Confessions of a Catholic convert to capitalism

The greatest conversion story of all time began at daybreak on Dec. 9, 1531, on a hill outside Mexico City. The ruthless Spanish conquest of the indigenous peoples was proving an uncompelling advertisement for the Catholic faith. It had produced a meager stream of voluntary converts up to that point.

That morning, according to tradition, an indigenous, Mexican peasantnamed Juan Diego reported an apparition of the Blessed Virgin Mary. Her message was simple. “Dear little son, I love you,” she told him. “I want you to know who I am. I am the Virgin Mary, Mother of the one true God, of Him who gives life.”

That message might sound a little anodyne, but the political significance of the apparition was anything but. In the midst of a violent campaign that attributed little human dignity to the indigenous communities, Mary appeared as a mestiza, an ethnic mix of the Spanish and native peoples. And she appeared to an indigenous man, speaking in his native tongue. In this deeply transgressive act, Our Lady showed that the Catholic Church, despite the mistakes and crimes of those who had introduced it to Mexico, represented the radical equality of God’s love.

In the seven years after this apparition, eight million natives were brought into the church. The tilma of Juan Diego, a cloak that was miraculously imprinted with an image of Our Lady, became the spiritual symbol of an entire people. Even now, the image is reported to convert thousands of onlookers each year.

I know something about that last data point. I am one of those converts.

At age 15, I visited the shrine of Our Lady of Guadalupe as part of a school band trip to Mexico. I had no connections to the Catholic Church at the time; I am not sure I knew any Catholics at all. But from within a crowd of teenagers on a forced march through a boring old church, I looked up at the image of the Blessed Virgin on the famous tilma, which still hangs in the shrine. I did not fall into a rapturous trance. I was not overcome by sweeping emotion. But a simple observation captured my imagination and lodged in my memory: Mary was appearing to me.

"This is how I became an unlikely warrior for free enterprise."

“People often mistake their imagination for their heart,” wrote Blaise Pascal, “and so often are convinced they are converted as soon as they start thinking of becoming converted.” It is true that Mary did not convert me in that singular moment. But the image stuck in my mind. A few months later, I started the conversion process at my local parish in Seattle. My Protestant parents were mildly chagrined but quickly recognized that if this was my teenage rebellion, Catholicism was probably better than drugs. I entered the church at 16 and began the great spiritual adventure of my life.

“The mind of man plans his way, but the Lord directs his steps” (Prov 16:9). God puts the truth before us in unexpected places,I have learned. Our job is to look hard and remain open-minded.

Sometimes that open-minded search has counterintuitive steps. I found that out in my short and ill-fated run at college. As the son and grandson of academics, I should have been a successful student, but I was an aspiring classical French horn player with little interest in studying. This led to academic probation. So I followed my heart and launched an era that my long-suffering parents would affectionately term my “gap decade.”

The first six years, spent touring with a chamber ensemble, sound more glamorous than they were. Imagine driving a van around the country with four other guys, earning $14,000 a year, and you get the idea. But this nomadic lifestyle had its rewards. In my early 20s, on a concert tour of France, I met a Spanish girl studying in Dijon for the summer. Shredding Pascal’s maxim and mistaking my imagination for my heart, I moved to Spain in hot pursuit, took a job with the City Orchestra of Barcelona and started working on my Spanish.

Big bets sometimes have big payoffs. Shortly thereafter, we married and commenced our journey of faith together. Twenty-five years later, as our children grow into adulthood, we find ourselves worrying they will do something crazy like drop out of college or move to Europe in pursuit of young love. We ask Our Lady of Guadalupe to pray for them.

Poverty on the Run

The next conversions were professional and ideological. As a Seattle-born bohemian living in Barcelona, my political views were predictably progressive. But my thinking began to change in my late 20s upon returning to college, which I did by correspondence while working as a musician.

I fancied myself a social justice warrior and regarded capitalism with a moderately hostile predisposition. I “knew” what everyone knows: Capitalism is great for the rich but terrible for the poor. The natural progression of free enterprise is that the rich and powerful accumulate more and more of the world’s resources while the poor are exploited. That state of affairs might be fine for a follower of Ayn Rand, but it is hardly consistent for a devotee of Our Lady of Guadalupe. Right?

Our ancestors had no concept that mass poverty was an acute social problem. Deprivation was simply the background condition for everyone.

As with most people of my generation, for me the symbol of world poverty was a starving child in Africa. I remember a picture from my childhood—I think it was from National Geographic—of an African boy about my own age. He had a distended belly and flies on his face, and he became for me the human face of true deprivation. As I grew up, I assumed, as do most Americans, that the tragic conditions facing the starving African boy had gotten worse. Today, more than two-thirds of Americans think global poverty has worsened over the past three decades.

This assumption and the attendant beliefs about capitalism hit a snag when I studied economics for the first time. In reality, I learned, humanity has starvation-level poverty on the run. Since 1970, the fraction of the global population that survives on one dollar or less a day (adjusted for inflation) has shrunk by 80 percent. Since 1990, the number of children who die before their fifth birthday has collapsed by more than 50 percent. Life expectancy and literacy rates have steadily climbed.

When faced with suffering, we often ask a conventional question: “Why are some people poor?” But grinding material poverty was the norm for the vast majority of people through the vast majority of human history. Our ancestors had no concept that mass poverty was an acute social problem that cried out for remedies. Deprivation was simply the background condition for everyone.

In just the last few hundred years, that all changed for a few billion people. So the right question today is: “Why did whole parts of the world cease to be poor for the first time in history?” And further: “What can we do to share this ahistorical prosperity with more people?” Economics taught me that two billion of my brothers and sisters had escaped poverty in my own lifetime. This was a modern-day miracle. I had to find its source.

St. Patrick's Cathedral stands amid the bustle of midtown Manhattan (iStock)
St. Patrick's Cathedral stands amid the bustle of midtown Manhattan. (iStock)

My search for the “why” of this miracle required almost no detective work. Virtually all development economists, across the mainstream political spectrum, agreed on the core explanation. It was not the success of international organizations like the United Nations (as important as they are) nor benevolent foreign aid that pulled billions back from the brink of starvation. Rather, the responsibility lay with five interrelated forces that were in the midst of reshaping the worldwide economy: globalization, free trade, property rights, the rule of law and the culture of entrepreneurship. In short, it was the American free enterprise system, spreading around the world, that had effected this anti-poverty miracle.

