Is Capitalism Christian?
We've written here before about the concept of economic egalitarianism and its biblical foundations. Ultimately it is based on core Christian teachings: that every human being is created to image God as a co-caretaker of all creation, and that Jesus rescues human beings regardless of merit and restores them to the human vocation. Now the question arises: does the current predominant economic order, that of capitalism, accord with these principles of economic egalitarianism? Many Christians contend that it does. They argue that flourishing comes when everyone has the ability to trade with one another freely (“freely” primarily meaning without intervention from the government), and where private property is protected above all. I think it is worth examining the rhetoric and reality of capitalism against the principles of Christian economic egalitarianism.
The case for capitalism usually goes like this: everyone wants to be able to meet their physical needs. In order to do that, under capitalism, one must work to meet someone else’s needs who will pay me so that I can meet my needs. As long as the transaction is voluntary and no deception is involved, everyone will work for the needs of others while having their own interests met. As Adam Smith wrote in The Wealth of Nations, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest.” As long as the fundamental rules of the game—right to private property, ability to enter into voluntary trade—are equally applied, this is economic equality. This will eventually result in ensuring everyone is better off, lifting people out of poverty and growing the total wealth and prosperity.
This simple and enchanting tale is enough to convince a lot of Christians that capitalism is amply compatible with the biblical principles of economic egalitarianism, but the problem is that the story is perhaps a bit too simple—in fact, it leaves out many of the crucial questions we must use to determine whether a system of economics honors the dignity God gave all human beings. I will address each of these components one by one: how property comes to be under this system, how work actually works, and how those in society who don’t do work in the marketplace fare under capitalism.
How does something come to be property?
Private property is one of the cornerstones of this system. It’s inherent within capitalism that the world is divided and assigned to people as their permanent property to dispose with as they please, and that the job of the government is simply to provide protection for that property from violation. In this way, those arguing for this system claim, people are protected from the violence and evil of theft. But how does something come to attain the status of “private property” in the first place? Who decides who gets what as their “private property?” We know that there is presently a distribution of this property, but it’s not clear where it originated.
Since we know that all creation was given in common by God to humanity, we know that there was a point at which no individual “owned” anything. To go from that point to the point of private property, someone (or a group of someones) must stake out a bit of the world and claim it as theirs. What was previously common to everyone is now excluded. A plot of land becomes someone’s property when he threatens to use violence if anyone walks across it without permission. Far from preventing violence, the creation of private property is the initiation of violence.
This is not just true in theory. We have historical record of parts of the world moving from common to private: the enclosure of common lands in England and the colonial settling of the United States (already inhabited by people groups who tended to have a more common view of the land) are particularly brutal examples of what it means for private property to come about where it previously was not. At minimum, the violent origins of our current property arrangements are a warning sign that the status quo of property is not a just distribution.
How does work actually work?
Similarly, the typical narration of capitalism’s goodness glosses over what work is actually like. Labor markets are said to work similarly to markets of goods: it’s in a worker’s best interest to get a job to make money and it’s in an employer’s best interest to have that work done. As long as the trade is not deceptive and both parties agree to it, you have a just labor arrangement.
What is made less obvious in the picture is the massive power imbalance inherent in that scenario: who has the power in a worker-employee relationship? Unless the worker has a lot of property—which she probably does not, given the very uneven distribution of property—she will have to work for an employer, or else her basic needs won’t be met. For the employer, the situation is much less urgent. There are a lot of people who will not be able to meet their basic needs if they don’t do work for an employer, so the employer is much less worried about not getting an employee than the worker is about not getting a job. The most an employer can lose is some productivity; the most a worker can lose is an entire livelihood. This is made even worse when there aren’t a lot of employers to choose from (what social scientists call labor monopsony)—if the only places you can get a job are the mega-corporations of Walmart, McDonald’s, or Kroger, the power imbalance is even more severe.
What happens to those who don’t work?
The typical capitalism story almost entirely leaves out non-workers. As I’ve written here before, about half of people in the US and in many other similar societies do not earn any income from work in a given year and only about a third work full time. Inherently, these people (mostly children, the elderly, the disabled, family carers, and students) do rely on the benevolence of others for their dinner. In a lot of these cases, they rely on their families to provide for them. But employers do not consider someone’s family size when determining how much they pay their workers: there are not automatic raises for having a child or taking in an aging parent. The result? If we just count distribution of market income (that is, the income paid to workers and owners), poverty in the US was around 21% in 2016. For the elderly, it was over 40%, and for the disabled, near 50%. If we simply rely on informal distribution where those who work to care for every single non-worker, the result is grinding deprivation for huge numbers of the most vulnerable.
There are big problems, both in theory and in practice, with capitalism according to economic egalitarianism. Christians who believe that human flourishing is what God wants for his creation have to be careful not to be deceived and to look closely at simple stories. They may not hold up to scrutiny.