Economic system

An interesting post on First Things by Michael Novak, “ Caritas and Economics.” Novak discusses the different understandings embodied in the six different Latin words for love.

In anticipation of some of my own work looking at private property in light of the tradition of the Orthodox Church, my attention was drawn to Novak’s definition of capitalism. I think he is correct in his assertion that, “ Especially in Europe, capitalism is a term supposed to be spoken with faint—or not so faint—moral disapproval.’ He continues that, at least among those who are self-appointed and anointed right thinker, “It is what all are supposed to be opposed to, not only by Marxists, who spent more than a century vilifying (and misdefining) the term, but also by humanists, poets, playwrights, churchmen, journalists, and all sensitive spirits.” The key to his criticism of the critics is, I think, the charge that most of those who reject it do not understand capitalism. While he doesn’t say this, in my own experience I have found that many opponents (and not a few proponents) of capitalism base their views on a straw man. So, let me turn the stage over to Novak and his answer to his own question “What do I mean by capitalism?”

It is not a term accurately defined by (a) private property, (b) market exchange, and (c) private accumulation or profits. That is the way Marx defined it, and that definition applies to virtually every economic system in history, even in biblical times. It is not sufficient to distinguish capitalism from the pre-capitalist systems that prevailed everywhere until the end of the eighteenth century and still prevail in most of what is called “the third world.” Max Weber, R.H. Tawney, and many others noted that something new entered the economic world some time after the Protestant Reformation. ( Post hoc, of course, is not propter hoc.)

Continue reading →