Again, this is a mainstream scholarly finding, not some political cliché. Informed people from left to right agree on these basic points. As no less an avowed progressive than President Barack Obama put it in a 2015 public conversation we had together at Georgetown University, the “free market is the greatest producer of wealth in history—it has lifted billions of people out of poverty.”

None of this is to assert that free enterprise is a perfect system—but more on that in a moment. Nor is it to claim that free enterprise is all we need as people. But it has unambiguously improved the lives of billions. It became my view that if I was truly to be a “Matthew 25 Catholic” and live the Lord’s teaching that “whatever you did for one of the least of these brothers and sisters of mine, you did for me,” then my vocation was to defend and improve the system that was achieving this miraculous result.

That is how an unlikely Catholic became an even more unlikely warrior for free enterprise.

The Inequality Trap

My new mission gave meaning to my growing disenchantment with music. I was hungry for work that served vulnerable people more directly. Now I had a roadmap to point me toward that future. I graduated from correspondence college shortly before my 30th birthday. Traditional graduate work in economics followed, and I left music for good to pursue a Ph.D. in policy analysis. That sparked a career as a university professor, teaching economics and social entrepreneurship.

As I taught about the anti-poverty properties of free enterprise, a common objection—especially among my Catholic friends—remained. “Okay,” many said, “I see that markets have pulled up the living standards of billions, and that’s great. But they haven’t pulled people up equally. In fact, capitalism has created more inequality than we have ever seen.” This spawns ancillary concerns about the rich getting richer at the expense of the poor, and the rising inequality of opportunity. My challenge as a Catholic economist was to answer these questions in good faith.

The evidence on income inequality seems to be all around us and irrefutable, particularly in the United States. From 1979 to today, the income won by the “top 1 percent” of Americans has surged by roughly 200 percent, while the bottom four-fifths have seen income growth of only about 40 percent.Today, the share of income that flows to the top 10 percent is higher than it has been since at any point since 1928, the peak of the bubble in the Roaring Twenties. And our lackluster “recovery” following the Great Recession likely amplified these long-run trends. Emmanuel Saez, a University of California economist, estimates that 95 percent of all the country’s income growth from 2009 to 2012 wound up in the hands of the top 1 percent.

Taking this evidence on its face, it is easy to conclude that our capitalist system is hopelessly flawed. Digging deeper, however, produces a more textured story.

To begin with, we should remember that inequality is not necessarily a bad thing when the alternative is the equality of grinding poverty, which was the case in previous centuries. Few would prefer a nation of equal paupers to modern-day America. But in any case, the notion that global income inequality has been rising inexorably is incorrect. From 1988 to 2008, a key era in the continued worldwide spread of market systems, economists have shown that the worldwideGini index—acommon measure of inequality—at worst has stayed level and has most likely fallen.

The real concern is capitalism’s purported tendency to create radically and unfairly disparate economic outcomes. In reality, however, most of the places with sky-high inequality are not bastions of unfettered free enterprise. According to the World Bank, while the United States has the 63rd highest level of income inequality in the world, communist China is higher (57th place). Pope Francis’ native Argentina, characterized more by government edict and economic planning than by free enterprise, is higher still (53rd).

If capitalism per sedoes not cause income inequality, what does? One part of the answer becomes clear after spending just a few days in China or Argentina. It is impossible to miss that prosperity in these places depends largely on political power and privilege, much more so than in the United States. While the United States is not perfect on this score by any means, our relative success at decoupling non-merit-based clout from economic success goes a long way toward explaining why so many people are so eager to relocate here.

Most of you have a family like mine. You are probably the descendant not of nobility but of ambitious riffraff who risked everything to flee poverty, oppression or both. Initially, they knew, poverty and inequality would also greet them in America—but here those conditions would be mutable, and some measure of prosperity could be achieved through hard work and personal responsibility. All this is doubly true for American Catholics, who were long viewed by the elite as the very archetype of impoverished and unpolished immigrants. Generations of Catholic immigrants—perhaps Juan Diego would be one today—showed up on our shores and at our bordersstarving for jobs and opportunity. Our country’s attractiveness to immigrants has persisted to this day, belying the idea that the United States is now some kind of plutocratic dystopia.

What about the worry that rich people are benefiting at the expense of the poor? It is ill-founded. All income groups in the United States have seen dramatic increases in their standard of consumption—not just since colonial times but also over the past few decades. Today, government data show, conveniences such as air-conditioning and color television—once literally inconceivable—have become ubiquitous all across the income distribution. Forty-five percent of Americans with incomes below the poverty line today live in a house with three or more bedrooms.

This is why many economists suggest that data on household consumption spending offer a better gauge of families’ daily realities than pretax earned income. Many households lose significant funds when they pay their taxes; many others gain meaningful resources through government transfers and benefits. Yet all of this is lost in the conventional income statistics. This is an especially noteworthy omission for Catholics, since our preferential option for the poor and corporal acts of mercy aim at concrete, specific improvements in actual living conditions. Eliminating poverty should mean fighting to raise living standards to a satisfactory threshold and eliminating acute material insufficiency. Mathematically, there must be a bottom 10 percent and 20 percent of earners in any society. The morally relevant issue is not this mathematical truism but rather how these people are actually living.

There must be a bottom 10 percent of earners in any society. The morally relevant issue is how these people are actually living. 

So what happens when we turn to consumption statistics, painting a more holistic picture with the data on what households actually spend? The allegations of recent runaway growth in inequality evaporate. Measured this way, the gap has not grown meaningfully in decades.

In other words, the zero-sum fear about our economy is mistaken. True, the rich are doing plenty well in the United States. Should they pay their tithe and then some, devoting resources not only to their government through taxes but also voluntarily to their churches and charities to help those who are less fortunate? Of course. But there is no real sense in which their success is directly stolen from the poor or middle class. In material terms, all these groups are unimaginably better off today than before free enterprise entered their lives.

