Is Capitalism God-Ordained?

Peace be with you,

In my experience, Catholics and other Christians are unanimously in favor of capitalism and view all alternatives as anti-Christian. I was wondering if anyone could explain this to me? What is Christ-like about capitalism? Is it the only Church-approved economic system? Why do you think is there so much greed, corruption, poverty and social inequality in capitalist societies? I’m just looking for some explanations, because I’ve never had a fellow Catholic explain why they believe capitalism is ideal. Scripture and catechism citations in support of capitalism would be great! Thank you and blessings. :slight_smile:

With all due respect, your experience is extremely limited. Many Christians, including Catholics (indeed including the present Pope and to some extent also his predecessor) have been very critical of capitalism.

Of course, it depends on what you mean by capitalism.

If we mean what G. K. Chesterton meant by it–the concentration of property in fewer and fewer hands (what many today call “crony capitalism”) the Church is clearly against it.

But if we mean economic freedom, in which people can try to start businesses and make money without too much government interference, then the Church is in favor of that within moral limits. Just where and how those limits are to be drawn, and how far direct government regulation is the best way to do so, is a point on which Catholics can and do differ. The default position of the Vatican tends to be much closer to “socialism” than the views held by the sort of American Catholics who dominate on this forum. . . .

Edwin

Both economics and social justice are many-faceted, so it is difficult to encapsulate Church teaching with regards to economics. Suffice it to say that capitalism is seen by the Church as an economic method that can be used in either good and productive ways or in evil, selfish, and predatory ways. Capitalism does not have an automatic imprimatur from the Catholic Church by any means! It ought to be noted, however, that systems such as communism do have intrinsic elements that are in opposition to a just society.

There have been many encyclicals written on the subject of social justice in the past 100 years or so. They can be tough going, but they are very much worth reading.

[quote]Yohji #1
I’m just looking for some explanations, because I’ve never had a fellow Catholic explain why they believe capitalism is ideal.
Scripture and catechism citations in support of capitalism would be great!

No human system of exchange is “ideal”.
[/quote]

The very term “capitalism” is not necessarily definitive as none other than St John Paul II has taken the trouble to point out.
In Centesimus Annus #42, 1991, St John Paul II stresses:
‘If by “capitalism” is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a “business economy”, “market economy” or simply “free economy”.’
The very term “capitalism” is a derogatory term coined by Karl Marx, and that’s perhaps why St John Paul II dislikes it, as he makes clear as he emphatically affirms free enterprise in Centesimus Annus.

Since here capitalism = free economy, and reaffirmed by St John Paul II is the ‘fundamental human “right to freedom of economic initiative.” ’ (*Sollicitudo Rei Socialis *(On Human Concerns), Encyclical, 1987, #42), and initiative = enterprise, it is clear what the pope means.

Pope Emeritus Benedict XVI also emphasizes:
Society does not have to protect itself from the market, as if the development of the latter were ipso facto to entail the death of authentically human relations…Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.” (Caritas et Veritate, Benedict XVI, 2009, #36).

Because those societies are populated by human beings. Do you think there is no corruption and poverty in socialist societies? Quite the contrary. There tends to be more corruption and poverty in government controlled systems precisely because of the incentives created in those societies. People are people regardless of the economic system they find themselves in.

Social Encyclicals and Catholic Economic teachings.

yohji. You stated (bold mine):

I’ve never had a fellow Catholic explain why they believe capitalism is ideal

And you also said:

. . . In my experience, Catholics and other Christians are unanimously in favor of capitalism and **view **all alternatives as anti-Christian. I was wondering if anyone could explain this to me? . . . .

Which is it? If Catholics are so silent on economic explanations to you, WHY would you conclude Catholics unanimously view all alternatives (to capitalism) as anti-Christian?

Catholics do NOT unanimously view all alternatives (to capitalism) as anti-Christian.

yohji. I think the other prior posters here too had good insights into your question and issues and would be worth considering.

I don’t think capitalism is “ideal”. Capitalism may or may not be a reasonable economic system depending on what a society does with it. Socialism of course is intrinsically flawed.

