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The Complexity of Markets

In our current polarized political environment, it is easy to paint in black and white, and pit staunchly liberal and conservative viewpoints in direct opposition of each other on a number of issues.

The question of free markets is no different.

It is easy for our categorical minds to identify only two options: capitalism versus socialism. In the Values & Capitalism Summer Honors class titled “Capitalism and Christianity: do Markets Hinder Neighborly Love?” taught by Dr. Anne Bradley, we probed the fundamental differences between socialism and capitalism and sought to identify which one provides a better tool to love our neighbors. After focusing on these broad economic systems, we also discussed more specific instances when the state intervenes within a capitalist framework, blurring the lines between the two systems.

As the course developed, we came to see that economic systems are tied up in an understanding of the human condition. According to the Genesis creation account, human beings are created in the image of God, endowed with inherent worth. We also create as God created and are called to steward all of God’s creation. Through the course we explored how capitalism supports creativity and flourishing.

For example, according to the World Bank, upwards of one billion individuals have raised themselves out of poverty in the last 25 years due to free market systems that allow self-interested individuals to exercise innovation. In contrast to socialism, capitalism requires private ownership for the means of production, allowing for freedom of choice. Although socialism does contain many Christian elements, such as a regard for the common good and the sharing of resources, there is a large difference between the disciples’ decision to “have everything in common” and a state-mandated distribution of resources.

Even though capitalism fosters creativity, innovation, and human flourishing, it is not a system that cures all ills. Any system will be flawed, because the humans that take part in it are flawed.

We must also admit that our system in the United States is not a completely free market system. From social security to environmental regulations, the federal government has a hand in many areas of society. Whether or not this is beneficial must be considered carefully. For example, capitalism has helped create new technologies, but is it the state’s role to help ensure fair access to these technologies in order to close the digital divide?

More research for many public policy areas is needed to identify a definitive role for the state. Our class discussed possible pros and cons to concepts like the elimination of the inheritance (“death”) tax or education reform to reduce inequality of opportunity, but in these instances, the question of the role of the federal government is highly complex.

Perhaps, there are more than two approaches—more than simply free markets or heavy federal regulations. Some scholars, such as Patrick Deneen, see the market and the state as two sides of the same heavy-handed coin. As a possible alternative, David Cooney follows in Chesterton and Belloc’s footsteps and points to the concept of distributism. Distributism can be described as a form of localism where free markets operate and the local communities are able to decide for themselves whether, for example, certain corporations are let in. This is similar to subsidiarity, a Catholic conception which preserves and gives autonomy to the lowest institutional levels in society (ex. family or church) and the higher authorities only intervene when a lower level cannot adequately perform its necessary functions.

Again, we must recognize that even a high degree of localism will not act as a cure-all. Even though local businesses generally retain more profits within their communities, large corporations also play an important role in the economy because economies of scale can reduce costs and provide employment.

Ultimately, we must look not simply at the ideal but also the real. In fact, identifying the real might just get us closer to a future ideal. The United States operates in a more or less free market system, which allows us to identify areas for improvement and consider all appropriate options for solutions to injustices–even if that means holding views contrary to a political party or ideology. Any system we have will be broken. This points us toward the beauty and hope of Jesus’ life, death, and resurrection as we recognize that ultimately God’s purpose is to restore the whole of creation, including the economy. In the end, scarcity will be replaced with abundance.

Another aspect about capitalism to recognize is that systems and institutions are not value neutral. They actively shape our habits and our loves. From viewing around 4,000 advertisements a day to making “pilgrimages” to shopping malls, we must understand that our actions affect our most deeply held beliefs. Although capitalism did not create greed, it has the potential to tempt us to value material possessions over and above families and communities. And, although some scholars, such as Jonathan Witt point to “cultural decay” and declining family life as proof of capitalism’s harmful effects, the changing nature of family structures today cannot be simply explained. On the other hand, we must not foster a fatalistic mentality because as individuals, we possess agency. We have the power to name these systems and habits and work to counteract them.

Although capitalism might create temptations, capitalism fosters creativity, innovation, and a greater quality of life. It has allowed self-interested individuals to contribute to the common good in a way that no other system in history has done. We can both be thankful for the bounty this economic system has created, while also grieving and working to reform the existence of inequality in the same system.