A bigger concern is inequality of economic opportunity. The waves of immigrants drawn to this country did not expect to exchange impoverished lives in their homelands for instant wealth and luxury in the United States. But they did believe—accurately—that they were exchanging ossified lives in permanently stratified societies for one in which hard work could more directly yield a measure of prosperity.

Unfortunately, the best data available today suggest that absolute economic mobility is, in fact, declining. A recent study led by Raj Chetty, a Stanford economics professor, shows that the percentage of children who earn more than their parents has rapidly decreased. Their research shows that at age 30, about 90 percent of children born in 1940 were earning more than their parents had earned at that same age. Only half of children born in the 1980s were able to accomplish the same feat. And Americans’ expectations are trending downward to match this reality: According to a survey from mid-2015, only one in eight Americans believe their kids will have more disposable income than adults today.

Of all the concerns about inequality, this is the most legitimate. Unfortunately, it is also the hardest to solve. For example, it is a dubious propositionat bestthat forcibly redistributing wealth to decrease inequality would necessarily reinvigorate opportunity. After all, the approximately $20 trillionin transfer payments that have resulted from the War on Poverty have purchased a lot of welfare programs to make poverty a little less unbearable, but they have failed to do anything meaningful to make poverty more escapable. Even education spending, which is meant to level the playing field, has failed to do so. It has doubled per child (in real terms) since 1970, yet the achievement gap between students at the top and bottom of the income distribution has increased, not decreased, by a third.

The bottom line is that income inequality is not rising worldwide or, when properly measured, in the United States. Income inequality is not a unique product of capitalism, and it does not itself create impoverishment of the poor or the diminution of opportunity. Income inequality is the wrong focus for our anxieties about free enterprise. Opportunity inequality is the crisis we face today, and weakening the free enterprise system will not solve this problem.

Capitalism for the Soul

Once I climbed over common Catholic criticisms of inequality, I realized that I had summited only a small foothill in the debate over free enterprise. A much bigger mountain loomed: the effects of capitalism on the soul.

The critics’ argument goes something like this: Capitalism makes us into materialists, into money-making automatons. Capitalism focuses us on greed and acquisition at the cost of our families, our faith, our friendships and even our planet. It sucks the life out of life.

The great G. K. Chesterton voiced this objection in his classic essay “Three Foes of the Family.” “It cannot be too often repeated,” he wrote, “that what destroyed the Family in the modern world was Capitalism.” He charged that the ethos that accompanies free enterprise had “broken up households and encouraged divorces, and treated the old domestic virtues with more and more open contempt.” Pope Francis put forward a similar point in his 2013 apostolic exhortation “Evangelii Gaudium”: “In this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which become the only rule.”

These critics claim that market-based societies destroy real human flourishing because they inevitably make their participants more acquisitive and selfish, and therefore more unethical and unhappy. The evidence on the happiness question is especially evocative. In 2009, for example, researchers from the University of Rochester conducted a study tracking recent graduates’ progress at achieving goals they had set for themselves. Some of the 147 alumni had set out toward “intrinsic” goals, such as developing deep, enduring relationships. Others aimed at “extrinsic” goals, such as achieving wealth or becoming famous.

The results brought good and bad news. The good news is that, by and large, the subjects did achieve their stated goals. But be careful what you wish for, because it was only the alumni who had set intrinsic goals for whom success translated into actual happiness. The people who had successfully attained extrinsic goals, many of which boiled down to indulging avarice or pride, experienced more negative emotions, such as shame and anger. They even suffered more physical maladies such as headaches and loss of energy.

For Catholics, this is a potentially lethal criticism of free enterprise: As capitalism fixates us on wealth, it weakens the family, fragments the community and leaves us miserable. Is this not the very essence of idolatry?

The answer to this has occupied me for the past decade. I have lain awake worrying about the coarsening materialism of our society and American popular culture. Turn on the television, go to the movies, glance at practically any advertisement, and you will learn that the formula for a happy life is simple: use people, love things, worship yourself. Is capitalism to blame?

My conclusion is that it is not. Systems are fundamentally amoral. The forces that make up the free enterprise system are fundamentally content-neutral. Free enterprise could be used for purely evil ends if capitalism produced only pornography and poison gas, or for purely virtuous ends if man were not fallen. In reality, like basically every human endeavor, capitalism as currently practiced contains a mixture of praiseworthy and damnable behavior. At root, then, what matters is the morality of those who participate in the system.

Capitalism is a mix of praiseworthy and damnable behavior. At root, what matters is the morality of those who participate in the system.

Confusion about this point is the reason for one of the most frequent misquotes in all of Scripture. St. Paul is often incorrectly cited as saying that “money is the root of all evil.” On the contrary, his indictment was of inordinate attachment to money: “For the love of money is a root of all kinds of evil, and in their eagerness to be rich some have wandered away from the faith and pierced themselves with many pains” (1 Tm 6:20).

The problem is not money; it is attachment to money. Why else would God himself enter the world in complete poverty? More precisely for the topic at hand, the big problem is not free enterprise per se. It is the choice by many men and women to prioritize the struggle for riches ahead of higher goods such as faith, family and friendships.

Still, doesn’t the free enterprise system’s relentless efficiency at creating wealth make it a special offender at incentivizing selfishness and avarice? Even if humans tend naturally toward greed until we are corrected, doesn’t capitalism just slam our feet down on the accelerator?

In a word, no. Anyone who traveled behind the Iron Curtain in the 1980s (or China and Argentina today) has seen every bit as much human selfishness and greed on the part of the powerful and privileged. And there is little doubt that kings, princes and even popes throughout history fell to pecuniary idolatry. Greed was a deadly sin long before the invention of capitalism. Free enterprise—which has brought so much good to billions of people—is not the culprit.

Why is this particular flaw woven so deep into our postlapsarian humanity? From the perspective of armchair evolutionary psychology, it makes intuitive sense that we have an appetite for material security. Had one particular caveman not stored up enough food or acquired enough animal skins, they might either have perished prematurely or failed to find a mating partner, and you would not be here to read America.

