Originally published on October 4, 2017 on Law and Liberty
Novak-as-Liberationist Won’t Fly
By Michael Matheson Miller
In his recent essay on the legacy of Michael Novak, First Things editor Rusty Reno has explained to longtime subscribers to Richard John Neuhaus’ old magazine where Reno is going with it and why.Observers such as John Zmirak and Joe Carter have wondered at several First Things pieces that shyly or openly make defenses of socialism.
Reno’s piece makes it clear that he disagrees with Michael Novak, and perhaps by implication Father Neuhaus, on the viability of a dynamic, open society—and the economic system that underpins such a system. He is looking for some alternative to the market economy. For him, that involves a number things including succumbing to the allure of what I’ll call “managerial capitalism.”
The merit of Reno’s piece is to provoke discussion about complex issues and to highlight some of the problems we face in the current system of global capitalism. I share some of his worries. Unfortunately, he seems to have let his desire to be provocative overcome a fair and reasonable assessment of Novak, and his analysis of the current state of affairs reveals less about Novak’s flaws than his own.
Reno’s reading of Novak is a caricature. He attributes positions to Novak that anyone who has read his work or spent any time with him knows are not accurate.
“It was characteristic of Michael,” according to Reno, “to frame the highest good as liberation from constraint.” He quotes Novak from The Spirit of Democratic Capitalism (1982), where he says that “God did not make creation coercive, but designed it as an arena of liberty.” But the highest good for Novak was not liberation, but love of God and neighbor. In the sentence immediately following the one Reno quotes, Novak writes: “Within that arena, God has called for individuals and peoples to live according to His law and inspiration.”
In other words, it is quite clear in The Spirit of Democratic Capitalism and elsewhere in Novak’s thought that the purpose of freedom and the spiritual ideal of capitalism is caritas and that the betrayal of this “injures the system in its every part.” Reno’s is a provincial reading, for what precipitated Novak’s insistence on liberty was not, as Reno suggests, the 1960s “decade of liberation,” but the image of the men and women of Poland, Slovakia, and the Soviet Union, where millions of lives and families were crushed by oppressive socialism.
Reno argues that Novak appreciated liberty but undervalued culture and failed to give “due emphasis” to “our desire to give ourselves in loyalty to permanent things. . . . He lost sight of the need for anchors.” While conceding that Novak’s explanation of the relationship between economic liberty, democratic institutions, and culture was “elegant,” Reno argues that “we overestimated the stability of the three-legged system.”
But Novak did not. As he wrote in Awakening from Nihilism (1995):
To maintain free societies in any of their three parts—economic, political, or cultural—is a constant struggle.
Of these three, the cultural struggle, long neglected, is the one on whose outcome the fate of free societies in the twenty-first century will most depend . . . .
No one ever promised us that free societies will endure forever. Indeed, a cold view of history shows that submission to tyranny is the more frequent condition of the human race, and that free societies have been few in number and not often long-lived.
I had the privilege to be one of Novak’s students in the first Slovakia seminar in 2001 where he spoke of his Slovakian and Pennsylvania roots. It was abundantly clear that his defense of economic and political liberty was grounded not in radical individualism but in loyalty and the permanent things.
Finally, Reno’s critique of Michael’s optimism about the dynamism of capitalism misses the point. It is true that Michael was optimistic and looked on the bright side. He had a strong belief in the capacity of ordinary people to rise up and accomplish great things. But at its core, what drove Michael was not expanding capitalism, or choice, or liberation, but the Christian virtue of hope. Reno takes a familiar tone yet he somehow misses the essence of Novak both as a thinker and a man.
It has been a theme of Reno’s for several years that capitalism is no longer a choice but is our fate. The valuable insight here is that we have to address the current model of capitalism as it exists; simply claiming we need more markets or that this is not “real capitalism” is insufficient. Reno rightly notes several pressing problems, such as the situation of American manufacturing workers who have not fared well in the global economy. I agree. While a free and competitive market economy makes everyone better in the long run, in the short run some people lose, and the short run is not always so short. For some, it can be two or three generations. To simply extol the virtues of the market or tell people to get trained in another field and relocate is not sufficient. We have a social responsibility to those who took a hit for the team.
