Montréal, 3 février 2001  /  No 76
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Dr. Younkins is a Professor of Accountancy and Business Administration at Wheeling Jesuit University in West Virginia.
 by Edward W.Younkins
          Michael Novak's work is of particular interest in that he is a Catholic intellectual who has painted a portrait of democratic capitalism and has explained its underlying principles. Four of his books have done this especially well: The Spirit of Democratic Capitalism (1982), Free Persons and the Common Good (1989), This Hemisphere of Liberty (1990), and The Catholic Ethic and the Spirit of Capitalism (1993).
The Spirit of Democratic Capitalism (1982) 
          Novak envisions democratic capitalism as a tripartite arrangement – a market-based economy, a democratic polity and a pluralistic and liberal moral-cultural system. Democratic capitalism is a system of natural liberty which forms the basis for a genuine form of communitarian free association, taps individual creativity and initiative, produces virtuous people, and reinforces habits consistent with Judeo-Christian tradition. 
          According to Novak, socialism and traditional society are based on similar assumptions. Both have « Zero-Sum » conceptions of man, nature, and wealth. These are fixed in amount so whatever one person gains another loses. It follows that without strong control by government, religion, and tradition there would be a war of all against all. Both traditionalism and socialism represent rigid, closed societies that stifle individuality and creativity. Under the socialist's view: 1) capitalists become wealthy by exploiting workers; 2) capitalist nations exploit Third World nations; and 3) eliminating private property will end such exploitation. Socialism especially appeals to political elites in socialist and Third World countries and to many intellectuals – especially Catholic theologians. 
          Novak's position is based upon a comparison of North America and Latin America. The orthodox explanation for the fact that North America is rich and Latin America is poor is that North America exploited Latin America. Novak points out that U.S. investment in Latin America is actually small and that Latin America's poverty existed well before there was any U.S. investment there. 
          Novak then explains the real reasons for Latin American poverty: failure to adopt an economic system that allowed for development; 19th-century Catholic Church opposition to capitalism; and a philosophical gulf between Latin Americans and North Americans. Latin Americans feel inferior in practical matters and superior in spiritual ones. Latin America's Catholic Aristocratic Ethic emphasizes luck, heroism, and status while North America's Protestant Ethic values work, persistence, responsibility, and accountability. In Latin America wealth is static and what is given to one is taken from another. Socialism feeds Latin America's strong traditional sense by providing a unitary order, a sharp focus on feelings of resentment and economic inferiority, and a simple scheme of good and bad. 
          Novak observes that the socialist speaks of possibilities while the capitalist speaks of realities; however, when each is judged by its real world performance capitalism proves to be more productive of goods, services, and personal liberation. Capitalism succeeds because it is an economic theory designed for sinners just as socialism fails because it is a theory designed for saints. Capitalism is able to convert individuals' private ambitions into the creation and distribution of wealth so that everyone has a solid material base. Capitalism demands freedom in order to function and thus liberates those who live under it; socialism ostensibly supports such liberation but, in fact, requires sharp restrictions of freedom in order to function. 
          Novak explains that many Catholic social teachings were formed in the pre-capitalist world of medieval society which prized stability in economics, politics, and religion. Papal teachings were thus more concerned with the just distribution of available goods than with the morality of systems that produce new wealth. Consequently, theologians have generally been critical of capitalism. 
Free Persons and the Common Good (1989) 
          This book was written in commemoration of the fortieth anniversary of the publication of Jacques Maritain's The Person and the Common Good. In this work Novak interweaves the traditions of Catholic social thought with liberal social theory, reconciles the social idea of the « common good » with the liberal emphasis upon the free person, and maintains that the liberal tradition of personal liberty has its own implicit doctrine of the common good. 
          Novak explains that the concept of the common good is of premodern origin. For Aristotle, the good is what all things aim at and thus has primacy over persons. Novak rejects this idea since persons should have primacy. In undifferentiated premodern societies care for the common good was vested in the paternalistic authorities of church and state; however, in today's free and differentiated societies individuals tend to have different aims. If free persons do have primacy, then the common good can be something that emerges from acts taken as free persons. 
          Novak relies on Aquinas, as interpreted by Maritain, to distinguish between the « person » and the « individual. » Whereas an individual is merely a member of a species, a person is an individual with a capacity for insight and choice, and, therefore, is both free and responsible. The purpose of every human person is to be with God in an eternal communion of insight and love. It follows that communion in perfect insight and love with God is both the common good of humankind and the personal good of each. For God, an absolute person, there is an absolute coincidence of common and personal good. Analogously, to the degree that a created person acts with reflection and choice the greater the tendency for the personal good and the common good to coincide. It follows that on earth the common good of persons is to live in as close an approximation of unity in insight and love as humans might attain. To learn and achieve the common good, persons need institutions suitable to the task. 