But I am not sure what you mean by “capitalism”.

Here in America today we seem to have a hybridized system of economics that can’t be defined as capitalism or socialism (in my opinion). For example, the USA ignoring its own anti-trust laws and having extensive corporate welfare (one of thousands of examples here) certainly isn’t “free-market capitalism” in your opinion is it?

Who is hurt the most from Government over-regulation? Small businesses. Large businesses often have a whole department to deal with re-licensing issues, or other forms of “certification”. Not so with small businesses. How can new small businesses even start-up in a climate of over-regulation?

BIG-Government and BIG-Business seem to go hand in hand despite the political rhetoric about “cleaning house in Washington” from many leaders.

Sometimes we are led to think that there are only two possible economic systems in modern society (capitalism and socialism). I think this is false.

Common Modern-Day Economic Models
[LIST]
*]Capitalism
[/LIST]
[LIST]
*]Socialism (And close companion of socialism, Communism)
[/LIST]

If you are interested, read all you can (written from Catholics who affirm ALL the Catholic faith) on the subjects of **distributism **and the principle of subsidiary (subsidiary, although, not an "economic system per se, does have a role in economics). I think this will give you more insight as to what the Church teaches in this sphere. Then you can inform other Catholics about Catholic economic teachings.

Don’t Forget Distributism
[LIST]
*]Distributism
[/LIST]

I would also suggest starting your reading here . . .

RERUM NOVARUM (from 1891)

QUADRAGESIMO ANNO (from 1931)

CENTESIMUS ANNUS (from 1991)

Hopefully this helps in your quest.

God bless.

Cathoholic

PS. I am just curious. Do YOU think economically what is being practiced in America today is free-market Capitalism or a hybrid of socialism and Capitalism (or something else)?

No, capitalism is not God ordained, nor is it free from corruption, no system is. But it is the best system out there. It rewards people for bettering themselves.

Because there are no real capitalist free market societies in the world today.

Only in a full, pure, uncontrolled, unregulated laissez-faire free market would greed, corruption, poverty and social inequality cease to exist.

I think you have it backwards. Without government regulation we have what we are experiencing today, massive inequality. Don’t jump to the conclusion I am advocating income distribution. Government regulation is needs to regulate capitalists to prevent the capitalists from dictating government policy. For an example on how capitalist control government see
U.S. Government Ties El Salvador USD 277 M Aid Package to Monsanto’s GMO Seeds . Gov’t intervention for a international corporation does not help the average US citizen and is downright hostile to El Salvador in that they are being forced to give up their food security for the sole benefit of Monsantos.

I will let you in a little secret. As capitalists control more and more of worlds capital less and less will be available to the middle class and poor. We are experiencing a shirking middle class in the US as we debate nonsense.

I don’t like the term “capitalism”. Karl Marx coined that word to explain the Free Market.
I don’t like to have an enemy defining terms. But for the sake of this discussion I will use “capitalism” and "Free Market interchangeably.

Capitalism and/or the Free Market cease to exist when the first government regulation is put in place. When one has to ask permission (license, permits, certifications, etc.) from a government…then that one is not free.

A full, pure, uncontrolled, unregulated laissez-faire free market needs no government regulation. The Market should be above the government. If there were no government ties (pay offs) to Monsanto (or any corporation), Monsanto would have to operate on the objective value of its products and services and on the rationality of those who recognize that value. When people are free to trade, with reason and reality as their only arbiter, when no one may use physical force to extort the consent of another, it is the best product and the best judgment that win in every field of human endeavor, and raise the standard of living for all those who take part in productive activity.

In a full, pure, uncontrolled, unregulated laissez-faire free market capitalist society the only function of government is: the police, to protect us from criminals; the military, to protect us from foreign invaders; and the courts, to protect our property and contracts from breach or fraud by others, to settle disputes by rational rules, according to objective law.

Our middle class is shrinking because many are moving up to the wealthy class…in spite of government controls and regulations.