Yet it is naïve to think that capitalism is simply a given. As nature tends toward entropy, so too does a market economy tend toward cronyism and mercantilism unless intentionally and continually made free and fair. The world was highly globalized before World War I as John Maynard Keynes and others have noted, and few imagined the quick descent into autarky and conflict that ensued. In the early 20th century, Argentina was a prosperous society similar to Australia. Today it is one of the least free economies in the world and suffers from high levels of poverty and inequality.
Economic freedom does not simply happen. It is always difficult of achievement, requiring a moral commitment by those in power to choose against their own economic incentives for the common good.
Reno seems to generally misunderstand the economic state we are in. He argues in the present essay and elsewhere that our economy is freer than it has ever been. This ignores the tremendous increase in regulation over the last 30 years, as Robert Miller and Samuel Gregg have pointed out. People tend to think of regulation as mending an economy for fairness. More often than not, it is a tool used to create special advantages—just look at U.S. agricultural policy, or ask the hundreds of millions of poor people throughout the developing world who are excluded from markets by a complex system of tariffs and protectionism that only the rich and well-connected can navigate. Global capitalism is not their fate. Cronyism and exclusion are their bane.
The biggest weakness of Reno’s analysis, however, is his assertion that capitalism is the driving force behind cultural and moral disintegration and his corollary argument that it is “patently absurd” for conservatives to worry about socialism. Here he makes two related but distinct points.
First, he suggests that the market economy, by providing so much choice, has led people to become unhinged to such a degree that we think we can choose our own gender like we do shoes. Second, he argues that there is a “clear .. . . link between global capitalism and progressive clear-cutting of traditional religious culture and morality.”
Indeed, capitalism and a global market create lot of choice. This can have negative cultural effects; it can even, as some studies argue, make people less happy. It’s also true that a market entrepreneurial and business culture can lead to a kind of crass utilitarianism, and that consumerism can lead to pollution and waste. But as others have noted, the idea that consumer choice is the source of people’s perceptions about their gender is a bizarre argument. Gluttony and intemperance in consumerism clearly have ramifications in the sexual realm. If Reno had said that, I would have nodded in agreement. But to make consumer choice the main culprit while at the same time minimizing the influence of socialist thought reflects a type of economistic reductionism which Reno supposedly laments.
Here Peter Berger’s distinction between what is intrinsic to capitalism and what goes along with it, or can exacerbate it, would be helpful. John Zmirak has pointed out that many of the actual insights in Reno’s essay are not controversial among free market conservatives. Wilhelm Röpke made most of them in the early 1940s. The irony is that for all his critiques of Novak, Reno seems to make the same mistake that he rightly accused some free marketers and conservatives of making when the Soviet Union fell: reducing socialism to its economic form alone.
Yes, some corporations fought against the Indiana religious liberty act. But while corporations’ buying into this authoritarianism is a problem, what it represents is not so much the influence of capitalism on society, as the “long march through the institutions” by the socialists that Reno tells us not to worry about. Would Reno really credit U.S. corporations with the Obergefell decision or with theories that identify sexual predilection with ontology—theories that have made their way into U.S. and European law and United Nations Yogyakarta Principles, and that will increasingly restrict both religious and commercial liberty?
Can markets exacerbate such developments? Of course. But to suggest they are their primary cause is to not only describe the problem inaccurately, but to let the real perpetrators get away.
Obviously, much depends here on what one means by socialism. If one means state ownership of the means of production and abolition of all private property, then Reno is right. But what if one means by socialism what most socialists living today mean by it? That is, a broad vision of social change that includes radical autonomy, egalitarianism, technocracy, relativism, and plastic anthropology. Then it becomes clear that the driving force behind the propagation of gender theory is in fact cultural socialism, which is definitely something to worry about.
So how does Reno suggest we solve the problems wrought by capitalism? He writes:
It is inhumane to forsake the dynamism of capitalism, but it also inhumane to think that quality is sufficient. In 2017 we need to direct economic freedom toward the service of the common good.
What Reno is suggesting here is effectively “managerial capitalism”—the same thing that Tony Blair and Bill Clinton, George Bush and Barack Obama, Alan Greenspan, Robert Rubin, Hank Paulson, Joseph Stiglitz, the World Economic Forum, Matt Damon, Bono, Vox, George Clooney, the World Bank, and the International Monetary Fund have been advocating and practicing for decades. And what has managerial capitalism given us? “Irrational exuberance,” financial crises, exclusion of the poor, and crony capitalism.
