Providence | 4.27.16
By Alan Dowd

“So often in the past there has been a division between left and right, between capitalists and communists or socialists,” President Obama explainedto a group of young people during his recent visit to Argentina. “You should be practical and just choose from what works. You don't have to worry about whether it neatly fits into socialist theory or capitalist theory,” he instructed, before adding, quite literally as an afterthought, “The most successful economies are ones that are rooted in a market-based system, but also recognize that a market does not work by itself.”

What a pity. Not long ago, American presidents spoke without apology or asterisks about the superiority of free enterprise, free markets, free exchange and free trade, recognizing that economic freedom undergirds political freedom at home and abroad. As leader of the free world, spreading that message used to be part of a president’s job description.

Recall that Thomas Jefferson’s masterpiece invokes the right to “life, liberty and the pursuit happiness.” He borrowed the phrase from Locke, who explained that each person has the right to “preserve his property…his life, liberty and estate against the injuries and attempts of other men.”

Calvin Coolidge said America’s purpose was to spread prosperity, famously concluding, “The chief business of the American people is business.”

Harry Truman advocated that “the whole world adopt the American system” of free government and free enterprise.

John Kennedy matter-of-factly concluded that the “philosophy of the free market—the wider economic choice for men and nations—is as old as freedom itself. It is not a partisan philosophy.”

Ronald Reagan advocated for the free market with historical insights and humorous observations:  “There is a threat posed to human freedom by the enormous power of the modern state,” he said. “History teaches the dangers of government that overreaches: political control taking precedence over free economic growth, secret police, mindless bureaucracy, all combining to stifle individual excellence and personal freedom.”

On the lighter side, Reagan told lots of jokes highlighting the differences between Marxism and capitalism. One of his favorites went like this: “How do you tell a communist? Well, it's someone who reads Marx and Lenin. And how do you tell an anti-Communist? It's someone who understands Marx and Lenin.”

Bill Clinton explained that “jobs must come from growth in a vibrant and vital system of free enterprise.”

The younger Bush spoke unequivocally and unapologetically about the superiority of freedom: “Free nations will answer the hopes and aspirations of their people,” he observed. “Free nations will help us achieve the peace we all want.” He bluntly called on the Cuban dictatorship to turn off the dead-end road of socialism: “Mr. Castro: Let your people live in freedom.” He connected economic freedom and political freedom by pointing to China: “Our greatest export to the world has been, is and always will be the incredible freedom we understand in America. And that’s why it’s important for us to trade with China to encourage the growth of an entrepreneurial class. It gets that taste of freedom…that breath of freedom in the marketplace.” And he promoted economic freedom by tying trade and development to market-oriented reforms.

Obama’s predecessors understood—innately, intuitively, inherently—that the free market is what works. It’s not a preference or an opinion. It’s not something that has to be tested or tried out. History proves it works. Empirical evidence proves it works. And both history and empirical evidence prove that socialism does not work.

Heart of the Matter

Yet 25 years after being discredited with the collapse of the Soviet Union, socialism seems to be making a comeback.

It’s regrettable but perhaps understandable that many Christians are confused about socialism and capitalism.

It’s understandable because socialism is often associated with lifting up the less fortunate, promoting social justice, and bringing fairness and balance to a world out of balance. These are things God really cares about.

Consider the guidelines He lays out in Deuteronomy: “Be openhanded toward your fellow Israelites who are poor and needy.”

“The righteous care about justice for the poor,” Proverbs 29 explains.

Jesus came “to proclaim good news to the poor,” declared, “Blessed are you who are poor, for yours is the kingdom of God,” and warned, “Woe to you who are rich for you have already received your comfort.” In fact, Jesus once told a rich man to sell everything in order to follow Him. And when asked about taxation, He showed contempt for money as the symbol of the very opposite of what really matters: “Give to Caesar what is Caesar’s, and to God what is God’s.”

The Church of Acts lived under what could be called a communal system: In Acts 4, we learn that “No one claimed that any of his possessions was his own, but they shared everything…From time to time those who owned lands or houses sold them, brought the money from the sales and put it at the apostles’ feet, and it was distributed to anyone as he had need.” Acts 11 adds, “The disciples, each according to his ability, decided to provide help for the brothers living in Judea.”  Taken together, these verses are echoed in one of Marx’s most oft-quoted maxims: “From each according to his abilities, to each according to his needs.”

Yet many Christians overlook the important distinction between Marx’s worldview and the Church of Acts: Marx envisioned the state—the “dictatorship of the proletariat”—compelling people to hand over and redistribute wealth, while the early Church wanted people to follow their hearts. That’s an enormous difference.