Government has no business…in business.

You are grossly uninformed. One example should be enough

Productivity has surged, but income and wages have stagnated for most Americans. If the median household income had kept pace with the economy since 1970, it would now be nearly $92,000, not $50,000.
http://www.motherjones.com/files/Screen%20Shot%202013-03-08%20at%2011.36.19%20AM.png

Perception, in this case, may not be greater than reality. It’s true. The middle class, and those who define themselves as middle class Americans, is shrinking.

According to a study by Pew Research, published Monday, a full 32 percent of Americans now identify themselves as being lower class, up from 25 percent in 2008…

Source: Forbes

The Lost Decade of the Middle Class

The reports may be a bit dated you can check how much improvement or lack thereof has been made in the last 2 years.

I agree that government should stay out of business but regulating out of control capitalism is not interfering with business it is leveling the playing field. It’s sad that our government is the best that money can buy.

No, you have grossly missed the point and provided a meaningless example.

Number of millionaires up 2M to record
usatoday.com/story/money/business/2014/06/20/millionaires-at-record/11040139/

The “evil 1%” is growing. Where do you think all these new millionaires are coming from?
If you say the middle class…go to the head of the class.

Your chart does not take that into consideration. The economic “classes” are very dynamic. People move in and out constantly. A rich man can lose his fortune overnight. A poor person can earn a promotion and a raise that moves him to the middle class. Someone in the middle class can go both ways…and a number of them are moving on up.

I am glad that you agree that government should stay out of business, but shocked that you take the “Phony Capitalist” view of government control to provide a level playing field.
You are right to say that our government is the best that (corporate) money can buy. Now with this in mind, it would be impossible for a government to provide a level playing field due to government corruption.

As long as Capitalism remains “out of control”, competition will level every playing field.

If a detailed, factual study were made of all those instances in the history of American Capitalism which have been used by the statists as an indictment of free enterprise and as an argument in favor of a government-controlled economy, it would be found that the actions blamed on the Free Market were caused, necessitated, and made possible only by government intervention in business. The evils, popularly ascribed to big industrialists, were not the result of an unregulated industry, but of government power over industry.

The villain in the picture was not the businessman, but the legislator, not Capitalism, but government controls.

“Is it really true that political self-interest is nobler somehow than economic self-interest?"

  • Milton Friedman

It never ceases to amaze me how often people completely overlook this fact. Why is it that we somehow magically expect people in government to behave differently from all other people? Why do we always expect government bureaucrats and politicians to pursue our self interest instead of their own? That’s just simply not reality and no amount of legislation or regulation can change that reality. People are people, they invariably as a group pursue their own interest, period.

So, Is Capitalism REALLY God-Ordained??

It has to be.

No other economic system has raised the standard of living for so many people worldwide…

When I say “capitalism,” I mean a full, pure, uncontrolled, unregulated laissez-faire capitalism—with a separation of state and economics, in the same way and for the same reasons as the separation of Church and state.

In a Capitalist society, no man or group may initiate the use of physical force against others. The only function of the government is to protect us from physical force and protect our rights.

In a Capitalist society, all human relationships are voluntary. We are free to cooperate or not, to deal with one another or not, as our own individual judgments, convictions, and interests dictate. We deal with one another only in terms of and by means of reason. By means of discussion, persuasion, and contractual agreement, by voluntary choice to mutual benefit.

The right to agree with others is not a problem in any society; it is the right to disagree that is crucial. It is the institution of private property that protects and implements the right to disagree. That keeps the road open to our most valuable attribute: our God given creativity and talent.

Capitalism demands the best of every one and rewards them accordingly. It leaves every one free to choose the work we like, to specialize in it, to trade products for the products of others, and to go as far on the road of achievement as our ability and ambition will carry us.

Capitalism has been called a system of selfishness, yet it is the only system that drew men to unite on a large scale into great countries, and peacefully cooperate across national boundaries, while all the collectivist, internationalist, One-World systems are splitting the world into divisions. When Capitalism was least controlled it gave mankind the longest period of peace in history. A time during which there were no wars involving the entire civilized world. From the end of the Napoleonic wars in 1815 to the outbreak of World War I in 1914. We can say that Capitalism is the economic system of peace.