After all his meandering reflections on the global economy Reno ends by telling us that First Thingshas decided to join the establishment, and promote the status quo. Aaahh . . . It’s good to be in New York. Maybe he’ll even get an invite to Davos.
Getting Global Markets Wrong
By James Rogers
First Things editor R.R. Reno, a good friend of 25 years, is surely right that Michael Novak’s classic book, The Spirit of Democratic Capitalism (1982), is a work birthed in response to intellectual trends of the 1960s and 1970s. Novak’s book supplied a critical entry for many of his coreligionists into a moral case for capitalism. For Novak, not only is capitalism an economic system that feeds the belly (a particularly good thing for people with empty bellies), but the system’s call for economic freedom, properly understood, uniquely provides for and supports human dignity. “Human dignity” is a critical concept in Catholicism’s, indeed, in Christianity’s, social thought, a necessary implication of the Imago Dei, that is, the creation of humanity in the image of God.
The thrust of Catholic social thought in the 1960s and 1970s, both in the abstract and as evidenced in the day-to-day culture of priest and parish, was that capitalism might need to be tolerated, but that it was in principle an exploitative system in tension with the faith’s commitment to human dignity. Novak’s book shattered that consensus. This is not to say that his position became the new reflexive dogma, but it did open intellectual doors, in Catholicism and more broadly, to the idea that capitalism can itself directly promote human dignity.
In particular, Novak’s argument in The Spirit of Democratic Capitalism influenced John Paul II’s important papal encyclical, Centesimus Annus. Centesimus Annus, however, was not simply The Spirit of Democratic Capitalism writ in the distinctive accent of Catholic social thought. It also expressed caution about some of the consequences of free markets, particularly when commitments to markets start to run roughshod over commitments to other humans. Centesimus Annus nests the market within a firm social context. (To be sure, Novak did as well, but with a lighter touch.)
Drawing on this, in recent years, and particularly with the candidacy and election of President Trump, Reno has sought to sharpen criticism of capitalism by focusing, first, on the economic tradeoffs created by the market—that is, the fact that markets produce economic winners and economic losers—and secondly, identifying what he considers to be deleterious social effects that can be caused by markets.
Reno’s discussion of his revisitation of The Spirit of Democratic Capitalism misses the mark in at least two important respects. First, he in fact ignores the tradeoffs of the globalization process, emphasizing the American experience as if that were the entire experience. Second, he approaches a kind of economic determinism, blaming globalization for spiritual problems that must more accurately be traced back far before globalization’s advent.
Reno paints the economic consequences of globalization as uniformly grim, as a phenomenon that causes “dwindling manufacturing jobs [and] technological displacement.” But it affects different parts of the world differently.
There are at least two aspects of globalization. The first is dramatically lowering the costs of labor and capital mobility, and of international trade more generally. The second is the bringing of new peoples and regions into the market system.
This is a disruptive process that hurts some people while helping others. We need to be careful, however. For example, overall, “manufacturing jobs” have not dwindled. They’ve moved. To be sure, that is cold comfort for U.S. manufacturing workers who lost their jobs. How to respond to that problem is a pressing political, economic, and social issue for the United States. At the same time, it is unfair for Reno to paint the consequences of globalization as uniformly grim when the same process has helped one billion other souls in the world move out of “extreme poverty,” defined as people who live on no more than a dollar or two every day. Further, the same process allows consumers everywhere to pay less for the same set of goods, thereby freeing up money for other goods and services, creating new jobs in new markets.
Without at all seeking to minimize the impact on American workers, the near invisibility of the rest of the world in Reno’s analysis—the billion people no longer living in extreme poverty—is a significant oversight, particularly for one seeking to articulate a moral (if not a religious) criticism of globalization.
Contrary to Reno as well, market freedom is presented almost nowhere as something about which people do not have a choice. In the United States, for example, the government’s ability to regulate economic liberty in ways it would not dream of regulating social liberty is enshrined in constitutional law. Justice Frankfurter dismissed concerns about protecting economic liberty that “derive merely from shifting economic arrangements.” To state the obvious, there’s a lot of economic regulation in America and in other countries. Whether each of those regulations creates more benefits than costs is an important policy issue for society. Free markets don’t reflexively win those arguments.
