Ambiguous Uses of the Word "Capitalism"

"If a baby wants to eat, he should get a job like everyone else."  That is a sentiment held by no sane person, but it contradicts an idea that many people either pretend to hold or do actually hold, either through ignorance of its consequences or through cognitive dissonance:  the idea that we have obligations to a person not because of who or what the person is, but only on the basis of the person's utility in the exchange of goods or services.  This contradiction cannot be avoided, because even though the primary responsibility for the care of a baby lies with the baby's parents, morally sane people still acknowledge that orphans deserve care, and that this obligation is not contingent on the odds of both the adult and child surviving long enough for the child to pay back the debt.

So much, then, for the first use of the word "Capitalism" -- that is, as an all-encompassing moral philosophy, sufficient to determine right and wrong.  Generally speaking, articles written to "defend Capitalism" attempt to defend this particular meaning of "Capitalism", because it provides cover for neglecting inconvenient duties.  Of course, one may feed babies as a hobby, if he is wealthy enough and so inclined; alternatively, he may collect sports cars as a hobby.  "Capitalism" makes no distinction, because it ironically agrees with Marxism that the only really important thing in history is the economy, and the value of a human being is his value to the economy.

If I appear to find Capitalism as an ersatz religion infuriating, then in this case appearances are not deceiving.  This version of "Capitalism" holds that if an employer gives an honest day's wages for two honest days of work, it doesn't make him a thief or a scoundrel, it makes him worthy of admiration.  It also holds as admirable the executive who draws a year's salary for a week's work, regardless of how valuable or destructive he is to his company.  It eloquently presents the contract as something sacred, but when retired city workers apply for the benefits agreed to them in their contracts, it applauds the response of Darth Vader:  "I am altering the deal. Pray I don't alter it any further."  It boldly contradicts Scripture by insisting that the love of money is the root of all good.

Moving on, the second definition is, arguably, the proper definition:  Capitalism is an economic system characterized by the loaning of money at interest from one private person or business to another private person or business, as shown in the cartoon above.  That's pretty much it.  Capitalism is a means of "putting money to work" to make more money, and it has intrinsic to itself no other purpose.  It can be thought of as a machine like a car is a machine, and either can be put to good or to bad use.  For example, an automobile can be driven by a paramedic or by a terrorist, and Capitalist systems have proven very effective at producing weapons and selling them to "the good guys", "the bad guys", or in some cases, both.  Capitalist systems have given wealth and stability to governments that cherish individual freedoms and to governments that crush dissent.  Capitalism is a machine that does what its designed to do, but that only makes it good in a functional sense, not necessarily in an ethical sense.

One important thing to remember is that Capitalism, in the sense of this second definition, is a relatively recent invention.  For one thing, Capitalism requires (and to a large extent created) a very abstract concept of wealth, and this required time to develop.  For another, there was a developing consensus during the Middle Ages that the collecting of interest was unethical under most circumstances; see the article in the Catholic Encyclopedia for details.  (Today it is difficult to get anyone to concede that it is ever unethical to collect interest.  The truth almost certainly lies between the two extremes.)  Finally, I suspect that Capitalism really requires a sufficiently large population and sufficiently fast communication to "work" properly.  At any rate, Capitalism really was born due to the massive trade involved in European colonization and the Industrial Revolution.

The third definition is used in a kind of bait-and-switch to fool the unwary into accepting the first definition.  The third definition of "Capitalism" is any way of life more characterized by private property than by state ownership.  This is a very Cold-War perspective that basically says whatever is not Communism or (possibly) Socialism must be Capitalism.  This is usually accompanied by a contrast between the USA and the USSR, typically with cartoonish (and unnecessary) exaggeration.

Of course, there is a strong argument that private property is a part of the natural law.  Likewise, there is a natural appeal to the whole picture of a Norman-Rockwell America, with a nuclear family living in its own home and perhaps owning a small business -- a butcher's shop or barber's shop, for example -- or perhaps a small farm.  It is in these two facts that the whole appeal lies, and it is my intention neither to deny nor to denounce that appeal.

However, as mentioned just above, genuine Capitalism has only existed for a few hundred years, whereas private property has existed for thousands of years.  In fact, it is even doubtful there has ever been a time when humans existed and private property did not.  American Indians, for example, may not have believed in private ownership of the land in the same way Europeans did, but they did at least believe that a man might own his shoes.  There have always been some who had more and some who had less, undoubtedly going back to our chimpanzee-like ancestors, and there have been trade networks going back long before written history.  I don't think it makes any sense to call Feudalism and other pre-modern economic systems "Capitalism" just because they were not Communism.

What is more, very few aspects of this Norman-Rockwell picture are actually goals of Capitalism.  Most of us like the idea of families owning their own homes and businesses, and that is possible within a Capitalist context, but Capitalism is not geared to encourage this outcome; at best it is a happy accident, like the spin-offs attributed to the Space Race.

If we really want materials for better consumer products, the best way to go about it is to develop materials with consumer products in mind, rather than to design materials for space exploration and hope that they will serendipitously have household uses as well; in the same way, if we want an economic system that will promote a Norman-Rockwell society, the biases and protections that will promote the desired end should be built into the system.  This, in essence, is what Distributism is:  an economic system based on private ownership that is designed to fit within Catholic social doctrine and promote the good of each member of society, as well as the common good.

Let us be completely honest:  no economic system exists in a vacuum.  The state determines taxes, tariffs, contract laws, and certification requirements; the state also builds roads and harbors and digs canals.  The state buys ships for its navy and food and weapons for its army.  All these things were as true of the Roman and Persian Empires as of the USA today or the USA of the nineteenth century; these are things a state simply must do, and of course these decisions create winners and losers in the market.  In addition, there are regulations that prohibit dumping and price gouging, that limit pollution, protect workers, restrict what drugs can be sold, set safety standards for food, regulate the training and equipment for commercial aviation, etc.; these regulations tend to be condemned by the most extreme ideologues of Capitalism (in sense #1), but the truth is that this sort of mixed economy helped prevent the USA from reacting against "pure Capitalism" into Communism.  So given the fact that we will have these kinds of regulations, it should not really be scandalous that Distributism asks that they be made to fit into a coherent ethical system that is ultimately about people, not about abstract wealth.