Capitalism has been called a system of greed, yet it is the system that raised the standard of living of its poorest citizens to heights no collectivist system has ever begun to equal…

Capitalism has been called nationalistic, yet it is the only system that banished ethnicity, and made it possible, in the United States, for men of various, formerly antagonistic nationalities to live together in peace.

Capitalism has been called cruel, yet it brought such hope, progress and general good will that the young people of today, who have not seen it, find it hard to believe.

Capitalism does not tell us to suffer, but to pursue enjoyment and achievement. Capitalism does not tell us to serve and sacrifice, but to produce and profit. Capitalism does not preach passivity, humility and resignation, but independence, self-confidence, self-reliance and, above all, Capitalism does not permit anyone to expect or demand the unearned.

In all human relationships private or public, spiritual or material, social or political or economic or moral…Capitalism requires that men be guided by the principle of justice.

God Bless Capitalism :extrahappy:

As others have mentioned, “capitalism” is not a well-defined term, and its original use was as a pejorative meant to confuse reality rather than elucidate it.

Does God approve of accumulating capital and investing it? Yes, of course. There are many examples in the Bible, including Joseph in Egypt, but also from the mouth of Jesus regarding investing money entrusted to servants by the master of an estate.

Does God approve of spending money on conspicuous consumption and luxury? No, of course not. There are few persons in the Bible who get worse treatment than the Rich Man who is tormented in the afterlife while the beggar he ignored is placed with Abraham.

This is not to say that we should live puritanical lives of poverty, since Jesus celebrated at wedding feasts and drank wine, and we need balance in our lives proportional to the lot of our local neighbors. (“Telescopic philanthropy” for people in distant lands should always be viewed with suspicion.) But we shouldn’t use our accumulated capital for trivial or wasteful purposes that seek to inflate our own egos.

The real issue you seem to be getting at is this though–Does God approve of voting for the use of secular government force to violently dispossess rich people of capital that they have accumulated and use in a sinful manner?

The answer is necessarily gray and dependent on the circumstances. On the one hand, just war doctrine should be applied in a similar fashion to civil police powers, and I don’t think it makes much sense to go to war against rich people, who for the most part should be free to use their capital however they see fit. When the rich man refused to give up his possessions and follow Jesus, nobody was sent to take away his money. He simply was not allowed to live with the followers of Jesus. This implies some civil power by local groups to shun people who don’t follow their moral principles, but on a large nation-wide level, I don’t think it makes much sense to regulate vice to the point to where you are using police force to steal riches away from people you don’t like at the point of a gun. The way of Jesus seems to indicate that we should simply walk away from these people. If this implies a system of “capitalism,” then so be it.

Now obviously there should be rules on how money can be legally accumulated, and the system of enforcing business contracts freely entered into seems mostly fair with regard to this purpose, although it’s always a thorny issue to decide whether particular perceived “damages” imply judicially recognizable torts or not. As Catholics we believe all sins we commit ripple out and effect other people, but we would not go to court and demand recompense in tort judgments for every sin committed. That would be ridiculous.

Paul teaches us to live within our local church communities as much as possible, and to bring as few court cases as we can to the outside world that doesn’t share in our faith. Logically, that would seem to me to imply not voting for secular rulers who wanted to confiscate wealth from the rich, and thus would also imply what most term capitalism. In that sense, the answer to your question would be YES.

I generally refrain from using the term “capitalism” as it has become, thanks to many liberals who like to ban certain words, a very loaded term. I prefer to defend the concept of a free market. As Milton Friedman said, underlying the lack of belief in a free market is a lack of belief in freedom itself. Any institution, government, Church, is subject to the influence of greed because its’ members are subject to the influence of greed.

Why do some people blame a corporation for seeking more profit when EVERY SINGLE MEMBER of that organization is seeking more of their own personal profit? How do you and your coworkers expect to get paid more if the company doesn’t make more?