This is why it is imperative never to forget that biology is not our loving Father. Unlike God, natural selection does not particularly care whether we are happy or whether we live flourishing lives that build up our communities. Our DNA certainly does not care how long we have to spend in purgatory—if we are fortunate enough to arrive there in the first place. This means the quicksand of materialism is one way in which we Catholics are called to mortify and purify our impulses. This is not made any easier, incidentally, by the pervasive popular advice that “if it feels good, do it.” Our Father gives us rational souls and inspired consciences for a reason. We must put them to use in our financial decisions and our careers, no less than in any other arena of our lives.

Catholic faith instructs us in a moral program that we can implement under any economic system, including our own. Our recipe for a better life simply inverts the world’s mistaken formula and renders it virtuous: Love people, use things, worship God.

As St. Josemaría Escrivá reminded us, earthly goods are “debased when man sets them up as idols, when he adores them” instead of the Lord. But they are not inherently bad. In fact, worldly goods can be “ennobled when they are converted into instruments for good, for just and charitable Christian undertakings. We cannot seek after material goods as if they were a treasure. Our treasure is Christ and all our love and desire must be centered on him.”

The bottom line, in my view, is that Catholics have no cause to reject free enterprise. We must acknowledge the limitations of any economic system, and avoid fashioning false idols out of our wealth or the markets that make it possible. But those tempted to consider different economic systems must remember that only free enterprise (accompanied by necessary regulation and proper social safety nets) has helped fulfill the noble antipoverty goals of our faith for billions of people all around the world. Meanwhile, capitalism’s collectivist competitors, such as state socialism or communism, have left a long trail of misery, tyranny and atheism.

Catholic faith instructs us in a moral program that we can implement under any economic system, including our own. 

In the United States, practically no one advocates a complete overthrow of capitalism. But among many Catholics who are laudably dedicated to social justice, there remains a reflex to militate against market forces and advocate for more state control of the economy. Our prudential analysis of key issues, from education to taxes to corporate regulation, should not begin with hostility to free enterprise. We must conduct an honest accounting of market failures, to be sure—but we should rely wherever possible on market concepts of competition and choice, which have consistently transformed industries and improved living standards.

American free enterprise has imperfections that must be mended. But at root, we should cultivate it widely, share it with everyone and celebrate its fruits with enthusiasm.

The Privilege of Work

Earlier in this essay, I outlined my religious conversion to Catholicism, followed by my vocational conversion from French hornist to economist. Let me close with a few words about how they are related.

In “Gaudium et Spes,” the Second Vatican Council gave laypeople a clear teaching on the importance of our secular work. “Let Christians follow the example of Christ who worked as a craftsman,” the document declares. “Let them be proud of the opportunity to carry out their earthly activity in such a way as to integrate human, domestic, professional, scientific and technical enterprises with religious values, under whose supreme direction all things are ordered to the glory of God.” In short, the church teaches each of us with an honest profession to sanctify our work, no matter what it may be.

During the years when my work was music, my favorite composer was Johann Sebastian Bach. The master of the High Baroque published more than 1,000 works over the course of his 65 years. From keyboard études to church cantatas for every Sunday in the lectionary, Bach’s incredible compositions seemed to fall easily from his pen.

But music was not the most important force in Bach’s life. Before music came family. He was the father of 20 children. And before everything else came his love for God. Bach finished each of his scores with the words “Soli Deo gloria,” or “Glory to God alone.” When asked one time why he wrote music, his answer was simple but profound: “The aim and final end of all music should be none other than the glory of God and the refreshment of the soul.”

I first read that quotation when I was still playing the French horn. It inspired me, but it also sank in like a knife to the heart. I wanted to be able to sanctify my secular work as the church instructs; to be able to confidently say that my work glorified God and served my fellow men and women. In the orchestra, frankly, I was feeling that way less and less often. A lot of nights I was refreshing no one, and I began to crave a new profession that would offer a more direct path toward serving others.

To switch from music to economics might sound like moving from the sublime to the dismal. Yet as paradoxical as it seems, economics is what enabled me finally to deliver something like Bach’s answer about my own work. As a Catholic dedicated to the welfare of those at the periphery of society, I am an expert witness to the fact that there has never been a better system than free enterprise for empowering real people to pull themselves out of poverty. There has never been a better system to allow people to unlock the unique sense of dignity that comes with earning their own way, deploying their talents to serve their community, colleagues or customers, and taking home justifiable pride in—and rewards for—their efforts. And there is no reason, if we are serious about our Christian apostolate, that free enterprise should become an idol in itself, impoverish anyone or capture our souls.

In sharing this truth, I can finally sanctify my work. Not on the level of the great Bach, to be sure, but in my own little way. What a privilege it is. Our Lady of Guadalupe, pray for me.

SayRah Greed
4 months 2 weeks ago

Beautifully stated, Michael! Your faith I want to follow! Can you seek with me more ways to #RegulateGreed and see how entrepreneurial efforts do not over-run our moral boundaries?

J Cosgrove
4 months 2 weeks ago

The editors should ask Dr Brooks to write another article on his education experiences. He is often held up as one who reached a high level of educational success with very little economic expenditure.

He did a large amount of his education on line at very low cost. The current educational system in the United States is anything but free market capitalism as societal pressures lead many families/students to almost impoverish themselves in pursuit of something that should be available for much lower costs. Jesuits should know something about this as they participate in these non free market activities.

Gary Gagliardi
4 months 2 weeks ago

What needs to be understood better here is not capitalism but the true nature of competition. What people oppose is not just capitalism but competition, in general, with winners and losers. People think of competition as a fight among competitors. They think that the opposite of competition is cooperation. This view almost instantly dooms you to failure. Competition is simply making comparisons. The comparison is among what we can call “opponents” or "alternatives". The opposite of competition isn’t cooperation; it is not making comparisons, not making decisions, and, more commonly, not having no choices.

Comparisons must be made when you make any decision. Alternatives are compared. Though you don’t call them opponents, your alternative choices compete in your mind. You can make a decision when, and only when, one of those opponents "wins." Note that, by this definition, even cooperation requires competition. You must choose when, how, and with whom you want to cooperate. The choice to cooperate, in any way, always has a competitor: the choice not to cooperate in that way. The choice to cooperate in a certain way must win the competition among other possible ways to cooperate.

