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Posted at 9:15 AM ET, 01/26/2011

A defense of capitalism

By Jennifer Rubin

Peter Wehner of the Ethics and Public Policy Center (and a former advisor to President George W. Bush) and Arthur C. Brooks, who heads AEI, are out with a concise defense of capitalism. In a mere 100 pages (including an introduction by Phillip Jenkins), Wealth & Justice:The Morality of Democratic Capitalism they cover a lot of ground. Pete and Arthur agreed to be interviewed via email. The questions are mine, the answers -- like the book -- were drafted jointly by the two of them.

Why the book - does capitalism need more defending?

It sure does. But in particular, we felt it needs a better moral defense than we typically see. In the aftermath of the financial crisis in 2008, capitalism as an economic system was under attack in ways that we hadn't seen in several generations. Most of the standard defenses simply argued that capitalism was more efficient than the alternatives, which people know is true, but which they also find somewhat emotionally uncompelling. The truth is that capitalism is a morally superior system to its alternatives and important for entirely non-materialistic reasons. Wealth & Justice is our attempt to make the moral case in a way that is intellectually serious, but also understandable.

The same left-leaning religious groups that decry capitalism generally eschew sermonizing on sin, personal responsibility, etc. Is there a bit of blame-shifting going on?

That's certainly a possibility. Some on the left find it much more to their liking to focus on corporate rather than individual failings. This makes it easier to focus on the tools of government than on the behavior of individuals.

Beyond that, though, we press one point home time and again: If left-leaning religious groups genuinely care for the poor -- as they profess they do and as we believe they do -- then they should be at the front of the line when it comes to providing a moral defense of capitalism. And the reason is simple: no economic system in history has done more to lift more people from mass misery and poverty than capitalism. If you care about the poor - or anybody else -- then you should be a champion of democratic capitalism.

That doesn't mean that capitalism is perfect or by itself sufficient to create the good society. In Wealth & Justice we argue that without a healthy, well-ordered culture, capitalism can be used for ill, just as any other tool or system can. But we also show that compared to the alternatives, capitalism is light years better than anything else in allowing people to flourish. And as such, everyone who cares about the poor should be looking for more ways to bring capitalism supported by a healthy culture to more people.

You make a devastating case for capitalism's superiority over communism but liberals seem to think that European socialism is "the best of both worlds." Aside from the fact these countries are economic basket cases, what is wrong with this argument?

We believe that socialism -- European or otherwise -- leads to dependency on the state and servility among the people. In a nutshell, this is because it engenders a culture of entitlement, instead of earned success. This is not just a theory; it is based on evidence as well. We're seeing what happens in Europe when citizens become dependent on the "nanny state" and, in times of financial difficulties, benefits are withdrawn, even if the changes are fairly minor and marginal. It creates enormous social unrest and even social violence. This vividly highlights why turning citizens into clients of the state is a terrible idea.

It's also the case that, as the great sociologist and theologian Peter Berger has argued, European socialist societies aren't more egalitarian than the United States. The claims to greater equality are even more hollow in the much poorer socialist societies in the Third World. Socialism doesn't even produce on what is supposedly its chief selling point.

We also think it is important to point that socialist systems are profoundly unfair. In Wealth & Justice we tell about a professor we know who, at the beginning of the semester, tells his students that he's going to redistribute points on the first exam in order to achieve an equal outcome of results. He then tells his students to imagine that he has taken points off their exam in order to achieve that result. To a person, these students are adamant that such a thing is simply unfair; they have earned their grade, they insist. To take points off their exam in order to give them to someone who scored lower is unfair. That is, of course, precisely the point. The students understood, in very personal terms, that justice is a matter of receiving the rewards of one's earned success.

In addition to religious critiques, capitalism ironically is often vilified by hyper-secularized popular culture that is equally hostile to religion. Is the secular/cultural assault a larger, more troubling phenomenon? Is there some connection between secular and religious criticisms of capitalism?

Both suffer from the same utopian views of human nature, considering it closer to perfectible than to fallen. Secularists are not religious, of course, but the premises about human nature secularists and the religious left share are fairly close to one another. It leads them to believe that socialism or some variation of it can work, that an economic system can be planned by the state, that "from each according to his ability to each according to his need" is a view that can be embraced across entire communities and nations, and that people who disagree with these things are either corrupt or living under a "false consciousness."

On the other hand capitalism, like our political form of government - based as it is on checks and balances and factions - is the philosophy of the fallen - but improvable -- man. If men were angels, Madison wrote in Federalist #51, no government would be necessary. But men aren't angels and so government is necessary.

Likewise Adam Smith, the father of modern capitalism, assumed that self-interest (but not selfishness; the difference is a big one) was a given and attempted to channel things in a constructive way, in which your true benefit is in my authentic self-interest. And for the most part, capitalism has done exactly that. Walter Lippmann once wrote that at the core of every social, political, and economic system is a picture of human nature. We believe capitalism assumes the right picture and socialism, and certainly communism, assumes the wrong one. As such, these collectivist systems are an exercise in futility and lead ultimately to failure and unhappiness.

Public schools (if we are lucky) teach about democracy but students rarely get any instruction in economics, let alone a defense of free market capitalism. Why is the former is considered essential and instruction in capitalism is not, or worse, is considered inappropriately partisan?

