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Capitalism and Human Nature

From an early age, I “knew” what everyone seems to know about capitalism: It is great for the rich but not for the poor.

In Nicaragua, where I grew up, a negative view of capitalism was the norm. The government’s harsh rhetoric on “imperialist capitalism” painted a dark picture of this economic system. Notwithstanding, a deep feeling of discontent and distrust never left me. In a Central American socialist dictatorship, large entitlement plans buy political favors, creating a culture of state corruption and cronyism that limits the people’s potential for flourishing. This is one reason Nicaragua is the second poorest country in the Western Hemisphere.

When I arrived in the United States three years ago for university studies, I was baffled by the notion that cars are not widely seen as a luxury that a few can afford, but as a necessity that everyone takes for granted. I wondered what made it possible and wanted to understand where the wealth was coming from. It was certainly a sharp contrast from the dark picture I saw at home from an early age.

As I began my search for answers, I found compelling objective facts: Over the 40-year period from 1960 through 2000, the world population grew from about 3 billion to 6.1 billion. During the same period, the total world production grew much faster, from $6.5 trillion in 1960 to $31 trillion in 2000. World production grew by a multiple of five over this 40-year period. Production per person grew at about 2.3 percent per year. In other words, the living standards of the average world citizen more than doubled.

The statistics above do not just look at advanced economies; these are numbers for the global community. The entire human race is getting richer at historically unprecedented rates. The historical data reveals a system that has the potential to unleash almost unimaginable prosperity. Such an incredible achievement was enabled by the global expansion of free markets, trade, the rule of law, and property rights.

However, my enthusiasm for the free enterprise system goes way beyond the materialist case and into the nature of the system and its interactions with people. I gained a major insight when I realized there are two key components at the core of the free enterprise system that also are inherent to human nature: the drive to flourish and the desire to create.

The question of how to flourish and achieve happiness was a dominant topic in ancient philosophy. Every ancient philosopher would turn his or her eyes to the question of what is “the good life” and how can one achieve it. Likewise, I have come to appreciate how the idea of dignity in work—the inherent dignity that comes from human labor—is intrinsically tied to human flourishing and the good life. When I held my first jobs as a translator, it was a significant source of my fulfillment to know that I was earning my way. Experiencing this helped build my sense of dignity and self-worth. More importantly, it was a source of meaning and purpose. It made me realize that in order to achieve my own goals and pursuits, I must also serve others and help them achieve their own goals.

My enthusiasm for the capitalist system springs from the fact that if it is enhanced in a society where there are political and economic freedoms, where humans are allowed and encouraged to pursue their own self-fulfillment and happiness. This profound desire to flourish is inherent in human nature, but it is also an essential part of God’s redemptive work and the overall theology of the Bible. God wants humans to flourish, and the capitalist system has best provided the conditions for ordinary citizens to pursue and potentially achieve real flourishing.

Also inherent to human nature is the ability to be creative. In the Genesis story, we learn that humans are created in the image and likeness of God. Being created in the image and likeness of God speaks to the unique place humans have in creation, and it also speaks to our unique calling to be stewards and co-creators on Earth. Creativity is the central calling of humanity from the beginning of creation, but creativity is best developed in a society where there is freedom. Our God-given capacities of ingenuity and inventiveness, also happen to be the central virtues of free enterprise and economic progress.

All of this said, capitalism also has great challenges. Whether or not capitalism corrodes human character is a question that deserves serious consideration. However, I do not believe that blaming the capitalist system outright for all human woes will help us engage in higher thinking. Adam Smith refers to the “system of natural liberty,” which accounts for human’s dual nature for good and evil. Capitalism can be used for evil when it produces such things as pornography or weapons of mass destruction, but it can also be used to unleash unimaginable good, such as lifting two billion people out of poverty. This is an inherent facet of fallen human nature, and any economic system will reflect it one way or another.

Philosopher Michael Novak writes in The Spirt of Democratic Capitalism, “A society composed of a system of liberties always lives in danger of suicide, always in danger of pulling its moral foundations out from under itself.” It is important to understand that any economic system rests on moral foundations. Fundamentally, at the core of the free enterprise system is the morality of the individuals who engage in it. This is why I believe studying the moral ecology underlying capitalism is essential. Michael Novak writes, “The greatest task of a commercial society becomes moral and cultural deepening, and an invitation to the young to develop the self-nourishing habits of will and mind are the best guarantors of strong character.”

Fostering the institutions and personal moral habits essential for the flourishing of self-governing individuals is one of the most important tasks of advanced industrial economic societies. Our ability to flourish will ultimately depend on our ability to protect those conditions.