Even with globalization itself, the issue isn’t one of having no choice; the issue is whether domestic costs for each nation are worth domestic benefits. I know of no economist who suggests that autarky, or numerous less dramatic choices, is not an option for any nation willing to accept the cost of opting out of the global economy in whole or in part.
Finally, Reno seems to hold globalization partly, albeit significantly, responsible for the moral and spiritual crisis of the age. I am doubtful. As the Preacher in Ecclesiastes puts it, “There is nothing new under the sun.” Look throughout the centuries, look in the Scriptures. Spiritual crises transcend economic systems because human nature transcends economic systems.
In his discussion, Reno comes close to identifying globalization as a one-size-fits-all explanation for all the ills of modern society—economic, political, social, and spiritual. The problem with misdiagnosing the illness, however, is that the ostensible cure is not really a cure. I don’t know exactly what Reno advocates as the cure for globalization, but I am pretty sure that cure won’t solve the immense spiritual crisis that worries him most of all.
Novak’s Restless Defense of the Good
By Grattan Brown
Like R.R. Reno, Michael Novak’s passing earlier this year prompted me to reread some of his writings. I served as Michael’s research assistant at the American Enterprise Institute from 2001 to 2004, admired his work, enjoyed his friendship, and with many others, including Reno, remembered him fondly. Unlike Reno, I think, my rereading led me to a deeper appreciation of Novak’s arguments and to the conviction that they should be developed, not set aside. His sophisticated analysis of the political economies of our age probe human good and evil as they manifest themselves in the social systems we inhabit.
Novak showed that capitalism has distinctive moral, spiritual, and social contributions to make to a society composed of good but also fallen people and of relatively few saints and few wicked. As Reno observes, Novak wrote during a time when societies emerging from colonialism and later from communism had the opportunity to establish capitalist economies. Novak demonstrated the fatal philosophical flaws of communism, the disadvantages of democratic socialism, and the relative advantages of capitalism, or, as some prefer to say, a business economy. A business economy not only generates wealth more abundantly than its socialist counterpart but tends to promote broad political participation and cultivates the practical reasoning and relational habits needed for meaningful, effective work and the sensible use of property.
The spread of global capitalism bears out at least some of these arguments and leaves us two overarching questions:
1) How do we sustain and improve a business economy or perhaps develop a better economic system? (Novak frequently said that capitalism is the worst system except for all the rest.)
2) How do we prevent the culture of a business economy from eroding its own moral-cultural and political supports?
Whether sustained and improved or replaced with something better, the preferred economic system would motivate people to work, to exercise creativity and responsibility in marshalling resources and meeting needs, and to accumulate and share wealth. Thus, it would enable people to provide for themselves and others across the entire population. It would also preserve, as Reno put it, “capitalism’s spiritual achievement.” In Reno’s analysis, Novak defined capitalism’s spiritual achievement in terms of liberation from constraint, openness in social relationships, and dynamism in human creativity. As Reno observes, this language reflects the sensibilities of the 1960s. Novak, a master writer, developed this language as a rhetorical strategy across five decades to persuade the widest possible audience of why communism would, and then did, fail and why a business economy within a democracy proves to be a better economic system than democratic socialism. While many may interpret the language of openness and dynamism in a materialistic way, Novak’s arguments militate against it.
This five-decades long argument was based on economic, sociological, philosophical and theological principles that, taken together, help illuminate the abiding goods of soul and of society that Reno seeks to protect and promote: “marital stability, democratic institutions, and . . . the dynamism and openness that seek higher things than can be had in any market.” In Spirit (1982, 1991) and again in The Universal Hunger for Liberty (2004), Novak proposed that we evaluate any system of political economy by investigating the following questions:
1) How does it compare with other known systems?
2) How do its particular institutions function?
3) How does it handle universal economic realities such as scarcity, risk, possession of productive goods?
With this framework, Novak tried to disentangle some complex economic causes of poverty under communism and wealth-generation in a business economy. Moreover he avoided the mistake of using failures in particular market economies as an argument for replacing an entire capitalist system with a socialist one, as some activists still energetically propose (using arguments that Novak confuted decades ago).
