Tuesday, June 14, 2011

Capitalism Has No Soul

Paul B Farrell questions mix of Christian morality with economics

Writing on Marketwatch.com, Paul B Farrell takes a comparative look at the beliefs of Ayn Rand and increasingly-influential Republican Senator Rand Paul.

Drawing heavily from the works of Rand herself, Farrell draws a stark conclusion: that Christian morality and Rand-ian self-interest are incompatible with one another.

But Farrell overlooks an important question: that of whether or not Rand's take on capitalism is morally or ethically permissable to someone who holds conservative beliefs, even if they favour individualism and self-reliance.

“When I say ‘capitalism,’ I mean a pure, uncontrolled, unregulated laissez-faire capitalism, with a separation of economics, in the same way and for the same reasons as a separation of state and church,” Rand once remarked. “Capitalism is the only system that can make freedom, individuality and the pursuit of values possible in practice because capitalism demands the best of every man, his rationality, and rewards him accordingly. It leaves every man free to choose the work he likes, to specialize in it, to trade his product for the products of others, and to go as far on the road of achievement as his ability and ambition will carry him.”

In other words, capitalism is the only economic system that can be truly democratic. It allows -- nyet, demands -- individual choice and individual responsibility.

That isn't to say that capitalism is inherently democratic. Democracy is more about individual choice, voting and majority rule. Democracy demands the existence of a system of rules, within which negotiated agreements can be reached. Democracy requires laws and institutions in order to function. In other words, democracy requires some sense of regulation.

The perils of allowing capitalism to roam without some sense of regulation has been well-established. As Farrell notes, this can be seen in The Fountainhead in which a frustrated real estate magnate destroys property being constructed by a competitor who profits by undercutting quality to the degree of sacrificing safety. (Right now, this breed of capitalism runs rampant in China.)

At the other extreme, portrayed in Atlas Shrugged, is that of over-production; one wherein ideolically-vain leftists seek to derail the wealth-producing classes by relentlessly imposing production quotas on virtually everything. When frustrated capitalists decide to stop producing, society incurs massive social losses (the term used in economics when government policy supplants market forces and increases the opportunity cost of producing or consuming particular products, leading to lags in the use of productive resources).

Farrell also invokes the comments of Boston University religion professor Stephen Prothero, who in USA Today declared that Rand -- although tremendously influential with the modern crop of GOPers -- is increasingly at odds with some of the moral concerns of conservatism.

"I am somewhat surprised at how few GOP thinkers seem to see how hostile her philosophy is to conservatism itself," Prothero wrote. "Real conservatism is first and foremost about conserving a society's traditions, including its religious and political traditions. But Rand's Objectivism rejects in the name of reason appeals to either revelation or tradition. The individual is her hero, and God and the dead be damned."

“Idolatry of the conservative icon should lead to some soul-searching within the GOP," he continued. "After all, Christian morality has no place in an ‘Atlas Shrugged’ world.”

Arguably, Farrell and Prothero miss one extremely salient detail: respect for the ideas of Rand doesn't necessitate exclusion of all others, including or excluding religion.

It's entirely possible to separate Rand's belief in self-reliance from Christian concerns of morality; this is particularly the case when moral issues, such as abortion, have little bearing on matters of economics. (Stephen Levitt and Stephen Dubner disagree on this matter, but set that aside momentarily.)

It's a very simple idea: capitalism doesn't have a soul. Humans do.

Ayn Rand may have underestimated the importance of this detail, but there's no reason for the Rand Pauls or Paul Ryans of today to do the same thing.

That they don't even grant the conflict between Rand's ideology and Christianity is a clear indication that they won't take Stephen Prothero's bait. The important question they must answer is where the free market ends and an appropriate level of democratic regulation begins.

Where does capitalism end and democracy begin? That must be a defining characteristic of the economic debate moving forward. Paul Farrell would be wiser to advance this debate, rather than deny it.

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