I’ve been putting in some extra shifts driving trucks recently, and so I’ve had large amounts of time with little to do except listen to CBC radio (try it, I highly recommend it). Lately, particularly on shows like The Invisible Hand and Ideas, I’ve been hearing quite a bit about economics. This post isn’t entirely theological, but I hope you find it interesting to follow me through a few thoughts on economics.
I hated capitalism before it was cool – well, at least before hating capitalism really caught on with the Occupy movement. There are all sorts of arguments for and against capitalism that can go back and forth; usually it involves some level of capitalists not understanding how society works and socialists not understanding how the market works, etc. But underneath all of that, I think there’s a level of moral repugnance toward capitalism, which is really what turned me against it in the first place.
The moral repugnance usually comes in when a certain type of capitalist goes on about how the desire for profit is what drives the economy – or to quote Gordon Gecko, “greed is good.” Even when they don’t try to vindicate greed, economists use similar arguments to show how self-interest ultimately works out for the best interests of us all (see the recent episode of The Invisible Hand called “The Great Gouge” for a good example of it). But in a country in which almost everyone has enough to get by, and even the poorest of us can still eat every day, the idea of striving to get even more (when we already have so much) seems excessive; and when we compare ourselves to any other time in history, or to any country in the “global south”, the idea of the selfish impulse to amass more wealth as a virtue turns my stomach. There are plenty of arguments for why capitalists aren’t being greedy, they’re just getting their due – but that just comes across as the rich feeling entitled, which couldn’t be better calculated to enrage the poor.
I’ve heard many economists across the capitalist/socialist spectrum, and they all have varying applications of economic theory that could tie in with a vague notion of “capitalism” – the difference seems to lie more in their view of how much of a role government and regulation should play in markets than in their understanding of how economics works. But it was listening to a pure capitalist tonight that really got me thinking about what exactly capitalism is.
Capitalism is a means to an end. Many capitalists would say that the end is profit, and that’s what we’d expect from the stereotypical capitalist – a banker or oil magnate, perhaps. This capitalist (on CBC’s Ideas) named Dierdre McCloskey said that she didn’t like the term “capitalism” because the word itself distracted us from the real focus, which is supposed to be innovation. The idea of raising capital – i.e. investment – is that the investment provides both the motive (which we tend to focus on – profit incentives) and the means required for innovation and invention to take place. She described capitalism as an idea that has allowed us to prosper from a continuous stream of innovations. I think she’s on to something. (She’s also an Anglican, who struggles with her faith because most Anglicans/Episcopalians lean toward socialism, which I find interesting).
If the goal of capitalism is innovation, it strikes me that there might be better ways of achieving that than through profit incentives. I recently read an article in the Chronicle for Higher Education by Robert and Edward Skidelsky that talked about the concept of leisure. Leisure, it argues, doesn’t actually (originally) refer to sitting around or doing something unproductive, but rather to do something for its own sake, rather than as a means to an end. True leisure, in this sense, can actually be highly productive – and if you love your job, then you live a life of leisure. Pursuit of leisure, I’m convinced, would be more productive (and more ethical) than pursuit of profit.
There’s a great RSA Animate video that talks about profit incentives, and how recent studies have shown that profit is far from the best incentive. Watch the video, but I’ll summarize it anyway. The study asked participants to perform a task, and offered them different levels of financial incentive for completing the task. For simple, manual tasks, the people offered the most money performed the best; but for complex and intellectual tasks, those offered the most money actually performed the worst. The researchers found that people who have just enough money to keep money off of their minds (i.e. not so little that they have financial pressures, but not so much that they have to spend time and energy managing and spending their fortune) are the best at their jobs.
And then there’s another recent phenomenon that is best exemplified by Wikipedia: those wonderful people who, though they have good day jobs, do their best and most innovative work for free on their own time. The people who invent things in their garage on weekends, or write software in the middle of the night, or contribute articles to Wikipedia or the Huffington Post, all without getting paid for it, are some of the greatest innovators of our time. While it’s still in highly funded corporate or university labs that most of the major breakthroughs are occurring, more and more we’re seeing great ideas coming out of the “cloud”. In the information age, these people are driving innovation – at their leisure.
Imagine what we could do if we all had such “leisure.” If capitalism is a way of providing the means and motive for innovation, and we’ve found that there’s a better way to motivate innovation (for its own sake, i.e. leisure), then what if there are better ways of providing the means as well? We’re seeing some level of this on the internet, with “pay what it’s worth” products and projects on fundraising sites like Kickstarter; there’s a sense that you’re not just supporting the artist or entrepreneur, and not even just the product or project, but also the sense that these things are valuable – you’re investing in your society. I’d say that these methods of fundraising are still inherently capitalistic, but they include a sense of democracy and social responsibility with them. It’s an excellent step forward.
Another interesting project that I don’t entirely understand but love the concept of is a system of guaranteed income. The idea is, instead of some people being very rich, most being middle class, and some being on welfare with all of the stigma associated with it, taxes would be higher for the rich and everyone would receive a guaranteed income from the government that would be enough to live on, but not enough to live large on. The hope is that it would remove all stigma from those who can’t work, allowing them to live on assistance without being singled out, but also and more importantly that it would free us from having to accept the first job that comes along because we need the money to pay bills. In essence, it would put everyone in some state of leisure. We wouldn’t get so much that we’d be tempted to do nothing (though inevitably some would), but we could be more selective about what we do for more income. We’d all be able to work in the field we want! As I said, I don’t know exactly how it works (though there are economists who say that it can be done), but the potential for greater leisure is huge, and thus the potential for greater innovation is still there – and if we believe the capitalists, it’s innovation that makes us wealthy.
However your system works, the point is that capitalism is a tool, a means to an end, and even profits are supposed to be the means to an end. Profits are supposed to motivate us toward greater innovation, with innovation itself being the goal. And this, I now realize, is my problem with so much modern capitalism: we’ve flipped it. We’ve made profit the goal, and innovation the means by which we can get personal profits. When we innovate, our entire society gains from it; but if the goal is profit and innovation becomes the means, then we quite naturally try to limit the gains to being just for us.
Perhaps there’s a chicken-and-egg issue here, because profit motivates innovation and innovation leads to profit, so theoretically whichever one you’re shooting for, you’ll get the other in the bargain too, right? So what’s the difference? The difference is moral and ethical and spiritual. I’ve already mentioned the morality of capitalism, and how economists love to explain that the immoral-seeming profit incentive actually helps more people than giving charity, which is obviously of higher moral value. The ethical difference comes when, as I just mentioned, those for whom profit is the goal work harder to protect their wealth than they do innovating, and thus deny the non-monetary gains of their innovation to society unless they can pay up.
The spiritual difference is crucial though, and this is what brings all of this back to theology. The definition of idolatry is, I think, when we begin to serve the things that are supposed to serve us. Idolatry is the inversion, the creator serving the creature, the means becoming the ends. Money is a tool, nothing more; but the love of money is the root of all kinds of evil. Money represents value; it has no actual value of its own. When we attribute to money the value of the thing that money represents, but then deny or de-value the actual innovation that enriches our entire society, we’re well on our way toward idolizing not only money, but idolizing capitalism. Capitalism becomes the gravy train, and we have to constantly prop it up (bailouts, anyone?) in order to make sure it keeps chugging along, rather than using it like the tool it is to allow us the leisure we need to be truly innovative and productive co-creators in this world.
So if you can, live a life of true leisure. Be a co-creator with God, and let your innovations enrich all of Creation. That‘s true, un-idolatrous capitalism.