Following one’s heart presupposes choice, volition, free will, freedom. These, too, are things God really cares about, which brings us to the other end of the spectrum.

Capitalism is characterized by free exchange, private ownership and competition in a free market.

God has always put a high value on individual choice and its close relative free will. In Genesis, after all, He gave Adam and Eve the choice to obey Him or not. It was their decision. Deuteronomy declares, “I have set before you life and death, blessings and curses. Now choose life.” Likewise, Jesus explains that He knocks but the choice is ours to answer.

God cares deeply about freedom. Indeed, the story of God’s people is one of freedom pursued, attained, misused, lost and regained.

In the beginning, freedom was the natural state of man, which helps explain why God so detests man’s tendency to usurp the freedom of his fellow man. He wants His people to be free—free from Pharaoh, free from Haman, free from Rome, free from the shackles of sin.

Thus, Jesus declares, “If the Son sets you free, you will be free indeed.” Paul writes, “Where the Spirit of the Lord is, there is liberty.” Peter counsels, “Live as free people.”

More specific to wealth, Proverbs is full of advice that still guides sound wealth creation. Scripture includes 128 references to “prosperity,” “prosper,” “prosperous.” Nicodemus, Zacchaeus, Jairus and Joseph of Arimathea were all men of considerable means, and Jesus didn’t tell them to sell all their possessions, suggesting that wealth in and of itself is not the problem.

Now, as then, wealth is to be used to support the Lord’s work—by choice, not compulsion. The more of that wealth that is confiscated, the more freedom is diminished, which raises a pivot-point question for people of faith: Would God—the God of justice and fairness, the God who lifts up the poor, the God of freedom and free will, the God of liberty and choice—rather your wealth be controlled and directed by you or by your government?

Of course, we know that God is bigger than any man-made philosophy. But this question has some merit. How an individual or a society answers it reveals something.


To be sure, government has a role to play in helping those in need, especially in a rich country like ours. But government doesn’t generate wealth, and history shows there’s no better answer to poverty than the free market—notwithstanding the president’s vague uncertainty about “what works.”

Consider the evidence.

Since 1990, a billion people have escaped extreme poverty, owing to the embrace of free markets. It’s no coincidence that this dramatic decline occurred as the Soviet Union’s Marxist-Leninist experiment imploded. Indeed, capitalism—not communism—has lifted 500 million people out of poverty in China in the past 30 years.

From Chicago to Sri Lanka, micro-enterprise lending, which gives aspiring entrepreneurs small amounts of capital to build self-sustaining businesses, has done more to alleviate poverty than the Great Society or UN Development Program—at a fraction of the cost.

Or look at the Korean peninsula—one people divided into two economic systems. The difference is breathtaking. Communist North Korea’s annual GDP is $40 billion (113th globally), per capita income $1,800, life expectancy 70. Capitalist South Korea’s annual GDP is $1.84 trillion (14th globally), per capita income $36,700, life expectancy 80.“The average seven-year-old North Korean boy is eight inches shorter, 20 pounds lighter and has a ten-year-shorter life expectancy than his seven-year-old counterpart in South Korea,” as James Morris noted when he headed the World Food Program.  

From the global to the personal, the free market allows for needs and wants to be met efficiently. As Adam Smith observed, “Man has almost-constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only.” In other words, we need each other, but we can’t always count on the generosity of others—and shouldn’t, for that matter. That’s where the free market comes into play. “It is not from the benevolence of the butcher, the brewer or the baker, that we can expect our dinner, but from their regard to their own interest,” Smith explained.

From this free exchange, the market enables people to use their talents and gifts. It also allows for wealth creation, which free people can deploy to help others. This might take the form of charity or job creation—or both.

  • Sam Walton’s Wal-Mart stores employ an astounding 1 percent of America’s working population.
  • Bill Gates and the firm he built are responsible for creating some 15 million jobs globally. Gates’ foundation has given away $28.3 billion (and counting).
  • Andrew Carnegie’s wealth built libraries, research institutions, universities, social-welfare charities and the TIAA-CREF pension fund for those working in the nonprofit sector.
  • Americans donate more to international development through private giving ($39 billion) than through taxes ($30.9 billion). In 2012, we donated $316.23 billion to charitable causes such as education, health care, food pantries, homeless shelters, disaster relief and human services. By way of comparison, that’s three times what the federal government spends on education, four times the amount the government spends on food programs for the needy, 40 times what Washington spends on the FEMA disaster-response program. Importantly, Americans directed the lion’s share of these charitable donations—32 percent—to religious organizations.

Capitalism is anything but perfect. It has flaws and shortcomings, excesses and limitations. But to paraphrase what Churchill said of democracy, “Capitalism is the worst economic system, except for all those other forms that have been tried.”