Theologian and author Michael Novak delivers a lecture on the ethics of capitalism from the Judeo-Christian perspective.
Bio
Tom Becker
Tom Becker is the president of Chautauqua Institution. Becker joined Chautauqua in March 1985 as a vice president of the Institution and vice president of the Chautauqua Foundation. Over the years he was promoted to executive vice president and CEO of the Foundation.
In 2001, he continued as chief executive officer of the Foundation and was named executive vice president of Chautauqua Institution. As chief executive, Becker oversaw the growth of the Foundation into a professional fund-raising organization and led it to raising over $100 million in support of the Institution.
Michael Novak
Michael Novak is an American Roman Catholic philosopher and diplomat. The author of some 25 books on the philosophy and theology of culture, Novak is most widely known for his book The Spirit of Democratic Capitalism (1982), which has also appeared in numerous translations. In 1994 he was awarded the Templeton Prize for Progress in Religion, a million-dollar purse awarded at Buckingham Palace. He writes on capitalism, religion, and the politics of democratization.
He served as U.S. chief ambassador to the United Nations Commission on Human Rights in 1981 and also as the ambassador to the Conference on Security and Cooperation in Europe. Novak is currently George Frederick Jewett Scholar in Religion, Philosophy, and Public Policy at the American Enterprise Institute.
Novak is a member of the Catholic Advisory Board for the Ave Maria Mutual Funds. Novak is also a board member of the Capital Research Center and the Center of the American Experiment.
Novak was born in 1933 in Johnstown, Pennsylvania. He earned an M.A. in history and philosophy of religion from Harvard University in 1966, a Sacrae Theologiae Baccalaureus (a degree in theology), from the Pontifical Gregorian University in Rome in 1958, and a Bachelor of Arts in philosophy and English (Summa Cum Laude) from Stonehill College in 1956.
Economic system in which most of the means of production are privately owned, and production is guided and income distributed largely through the operation of markets. Capitalism has been dominant in the Western world since the end of mercantilism. It was fostered by the Reformation, which sanctioned hard work and frugality, and by the rise of industry during the Industrial Revolution, especially the English textile industry (16th–18th centuries). Unlike earlier systems, capitalism used the excess of production over consumption to enlarge productive capacity rather than investing it in economically unproductive enterprises such as palaces or cathedrals. The strong national states of the mercantilist era provided the social conditions, such as uniform monetary systems and legal codes, necessary for the rise of capitalism. The ideology of classical capitalism was expressed in Adam Smith's Wealth of Nations (1776), and Smith's free-market theories were widely adopted in the 19th century. In the 20th century the Great Depression effectively ended laissez-faire economics in most countries, but the demise of the state-run command economies of eastern Europe and the former Soviet Union (seecommunism) and the adoption of some free-market principles in China left capitalism unrivaled (if not untroubled) by the beginning of the 21st century.
It's kind of refreshing to see that the only "arguments" for capitalism come from religion nowadays.
That is not so, I am an atheist and a capitalist.
I mean you no disrespect, but you're just as wrong to connect religion with capitalism as Novak was to connect it with capitalism, you kind of have made the same mistake.
Capitalism, is a economic system. There are social/political consequences of it, but fundamentally it is a substrate of the system, separate from any right or left rationalisation about it. Once upon a time the right was about Socialism and the left was about Capitalism, this is something that changes.
What is more, Capitalism is too complex to be understood fully, it's a force of nature like gravity. This is because the Division of Labour and Compound Interest are geometric, exponential in their natures, hence why Capitalism creates both more wealth and more inequality at the same time. People like Novak can rationalise as much as they like about how Capitalism is connected to Christianity somehow, but it's BS. He's not wrong about everything, his central point that Capitalism is an ethical system, has considerable merit to it, albeit I appreciate the counter intuitive nature of this.
To me, Capitalism and Socialism are like Yin and Yang, they are the same system, one pushes the other, and around and around we go. It's the same reason why 'right' and 'left' exist in every society on Earth, and why also their rationalisations evolve dramatically through time. The economic and political equilibrium are directly related, hence 'political economy'.
