David Bahnsen was kind enough to send me a copy of The Good of Affluence: Seeking God in a Culture of Wealth, which I began to read last night. I have really enjoyed what I have read thus far, and because it has been a while since I blogged through a book, here we go.
The introduction contained several points that delighted me, and another that raised a basic question or concern. That concern does not take away from what I take to be Schneider’s central point, but we will have plenty of time to get to that later.
First, this is the first time I have seen in print a point that I have sought to make a number of times in various conversations. “There have always been rich people in the world, and in the church there have always been rich Christian people. But human history has never before known circumstances in which entire societies were affluent and engaged in this sort of constant economic activity” (p. 2). Put another way, when Paul tells Timothy to tell the “rich in this present world” not to set their hope on riches, he was speaking to a tiny fraction of the church of that day. Today, if that exhortation were to be directd to a typical American congregation, it applies to virtually everyone there. Affluence in a poverty-stricken world is a completely different set of circumstances than affluence in an affluent society. This question of contextualization has to have a profound impact on us — not how we read the texts, but certainly on how we apply them. I am greatly heartened that this is one of the questions that Schneider wants to address.
The second point that was really good was the way that Schneider framed the question of how we are to relate to our wealth. “In my view, being affluent in a certain way — I call it ‘delight’ — indeed reflects the good created order of God” (p. 3). “I call this condition ‘delight,’ and I believe it endures throughout the biblical story as the vision that God has for all human beings” (p. 10). When it comes to serving and loving God, guilt, misery, shame, and despair are terrible motivators. When it comes to loving our neighbors, including our poor neighbors, they remain terrible motivators.
But here is my concern — it has to do with how Schneider is defining capitalism. Let me register the concern, and then make a few comments on how it probably doesn’t matter in his discussion. “There are today twenty-five societies that have successfully deployed capitalism” (p. 1). Clearly he is using a broad brush here, defining America as a capitalistic nation (among a number of others) over against a country like North Korea, which isn’t. But this means that he is defining a society as a capitalistic one if the economy is relatively free and comparatively unregulated. This is fine as a stipulated definition, but in my experience, it tends toward enormous confusion. It drives me crazy when people treat capitalism and big business-ism as synonyms. Businessmen are often the worst anti-capitalists.
A mercantilist economy can have a lot of money (capital) in it, but that doesn’t make it capitalist. A fascist economy can prosper for a time, because of all the capital, but that doesn’t make fascism capitalism. What is capitalism? Thomas DiLorenzo, in How Capitalism Saved America, used Rothbard’s definition. “Free-market capitalism is a network of free and voluntary exchanges in which producers work, produce, and exchange their products for the products of others through prices voluntarily arrived at.” The key words in there are free and voluntary. Managed economies are not capitalist. Regulated economies are not capitalist. Rigged economies are not capitalist. This is because the prices are all managed, massaged, taxed, fined, restricted, subsidized, and flushed down the toilet. A society is not capitalistic if it has prices. It is capitalistic if it has free prices, voluntarily arranged by a free buyer and a free seller.
A quick aside: just because I used Rothbard’s definition here does not mean that I worship the autonomous market as though it were a religion unto itself. Adam Smith’s invisible hand is not the product of impersonal laws — that hand is actually attached to the infinite, personal God the Bible, which is why the actions of that hand are resented by sinful men as much as they are. Men want to manage the economies of their nations because they want God to stop doing it. This means that advocates of Austrian economics who deny the God of the Bible are trying to suspend their common grace insights from a great big skyhook. They then wonder why nobody pays attention to their cogent economic insights, but that is because skyhooks are unreliable and their insights keep falling to the ground where we can’t see them anymore.
But if we go with a relatively “pure” definition of capitalism, then doesn’t that lower our number of capitalist societies from twenty-five to one? With that one only showing up intermittently, and moving around from nation to nation? Well, yeah, and it is a good objection. There are not twenty-five capitalist societies in the world, and so I would take issue with Schneider here. But this is why I don’t think this objection touches what I think Schneider’s upcoming point will be.
Capitalism will always be a comparative term. In other words, even in a ruthlessly communistic country like North Korea, the system is still supported by free markets. True, they are called black markets, and the free transactions in them are illegal, but they are what keep the people and the system alive. If we were to imagine a pure communist state, with all the regulations for some reason obeyed by everyone, the end result would be starvation for everybody.
As Jonah Goldberg has shown us, we live in a society that has more than a small problem with economic fascism — state regulation of big business for the greater, common good. Bleh. And to the extent we have that problem, and we do, then sorry, we are not being capitalist. Our economy is heavily regulated, but not as bad as Sweden or the UK. And so to the extent that we are not regulated, and there are still plenty of areas where we are not, then we enjoy a relative amount of capitalist freedom. That freedom, to the extent that we have it, can be observed to contribute to the affluence of the people. To the extent we lose it, we are not just losing our freedom, but also our wealth.
Instead of using terms like capitalism, socialism, fascism, or communism, it might be more helpful to look at the ratio of a nation’s government expenditures to the GNP. This is more of a sliding scale, and it helps explain why Ronald Reagan’s economic reforms were a genuine help, and set us on a very different course than the one taken by Europe. Even though the bloat of government continued to grow under his administration, government expenditures still shrank when compared to the GNP. In other words, a roaring economy has the capacity to run away from the regulation. In other words, I would be willing for the federal government to have a budget twice the size of the current one, provided the GNP were twenty-times the size of the current one. This is part of what we are seeing with the Internet economy — and of course, statists run after such developing robust economies, bit and bridle in one hand and a lump of sugar in the other. This is the kind of attempt that we are seeing with so-called “free-trade” agreements, like NAFTA. NAFTA is a huge problem, not because it is free trade, but because it isn’t. It is, by purpose and intent, a desire to set the framework for a future global fascism. But the fact that NAFTA is now in place isn’t the end of the world — it is quite possible that the markets that our handlers want to get hold of will be far more than they can actually handle. If this personal wish of mine is granted we will see huge stallions and little, puny cowboys.