Since my post several weeks ago titled “Solutions” for Social Justice?, I have been delving deep into books, blogs, and articles that speak to capitalism and its relationship to human action. Specifically, my concern was how the poor are affected by capitalism and if it is indeed the best economic model for the poor, the rich, and those in between. While I am absolutely positive that socialism is not a viable economic model, since it concentrates economic control into the hands of a few, my thought was that Distributism would be a practical “third way,” as I expressed in my previous “Solutions” post, which would counter the concentration of wealth that appears inevitable within a capitalist system. While Distributism certainly has some striking benefits as an economic system based on subsidiarity, which is an organizing principle that matters ought to be handled by the smallest, lowest or least centralized competent authority, in practical terms it appears the implementation of this model en masse would require a fundamental remake of our economy, but I believe it would be a powerful model for social and economic change. Still, I continue to believe that capitalism as it currently exists is a viable economic model that preserves individual liberty while providing opportunity for the upward mobility of all classes. In particular, I believe the Austrian School of economics provides the best model for robust capitalism, and I would argue that our system of government should further incorporate the Catholic principle of subsidiarity sans its hierarchical social structure (closer to sphere sovereignty in Reformed parlance) if it is to continue successfully with capitalism as our chosen economic model.
I recently finished the book Money, Greed, and God by Jay Wesley Richards, who is a former Director and Research Fellow at the Acton Institute, a Christian think-tank whose mission is “to promote a free, virtuous, and humane society. This direction recognizes the benefits of a limited government, but also the beneficent consequences of a free market. It embraces an objective framework of moral values, but also recognizes and appreciates the subjective nature of economic value. It views justice as a duty of all to give the one his due but, more importantly, as an individual obligation to serve the common good and not just his own needs and wants.” Note the emphases on limited government, free markets, and moral values, which are buttressed by justice as a duty of all to serve the common good in a free society with free markets. I believe Jay has captured in his book the crux of what makes a free, capitalist society such as ours work and thus achieve greatness as a young republic. His book provides deep insights into capitalism and its history, and he has explicated the ideals of the Acton Institute in concert with the controversial yet powerful Austrian economic model, providing a clear way forward for realizing the continued greatness of our country, if we embrace capitalism for its highest purpose.
In leveraging Jay’s book as the basis for this post, I want to be clear that neither Jay, in his book, nor I, in this post, believe that any economic system is perfect. Despite what some in government would have us believe, there will never be a utopia on earth (and of all people, Christians should know this better than anyone else). Government simply cannot and will not solve all of our problems, because human interaction is incredibly complex. The best the government can do is provide a framework for economic interaction that produces the best possible outcomes, and then properly enforce the rules of engagement. The more government attempts to take on above and beyond the limited number of things it is designed to do well, the harder it is for a society to function because decision-making becomes concentrated into the hands of a few instead of allowing a fairly-traded market to decide outcomes based on free interchange. Though there are some brilliant and highly talented people working for the government, it is humanly impossible, particularly at the federal level, for any of them to fully consider the consequences of meddling in free markets.
For just a moment, think about the fact that the framers of our Constitution, many who were men of wealth, power, and prestige, could have constructed a centralized system of government, but instead chose to provide a small number of enumerated powers to the federal government while allowing the states to conduct their own affairs. The wisdom in this choice was that people were free to govern themselves at the state level, and moreover, free to own property and to conduct business through free markets (evils of slavery notwithstanding). The states were (and continue to be) in constant competition with one another to test out new ideas and either fail or succeed in the manner in which they decided to govern. If a state government became too onerous or abusive in its power, or did things to hurt its own economy, its citizens were always free to move to another state that provided more opportunities or freedoms (which I am seriously considering doing since I happen to live in the sorry state of California). What was common to all states was the Constitution, which was the supreme law of the land, yet it also expressly limited the powers of the federal government. If only the folks in Washington, D.C. would adhere to these limits.
Now, to get to the topic at hand, the problem is, as Jay states in his book, that we have reflexively looked to the government for the past forty years to solve social problems. It hasn’t worked because when the state takes over a task that is better handled by someone closer to the problem, it transgresses its proper boundaries and creates more problems than it solves. Jay discusses a set of overlapping “circles of responsibility,” which I have ordered as follows: self, family, neighbors, churches and nonprofits, city/state government, and the federal government. It is when the federal government steps in and runs roughshod over this intricate “web” of overlapping responsibilities with no knowledge of the situation on the ground, violating the principle of subsidiarity, that we have increased problems. The federal government simply grows itself by confiscating capital that could be used more efficiently at the lower levels, and redistributes the wealth it has taken based on its own priorities. This is entirely different from general taxation for legitimate government functions as enumerated in the Constitution. Rather than promoting the general welfare, these redistribution schemes end up allowing citizens to vote for the government to take property from others to give to them. And it doesn’t solve the poverty problem, but simply breeds more dependence on the federal government. And apparently, that is precisely why they do it even though it is impersonal, inefficient, lacking in necessary knowledge, and decidedly unconstitutional.
More to come in Part 3, where I will discuss how capitalism does not reward the rich at the expense of the poor, and how it provides the best model for lifting the poor out of poverty, requiring a change in the government mindset towards to the poor and allowing those who can best serve the poor to do so. Of course, this will mean no more cheap votes, which I believe is the federal government’s purpose for involving itself in social programs in the first place.
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