The Spirit of Democratic Capitalism

This is an incredible work of scholarship and insight. It is not an easy read, but a read filled with insights almost on every page. The magnitude of the task to identify and explain the spirit of democratic capitalism that gives the form energy and success is formidable. Michael Novak is almost uniquely qualified to take on this task. He is a theologian, deeply steeped in the Catholic tradition, a history, philosopher and an economist. The Wall Street Journal gave the book high praise when it published that the book was “The most remarkable and original treatise on the roots of modern capitalism to be published in many years.”

Many things, having full reference
To one consent, may work contrariously;
As many arrows, loosed several ways,
Fly to one mark; as many ways meet in one town;
As many streams meet in one salt sea;
As many lines close in the dial’s center;
So may a thousand actions, once afoot,
End in one purpose, and be all well borne
Without defeat.

Shakespeare, King Henry V

Is there anything about human nature that Shakespeare didn’t touch?

Novak begins the book with, “This book is about the life of the spirit which makes democratic capitalism possible. It is about the theological presumptions, values and systemic intentions.

What do I mean by ‘democratic capitalism’? I mean three systems in one: a predominately market economy; a polity respectful of the rights the individual to life, liberty and the pursuit of happiness; and a system of cultural institutions moved by the ideals of liberty and justice for all. In short, three dynamic and converging systems functioning as one: a democratic polity, and economy based on markets and incentives, and a moral-cultural system which is pluralistic and, in the largest sense, liberal.”

He argues that “…political democracy is compatible in practice only with a market economy. In turn, both systems nourish and are nourished by a pluralistic liberal culture.”

“The first of all moral obligations,” he admonishes, “is to think clearly. Societies are not like the weather, merely given, since human beings are responsible for their form. Social forms are constructs of the human spirit.”

Or, in religious terms, he writes, “The world as Adam faced it after the Garden of Eden left humankind in misery and hunger for millennia. Now that the secrets of sustained material progress have been decoded, the responsibility for reducing misery and hunger is no longer God’s but ours.”

The book is divided into three parts. “In Part One, I try to put into words the structural dynamic beliefs which suffuse democratic capitalism: its Geist, its living spirit. In Part Two, I examine briefly what is left of the socialist idea today, so as to glimpse, as if in a mirror, a view of democratic capitalism by contrast. In Part three, I try to supply at least the beginnings of a religious perspective on democratic capitalism.”

Novak comments in the introduction to the book that he was a democratic socialist. He know sees this a unworkable and the second part is devoted to discrediting the concept in theory and practice. As a result, I found Part Two of the book to be the least enjoyable or insightful. Part One provides to foundations of the concept of the trinity of democracy, capitalism and pluralism. Part Three is the most theoretical of the three sections and for me, was an indictment of widely held theological concepts that have kept areas like South America impoverished.

No short book review like this can do justice to this work. It is a work that needs to be studied and discussed in depth.

However, the one profound truth that emerges for me from these 460 pages is how delicate the balance is between democratic polity, capitalistic economy and a pluralistic society. And, any attempt to change this balance ought to be viewed with alarm, because I just believe that people in power are not thinking of our pluralistic, democratic, capitalistic system as a whole.

He does not cover the social technologies that extreme democracy covers. Almost in passing, he states, “…in a world of instantaneous, universal mass communications, the balance of power has shifted. Ideas, always a part of reality, have today acquired power greater that that of reality.”

Ideas are even more important now. And, we have tools beyond the mass communications he mentions. We are all responsible for the careful and thoughtful implementation of these tools to improving our pluralistic, democratic, capitalistic system.

The Spirit of Democratic Capitalism
Michael Novak
Madison Books, 1991