Put simply, Capitalism is Accumulation and Socialism is Distribution, we require both for a decent system. There is no society on Earth that is 100% Capitalist or Socialist, and nor should there be. Even N.Korea has its black markets. America has (lots!) taxes.
It's just not quite so simple. On just one topic, consider inflation.
Inflation does not reduce the amount of capital (and thereby $$$) in the world. It simply increases the 'receipts' in a sense.
Example: There is a nominal rate of return on stocks of roughly 10%.
With inflation, this is 7% in 'real' terms.
However, this is not a bad thing. Yes, it *does* reduce returns, but
it promotes growth. It is easy to find out how an economy operates
inflation. E.g. when an economy is tied to a standard like that of
gold, then you have no inflation whatsoever. You also have reduced
levels of growth, back to less than 7%. Why less than 7%? Because
the production of currency stimulates growth (as long as it's not
too high or low) and allows it to be used as a tool by government
to increase credit when confidence of consumers is lower. Remember
that 'credit' means trust, you are trusting that money has value and
that other people believe it does too. Even in a gold standard this is
true (but you cannot easily use the supply to regulate growth).
Capitalists demand a higher return in an inflationary economy because
they are interested in 'real' returns. 10% in an inflationary
economy is (numbers obtained from 1 century of averaging stock returns
and the production of currency) the same as 7 real percent.
This is widely accepted by economists, I realise most people believe that inflation is a evil thing designed to rob them (and it can be used as such, hyper-inflation being an example of governments debasing their own currency),
but inflation is a positive thing, it allows more flexibility. It is in theory
and practice possible to develop a 0% inflation rate, but this always increases
the inflation rate, if you look at Canada's inflation rate and the unemployment numbers, this is most especially obvious.
There is currently no great need for people to boost agricultural efficiency.
Two hundred and fifty years ago, in the US, 90% of the population worked the land time to grow food for themselves and the rest of the population, today less than 5% of the population provide enough food to feed us all, and two thirds of their production is sold abroad.
The republican party for political reasons promote a meme, postulating that most people receiving government assistance are just lazy and living of your back, it's an insidious and socially divisive tactic of which they should feel great shame, but I can only assume that most republicans are not familiar with the major tenets of the bible they are so quick to quote.
To further illustrate the extent of misconceptions many people labor under under due to a vigorous program of dis-information, consider the following;
Something doesn't add up!
Reading the CIA Online World Fact Book I came across some surprising statistics, the top three exporting countries in the world are #3-USA #2-China and #1 with only a population of 82 million is Germany!
My first thought was something doesn't add up about the story of US manufacturing job losses in the last few years.
We were told manufacturing jobs, were transferred to other countries, due to the following reasons,
-high wages-
-union actions
-environmental regulations
-OSHA regulations
-short working hours
-too much holiday time off
-medical care costs
-unemployment insurance costs
-etc.
Well something doesn't add up!
In Germany workers,
-earn close to US wages
-by law a union representative sits on the board of directors of all public companies
-environmental regulations are much tougher in Germany
-workplace safety regulations are tougher
-they work fewer hours per week
-every worker has a minimum four weeks of vacation plus holidays for a total of 39 days per year, the US has a minimum of one week vacation plus holidays for a total of 13 days per year
-Germany has universal free medical care which is considered one of the best in the world
-unemployment insurance last much much longer than in the US
-etc. etc. etc.
There are however at least two areas in which the US leads Germany,
-as a larger country it has vastly more natural resources.
-AND! US workers are the most productive workers in the world and have been so for many years!
Something doesn't add up!
If Germany, with more of the "problems" purportedly hobbling US manufacturing can provide it's workers and citizens with one of the highest standards of living and the US with more natural resources plus a more productive work force cannot,
SOMETHING DOESN'T ADD UP!