That's a great question, and we're not sure we know the answer to it. It hasn't always been the case that the education establishment was hostile to free enterprise, but there's plenty of evidence that this view has been the prevailing fashion for a few decades at least. It may have to do with the belief some people seem to hold that offering a defense of capitalism is somehow embarrassing and materialistic, that it may be necessary but that it's also distasteful and it ignores a higher moral plane. Or maybe the educational mainstream simply hit an ideological tipping point with so many 1960s radicals never really leaving school.

Whatever the reason, it is clear that capitalism is generally portrayed as a selfish system, and much energy is dedicated to weakening it. We believe these efforts range from silly to pernicious -- but they do exist and, unfortunately, they have created a pretty powerful narrative. Showing why that narrative is false and harmful is why we wrote Wealth & Justice.

With the collapse of the USSR and the plight of western socialistic economies why hasn't capitalism achieved widespread plaudits as best available economic system?

Because many of those in a position to give the plaudits are themselves either suspicious of capitalism or are outright hostile to it. Hook intellectuals up to lie-detector tests, and you'll find a lot of folks who actually regret the failure of the socialistic economies. Those systems seemed like a such a good idea--and engineered by people with doctorates!

Today, nobody defends Soviet-style communism -- but there is still a remarkable resistance to giving capitalism its due.

Can we expect the public to understand free market capitalism when many elected officials are so economically illiterate (e.g. government "creates jobs,")?

It doesn't help. But realistically, we shouldn't expect government to be the main force for the culture of free enterprise. That force comes from private citizens, dedicated as a matter of values to liberty, individual opportunity, and entrepreneurship.

A statist government with politicians who don't understand or appreciate private enterprise is something we need to be constantly vigilant about. But a much bigger threat is a citizenry that has forgotten why free enterprise matters. Fortunately, for the moment, Americans are stubbornly and impressively pro-capitalist, probably as much as any people on earth. That doesn't mean from time to time we don't support policies that we believe will sand off some of the rougher edges of capitalism, but in terms of the core principles of free enterprise, the American people remain, for the most part, rock solid.

In addition, when the public is actually forced to live with the real-world effects of liberalism and politicians who portray wealth creators as robber barons, that fortifies their faith in conservatism and capitalism. We found this out during both the Carter presidency and in the last couple of years as well. Nothing convinces people of the merits of limited government and the free market like living under their alternatives.

By Jennifer Rubin  | January 26, 2011; 9:15 AM ET
Categories:  Conservative movement  
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Well done! Cannot wait to read the reactions to these thoughtful questions and intelligent responses. Keep up the good work.

Posted by: DocC1 | January 26, 2011 9:53 AM | Report abuse

Bravo, Jennifer. This little book may be much help in educating some of our ignorant "elites". They certainly aren't about to digest "The Wealth of Nations" or "The Road to Serfdom", but this book might get their attention, focused as it is on the morality issue. Otherwise, they will just have to grit their teeth and bellyache as the US turns back to its roots, and leaves the rot of progressivism behind.

Posted by: jafco | January 26, 2011 9:59 AM | Report abuse

this interview reminds me of when the nazis outlawed 'jewish' mathmatics. no doubt rubin would like to do the same with any economic theory which offends her delusions. i say delusions because you cant read two paragraphs of her without concluding that her grasp of economics approximates glen beck's grasp of history.

Posted by: jimfilyaw | January 26, 2011 11:56 AM | Report abuse

Economic freedom is morally superior to economic coercion. The problem is that elites are attracted to coercion, i.e. running other people's lives. All the statists have to do to succeed is to convince the majority that the government is giving them benefits paid for by "the rich". It's an obvious con, but with a dysfunctional, corrupted education system, it has become the ideology of both the highly educated and the ignorant.

Fortunately, socialist, redistributionist economics always fails, as the productive stop producing at the margin. The only jobs government can create are unproductive jobs.

Posted by: eoniii | January 26, 2011 12:48 PM | Report abuse

Speaking of capitalism, the Fed met today. Look at their statement, and forget your ideology. Batten down the hatches for inflation.

I have been preaching for many months to go long commodities, (not gold) and short on Treasuries. Double down on that bet on any significant dips!

To quote former Senator Fred Thompson in his cameo role in "The Hunt for Red October:

"This business will get out of control. It will get out of control and we'll be lucky to live through it."

But don't take financial advice from me. I'm just a homeless guy on a public library computer!

Posted by: johnmarshall5446 | January 26, 2011 2:56 PM | Report abuse

Well, capitalism is man feeding on man at its rawest. Obviously there needs to be control or there would be 3 people with money, and the rest of us slaves.

But that aside, let me just point out that government does create jobs. Take the defense of the nation -- created by government, and very much a job creator obviously.

Why some think that the government seeing to it that certain things, like defense, education, health, are 'optional' and that the people with excessive incomes should'bt be expected to help those that create their wealth is obvious. They won't if they don't have to, they have all the above.

The basic fallacy, that we can all be rich and wealthy and take care of these things for ourselves. We can't all afford our own stealth bomber, in fact some of us can't afford a check up.

Thats what government is for, too.

Posted by: tdavis0525 | February 2, 2011 12:47 PM | Report abuse

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