Income inequality? really people? I don’t think the janitor at the hospital deserves to make as much as the doctor, that’s just my 2 cents.

We are called as individuals to support the needy, not called to send in a SWAT team to force someone to pay income tax to the IRS to support the needy. Early Christians volunteered their possessions to help the needy, they weren’t forced.

Fantastic post !:thumbsup:

Contrary to what too many people infer from Papal writings, the mention of any economic system in Church documents is neither an endorsement of same, nor a command to support and use any such system.

Mentions of specific economic systems are made, almost invariably, to discuss the immoral use of an economic system. That’s because economic systems are, like weapons, amoral (not moral agents). Like a weapon, it is the user or participant in an economic activity who is acting morally or immorally, not the system. In such matters, the Church rightly limits itself to teaching the public morality, it avoids making policy prescriptions.

That said, clearly those systems that are not purely economic systems (those that are, to some degree, theocratic in nature) are an anathema to a believing, practicing Catholic. Communism, for instance, is not anathema in a purely economic, voluntary form (many monasteries and convents are functioning communes), but “Communism” as a political system is like Fascism and Socialism, more a theocratic political system, not simply an economic one.

There are others who have posted comments that clearly demonstrate the confusion inherent in the terminology. A “free market” is probably a better term than “capitalism”, but those who claim that a market may truly only be free if government does not regulate it in any way do not truly understand the structure of a free, civil society. A free market requires government regulation precisely because, and as much as, it is necessary to protect that freedom. This protection includes such things as a justice system empowered to adjudicate contracts, for example.

That “capitalism” can be used in an evil fashion is self-evident: in a purely free market, one can find offered goods and services that should not be traded; one can find both slaves and prostitutes in a totally unregulated market. While one could make the amoral libertarian argument that a person should be allowed to sell themselves into slavery, or that persons should be allowed to offer any service, I sincerely hope most Catholics would agree that such goods and services should not be traded, and that it is government who is tasked with using its coercive power to prevent such exchanges.

God did not ordain capitalism, communism, feudalism, or any other economic system or practice not found in the Bible. When Christ returns to physically establish the Kingdom of God on earth we will know what will be God-ordained and what will not. I suspect the system then will more closely related to the practices of the primitive church than what is permitted or obligatory today.

As such, I believe the following may be introduced:

  1. A minimum standard of living will be guaranteed for everyone in the Kingdom.
  2. Employment will be guaranteed for those able to work.
  3. A lifetime limitation will be placed on the accumulation of wealth by any individual.
  4. Equal pay for equal work will be mandatory.
  5. The free flow of capital or anything of economic value between nations will be subject to restrictions.

Maintaining human life at a decent level will be much more important than unrestrained wealth creation.

No one knows the answer to that question, which is a very good question.

Catholics believe in charity to the poor. No economic system raises up the poor more than capitalism. Does capitalism create unequal wealth between rich and poor? Of course it does. But if the poor in a capitalist society are better off than the poor in a socialist or communist society, than how can a Catholic not be in favor of capitalism.

Don’t let those silly graphs fool you. The middle class is evaporating because of global competition, which is the same reason why American unions are evaporating. The middle class was at its strongest just after WW II, when Germany and Japan lay in ruins.

If you need any more proof, just look at China. Dormant for centuries, only its embrace of capitalism has awakened the Asian giant. Yet, it is a limited capitalism, because of the rampant corruption in its government.

All governments can be corrupt because there nothing from stopping them. There is no “invisible hand” of competition to curb the appetite of government. Have you ever heard the saying, “Well, its good enough for government work!” What that means is that whatever product or service the government provide is simply good enough.

No one helps the poor like the Catholic Church. The Catholic Church can help the poor only because of generous donors. Most of those donors got their money through capitalism.

If one loves the poor, then take them into your home and comfort them. Above all, remember that when you give a man a fish, he eats for a day, but when you teach him how to fish, he eats for a lifetime.

God bless all of you.

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