Christian Individualism vs. Secular Common Good
By Roger McKinney
in the West are confused about capitalism because they don’t know enough about socialism. Karl Marx had a greater respect for capitalism than do modern socialists or conservatives.
Karl Marx fabricated the term “capitalism” and defined it as the private ownership of the means of production. He did not conflate capitalism with commerce, as do most historians today who see shoots of capitalism sprouting throughout human history. Neither did the monasteries of medieval Europe birth capitalism as some historians claim. Is it really necessary to remind historians that monks owned no property and took vows of poverty? Monasteries were closer to the many small socialist experiments, like the kibbutzim of Israel. Marx saw the origins of capitalism in the 17th century.
Marx pretended to have discovered the secret forces of history that had led mankind from tribal economies through feudalism to capitalism and ultimately will usher in socialism. And he insisted that society must follow that sequence. They could not jump from feudalism to socialism because only capitalism could produce the wealth necessary for its socialist heirs to live in abundance. Trying to shorten the path would perpetuate poverty and misery. That’s why Marx was skeptical about the possibility of backward nations such as Russia succeeding with socialism.
Marx got everything else wrong, but he wasn’t so stupid that he couldn’t see the explosion of wealth created by capitalism since the 17th century and the poverty of backward nations that had not enjoyed the capitalist revolution. Deirdre McCloskey calls it the hockey stick of per capita income in his trilogy on the bourgeois virtues because according to economic historians, income had remained stagnant from the beginning of history until the rise of capitalism. World GDP didn’t begin to rise until the industrial revolution, but it began centuries earlier in the Dutch Republic, which was too small to impact world figures.
Reverse engineering Marx’s definition of capitalism it’s clear that he had in mind the economic system that caused the explosion of wealth in the UK and Western Europe since the 17th century and drove the rapidly rising wages of English workers of his day. If capitalism is just commerce, as historians write, then we don’t have a word for the system that caused the hockey stick wealth effect. What was that system and how did it come about?
The economic system in the UK that Marx wrote about resulted from the attempt to instantiate Adam Smith’s notion of a “system of natural liberty.” Marx relied on Smith for much of his knowledge of capitalism and derived his labor theory of value from Smith. But Smith didn’t invent capitalism. He was the last in a long line of scholastics dating back to Thomas Aquinas who studied “economics” as a sub-discipline of ethics. Smith’s first book was A Theory of Moral Sentiments. Smith inherited his economics from the Catholic theologians at the University of Salamanca, Spain of the 16th and 17th centuries. Possibly inspired by the Reformation, the Salamancan theologians ruptured 1,500 years of Church teaching on wealth and business. But the Church had not derived its economics from the Bible or the Judaism from which Christianity sprung, but from pagan philosophers such as Plato, Aristotle, Cicero, and the Cynics, all of whom held commerce in contempt. Plato’s Republic deploys the Spartan system and Sparta was the first socialist state.
The Salamancan scholars abandoned the pagan philosophers and distilled their market principles from the Bible and natural law. Beginning with the Biblical sanctification of private property, they reasoned that property can exist only in a free market because property requires control by the owner and only free markets allow that control. Property and free markets also require limiting the state to only the protection of the life, liberty and property of the citizens.
The ideas of the Salamancan scholars were radical for their day, so radical that no country adopted them except the Protestant Dutch Republic. The Dutch had such a limited state that many observers claimed they didn’t have one. The great economic historian Angus Maddison said that the Dutch were the first people in European history to enjoy real protection for private property. As a result, the Dutch quickly became the richest nation in the world with the most powerful military. The French and British regularly attacked the Dutch for two hundred years but the Dutch successfully defended their tiny nation in every war. The Dutch were still a major power when Adam Smith wrote his Wealth of Nations and he cites the Dutch as having most fully implemented that system of natural liberty.
A first attempt at a definition of capitalism would say it is the system that makes property rights real through free markets and limitations on state intervention into the economy. But that is only a necessary condition, not a sufficient one. A system could protect property and still not be capitalist or enjoy rising wealth. Several other institutions are needed to make a system capitalist and create the explosive growth the West has enjoyed. Respect for business by most people, mass production and individualism are also necessary. Those will be discussed in Part 2 of Christian Individualism vs Pagan ‘Common Good.’
Christian Individualism vs. Secular Common Good
By Roger McKinney
“Freedom Is Not Enough: Prosperity Requires A Pro-Commerce Culture”
[The previous installment] in the series defining free market capitalism, we reverse-engineered Karl Marx’s definition of capitalism and found that it referred to the economic system that produced the hockey stick effect in per capita GDP beginning in the Dutch Republic of the 17th century, picking up England and Anglo nations, then the rest of Western Europe. The first principle of that system was protection of private property. That was a necessary, but by itself insufficient cause of the hockey stick. The remaining necessary traits are 1) respect for commerce, 2) mass production, and 3) individualism.