Similarly, Novak proposed cultural principles capable of holding the moral-cultural system of democratic capitalism to a viable standard. Novak used secular theorists and Catholic philosophy and theology to argue for a political economy of wealth-creation and the cultivation of virtue, emphasis on the latter. He injected realism into the high socialist ideals of some fellow Christians using their own language:
The point of the Incarnation is to respect the world as it is, to acknowledge its limits, to recognize its weaknesses, irrationalities, and evil forces, and to disbelieve any promises that the world is now or ever will be transformed into the City of God.
Nonetheless, at crucial points in his analysis of democratic capitalism, he tried to make economic laws and analysis support the human desire to love and be loved:
The highest goal of . . . democratic capitalism is to be suffused by caritas. Within such a system, each person is regarded as an originating source of insight, choice, action, and love. Yet each is also a part of all the others.
To Novak’s Western and Christian way of thinking, virtue translates personal insight into acts of caritas, but not only for Westerners or Christians. In The Universal Hunger for Liberty, Novak advocated “new habits of cross-civilizational respect,” built on respect for the regulative ideal of truth, cultural humility, the dignity of the individual person, and human solidarity” and for an expanded set of political, economic, and cultural virtues capable of animating the institutions of a free society, including but not primarily the state.
Novak’s argument for democratic capitalism rested upon distinguishable sets of cultural, economic, and political principles more than on his rhetoric of openness and dynamism. These principles seem essential today for disentangling complex social problems in a global economy. Reno seems to think that global market activity has brought global moral corruption all the way down through culture. This corruption of culture has led to “dwindling manufacturing jobs, technological displacement, and global flows of labor and capital” and has tended to render “the very idea of borders—between nations . . . [and] the sexes—. . . more and more tenuous,” and to “liquefy our social relations and even our sense of self.”
But surely we should first try to understand labor and capital fluctuations in economic terms, territorial issues in political terms, and social and sexual relations in cultural terms. If an economic institution such as a market strains the capacity of its current culture, the culture has to develop.
One might craft a better framework than Novak’s, but to dismiss his principled arguments will probably leave many people—with good intentions but insufficient reflection—receptive to socialism or movements that tend in a similar direction, such as agrarianism or distributism. Having rejected the “dead end” of retro-socialism, does Reno nonetheless see a cultural remedy primarily in a more regulated economy, even a heavily regulated and protectionist one?
Novak recognized that his own arguments would need development: “To know [democratic capitalism’s] ideals is to be restless under the status quo and to wish to do better in the future.” Novak also recognized that the restless might pale before the difficulty of sustaining a free society and shift responsibility back to the state. First Things has consistently found true guiding lights for building free economies. Let us hope it continues to do so.
Reno’s Critique of Globalism Doesn’t Solve Anything
By Michael M. Uhlmann
For the past 20 years or so, conservatives of all stripes—neo-, paleo-, traditional, libertarian, and more or less everyone in between—have been engaged in a lively debate about the meaning and matter of conservativism. Diverse think tanks, magazines, and symposia, not to mention innumerable blogs of every description, have devoted considerable energy to the task, addressing topics of grand theoretical import no less than practical disputes about candidates, parties, and elections.
Among the more important of these debates are those that occur at the intersection of religion, politics, culture, and political economy. Not so long ago, there was a rough consensus on such matters, not refined enough to satisfy all comers, to be sure, but sufficient to permit operational tactical agreement in opposition to the moral and political threat posed by an aggressive Soviet Union. Michael Novak’s The Spirit of Democratic Capitalism, published in 1982, neatly captured that workable consensus while furnishing a philosophical framework that, among other things, brought depth and breadth to the policies that made Ronald Reagan and Margaret Thatcher such successful politicians. Many of Novak’s arguments even made their way into John Paul II’s remarkable 1991 encyclical, Centesimus Annus.
Novak’s thesis, in a nutshell, is that capitalism is not merely an efficient tool for allocating goods and services, and not only a means for making some people rich; it provides a creative platform for genuine human flourishing of a sort that rises above mere getting and spending. It has been the instrument par excellence through which millions upon millions of people have been able to escape the debilitating tyranny of poverty for the first time.
Until Novak came along, capitalism’s contributions to the enhancement of human dignity had seldom if ever received praise from moral theologians. To the contrary, most theological commentary focused on capitalism’s vices, chiefly the emancipation of greed and exploitation of the poor by the rich. That such vices exist cannot be denied (and Novak didn’t deny it), but Marxist and sentimental Christian accounts to the contrary, they tell only a partial and ultimately misleading tale.
