Capitalism clarified
by Martha L. Blandford
Reading Regina Schmiedicke’s criticisms of my defense of capitalism, I feel she is confused over the definitions of two terms: capitalism and freedom. In an attempt to clarify the meaning of capitalism and answer her first question regarding the Church’s sustained criticisms of capitalism, let me humbly suggest that, like Mrs. Schmiedicke, perhaps what the Church criticizes as being capitalism is what economists refer to as a “mixed economy.” This is the form of economic organization where government and big business conspire to retain power in the hands of the few. This latter point is undoubtedly what Mrs. Schmiedicke is referring to when she talks about capitalism. If this is the model she fears, then I wholeheartedly support her thoughts.
Laissez-faire capitalism, however, as I stated in my original article, would not support an unfair allegiance between private enterprise and the state. In fact, true capitalism has never existed; the closest to it was the U.S. economy before the turn of the century. (History notes that social and technological progress was unprecedented during that time.) Perhaps the difficulty in discussing these issues today lies in the fact that most people have all but lost the knowledge of what capitalism is, how it functions, and what it has achieved. The truth about its nature and history has been drowned in a wave of misrepresentations, distortions, falsifications and almost universal ignorance. Nearly everyone today takes it as axiomatic that capitalism results in the vicious exploitation of the poor; that it leads to monopoly; that it resisted and opposed the worker’s rising standard of living; that that standard of living was the achievement, not of capitalism, but of the state and regulation. It seems that people often do not question such bromides, since they “know” that capitalism is based on the profit motive and appeals to the individual’s self-interest; that alone is sufficient to damn it.
Mrs. Schmiedicke states: “In its present form as well as in a more ‘ideal’ form, capitalism does not (and I would say cannot) fully allow the majority of men to experience the ‘power of self-determination.’ Why? Because capitalism without restraints is essentially competitive.” I am unsure as to what she means by “a more ‘ideal’ form” of capitalism, but, as I said, in its present form we are dealing with a mixed economy, not capitalism. Also, this statement seems to make competition intrinsically evil. But surely Mrs. Schmiedicke would agree that competition develops man’s creative powers and results in better quality products at lower prices, thus helping those who need it most: the poor.
The benefits of competition are especially important to keep in mind when we consider the power of monopolies. For example, in our present day mixed economy there exists one monopoly that cannot be threatened by any competitive forces. This monopoly is largely counterproductive, consumes more money than any other, and can be blamed for the murder of thousands of unborn children every day. This “monopoly” is the state, and it is protected from market competition not by the superiority of its “products” but by force of law. One of the state’s “products” is public education. I am sure that most Concourse readers would agree that “public education” is failing miserably to educate young people. I am sure that if public education had to “compete” with private education it would cease to be as shameless as it presently is.
Mrs. Schmiedicke argues for a “Third Way,” that is, a distributive system based on the principle of subsidiarity. But the meaning she gives the term is in no way clear. She states: “Subsidiarity means that when there is a need, society should first look to the smallest possible unit to meet it…the small business is allowed to handle it.” To me it seems like the words “is
allowed” are nothing but a nice way of saying “will be required by law.” To illustrate her point further, Mrs. Schmiedicke states: “The state government maintains the highways, but it should not discipline our children for not doing their homework.” Excuse the cliche, but you cannot have your cake and eat it, too. In other words, you cannot expand the role of government to ensure that businesses are held responsible for an individual’s needs and then hope that the state won’t discipline your children. The system she describes reminds me ominously of the famous Marxist saying “From each according to his ability, to each according to his need.”
In her discussion of the role of corporations and government, Mrs. Schmiedicke wrote the following: “Today the government and corporations regularly promise to meet the needs of everyone, but it is a promise every thinking person can recognize as patently unrealistic.” My question is: since when is it the responsibility of the government or of business to meet everyone’s needs?! It seems to me that we have moved on from a discussion of what defines capitalism to a discussion of what defines freedom. Mrs. Schmiedicke seems to nuance the definition of freedom to include “the right to have my needs met.”
In a politico-economic context, freedom means one thing and one thing only: freedom from coercion. Civil laws are created in order to protect the individual from those who would use coercion or fraud against another. This definition of freedom may be summed up as a “freedom from” not a “right to” and is compatible with “the acting person” that John Paul II speaks of in Love and Responsibility.
With all due respect, it sounds to me like the distributism Regina Schmiedicke advocates is just another type of mixed economy. It is as if she were saying “we will use the principles of socialism, but we will do it better, we will be fair.”
I would like to end by saying how much I appreciated Jules van Schaijik’s recent article, “On dwarfs, giants and little boys.” In it, he wrote: “We are all aware that to be morally mature, our actions and choices must be our own. We cannot hand our consciences over to someone else, no matter how much holier he is then we.” If one agrees with this statement, how can he then not apply it to the field of economics? Just as you cannot steal someone else’s conscience, you cannot rob him of his freedom to be benevolent.
Martha (Cotton, ‘89) Blandford
