I recently read Jim Wallis’s book, “Rediscovering Values: A Guide for Economic and Moral Recovery,” which proved to be a remarkable experience, both for challenging my own beliefs and for understanding the arguments of those with whom I disagree. The first red flag in reading the arguments of someone with a different ideological framework is the confusion of terms. It quickly became apparent that what free-market advocates, like myself, mean by the term “the market” and what big government advocates, like Jim Wallis, mean is not the same thing. In “Rediscovering Values,” the term “the market” is used synonymously with “capitalism” and even “consumerism.” This use does not do justice to even the most basic concepts of macroeconomics. Properly understood, a market exists anywhere there are two or more people and scarcity of some needs or wants. When these people are willing and able to trade freely, it is considered a “free market.” When the interactions of the two willing traders are guided by a third person, it is a “controlled market.” Yet Wallis rejects the idea that the existence of a market is simply a signal that there is scarcity, and he insists that a market should have limits (third parties), writing, “the market can be a good thing and even necessary; but it now commands too much, claims ultimate significance, controls too much space in our lives, and has gone far beyond its proper limits.” Because a market exists does not necessarily mean that it is a free market. But perhaps of even greater concern is the book’s conflation of a market with consumerism. For example, Wallis often quotes directly from Oliver Stone’s 1987 film, “Wall Street,” which I would classify almost as satire, rather than a serious critique of capitalism. Yet Wallis develops his argument as if quoting Gordon Gekko represented all free-market advocates. In a chapter entitled “I Want It Now,” Wallis says, “The ethic of ‘I want it now’ clearly doesn’t work. In fact, it works against our own balance and well-being.” It is true that immediate gratification is neither sustainable nor morally beneficial. That is why capitalism, defined as free markets and limited government, is not primarily about consumerism. At the Institute for Faith, Work & Economics, Jay Richards responds to the question, “Does free enterprise lead to an ugly consumerist culture?” saying:
People often confuse the free market with the bad choices free people choose. Freedom of choice doesn’t dictate what people will choose. It may allow people to choose gluttony and consumerism, but it doesn’t cause them to.
So the gluttony we see on display in free economies is not caused by those economies being free. It is caused by humanity’s sinful nature. This underscores the importance of free institutions of civil society, like family and the church, that can help produce virtuous people who make right choices.Capitalism is about people investing their hard-earned income in the hard work of others—and in projects they believe are worthwhile. This is intergenerational justice, by giving those younger than ourselves the same entrepreneurial opportunities afforded to us, by investing in startup companies and in their employment in healthy corporations. Capitalism is about taking risks and using your finances purposefully—not to fill your immediate wants, but to pursue your dreams and provide for your family. This is social justice, by being sensitive to the needs of your neighbors and meeting those needs in your immediate community. Consumerism—the “I want it now” ethic—is what leads people to depend on government to provide for them the non-essential products they cannot presently afford. Consumerism, not capitalism, leads people to elect government officials who run up trillions of dollars’ worth of debt in entitlement spending, paying for programs on the credit of our children. Are people greedy and selfish? Yes, all humans are by our sin nature. But it is capitalism—not redistributive policies—that best teach us restraint, thrift, prudence, resolve and sensitivity to the needs of our community and neighbors. Capitalism is not consumerism, and free-market advocates should not accept that the terms can be used interchangeably.