Novak also understood what it was that made the virtues of capitalism feasible: the rule of law, the security of private property, and the establishment of limited constitutional government. Nor would these beneficial economic and legal effects be achievable, he pointed out repeatedly, without a social order that encouraged charity and moderation among its citizens. In short, free markets, liberal democracy, and a virtuous citizenry are inextricably intertwined, and if you wish to preserve such a political and social order none of the three elements can be safely disregarded.
With the Cold War’s end, the rough consensus so eloquently articulated by Novak has split all ends up. Even some of his former friends and allies have now parted company with his thesis. Conspicuous among them is R.R. Reno, editor of First Things, the journal founded by the late Richard John Neuhaus that on multiple fronts expanded upon and fortified Novak’s arguments about polity and economy. Reno acknowledges the extraordinary successes of capitalism and its interrelated institutions as described by Novak, but believes Spirit is essentially a solution to a problem that, like the Cold War era, is no longer central to our current social malaise. “It is time,” he says, “to set aside the notion that the problems we face in the West can be solved by stiffer doses of economic freedom.”
In fact, Reno adds, the very market freedom Novak did so much to encourage has now turned back upon itself and threatens “the two other legs holding up society: democratic institutions and a vital religious and moral culture.” The effects of economic globalism and rapid technological innovation tend to destroy manufacturing jobs and the sense of political community once generated by localized means of production. These same economic forces, moreover, tend to beget a new entrepreneurial class, one increasingly detached from nation and locale and, to protect their bottom line, increasingly wedded to ersatz theories of social justice and “diversity.” To make matters worse, Reno suggests, the new economy neither remembers nor relies upon the old moral virtues and in their stead embraces an ethos of autonomous individualism. –All of which is a far cry from the attributes of the free society that attracted Novak’s sympathetic understanding and praise.
Reno’s argument will attract supporters if only because he is a thoughtful man and First Things is an important journal. Indeed, the journal’s readers will see the critique of Novak as part of a larger editorial plan to reassess the ravages of postmodernism, an agenda markedly different from that once powerfully advanced by Novak and Neuhaus.
About all this, two immediate thoughts.
First, there is very little in Reno’s critique that would be unfamiliar to Novak. He understood perfectly well that a certain species of liberalism—let us call it unalloyed Lockeanism—cannot, unassisted, secure the foundations of a good society. Part of his mission, not only in Spirit but in other works as well, was to orient us toward a higher and better understanding of liberalism. This higher and better understanding, he believed, is rooted ultimately in Christian political thought and more accurately reflects the principles of the American regime rightly understood. By contrast, there are those who believe that the American proposition is essentially Hobbes and Locke all the way down and for that reason doomed to failure. This an old debate, and Reno’s essay and magazine will keep it going.
Second, it is not at all clear what Reno would have us do. The global economy is here to stay, as are the mind-bending creations of modern technology. It is well and good to note the vices of globalism and radical technological innovation, but any such critique should also note the considerable benefits produced by the same forces that appear to Reno to be almost entirely disruptive—not least in vastly lower prices for many consumer goods that are vital to the lives of the poor and downtrodden, and in life-saving medical innovations. This, too, is an old debate that finds earlier counterparts in the first decades of the industrial revolution.
As thoughtful people of good will argue about the causes and cures of our contemporary discomfit, the works of Michael Novak will remain as useful as they ever were. They are anything but a period piece of the Cold War.
Michael Novak’s Spirit of Democratic Capitalism Remains Essential for Our Time
By Jay W. Richards
Rusty Reno’s recent editorial in First Things, which took aim at Michael Novak’s 1982 book The Spirit of Democratic Capitalism, was uncharitable. It also missed its target.
I have a personal stake in the matter, since Novak’s book played a pivotal role in my own intellectual journey. As a young graduate student, I struggled. My study of economics had convinced me (against my earlier instincts) that a free market was much better than the live alternatives at lifting societies out of poverty, and at allowing human beings to channel their interests in ways that benefit others. But I had read enough Ayn Rand to worry that “capitalism” clashed with Christianity. After all, that’s just what Rand had argued.
The result of this tension between my practical reason and my moral intuitions was, predictably, mental fog.