How does this relate to capitalism and free enterprise? They are simply open competition, giving individuals unconstrained choices about what they can do with their time to earn a living and what they can purchase from others with what they have earned. Political-based economic systems are defined by limiting those choices in one way or another for individuals by the coercion of the state. In other words, they take decisions from each individual and give them to some other "authority" who make the decision for them.

So the real judgment here is about individual freedom. While there may be a discussion here about how freedom should be limited in a civilized state, there is no discussion regarding personal morality. God judges by each individual's decisions. Constraining individual decisions on the state level cannot improve our moral standing from the divine perspective. However, I maintain that taking away the choices of others, constraining their ability to compete and to acts as a judge the competition of others is immoral.

I too am a Matthew 25 Christian, but before the judgment of the sheep and goats, we first must make the judgment about to do with the talents we are giving. What lifts people from slavery and produces prosperity is encouraging them to trade their talents rather than bury them.

Joseph Pacone
4 months 2 weeks ago

A bit to long, but a nice story with a good final conclusion regarding capitalism.

My one criticism of substance in the authors defense of capitalism is this....
Why not give voice to the possibility of Capitalism 2.0.

For me, that would be 'a revised capitalism' (2.0), which shared its profits in a more equitable way, between owner and worker.

The idea being this, that a company should reward it's workers with a LARGER SHARE of the profits of the company, according to 'company profits and worker contribution'.

We might call it 'Commonwealth Capitalism', since at least some of the resources that allow a company owner to succeed can be identified as the 'common resources of the nation'.

Morally speaking, is it really necessary for the 'owner' to pocket every penny of profit he can, including paying the workers as little as possible? That's where we see the 'incredible greed' of the corporate elites, who amass 'huge personal fortunes' as middle class Americans are left behind.

We need a more fair capitalist system.

Stuart Meisenzahl
4 months 2 weeks ago

Many many companies have profit sharing plans, matching retirement contributions based on profits and annual company wide bonuses or stock grants
One difficulty many companies encounter is that if the Company has a Union contract it cannot unilaterally institute such plans without the Union consent. Unions frequently prefer work place guarantees, layoff protections or enhanced contributions to the Union Master Pension Plan. Seems counter intuitive, but there you have it!

Catherine Shortt
4 months 2 weeks ago

Mike Evans, I hear you. Sitting up here in Canada we are sometimes amused but more recently disappointed to hear and read so much attachment to the status quo and the denigration of those who struggle the most. We do have our share of problems, but our intention is with a sharing heart. It would not be difficult for the status quoers to find less biased research than this blind love affair with capitalism. Can capitalism evolve? I am praying for the souls who are bowing to this simple-minded drivel. What would Jesus do? There really is enough to go around. Scarcity is a trap.

Stuart Meisenzahl
4 months 1 week ago

Catherine
Unless you expect thousands of people to daily reenact the story of Christ with the loaves and fishes sufficient to feed the world, you are living in a fantasy land ...not Canada. Christ went fishing with apostles; He never preached "a free lunch"; he never suggested that a government redistributionist policy was essential; He preached giving and sharing at the individual and personal level There is nothing in Capitalism per se that is inconsistent or contrary to these commands.

History is full of utopian "dreamers and wishers". Every utopian based society has failed spectacularly! History has proven time and again that what Arthur Brooks has produced is anything but what you call simple- minded drivel. I am interested in understanding your professional qualifications that compel you to reach this conclusion.

C Jones
4 months 2 weeks ago

Market capitalism serves the customers and is a good tool in improving the lives of others, but functions better in a competitive, rather than monopolistic, atmosphere. Although the poor will always be with us, one good idea can lead from rags to riches.
Governments which have condemned the markets and attempted to instill social justice on the masses, in the majority of instances, became monopolistic in too many ways, increased inefficiencies, created over regulating bureaucracies, disregarded God and religious practices for cults of personality, slaughtered and/or imprisoned hundreds of millions, and generally did more harm than good.
Envy destroys success and self, admiration teaches success and self discipline. If an individual or a country runs a positive balance of trade, more resources become available and generosity increases.

William Chamberlain
4 months 2 weeks ago

Poverty in America? Look no further than the breakdown of the family through divorce and skyrocketing out of wedlock births. Root cause of this? The sexual revolution and the programs of the Great Society - well meaning but with dire consequences.

Kay Fiset
4 months 2 weeks ago

Dear Dr. Brooks,
Thank you for this. It's such a pleasure to be reminded of why you are one of my favorite professors ever. I'm passing this on to my husband and sister--both Catholics. I have always been a proponent of capitalism and appreciate your arguments in its defense. I would like to note that the term "social justice," as currently used, is perhaps less of a good than it is presented. Hayek saw what it really meant, as I'm sure you know, and while we can all agree that generous voluntary giving is a Christian duty, I do not believe that the forced redistribution of income, in support of "social justice" or for any other reason, is a Biblical imperative.

ALICE MARX
4 months 2 weeks ago

I read this essay by Dr. Brooks as saying capitalism as a system is not for discussion but how we practice it can be problematic for the Christian -- I agree with both parts of his thesis. I also contend that Pope Francis says the same.

Dr. Brooks also speaks to using the strength of our democracy in defending capitalism. The beauty of our democracy is that we have accepted the responsibility to be governed by the vote of a 50/100 (+1) majority. We as US citizens do have the ability (and we as Christians may see a moral obligation) to put in place a Capitalism that provides certain basic human needs, such as food, health care, education and mobility outside of "blind" market forces. Does that mean that these basics might be more expensive for those of us who can afford them in the "blind" market place? Yes! My hope is that Dr. Brooks means to say this when he added this to his essay: "On the contrary, his (the Apostle, Paul) indictment was of inordinate attachment to money: “For the love of money is a root of all kinds of evil, and in their eagerness to be rich some have wandered away from the faith and pierced themselves with many pains” (1 Tm 6:20)".

