Another Catholic Case for Capitalism
The time to make the Catholic case for capitalism has finally arrived.
Recently, I began to make the case that Catholicism and capitalism are not at odds with each other. Government intervention in trade and commerce, along with a whole host of social and environmental causes, is becoming less and less relevant and is no longer as helpful as it once may have been. (In fact, it has become quite harmful in many cases. Perhaps government still has a role, but that is only when other options don’t exist.)
So, why should the Church consider new possibilities being advocated for bringing about a more just and fair society – for bringing about a greater appreciation and respect for the dignity of workers and labor? Why is this moment the time for exploring the value that capitalism can bring to the table? For one thing, it’s important to remember that no other system in all of human history has helped bring more people out of abject poverty than capitalism. “Thirty years ago half (50 percent) the people in the poorer nations of the world lived in extreme poverty. In 2012, 21 percent of people in the poorer nations of the world live in extreme poverty. Development of global markets has greatly lessened poverty around the world.” (www.mises.org) No other system has brought about more innovation and a release of collective creativity than free markets. But in addition to this historical perspective, there are many factors that are all coalescing to help create a perfect storm for this argument now. Here are just a few of those factors:
- Free access to information
- Publicly-available “ratings” of large (and small) companies
- Peer-to-peer transaction capabilities with market-driven safety mechanisms
- Open-source technology
- Blockchain technology
Free access to information: Workers and consumers have access to data and resources they’ve never had at any point in history. They can find price and wage information, alternative products, ingredients, production methods, shipping options, and background information on virtually any organization.
Public “ratings” of companies: Organizations and businesses (e.g. Angie’s List and HomeAdvisor) now exist for the sole purpose of allowing the “little guy” to know who they’re dealing with and what kind of reputation they have before engaging in business with virtually any company in the public sphere. And when a business doesn’t “behave itself,” people know it and can quickly seek other options. Social media (though flawed in this respect) also helps serve this purpose of the public being aware of an organization’s reputation.
Peer-to-peer transaction capabilities with market-driven safety mechanisms: “Flea markets” have essentially gone global. We can now search for virtually any product or service desired and find customers and vendors anywhere in the world. Ebay and other online auction outlets serve this purpose nicely, with no need for government oversight since vendor ratings are included, as well as payment services that can be handled through PayPal to assure both parties are “playing by the rules”. (More on this “peer-to-peer” dynamic below in the “blockchain” section.)
Open-source technology: One of the beautiful things about all the factors listed above is that when you take them collectively, you have empowerment of consumers and innovation on a mind-boggling scale. Have you ever thought about why Firefox quickly became the preferred Internet browser of tens of millions of people? It was not because of government regulators bearing down on Microsoft (though they did). It was because Microsoft got complacent with their Internet Explorer browser and consumers weren’t happy with it. So, Mozilla created Firefox as an open source option with thousands of knowledgeable people writing code to make the product better and better. Moodle has done the same thing in online education platforms as Blackboard became monopolistic. Again, if you have a giant corporation dominating an industry these days, the Internet “community” will inevitably create an inexpensive (and superior) alternative, without any need for government.
Blockchain technology: Most people I speak to about this emerging technology have never heard of it. However, it is destined to have as big of an impact as the printing press, the internal combustion engine, or the Internet. Blockchain is a decentralized, digital ledger system that allows all steps in any type of transaction to be recorded by multiple computer systems. The beauty of this arrangement is that even if someone was able to hack or change one of the entries, there would be many, many other records of this anomaly and such fraud would be immediately flagged by the system itself. Nothing in the form of government regulation even comes close to the level of security this system provides. Within the next 10-20 years, such “blockchains” will likely exist in virtually every industry, but because this will largely replace the need for regulators and those who live off of ridiculously-complex rules (like lawyers and accountants), implementation of such systems will be fought every step of the way.
Cryptocurrencies: Speaking of blockchain technology, cryptocurrency (in the form of Bitcoin) was introduced to the world in 2007 with blockchain as its platform. Bitcoin was the “proof of concept” for blockchain, and competing forms of cryptocurrency have continued to emerge. Here’s a link with all the basic FAQs on crypto. Yet another vehicle for “little guy empowerment”, cryptocurrencies often make use of “smart contracts”, which remove the need for middlemen in order to carry out peer-to-peer transactions anywhere in the world. These alleviate the need to “trust” the other party, because technology assures that each step is carried out in a way that keeps both parties honest. As cryptocurrencies become more normalized and replace government sponsored fiat currencies, the entire banking industry will change (if not go away completely). This will be unsettling to the money printers in government, as well as to the banking industry itself.
There are other factors on the horizon that will also add to consumer and worker empowerment (like 3D printing and self-driving cars), but this article is already approaching maximum density.
So, the Catholic Church has an opportunity to be at the forefront of this fundamental change in society. The Church could actually help guide and educate the world in these areas, in a way that promotes ethical and moral behavior, while helping to achieve a world economy that is more inclusive and innovative. When most people think of capitalism in our world today, what they’ve really experienced is crony capitalism — a perverted version that has married Big Corporations to Big Government, with consumers and small businesses losing out in the process. To borrow and slightly alter a phrase from G.K. Chesterton, capitalism has not been tried and found wanting; it has been found difficult (for government bureaucrats to forego power) and not tried. The time has come for the Church to recognize the opportunity it now has. The time to make the Catholic case for capitalism has finally arrived.