Deirdre McCloskey has expressed well the importance of respect for commerce in his trilogy about bourgeois virtues. If a country protects property but has contempt for commerce, the people won’t go into business but will do what most people in the world have always done: get into government or the military where the “respectable” means to wealth attainment reside. This was one of the main reasons most of Europe remained as poor in 1700 AD as it was in 2000 BC.
People in government extracted wealth from the masses through heavy taxation and enriched themselves. Generals grew rich through looting in war. Until the advent of capitalism, looting in war, kidnapping for ransom, and taking bribes as a government official were the respectable means to wealth. Commerce held as much appeal as prostitution.
In spite of the fact that much of Europe was predominantly Christian after, say, the year 500, the Church taught people to hold commerce in contempt. And they did. Businessmen were told that the sins inherent in their profession were so great that it would be impossible for them to go to heaven. So businessmen who grew wealthy in trade would give half of their wealth to the Church in hopes of buying their way into heaven, and spend the other half buying land and titles to nobility so they could rob their fellow citizens.
But the Church fathers didn’t get their views of commerce from the Bible or the Judaism from which Christianity sprang. Many of the Church fathers were recruited from among the nobility because of their education, political influence, and wealth, according to Peter Brown in Through the Eye of a Needle: Wealth, the Fall of Rome, and the Making of Christianity in the West, 350-550 AD. Many were new to the faith and filled in the holes in their Biblical knowledge with the writings of pagan philosophers from Plato to Cicero, all of whom held commerce in low regard.
Pagan philosophy dominated the theology of wealth from the 2nd through the 15th century. In fact, pagan intellectuals have always dominated Church teaching on social issues with few exceptions. E. R. Norman drives home that point in Church and Society in England 1770 – 1970. The only exceptions took place when the leading intellectuals were also Christians, such as the Salamancan theologians, the founders of the Dutch Republic and the “clerical” economists in the UK and US during the 19th century. In the late 19th century most intellectuals were atheists and socialists, so Protestant and Catholic theologians became socialists as well.
The theologians of the University of Salamanca had the courage to break with the pagans and distill their economics from the Bible and natural law. McCloskey described the radical change in European values from the pagan contempt for commerce to the bourgeois virtues but fails to offer a convincing reason for the change. But the teaching of the Salamancan scholars explains it well. Their theology gave people permission to be pro-business and godly at the same time.
All of the poor countries today have failed to make the change in values that would give them respect for business as a means to wealth. The great economist Thomas Sowell details the trials and tribulations of “middleman minorities” in his Black Rednecks and White Liberals. Jews in Europe are the prototypical middleman minorities. Christians persecuted them relentlessly because Christians restricted them to business as their only means of support, barring them from government or the military. As business people, they became wealthy, and inflamed the envy of Christians.
Christians in Muslim nations, Chinese in Southeast Asia, Lebanese in West Africa, and Koreans in Los Angeles recently have all been middleman minorities engaged in commerce that made them wealthier than their neighbors. That wealth and their hated professions ignited envy, which boiled over into frequent riots and murder.
The issue of mass production is simpler. Many historians locate the origins of capitalism in the commercial cities of Northern Italy, such as Venice. Those cities did enjoy a healthy respect for commerce, but they lacked mass production. All production except for ship building in Venice, which was state-owned, was craft production in guilds. Craft production has always existed and so cannot explain an explosion in wealth like the ‘hockey stick’ because it never produced large increases in productivity. Such wealth creation can only take place when business people invest their wealth in new and better machines to aid workers and boost productivity. Ludwig von Mises wrote in Planned Chaos, “There is no means by which the height of wage rates can be raised for all those eager to earn wages other than through the increase of the per capita quota of capital invested.”
Craft production was always small production for the wealthy. Capitalism is mass production for the masses and that requires investment in capital goods. Hence the appropriate name, capitalism. That began to happen first in the Dutch Republic.
Capitalism requires 1) protection of property and free markets, 2) respect for commerce, 3) mass, capital-intensive production, and 4) individualism. I saved individualism for last because it is the most difficult, and we’ll discuss it next time.
Christian Individualism vs. Secular Common Good
“Freedom from State Coercion”
Individualism is the root of all evil if you believe many theologians and sociologists today. For example, Philip bond wrote in First Things,
Liberalism finds its quintessential form in a market state that enforces individualism. The market state must abolish anything that stands in the way of unconstrained freedom; it must eliminate solidarity or shared associations with other people, places, or things. This gives liberalism a curious Maoist cast, as it seeks to dispel our settled notions, be they sexual, biological, or even of who counts as human.
