Sunday, 17 July 2016

The Spirit of Democratic Capitalism, by Michael Novak




Michael Novak, The Spirit of Democratic Capitalism, 1982 Simon and Schuster, New York


Oh, for those blessed days when Ronald Reagan was in the White House, Margaret Thatcher was in No.10 Downing Street and St. John Paul II was in the Vatican. Actually no, those days were not so great. The 80s was a time of increasing inequality, increasing polarisation between the political parties and social and racial tensions. It's also important to remember that for all his opposition to Communism, Pope St. John Paul II was significantly to the left of Thatcher and Reagan. Yet there is something powerful about the way those three figures paved the way for the liberation of Eastern Europe from Communism and the victory of democratic capitalism in that region. Novak was a significant figure in the New Right of the 80s and helped to generate the alliance between conservative Catholics in America and the Republican Right. This was an immensely powerful book in that it called for an whole-hearted embrace of democratic capitalism by Catholics, instead of the weary, grudging acceptance of capitalism that had previously characterised Catholic social teaching.

I first encountered Michael Novak's thought when I was studying for my first degree in theology. I was taking a module on Liberation Theology, which my lecturers were very enthusiastic about. I read Michael Novak's book on Liberation Theology, which offered a very robust critique of the movement and a passionate defence of capitalism. I found it very encouraging at the time. The lecturer who taught the module offered a brief presentation of Novak's critique, acknowledging his criticisms, but pointing out a number of flaws, including his failure to address poverty in capitalist societies, a flaw which can be seen in Spirit of Democratic Capitalism as well.

The book feels quite loosely structured, it almost comes across as a compendium of essays, with a lot of Novak's thoughts feeling somewhat pithy. Our author attempts to establish a positive theology of economics. He makes the case that democratic capitalism creates a society that is free and fair and in which the population is energised to engage in all kinds of good and noble pursuits. On the whole I agree with him. There is little in the book that I disagree with. The problem is the important topics that Novak avoids discussing.

Novak says absolutely nothing about the welfare state, apart from some comments hidden in the endnotes that worryingly suggest he thinks social security is a bad thing. I would suggest that the welfare state has been central in moderating capitalism and preventing it from collapse and revolution. As indicated above, Novak avoids any discussion of poverty in capitalist societies. Surprisingly in a book advocating a theology of economics, our author does not go into the technical side of economics. Crucially, he has nothing to say about what is arguably a central problem of capitalism, the cycle of recession and the risk of depression. He never mentions Keynesianism and its model of balanced capitalism.

I think this is an important and a beautiful book, but it is somewhat unbalanced and would have benefitted from a little more critical reflection.



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