Last Thursday’s AEI panel on “The Joy of Capitalism” reheated my enthusiasm for free markets with a foray into a classic text paired with insights fresh from the entrepreneurial oven. The evening offered an updated look at theologian Michael Novak’s 30-year-old magnum opus, “The Spirit of Democratic Capitalism” and introduced two enterprising peers.
With a glimmer in his eye, Novak opened with the confession that he wasn’t sold on the title of the event. “The Joy of Capitalism,” he mused, “that sounds like a cookbook!” But I think the cookbook analogy works nicely since the thesis of “The Spirit of Democratic Capitalism”unveils the secret ingredient of a prosperous world.
What is this secret ingredient, the “spirit” in “The Spirit of Democratic Capitalism?” According to Novak, it’s not the institution of property rights or the phenomenon of the marketplace (both of which date back to biblical times) but a more recent “central dynamism” and “vivifying focus” that come from empowering creative intellect.
At the dawn of the capitalist era, focus shifted away from land ownership to ownership of insight, production of new services and the demand to add distinctive value in order to succeed. In America, we recognize the virtue in enterprising action, the “do it yourself” attitude born of wit, energy and necessity.
Abraham Lincoln observed that generative insight opens up new kinds of productivity and new kinds of rewards. The patent trumping the land deed expresses “the moral genius of capitalism,” which adds to genius “the fire of interest in the discovery and production of new and useful things.” The cotton gin, the light bulb and, in contemporary society, the iPhone 5 all illustrate his point.
Capitalism set the stage for innovation and practicality to bring about immense good—and not just material good. As Hannah Arendt reflected in “On Revolution,” we no longer accept the idea “the poor will always be with you.” Because of capitalism, Novak explained, we saw 500 million people rise from poverty in China and India over the course of just three decades.
And here we have what Novak calls the chief moral purpose of capitalism: to harness individuals’ God-given ingenuity and initiative to transform poverty into prosperity on an unprecedented scale. Implicit in this grand moral purpose, Novak reminds us, is a call to action for free individuals to “get up and start doing things independent of government.”
What kinds of things can individuals do to further the macro moral purpose of capitalism? Two young entrepreneurs, photographer Katarina Price and baker John Sweet, offered “snapshots” and “samples,” respectively showing how enterprising people can contribute.
Katarina calls Katarina Price Photography a fusion of storytelling and business. When the economic downturn interrupted her steady career path, which circled the globe thanks to stints with National Geographic and the Discovery Channel, Katarina decided to strike out on her own, connecting her interests and skills to the growing market for boutique photography services.
John Sweet worked at a bakery during college and fell in love with bread-making. After school, he invested the bulk of his hours and savings to create the initial version of Niedlov’s Breadworks, the bakery he runs today. To start the business, John and his wife worked around the clock (mixing occurs at 2:30 a.m.) and the calendar year (people still want bread on holidays) kneading, mixing, shaping loaves and watching their labors produce nourishing bread. The heat of the kitchen and the relentless demands of a brick and mortar store never let up, but John’s passion and commitment as a “bread creator,” which he ties closely to his spiritual life, have for the first time carried Niedlov’s to its million-dollar revenue mark this year.
After the talk, I asked Mr. Novak what he would have called the evening’s event instead of “The Joy of Capitalism.” After a pause and a smile, he recalled Irving Kristol’s notion to title his book “Two Cheers for Capitalism,” celebrating the system’s dual benefits, material effectiveness and congeniality to personal liberty. “But I think one cheer is quite enough,” suggested Novak. “After all, the spirit of capitalism runs on ideas and profits instead of cheers.”