Novak’s book helped sweep away the fog. The Spirit of Democratic Capitalism was no partisan pamphlet. It was a nuanced and satisfying treatise that tallied up both the costs and benefits of the system. Novak understood that the economy is only one part of our social reality. Human flourishing, he argued, required not just freedom in the economic sphere, but rule of law in the political sphere, and virtue in the cultural sphere. Without all three elements, a society could not sustain itself for long.
Reno suggests that Novak’s work is now past its expiration date. He’s wrong.
Reno starts by missing a key lesson of Novak’s work: We must distinguish knowledge based on empirical evidence from ideology. Only by confusing the two can Reno manage to blame gender identity theory, of all things, on economic freedom. Does anyone really think that if we had more socialism (or, for that matter, feudalism), we wouldn’t face this problem? That gender identity theory—a mongrel creature of culture, academy and courts—would have been stopped in its tracks?
A perennial temptation of intellectuals in the humanities is to reduce every question to a contest between ideologies. An easy way to detect this problem is the use of sweeping, undefined terms. It’s “traditionalism” versus “neoliberalism.” “Libertarianism” vs. “Marxism.” “Global capitalism” versus “localism.”
Novak avoided this intellectual tic because he understood economic reality, and knew that some systems better conformed to it than others. That reality doesn’t change with the calendar. When I first read Novak, I thought: “Finally! A thinker who has integrated central economic discoveries with a robustly Christian vision of the human person and society.”
The relationship between supply and demand is not a propaganda tool of globalists. It’s a well-understood truth. The wealth-creating value of rule of law, private property rights, and expanding trade doesn’t depend on Rand’s egoist philosophy. We can discern these facts by comparing the economies of different countries. The role of prices in communicating underlying economic realities is a proven fact, not a deduction from Hayek’s philosophy.
It’s as misguided to dismiss such truths as the claims of a “global capitalism” as to wave away the periodic table of the elements as the poison fruit of Democritus.
It wasn’t Novak’s prior loyalty to “neoliberalism” or “neoconservatism” that led him to defend property rights, a patent system, and free trade. It was his fealty to the lessons of history.
The last three decades have confirmed his wisdom. More than a billion human beings, images of God, have emerged from absolute poverty since 1990. Why? Because of greater economic freedom in places like India and China. That’s nothing to yawn at.
Next, Reno suggests that “global capitalism” has won and so needs no defenders. It is “not a choice,” he writes. “It is our fate—and our problem.”* But it’s not our fate. Sam Gregg shows how tenuous, and in some cases illusory, its victory is in his recent piece at The Public Discourse.
Despite the evidence in its favor, and the lack of any humane alternative, it’s harder than ever to defend economic freedom. In the Reagan era, the influential critics of economic freedom were largely on the left. As Reno’s piece shows, the anti-market virus is now so widespread that it has infected influential corners on the right. Indeed, the current Republican president of the United States opposes free trade.
The Soviet Union is gone—thanks be to God. But bad economic ideas are more deeply rooted in the American psyche now than they were when Novak first wrote his book. Last year, a self-declared socialist gave Hillary Clinton a run for her money for the Democratic Party’s nomination for president. He might even have been a formidable opponent against Trump. (Sanders, like Trump, diagnosed real problems in the Rust Belt, though he’s clueless about the cause and the remedy.) And a 2016 Harvard IOP poll revealed that one in three young Americans support socialism, and one in six identifies as socialist.
Novak’s book was, if anything, ahead of the curve. It highlighted the centrality of the human mind, of human creativity, when even most economists were still fixated on land, labor, and capital. “Capitalism,” as he put it, “is the mind-centered system, springing from the creative power of insight, invention, and discovery.” With the rise of the information economy, this may seem obvious. But even many who studied the economy managed to miss it. As do many who see themselves as insightful commentators.
Rusty Reno fails to show that Michael Novak’s magnum opus is obsolete. He has, instead, confirmed what we already knew: that it is unfashionable. It’s as unfashionable now as it was in 1982, at least among those who write for a living. That’s fine. Novak was more interested in truth than in fashion. Those who seek the truth in matters of political economy can do no better than to study, not just Novak’s Spirit of Democratic Capitalism, but his many books that followed in its wake, almost until the year of his death.
*I’ll let pass the comment that it is “our problem,” since I’ve written at length about that claim elsewhere.