The "Evils" of Capitalism and Why Christians Should Support It

It has been a long time since my last post. This post is somewhat a continuation of my last post, There Are No Greedy Corporations, in that it follows some of the same themes. This post, however, addresses how I believe the church should approach capitalism.

There has been much said in the media, and even in discussions I've heard or been a part of, about the "evils of capitalism". First let me say that there is much evil that is done in the name of capitalism. It wasn't that long ago that Enron and, locally, HealthSouth, were both involved in accounting scandals that hurt thousands.

Before we address these "evils", let's look at what capitalism is. According to Merriam-Webster, capitalism is defined as "an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market".

Given that definition, does this economic system bring out the best in man, or the worst? Does it make man selfish and greedy? Let's address that.

No system can make man selfish and greedy because that is actually natural. We start out that way. Selfish ambition characterizes our lives. We are filled with greed. No one is good. (Only through Jesus Christ, can we be delivered from this.)

If this is what man indeed is like, then what economic system is good? There is no economic system without the corrupted men who drive it. There are sinful, greedy, selfish men at the head of socialist governments just as there are sinful, greedy, selfish men at the head of corporations. The major overlooked thing that differentiates economic systems is incentive.

On the issue of incentive, the question is: Can evil, selfish men be incentivized to do good things? In any system where the power is centralized among the few, there is no incentive for good. There is simply incentive for more power.

In a capitalist system, there is competition. (See the above definition.) Where there is competition there are choices rather than a centralization of power. For the most part, the owners of a business must provide goods or services at fair prices that benefit others to get monetary reward in return for them. If they don't, customers will seek goods and services from others whom do a better job or ask a better price. Workers who don't own the companies they work for are incentivized to do good also. Workers that don't work or are dishonest are often fired.

Adam Smith, in the Wealth of Nations, acknowledges this:

Every individual...generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. (The Wealth of Nations, Book IV Chapter II)

There are exceptions to these things (e.g., Enron and HealthSouth) but those who don't do good (even for selfish reasons) for those they serve typically have justice catch up with them eventually.

The problems with other economic systems such as socialism or communism is that there is no accountability and, therefore, no incentive for good. What incentive is there for good? I'm not making the arguement that capitalism is a great system, just that it is the best we have or will have until the return of Christ.

So what should Christians do with capitalism? Given that it is the best system we have, we should support it. But should it's rewards be our incentives? Not at all.

God equates greed with idolatry. He desires that we be generous rather than selfish. What does this all mean in a capitalistic system? If we either own a business or simply work for one, we should work diligently to provide something good, not to gain but demonstrate what God is like. With what we earn in the process, we should be generous, helping those in need, not for how it makes us feel or the praise of men, but to demonstrate what God is like. That is what we should do with capitalism.