          American liberalism makes the protection of individual rights central to the idea of the common good and allows for the development of institutions that nourish cooperation without requiring prior agreement with respect to final ends or personal motivations. The common good consists in treating each person as an end – never solely as a means. In order to achieve both personal rights and the public good, the framers of the constitution chose not to impose a moral-cultural system. Rather, they left the construction of such a system to institutions distinct from government. The Founders' idea of a limited state, whose power is restricted by a written constitution, is based on the idea of the inviolability of personal rights. The result is the separation of the powers of the state from the powers of society. 
          The common good is not attained solely nor primarily by the government but by social institutions beyond the scope of the state. The purpose of government is to provide opportunities for individuals to exercise their own freedoms. The common good consists of mutual cooperation many times apart from common intentions, aims and purposes. Things can be done publicly without being done governmentally. The common good is far greater than the political good. The main and most able instrument of attaining the common good is not the state but society at large in its full range of social institutions, and not the atomistic individual but the communitarian individual. Novak discusses Madison's and Tocqueville's views to illustrate how factions and « self-interest rightly understood » are able to serve the public good. 
     « Each has been given by God the capacity to create more in a lifetime than he or she consumes. This causes economic progress. If people create more than they consume, the world will be better off because of each life. » 
          According to Novak, the common good is actually many goods that are often in direct conflict. Free persons typically have diverse visions of the common good. Each person in a free society is responsible under the « veil of ignorance » for his own conception of both his own good and the common good. The common good of pluralistic modern societies is thus something unplanned, unenforced, and unintended but achieved through the participation of all citizens. It follows that the kind of common good that can be achieved is the common good of a particular community at a particular moment – not the common good for all places and for all times. Today, the common good means: 1) a liberating framework of institutions designed to liberate free persons; 2) a concrete social achievement; and 3) a benchmark that reminds us that no level of common good as concrete social achievement has as yet met the full measure of legitimate expectation. 
This Hemisphere of Liberty (1990) 
          This work offers an accurate analysis of the Latin American spirit, explains the philosophical link between North and South America, and discusses ways to build institutions of liberty. Novak uses an explicitly Catholic language to integrate the communitarianism of Catholic tradition with the creativity inherent in economic liberalism. 
          The key idea is the « Catholic Whig tradition » – a philosophical view that has roots in the thought of Aquinas. Catholic Whigs believe in the dignity of the human person, in liberty, in creativity, in humility, in productivity, and in steady, gradual institutional reform and progress. In addition, they have great respect for tradition, custom, habit, language, law, and liturgy. The Catholic Whig tradition is based on the concepts of ordered liberty, the person, the community, and creativity. 
          Ordered liberty is not the power to do whatever we like but rather the freedom to do what we ought. Novak codefines community and person. A true community respects free persons. To be a fully developed free person is to know and love others in community. A community is true when its institutions and practices enable persons to multiply the frequency of their acts of knowing and loving. The purpose of a true community is to nourish the full development of each of its members. The inherent end of personhood is communion and the inherent end of a true community is full respect for personhood and for the forms of association that persons create. Creativity, also known as enterprise, is the capacity for insight, discerning new possibilities, and realizing one's creative insights. Enterprise is a central capacity of personhood. To exercise it is not only a right but a duty. Personal economic enterprise advances the common good – it is relational and usually fosters human interdependence. To exercise the human right of personal economic initiative is to fulfill the image of God inherent in every person. 
          Novak argues that the virtue of enterprise can be taught and that a social system can be constructed to enable human beings to create wealth in a sustained and systematic way. Novak contends that capitalism can best actualize the promise of self-betterment and freedom for the poor. What is distinctive about capitalism is its discovery that the primary cause of economic development and the wealth of nations is wit, invention, discovery, and enterprise. Each nation's greatest resource is the creativity endowed in every single person by the Creator. Each has been given by God the capacity to create more in a lifetime than he or she consumes. This causes economic progress. If people create more than they consume, the world will be better off because of each life. One should leave the world better off than he or she found it. 
          The basic reason that Latin America is poor is that if offers insufficient supports for the operation of a capitalistic economy. Toward the end of the book Novak offers ten proposals that will move countries toward a system of democratic capitalism. 
The Catholic Ethic and the Spirit of Capitalism (1993) 
          This book has the major thesis that a hundred year debate within the church has led to a fuller vision of capitalism than that described in Max Weber's 1904 classic, The Protestant Ethic and the Spirit of Capitalism. By analyzing modern papal thought, Novak explains how the Catholic tradition has evolved to reflect this richer interpretation of capitalism. 
          Novak argues that Weber missed the mark by defining the spirit of capitalism too narrowly and attributing it to Calvinistic attitudes rather than to a range of values that were actually shared by many types of Christians and Jews. Weber was wrong to believe that all versions of capitalism depend on the ascetic Protestant spirit for moral legitimation. Novak's insight is that the European continental version of capitalism should be distinguished from capitalism as it developed in England and the United States. The former version is in accord with the Weberian vision of a greedy, grasping, coldly-calculating capitalism. Novak observes that a similar view was popularized by the Italian Christian Democrat Amintore Fanfani. 