Eugene Palumbo
4 months 1 week ago

Maybe I should have said a few words about the two responses I mentioned in my previous comment. The first, “Missing the Mark on Capitalism,” is by David Cloutier, associate professor of theology at the Catholic University of America and editor of catholicmoraltheology.com. An excerpt:

“America has published a lengthy essay by Arthur Brooks, defending the compatibility of capitalism and Catholic social teaching. Brooks is a writer worth reading, even if one disagrees. And Brooks is not wrong to say that sometimes progressive Catholics are excessively anti-market or anti-capitalism. The point should be taken, and a more productive conversation could be had if sloganeering critiques of capitalism per se were more carefully developed. But the essay also displays the limitations of the argument Brooks is trying to make, and does so with immense clarity.

“Three images do considerable work in this essay, and each of them mislead. (Each of them can also be found throughout standard defenses of capitalism.) The first is the story of life as “nasty, brutish, and short” before the coming of free market capitalism, which then emerges and lifts billions out of poverty. The second is the appeal to the televisions and air conditioners of the poor as evidence that capitalism in fact makes everyone better off, and so we should worry less about inequality. And the third is the the defense of the status quo by pointing to certain examples – so, for example, defending American equality by comparing it to China and Argentina – while ignoring other examples that might be more helpful in developing a capitalism compatible with human flourishing.”

The second response is by Michael Sean Winters, Washington columnist for National Catholic Reporter and a visiting fellow at Catholic University's Institute for Policy Research and Catholic Studies. An excerpt:

“The issue is deeper than regulation. Brooks and other Catholic free-marketeers are correct that Catholic social doctrine posits a right to private property. But, that is not the end of the story. They tend to ignore the church's teaching on the universal destination of goods. Every person is entitled to own what they need for their sustenance, but whatever they own beyond that has a social mortgage attached. I can conceive of other civil society actors being the beneficiary of that social mortgage, but I do not see why government should not as well. It is typical of Brooks that he highlights those few principles of Catholic social doctrine that do not challenge his faith in the market, but neglects other important principles that would challenge his economic presuppositions.

“Brooks . . . misses the point. For Catholic social doctrine, the preference for solidarity over competition is a given. The preference of charity, in its fullest sense, over profit is a given. The preference of labor over capital is a given.

“Catholic social doctrine is a rich and challenging set of teachings. Brooks cherry picks those items he likes and ignores a great deal. . . . Brooks is not so much wrong as he is incomplete, he comes to the tradition seeking only what will bolster his other faith. At some point, certainly if you are going to publish, you need to recognize the ways your religions collide and choose between them.”

J Cosgrove
4 months 1 week ago

I have never seen a valid criticism of Free Market Capitalism. And there is nothing written so far on this comment thread that comes close to impugning free market capitalism as the preferred system for organizing the distribution of goods.

Yes, there is something wrong with every form of societal organization including the distribution of economic goods. If you are a Catholic, that is part of what we believe. We live in an imperfect world. So don’t expect Free Market Capitalism to be perfect. Also one can find lots of defects with democracy too. There is one big thing that Free Market Capitalism and Democracy have in common

No one has been able to define a better system.

To visually see the power of what capitalism has brought to the world including the poor parts of the world see this very visual display of changes in human welfare since capitalism was introduced over 200 years ago in England and Holland.

Hans Rosling's 200 Countries, 200 Years, 4 Minutes - The Joy of Stats

http://bit.ly/1S9BM3G

There are various forms of capitalism. Here is a book that describes the various forms of capitalism. Some types of capitalism are much more desirable than others.

Good Capitalism, Bad Capitalism, and the Economics of Growth and Prosperity William J. Baumol

http://amzn.to/1Oo8QE5

So when one criticizes capitalism, which type is one criticizing? And if you are criticizing capitalism you are required to have a better alternative or else you are being disingenuous.

For a history of capitalism there are two very good sources but each will take some time absorbing since it is such a vast subject. Both sources are by Jerry Muller, an economist from Catholic University

Thinking about Capitalism

http://bit.ly/2kL0An4

This a video course of 36 lectures and can often be purchased for less than $50 when on sale(usually at least once a month) or gotten from a local library. It is very complete and discusses the history of capitalism and the various types.

The Mind and the Market: Capitalism in Western Thought by Jerry Z. Muller

http://amzn.to/1ZO8BD0 This is a book and less complete than the video course by Professor Muller but is available in seconds from Amazon with the Kindle format.

So if you are going to criticize capitalism, specify which type you are criticizing and above all provide a better system. You will quickly find out there is no better system.

It is possible to tweak Free Market Capitalism around the edges and the debate should be on the tweaking and not whether to replace capitalism with something else. Everything else in much inferior.

And if you want to know why it happened in England and the United States first, read

Civilization: The West and the Rest by Niall Ferguson

http://amzn.to/2cusxLD

Chuck Kotlarz
4 months 1 week ago

“There is one big thing that Free Market Capitalism and Democracy have in common. No one has been able to define a better system.”

Perhaps no one defines Free Market Capitalism and Democracy better than Nobel prize winner Angus Deaton in his book, The Great Escape.

“…society ‘cannot endure’ under the strains of financial insecurity and anxiety that capitalism deepens as it concentrates ownership in the hands of a few."

10,000 corporate lobbyists have for years have cut voters off at the Potomac. Just weeks ago, US voters, so frustrated by a broken Washington, rejected establishment candidates from both parties. A multi-trillion dollar stock buyback legacy has clearly concentrated ownership in fewer and fewer hands.

Eugene Devany
4 months 1 week ago

Arthur C. Brooks is a wonderful writer but his job at the American Enterprise Institute (AEI) does not allow him to go much beyond the Republican mainstream of thought. Brooks has a good handle on extreme poverty and knows that half the population lives on just 1% of family wealth. Cheap air conditioners, cell phones and color TV’s have not prevented the destruction of family formation. Large consumer debt and low salaries are simply not conducive to marriage and child rearing.
Currently, the Republicans are considering a destination-based cash-flow tax (DBCFT) to replace the corporate income tax. It is similar to a Value Added Tax (VAT) used by all other developed countries but it includes a deduction for wages – a provision that the World Trade Organization (WTO) opposes. It would be far better for workers if the U.S. adopted a small 4% VAT to replace the business portion of the payroll tax. The C corporation income tax could still be reduced to as little as 8% by eliminating all tax expenditures. Similar treatment would be needed for pass-through businesses taxed on the individual returns of the owners.
Individual tax reform done right could solve most troubling issues relating to wealth accumulation and greed by taxing income and wealth inversely. Imagine a federal income tax that ranged from 8% to 28% that was paired with a wealth tax ranging from 2% down to zero. Rich and poor would have the same choice of paired tax rates making it fair to all. To encourage economic mobility, a sum of $500,000 could be saved wealth tax free (for retirement, health care or education). Wealth taxes paid over a lifetime would also offset estate taxes of 28%. Inverse taxation puts pressure on the wealthy to be profitable year after year and take advantage of the available 8% income tax rate. Of course, Warren Buffett may be reluctant to pay 2% of his wealth.