I will however admit that many of these facts come from the CIA World Fact Book, which is probably some kind of Commie/pinko organization.
John
One ought to be very dumb, oblivious, and ignorant to talk in 21 century about creator, or must be despaired and stubborn religious pitcher who makes money while lying to believers. Guess which kind is "profesor" Novak!
Ugh, I didn't know who Novak was and I thought I was going to gain some real insight into ethics as it pertains to capitalism. Instead I was greeted with some old man's rant on why religion is bigger and better than secularism. First he goes on about it being like the default human condition which I think carries little water. Ignorance is also the default human condition. If you travel the world over you'll find that most people are pretty ignorant of almost everything; they often even seem proud to be so. That doesn't make the behavior useful. A baby wales in delight when it sees car keys jingle, but that doesn't make the car keys magical.
It might seem lovely to live in a fairy tale, but it is not very practical.
Something terribly wrong? Could it be that you are not getting any of this? Would you prefer that no one made this much?
Consider what he will do with this money: spend it. Just like the government is doing. It is called a stimulus package when they do it. Is the government the only one who can stimulate the economy? Consider all the people who he employs. You would be capping their salary too.
Consider all the people you think are making too much money. Think not just what they make but what they spend. GM spends millions of dollars a day, and they do it at a profit (usually). They end up with even more money to employ more people by spending their money.
Consider the lowly cell phone. Do you think we would all have such conveniences in our pockets if they could only have been sold to poor people? The development of the cell phone was paid for by rich jerks who spoke loudly on them in book stores to flaunt their wealth and make big business deals.
In a free market when people spend money in their own self-interest the pie chart of the world's wealth get's bigger.
"Egotist: Someone who cares more about himself than he does about me." -- Ambrose Bierce.
This may be the single most embarrasing thing I've ever read.
To point out the fallacy, first of all - rich people do no spend their wealth. as a proportion they tend towards hoarding it: if someone earning €40,000 gets paid, by the time they buy food, pay for transport, pay bills, rent and taxes they're skint. If someone earning $10,000,000 gets paid - from month to month, there is simply nothing outside drugs that they could posibly buy to make a dent in that. They invariably have a current account balance which dwarves your savings and savings in excess of the average man's life's work. This is not through malice or misery - but simply because they earn far too much to spend.
I might buy a car for the equivalent of a years wages - fine BMW 5-series, Nissan Skyline whatever, lots of choice take out a loan - they create $50k from my promise to pay pumping real money into the economy.
There is no car for $10,000,000. In fact there are no cars which couldn't be bought once a month, binned and replaced for cash, without leaving the entirety of the average annual wage. The money that is earnt is banked, spent from but rarely spent. And then handed down in what is technically a massively anti-capitalist manner through inheritance. All well and good - and I'm not crticising it - however - don't lie or hack the truth. Every penny given to thoe at the bottom is pumped straight back into the system, merely for survival, whilst at best some of the fortune paid in a millionaire scenario may be invested in corporations or houses where they are expected to return a profit and remove more money from the system.
Just recently a football quaterback signed a contract to get paid $15.3 million per year. There is something terribly wrong about this.
Something terribly wrong? Could it be that you are not getting any of this? Would you prefer that no one made this much?
Consider what he will do with this money: spend it. Just like the government is doing. It is called a stimulus package when they do it. Is the government the only one who can stimulate the economy? Consider all the people who he employs. You would be capping their salary too.
Consider all the people you think are making too much money. Think not just what they make but what they spend. GM spends millions of dollars a day, and they do it at a profit (usually). They end up with even more money to employ more people by spending their money.
Consider the lowly cell phone. Do you think we would all have such conveniences in our pockets if they could only have been sold to poor people? The development of the cell phone was paid for by rich jerks who spoke loudly on them in book stores to flaunt their wealth and make big business deals.
In a free market when people spend money in their own self-interest the pie chart of the world's wealth get's bigger.
"Egotist: Someone who cares more about himself than he does about me." -- Ambrose Bierce.
member. 