The current Pope has been a leading critic of individualism, according to a Catholic writer:
The Pontiff acknowledged that our Western culture, ”has exalted the individual to the point of making him an island, almost as if one could be happy on one’s own.” Stemming from it are ideological visions and political powers that “have squeezed the person, have standardized him, thus making room for economic powers that wish to exploit globalization, instead of fostering greater sharing among men, simply to impose a global market of which they themselves dictate the rules and draw the profits… the concept of person, born and matured in Christianity, helps in fact to pursue a fully human development.” Moreover, the word “person” always means relation, not individualism; it affirms inclusion, not exclusion, a unique and inviolable dignity and not exploitation, freedom and not constriction.
This is the last (3rd) article in a series defining free market capitalism. Part one contributed the first of four criteria, calling it the system that makes property rights real through free markets and government. Part two showed the need for respect for commerce and mass production. This article shows the importance of Christian individualism.
The hatred of individualism comes as a result of the withering of the concept of the “common good” in the West. The religious left continually thrusts the common good in our faces. Free marketeers rarely talk about it. As I explained here, the concept of the common good has a pagan genesis. In classical Greece and Rome, patricians beat the people to death, sometimes literally, with the common good. It meant nothing more than doing what the city or state leaders told you to do without complaining. After all, someone has to decide what the common good for the moment is and that someone is always those with the most power. In classical civilization it was the dictators; today it’s the tyrannical majority. Regular citizens, or slaves who made up most of the population, had no choices or rights against the dictates of the common good.
Then along came Christianity. According to Larry Siedentop in Inventing the Individual, Christianity broke the enslavement of the people to the common good. It gave to individuals rights that the state and powerful patricians could not take away. But Church fathers didn’t understand what they had in Christian individualism. They grasped that it made all races, nationalities, genders, freemen and slaves equal before God, but how would that work out in society? Blinded by the pagan philosophers who promoted submission to the common good, it took theologians 1,500 years to figure out how Christian individualism should reconstruct society.
Again, the theologians of the University of Salamanca, Spain, put it all together for us. Boiled down, Christian individualism limits the state to protecting the life, liberty and property of its citizens. It is freedom from state coercion. At the same time, Christian individualism encourages communities such as the family, church, school and voluntary organizations to carry out the work that it prevents the state from engaging in because of mankind’s inalienable rights.
That was how the West understood individualism up to the French Revolution. Then atheists and deists emptied the word and filled it with their own concoction of fake individualism. The left has championed that version since. Enlightenment individualism is that evil version that the religious left rants against even though the left created it. Hayek wrote in “Individualism: True and False” that the false individualism of the Enlightenment divorced people from all tradition, morality and solidarity with family, church or other communities. Each person became the measure of all things. If one could not grasp the long-term consequences of a principal, he was free to jettison it. Nothing he could not personally understand, and see the long-term consequences of it, was valid.
But humanity can’t bear so much freedom, so socialists rode to rescue people from the monster socialists had created: scientists would lead us ignorant masses to salvation through the power of the state. People owed no allegiance to any other person or group, but the state demanded absolute submission to the common good as determined by the scientists. The Enlightenment brought Europe full circle from the tyranny of the common good in Greece and Rome to the tyranny of the modern state in the name of the common good. Frederic Bastiat blamed the regression on the intense study of the classics in French schools.
On the other hand, capitalists praise individualism, especially the rugged American version. But they have a different definition in mind. Capitalists keep dredging up Christian individualism while leftists condemn their own child. Untangling the confusion over individualism is difficult because socialists have done a superb job of confusing everyone.
How does Christian individualism tie in with the hockey stick in per capita income? It seems like we have strayed a long distance from the topic, but we haven’t. Christian individualism was essential to the hockey stick as Helmut Schoeck pointed out in his great book, Envy: A Theory of Social Behavior. Envy is the enemy of innovation, commerce, and property. Envy demands that all of the people in the same class be alike in every way possible. It punishes those who excel, thus destroying innovation. It legislates equality of wealth, taking the property of those who have produced it honestly and giving it to others who have wasted theirs. Since innovation and earning wealth take place in commerce, envy condemns commerce as well. Finally, envy prevents mass production for the masses because it forbids the accumulation of wealth necessary for investment in capital goods that boost human productivity.
Adam Smith demonstrated that competition in free markets can control greed better than the state can. But Smith had little to say about envy. The only force equal to the power of envy has been traditional Christianity.
Capitalism requires property, free markets, respect for commerce, capital-intensive production for the masses and Christian individualism. But Christian individualism is the unifying force. It makes the other features of capitalism possible, while the socialist false individualism destroys all and leads to the tyranny of the common good.