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  • Writer's pictureDawson Vosburg

The Problem with Capitalism: Human Nature

Capitalism is frequently lifted up as the best economic system—it’s common even for Christians to say so. But I worry that many people are embracing an economic system that is, in the end, at odds with human nature. While laissez-faire capitalism seems nice on paper, it would require human beings to be sinless and to have perfect knowledge in order to accomplish the central task of an economy: to produce and distribute the goods to meet the needs of everyone in society.

The way capitalism works is that some people own the productive resources of society while most everyone else in the economy has to work. This produces a quite high degree of inequality as the best off are able to accumulate vast quantities of wealth and income. Here we encounter the first problem: if you find a way to leverage market forces, you can end up with unimaginable economic resources and power. Some capitalism advocates claim that you need to be able to serve other people’s needs in order to make huge amounts of money, but this is not the case: you can leverage the fact that you own a lot of something that other people need access to (a concept called rents), you can take advantage of arbitrage, you can capitalize on the anxieties of vulnerable people—all of these are legal, and all of them have made some people unbelievably wealthy. Ultimately, this means that under capitalism, some people have their greed massively rewarded.

Once people have made this wealth—even if it’s been by legitimate and moral means—they have something other than the ability to consume products. Wealth comes with power over other people. Someone with a huge amount of wealth has the ability to wield huge, unaccountable power in the economy and in society. As Christians, we know that human beings do not do well with huge amounts of unaccountable power! Almost certainly, as people accrue more power to themselves, the temptation will grow ever stronger to wield it for selfish purposes. The incentive structure of capitalism is to continue to leverage their resources for their own benefit. If that person is greedy, there is no guardrail to keep that greed in check.

But the problem goes even deeper. As we’ve covered here before, only about 50% of people in the US at any given time earn any sort of market income. This means 1 in 4 Americans would be poor if we left income distribution fully up to the market. The laissez-faire capitalist solution to this problem is private charity. Those who make a market income have to give some of it away, hoping it goes to the right people such that everyone’s needs are met.

In order to address the massive problem—that a quarter of people in society simply wouldn’t have enough to live on—capitalism has to assume that people are so free of sin that they will just wipe away poverty at their own expense. It rests on the notion that the people who make the most will have both perfect knowledge about who to give money to in order to eliminate poverty and that they will overcome their self-interest in order to do so. But Christians know that people want to keep what is theirs, and will hoard things up as long as it is beneficial to them. Confirmation of this Christian intuition comes with the fact that the richest give away a lower percentage of their income than the poorest.

Human beings, since the fall of our foreparents Adam and Eve, have constantly sought to seize power and rule the world on their own terms. Instead of guarding against this tendency by limiting the accumulation of economic power, capitalism makes this precise desire to rule the world on one’s own terms into its engine. Christians know that there will be no perfect people until Jesus returns to restore all things, so until that time, we need a system that does not require people to be perfect in order for basic human needs to be met by the economy and where the impulse of greed cannot be rewarded with near-endless money and power.


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