of the following? a. Education and clubs b. Culture and entertainment industries c. Press and governmental accountability d. Athletics and scientific research

Essay or Term Paper Suggestions 1. The authors mention the Enron scandal as an example of the corruption possible under capitalism. Yet they point out that the Enron officials’ behavior was not a problem with capitalism, but a problem with morality. Watch Enron: The Smartest Guys in the Room (2005). Discuss: What went wrong with the capitalist venture in this business? What were the consequences? How might a capitalist society prevent further such acts of selfishness? 2. What business scandals are in the news today? Scan your national newspapers for such accounts. How are they presented? Discuss the ways that they reflect on moral institutions. Are the journalists blaming capitalism? Do they make suggestions about remedies? 3. Read the accounts of the Occupy Wall Street movement. What was it all about? What solutions did the protesters propose? In what ways does the capitalist structure need to self-correct, or are there other issues that have created these problems? 4. Which biblical passages do the authors use in this text? How do they demonstrate the viability of free free-market capitalism as an economic system in meeting the priorities of a God of justice and compassion?

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For Further Reading Bell, Daniel. The Economy of Desire: Christianity and Capitalism in a Postmodern World (2012). Bell offers a Christian critique of capitalism and compares it to an ethic derived from scripture. Berger, Peter. The Capitalist Revolution: Fifty Propositions about Prosperity, Equality, and Liberty (1986). This sociologist argues for free free-market capitalism as the optimum method of ameliorating poverty. Fulcher, James. Capitalism: A Very Short Introduction (2004). Fulcher describes the development and effects of capitalism, comparing it to other economic systems. Landes, David. The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor (1999). Landes explores the history behind the rise and success of democratic capitalism by looking at global cultures, economic systems, religions, and philosophies. Newman, Michael. Socialism: A Very Short Introduction (2005). Newman looks at the historical accounts of cultures that have implemented socialism, and compares social democracy to communism, and other contemporary forms of socialism. Novak, Michael. The Spirit of Democratic Capitalism (1990). Novak, a Catholic theologian and philosopher, explores the history of capitalism, its compatibility with Christian ethics, and its superiority to socialism. Weber, Max, Peter Baehr, Gordon Wells. The Protestant Ethic and the Spirit of Capitalism: and Other Writings (2002). Weber’s classic theory of the influence of Calvinism on the rise of a capitalist society, along with some of his other essays, illuminated by commentary and introduction from two contemporary scholars.

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