The Catholic Ethic and the Spirit of Capitalism.

The Catholic Ethic and the Spirit of Capitalism, by Michael Novak (Free Press, 200 pp., $22.95)

We are all capitalists now, or at least hardly anyone dares to commend socialism or Communism as utopias. Yet Michael Novak is right in thinking that the victory of capitalism is far from assured and that more needs to be explained. Although his message is especially telling for Catholics of Latin America and Eastern Europe, even born-and-bred non-Catholic advocates of capitalism in the West can learn much from him.

By "capitalism," Novak means not merely or mainly an economic order based on private property and competition among buyers and sellers of goods and services, but a distinctive spirit, culture, and morality associated with such economic arrangements. The chief villains in his story are the German sociologist Max Weber, who traced the origins of capitalism to "the Protestant ethic," and the Italian Christian Democrat Amintore Fanfani, whose book Catholicism, Protestantism, and Capitalism (1935) provides social democrats with their bible. Novak charges them with propagating a view of capitalism that puts it at odds with Christianity and Judaism and omits or distorts its chief virtues.

Novak's original and important insight is that capitalism as understood on the European Continent should be sharply distinguished from capitalism as it has developed in the U.S. and in Britain. Oddly enough, it is the Continental version which accords with the Weberian picture of a dour, miserly, crotchety, calculating capitalism devoted to nothing other than acquisition. Weber was right, Novak acknowledges, in associating capitalism with certain moral habits, but he mistook their nature, certainly for one version of capitalism. The same view was endorsed by Fanfani when he said that the capitalist spirit regards the acquisition and use of wealth for "unlimited, individualistic, and utilitarian satisfaction" as limited only by "hedonistic society." This grim picture, Novak recognizes, has been reinforced by some British and American defenders of a market economy who-taking their cue from Darwin or Herbert Spencer, or more recently from Ayn Rand and anarchistic libertarians-- laud capitalism as a free-for-all in which the ideal is the ruthless, wholly selfish, and uncultivated individualist, obsessed  with accumulating more money. But nothing of the sort was advocated by Adam Smith or the Founding Fathers.

The capitalism they admired, Novak emphasizes, is distinguished by something very different--the spirit of creativity. Such capitalists are not Scrooges but industrial and commercial pioneers, artists, craftsmen, romantics, who are bold, extroverted, and venturesome; far from confining themselves to cold calculations, they follow hunches and intuitions and take pride in their creations. This is what intellectuals who ridicule capitalists as philistine and mean-minded fail to appreciate. It is this species of capitalism that is associated with a culture of creativity, where the state maintains rules that permit a great variety of voluntary associations and activities to flourish, and the future is regarded as indeterminate, an invitation to the exercise of imagination. Novak's capitalism is not, then, distinguished by greed but by openness to change, by adaptability and inventiveness--in short, by the substitution of creativity for passivity.

This is what the Catholic Church began to recognize, Novak believes, in Rerum Novarum in 1891, then more clearly and vigorously when the Church acquired a Polish Pope bred under Communism. John Paul II has used the Creation story to heal the breach between religion and economics which has afflicted the West for the past two hundred years. All of John Paul II's pronouncements have been inspired by the conviction that "every woman and every man has been created in the image of the creator in order to help co-create the future of the world." He has reminded us that man is endowed by God with an inalienable right to be creative and to initiate new developments, and that capitalism is a far more demanding regime than socialism or Communism because it requires us to exercise choice, accept constant change, and reject passivity. Thus the encyclicals of John Paul II have rooted the capitalist ethos in the capacity of Judaism and Christianity for "inspiring new visions and creative actions" and rejected the bleak asceticism of the Protestant ethic with which Weber saddled capitalism.

If Novak is sometimes less precise than one might wish, that is a small price to pay for his introduction of a new and revealing standpoint from which to discuss economic and political questions. From this standpoint, Novak rejects Hayek's attack on "social justice." As Pius XI made the conception of social justice canonical in 1931, Novak, writing as a Catholic, cannot leave "social justice" to the well deserved death of an oxymoron. But as even loyal followers of Hayek persist in using the phrase, Novak's redefinition may more effectively dispose of a mischievous idea. What Hayek attacks, Novak rightly argues, is an arid, abstract ideal enforced by an all-powerful state which encourages dependency and submissiveness. The "social justice" defended by Novak is, rather, a "personal virtue," a readiness to use one's imagination and creativity to assist others. Novak would substitute personal work among the needy for the "sterile bureaucratic relationship," of the welfare state.

The creative spirit of Novak's kind of capitalism calls not for an ever increasing welfare state, but for a variety of imaginative initiatives by family, friends, neighbors, fraternal societies, churches, clubs to assist those in need. The difference between these two ways of providing help was well understood by the charitable organizations and friendly societies that flourished in the late nineteenth century, but which were so brutally extinguished by the welfare state that their existence is hardly remembered now. For good reason, socialists like Beatrice Webb regarded all such efforts as threats to socialism. Novak's message is that the common good is best achieved not by grand programs directed from on high by a state bureaucracy but by the varied efforts of voluntary groups, those "little platoons" praised by Burke, inventing and pursuing independent projects for assisting their fellow men.

In the course of reminding us that the welfare state is not the only way to help the needy, as socialists have taught us to believe, Novak points out that the "core illness of the underclass" arises from envy and a feeling of incompetence. Among the remedies that he suggests, he emphasizes the role of parents and especially of fathers in teaching children to take pride in self-sufficiency. He believes that this might be fostered more effectively by making support for children dependent on the work and educational record of both mothers and fathers, and by distributing benefits in settings such as local churches or schools where parents can learn, through associating with others, how to care for their children. It would help also, he believes, if the media, and especially television, used their influence to support conscientious parents; if public-housing projects were made self-governing; if businesses, schools, churches, professional associations, military establishments, and trade unions provided training programs for young people with unfocused energies. And generally he argues that in order to bring up a generation able and willing to fend for itself we must take every opportunity to teach these young people the courtesy and discipline that constitute the art of civil association.

In emphasizing the "creativity" of capitalism and the need to replace the welfare state with the work of "little platoons," Novak has hit upon what is now the leading social issue. No one would dare to deny the superiority of a free society over a socialist paradise. The economic argument for capitalism and against socialism has been well aired by brilliant expositors. Of course, many still remain to be persuaded. But what has received hardly any attention is the need to rebut the argument that identifies capitalism with greed and selfishness. And since, at the same time, the difficulties of the "underclass" attract ever more attention, above all in the more affluent countries, we are now increasingly being tempted to adopt the innocuous-sounding "strategies" and "subsidies" so beloved by social democrats, which--we are assured--are the only cures for the evils of capitalism. It is through these apparently innocent "strategies" and "subsidies," through "cooperation" between "industry and labor," through government "investment in infrastructure" that socialism is insinuating its way back to power. And it will not be finally defeated until it is generally recognized by rich and poor alike that the quality of life enjoyed by a community depends ultimately not on what the state does but on the moral character of its people. Novak's book is a notable contribution to the spread of that gospel.

Mrs. Letwin is the author of The Anatomy of Thatcherism (Transaction Books).