          For Weber, the spirit of capitalism involved a sense of duty to the discipline of work, the idea of work as a calling, and an otherworldly austerity. Novak acknowledges that the strength of Weber's position was that he associated capitalism with moral habits and with the human spirit. The weakness was that he limited the association to Calvinism and wrote only about one type of capitalist spirit. To replace the Protestant Ethic, Novak espouses a Catholic (and catholic) Ethic that appreciates the social dimensions of capitalism and stresses the creativity, liberty, and responsibility of the individual. 
          Novak argues that capitalism depends on a culture characterized by inventiveness, discovery, cooperative effort, social initiative, openness to change, adaptability, generosity, experimentation, and voluntary participation. This kind of capitalism is inherently social, brings companies and other voluntary associations into existence, nourishes virtues such as honesty and hard work, and enriches the lives of the participants. This is the type of capitalism that the Catholic Church began to recognize in 1891 in Pope Leo XIII's encyclical, Rerum Novarum. 
          Novak redefines social justice as a personal virtue. The old vision of social justice is as a guiding rule asserted by the state. Social justice, so defined, is not a virtue. It gives the state the authority and power to bring about a legal social order. This is the understanding of social justice that Hayek attacks as an arid, abstract, ideal enforced by an all-powerful state which encourages dependency and submissiveness. 
          This is not the concept of social justice that Pius XI made canonical in 1931 in Quadragesimo Anno. What Pius intended was not the corporatist state but the revitalization of civil society by the « principle of association. » Novak amplifies this view by reinterpreting social justice as a distinctive virtue of free persons associating themselves together. The practice of social justice means activism, organizing, and trying to make the system better. Social justice is exercised as a social habit when men and women join with others to change the institutions of society. Novak explains that the habit of social justice has as its aim the improvement of some feature of the common good. 
          Novak calls Centesimus Annus a classic restatement of Christian anthropology in which John Paul II has rooted his proposals in his anthropology of « the acting person » and « creative subjectivity. » This document emphasizes ordered liberty and calls for a tripartite social structure made up of a free political system, a free economy, and most importantly a free moral-cultural system. The Pope's fundamental insight is that every person has been created in the image of the Creator in order to help co-create the future of the world. 
          According to Centesimus Annus, socialism fell because it violated the human right to private initiative and private property. The error of socialism was anthropological in nature. Socialism considered the person as an element in the system subordinate to the functioning of the socio-economic mechanism. The Pope states that the possession of know-how, technology, and skill is the kind of ownership that the wealth of industrialized nations is based on. Many people, especially in Third World countries need knowledge and training. The poor are oppressed because of the absence of capitalism. 
          John Paul II aserts that it is wrong for a life style to be directed toward having rather than being. Consumerism results from weaknesses in the moral-cultural system. He calls for reform of moral-cultural institutions including mass media, cinema, universities, and families. The Pope believes in the principle of subsidiarity in which the individual, voluntary associations, and society itself are all considered prior to the state in dignity and rights. Centesimus Annus therefore emphasizes the crucial role of mediating structures and criticizes the excesses of the welfare state. 
          Novak states that the poor in Third World countries must be brought into the capitalist system. He believes that foreign aid, when given, should primarily be given directly to ordinary people – not in the form of welfare payments but in the form of education, training, and credit for the launching of small local businesses. Within capitalist nations, Novak calls for local initiatives to assist those in need. He warns that care must be taken to make sure that assistance programs do not lure the able-bodied into dependency. Assistance should encourage the building up of assets – not the prolongation of dependency. 
          Novak observes that envy must be defeated and the best systematic way to defeat it is through economic growth and open access. True social justice begins by removing systems of political allocation and group favoritism. Multiculturalism is currently being used to single out certain cultures for special status and discriminatory treatment. 
          Novak emphasizes the primacy of morals – if our moral and cultural institutions fail all the rest of ordered liberty is lost. If the primary flaw lies in our ideals and morals (i.e., in ourselves) then we have a chance to mend our ways. According to Novak, the hardest part of the moral task we now face is the power of the adversary culture with its emphasis on equality of result and moral relativism. This counter-culture repudiates the possibility of any objective, eternal, absolute, moral standard by which human deeds should be measured. However, many people do speak the language of moral foundations, being, and the laws of nature and God. To exist is to stand out from nothingness, to say yes to life and the will of God who gave human beings a vocation to wonder at His creation and to bring it to its latent perfection, to the best of their abilities. 
          Michael Novak thoughtfully makes the case that capitalism rightly understood is not only compatible with Catholic social doctrine but is also the strongest force for liberation the world has ever known. His works mark an advance in thought regarding the right ordering of our lives, offer an interesting explanation of the moral structure of the market economy, and are indispensable reading for anyone concerned with morality in society. He will long be remembered for his innovative work – especially for his influence on Pope John Paul II and Centesimus Annus. 
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