Chuck Kotlarz
4 months 1 week ago

As I understand it, Boeing today would pay corporate income tax on a $20 million profit for a plane that costs $80 million to build and sells for $100 million. DBCFT would treat the sale of the same plane to Air France as zero income and an $80 million tax loss. Look, up in the sky, it’s a bird, it’s a plane, no, it’s Boeing’s stock price. More powerful than a stock buyback, able to transform even a dismal a bottom line in a single tax cut. Any DBCFT company with significant sales abroad on US made product could see its stock price balloon overnight.

The individual income tax plan you propose perhaps could be an alternative to the Buffet Rule (minimum 30% income tax on the 0.1%) favored by Buffet, Gates and Soros.

Gianluigi Magri
4 months 1 week ago

Excellent Dr Brooks! Economy explains that only capitalism produces wealth and we must give eveyone the opportunity of the redistribution of wealth. I always remember Matthew 10, 16: ''See, I send you out as sheep among wolves. Be then as wise as snakes and as gentle as doves.'' Wise and gentle, not crazy. We must ride capitalism with our ethic and faith.

Patrick D
4 months 1 week ago

In quoting Gaudium et Spes, the syllogistic implication seems to be:

Capitalism is good for the world's poor.
I am a capitalist.
Therefore, I am good for the world's poor.

In other words, Dr. Brooks seems to be suggesting that merely identifying as a capitalist is sufficient for doing the Lord's work. A Catholic apologist for capitalism has a lot more work to do, and I hope Dr. Brooks is up to the task. I don't even disagree with capitalism, per se, but this ill-reasoned and vague mess of an essay doesn't cut it.

J Cosgrove
4 months 1 week ago

A Catholic apologist for capitalism has a lot more work to do, and I hope Dr. Brooks is up to the task. I don't even disagree with capitalism, per se, but this ill-reasoned and vague mess of an essay doesn't cut it.

What is missing in your comment is recognition of the difference between a necessary and sufficient condition. Free Market Capitalism is a necessary condition for a prosperous growing society. It is not a sufficient condition for a healthy moral society. Something else is needed in addition. That understanding is what is universally missing from the editors and authors on this site.

Without Free Market Capitalism there will be great injustices in any society that does not practice it. Any other system will favor the few over the many. This is why we have so many people trying to get into the United States and Western Europe. Free Market Capitalism does not guarantee wealth for everyone or that it will be a moral society but it eliminates a lot of the negative forces the have kept people down since the beginning of time. Good examples of these injustices causing problems is Central America, the Middle East and most of Africa.

So yes there is more but until all agree that Free Market Capitalism is necessary there is no way to improve the plight of the poor in a large part of the world. The Jesuits don't seem to understand this and want to bring all the world here but do not seem to be interested in solving the problems that the rest of the world is fleeing from.

This essay is a breath of fresh air for a Jesuit magazine. There was a similar essay 4 years ago by Stacie Beck but nothing since. See

http://www.americamagazine.org/issue/just-economics.

Patrick D
4 months 1 week ago

Thank you for your reply. I recognize the distinction between necessary and sufficient conditions, but as it had no direct bearing on my comment, I didn't feel the need to provide instruction in logic. Your comment seems tangential as a direct reply to mine.

My (rather trivial) point, as stated, is that merely identifying as a capitalist is not sufficient for being a virtuous Catholic, as is implied by Dr. Brooks in his discussion of Guadium et Spes.

I also don't see the necessity of the article. Dr. Brooks himself admits, "In the United States, practically no one advocates a complete overthrow of capitalism." Right. Based on the comments in this article, it would appear as if there's a Marxist plot to take over America. And in any case, we're all practicing capitalists if not ideological ones. Even Bernie Sanders, who identifies as a democratic socialist, isn't pushing to nationalize industry, and states bluntly that free enterprise has made America great. I think there's more to be concerned about from the Right, with its current emphasis on corporate capitalism over, say, lack of opportunity, its callousness in the face of poverty and inequality.

In any case, I'm not necessarily disagreeing with you: I largely agree with economists from Adam Smith to Deirde McCloskey. I consider myself a common-sense capitalist. Basic history will show one, if he's open to facts, that free enterprise brought the West out of the mud. It doesn't take away that it's unclear what form of capitalism Dr. Brooks is advocating (like I said, the article is vague), and that he's the president of the secular American Enterprise Institute makes me suspect his agenda in publishing the piece. I worry many Catholics reading the article will walk away feeling self-satisfied just for agreeing vaguely with their individual interpretation of "capitalism." See the syllogism above.

william fahrenkrug
4 months 1 week ago

While I am not an academic, I was involved as a labor leader during my career, and I take issue with many of the statements made by Dr. Brooks. However, I will simply point out that the article would have been more balanced and credible if he had devoted more than one sentence in reference to the "imperfections that must be mended" in the American free enterprise system. Former Labor Secretary Robert Reich devoted an entire book addressing an economic system that isn't working for ninety nine percent of the people. Dr. Brooks didn't mention one specific thing that needed to be mended. And as far as his "standard of consumption" measuring stick goes, did it ever occur to him that there might be more consumption by the poor, but there is more debt (which most will never get out of), and not much ownership of homes.

Sorry Dr. Brooks, those who have the money have the political power to make the rules upon which the economy runs, and they have made rules that work for them. Appealing to their moral values isn't going to change the playing field.

Lexie Kings
4 months 1 week ago

yeah

Tad Dunne
4 months ago

Re: "Confessions of a Capitalist Convert" (2/20): Arthur C. Brooks makes a convincing case for the merits of capitalism. But he mistakenly assumes that free-enterprise is a morally-neutral system and that greed is what makes it dysfunctional. The reality is that there are intrinsic functions of production and finance that should be understood and observed. Case in point: a tennis professional studies the intrinsic function of the elbow to understand what should and should not be done with it. "Should" is a moral norm intrinsic to any system where human understanding is involved. There is a strong case to be made that the dysfunctions of capitalism arise less from greed and more from ignorance of these intrinsic dynamics. I draw his attention to the macroeconomics of Bernard Lonergan.

Joseph J Dunn
4 months ago

The podcast with Arthur Brooks accessible from this site is responsive to some of the comments here. Worth listening.

Tad Dunne
4 months ago

Arthur Brooks makes a compelling case that capitalism of itself is not rigged against people. But he assumes that any economic system is "value neutral" and that greed is the main cause of economic problems. I suggest that every "system" that involves human understanding has intrinsic moral norms. A pro tennis player studies the elbow to understand what should and should not be done with it. Failure to observe these intrinsic "shoulds" his hardly "value neutral." According to Bernard Lonergan, the failures of capitalism result less from greed and more from ignorance of the intrinsic dynamics of production and finance which, when observed, reveal moral criteria for deciding how to spend net profits for the common good in any given socio-economic environment--whether to investment, consumer spending, taxes, or charities.

John Moynihan
4 months ago

Jack Moynihan
Having had the opportunity to read this article, I must admit, that with my experience during 42 years of living in rural areas of four Latin American counties (Bolivia, Peru, Nicaragua and Guatemala) accompanying the people on a full time basis, the author and I have completely contradictory understandings of the generalized reality throughout our globalized world. My ministry has been and is ‘human integral development from a christian perspective’.
But the contradiction is somewhat understandable with a bit of refection. He clearly indicates that his conversion from “a social justice warrior” to “a free enterprise warrior” is due to both his college and other professional mentors, and his self-satisfying conviction that Our Lady of Guadelupe is animating him and that his promotional preaching of FREE ENTERPISE will greatly contribute to an increase of wealth for the accumulators, and consequentially may provide ‘a bit of trickle down’ for the needy of the U.S. and the world. Will St. Mathew 25 be content with this arrangement?
This article clearly demonstrates how things are actually being run throughout the world. The great need is that there be a more generalized understanding on the part of citizens on all levels of life, the local, state, country and the global. This is in order to enable us to recuperate an authentic sense of democracy and actively assume our responsibility with a committed concern to participate in the struggle to establish a system which contributes to the wellbeing of all people. Without a firm effort to do so, the future will continue along on the same road as the present one.

John Moynihan
4 months ago

Jack Moynihan
Note: There are many fine resources available that are able to provide an understanding of the existing common global problems which have resulted in a dehumanization process. Pope Francis expresses this in his available letter (booklet) “Joy of the Gospel” in the following manner:
“We have created a ‘throw away’ culture which is now spreading. It is no longer simply about exploitation and oppression, but something new. Exclusion ultimately has to do with what it means to be a part of society in which we live; those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even part of it. The excluded are not the ‘exploited’ but the outcast, the ‘leftovers’.”

Susan D'Entremont
4 months ago

There are many important points in this article that liberals like myself need to be reminded of - world poverty has been decreasing in recent years, systems are amoral - it is how they are used that make them moral or immoral, there will always be a bottom 10% - the question is how that bottom 10% is doing.

But there is one thing in this article that I just don't understand, no matter how hard I try. It is "The bottom line is that income inequality is not rising worldwide or, when properly measured, in the United States." I am not an economist, but I am married to one. The first part of that sentence is likely true, but I do not see how the second part of the sentence can possibly be true. Yes, more people have air-conditioning today, but that's like saying more people have cell phones. So what? Those sorts of things are cheaper in real dollars, but other necessities, such as housing, are not. Every index and stat that I have seen from all over the spectrum indicates that wealth in the US has been increasingly concentrated at the top - not even the top 1%, but the top .1%. More people have been coming to our food pantries, including people in jobs that are considered middle class. Over 20% of children in the US live in poverty. I don't think this sorts of statistics should be brushed under the rug because at some point, when few people have money to buy more than the necessities, the economy will collapse.

If our country as a whole was holding fewer assets because more money was going overseas, that would be OK because, as the article points out, there would be less global poverty. But there is more wealth than ever in the US, it is just being held by fewer and fewer people. Yes, there will always be inequality, and if everyone's wealth was rising at the same rate or if poorer people's wealth was rising faster than richer people's wealth, that would be OK too. But as it stands now, the richest people's wealth is rising at a rate that is extraordinarily greater than everyone else. And that doesn't jibe with my Catholic social teaching. I don't condemn capitalism, but it seems that it has run amok. It isn't even what I would call free enterprise anymore. Instead, it is ENHANCED by government - the tax code and subsidies have been built to help the rich more than the poor.

Peter Kozik
2 weeks ago

I found the article not only disingenuous but deeply troubling. Among other things, it cites consumer spending as a mitigating argument to income disparity when in fact consumer spending drives the basic economy and the income gap is the result of investment, which poor people can’t do. It criticizes the public education system while failing to acknowledge that public schools educate a growing population of people in poverty. It fails to acknowledge the causes of the Great Recession which was directly the result of algorithms deliberately designed to fleece mortgages, a sure indication of greed. The article touts the happiness index, and then disparages socialist economies, many of which, like Sweden, support the happiest people in the world. It was written by Arthur Brooks of the Heritage Foundation, the cabal responsible for Trumpian economics which desperately misses the mark of how to make America great at all. In plain view, this article is subtle propaganda, cloaked in kind talk about the money machine. Let me add to my criticism from my own Catholic faith: the article, ultimately, is hypocritical. Most unnervingly, the article fails to capture Jesus’s vision of economic equality, a vision that still drives whatever fairness will be left in our economy once Trump steps down. I believe Jesus would have upended the Heritage Foundation’s table first upon entering the temple.

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