Capitalism

Christians have long debated the merits or otherwise of the free market without ever reaching a consensus. With this in mind, we have reviewed the two books that, better than any others, reflect the two main approaches that Christians have adopted over the past century: The Spirit of Democratic Capitalism by Michael Novak (published 1982) and Capital and the Kingdom by Tim Gorrince (published 1994).

The Spirit of Democratic Capitalism strongly advocates a free market approach. It was published at a time when the terms “capitalism” and “the free market” were used in many Western Christian circles with contempt and many Christians believed that socialism was the only legitimate Christian option. It played a leading role in changing that position and it is still worth reading today as a clear justification of what it calls “Democratic Capitalism”.

Capital and the Kingdom comes from an essentially Marxist viewpoint and it may be felt that this is now so dated that it can be of no more than historic interest. However, the ideas set out in it are often heard from the mouths of bishops and other church leaders and there are signs that they are making a political comeback. It is thus important that their theoretical basis be understood and analysed and this book contains a clear exposition of them.

Timothy Gorringe’s more recent book, The World Made Otherwise (published 2018) repeats his call for radical, political, economic and social change and environmental issues have added to the imperative tone of his appeals for this. Unfortunately, his proposals are Utopian and the book is unlikely to prove persuasive to those who do not share his liberal Christian and Marxist views.

Christianity and the New Spirit of Capitalism by Kathryn Tanner (published 2019) also comes from a left of centre starting point. It purports to offer “an imaginative counter to the whole world of capitalism” but its description of capitalism is a muddled caricature and it lacks suggestions that would help people in relation to their everyday work and other actions. Those looking for help in relation to these things would be better off reading some of the other books reviewed in the section of this website entitled “The Business World” (see, in particular, those mentioned under “The Purpose of Business”).

Faith, Finance, and Economy (published 2020) is a fascinating miscellany of essays exploring the relationship between fair and financial or economic matters. Its focus is on Christian perspectives but it also contains interesting essays relating to consumerism in China, Islamic finance and faith in the work place. Although not all the essays will interest all readers, it is a good introduction to various important issues.

Those interested in the range of Christian views should also read With Liberty and Justice for Whom? by Craig Blomberg. It analyses the spectrum of conservative protestant views about capitalism. It is also quite old (published 1991) but remains valuable as an overview of the various approaches and the issues raised in it are of continuing importance. Indeed, there would be merit in reading it before reading any Christian analysis of capitalism since it will help lay bare the theological and other factors underlying such analyses.

Good News to the Poor by Theodore Jennings (published 1990) provides an historical perspective. It is an examination of the economic views of John Wesley. It is thus a more specialist book than most of the others that we have reviewed and many people will feel that they can give it a miss. Furthermore, as Richard Turnbull’s review indicates, the book does not always reflect Wesley’s thinking in a balanced way. However, it is wise to allow the views of Christians from past centuries to challenge our views today and consideration of John Wesley’s views on economics may still have a role to play in developing our thinking.

The other books that we have reviewed all set out recent Christian thinking on the economy but they have very different angles on the relevant issues.

Redeeming Capitalism by Kenneth Barnes (published 2018) sets out to point the way to the reform of current western capitalism. Barnes suggests that this suffers from serious flaws that derive from a “moral vacuum”. However, he does not reject capitalism as a whole. Rather he suggests that we need to replace “post-modern capitalism” with “virtuous capitalism”. Unfortunately, although it is interesting in parts, the book is superficial: it is long on eye-catching statements and short on justification and it presents no ideas as to how in practice the desired change might be effected. It does not advance the debate about practical reform.

Aquinas and the Market: Toward A Humane Economy (published 2018) is certainly not superficial. Mary Hischfield has doctorates in both economics (Harvard) and theology (Notre Dame) and she seeks to bring Thomist thought to bear on current economic issues. This may suggest that the book is heavy going but, although complex, it is readable and worth reading. It offers a perspective on the underlying purpose and functioning of a market economy that is very different from those with which most people are familiar.

Crumbling Foundations (published 2016) is only 40 pages long and it focuses on a single, specialist subject: it is, it claims, “A biblical critique of modern money”. Many people will wish to take issue with its application of a number of passages of the bible and others will find some of the issues too specialised for them. However, it is a good introduction to some of the issues raised by the modern global financial system.

An Idol Unmasked: A Faith Perspective on Money (published 2014) is by Peter Selby, the retired former Anglican Bishop of Worcester. It is a polemic against modern money and sets out an attitude to money that is widely held within the Church. It may be worth reading for this reason alone. However, it does not have anything materially new to say on its subject and it does not contain a balanced appraisal of the complex issues that arise out of the modern monetary system. Hence, those wishing to consider these issues are probably best advised to start elsewhere.

Contemporary Issues:

We have reviewed a number of recently published books relating to current issues in western economies. Some of these relate to the overall direction of travel of these economies whilst others focus on specific issues (frequently related to the impact of technology). Many are critical and a number are hostile to capitalism as a system (at least in the form currently experienced in the West).

Capitalism and Democracy (published 2021) should provide a good introduction to the issues that underlie contemporary disagreements about the role of the market and of government in the economy. It is aimed at the general public who want to improve their understanding of the relevant issues and university students and many others will benefit from its succinct overview of the relevant issues. In an age of political polarisation, Spragens refreshingly argues that reasonable people may differ and that we need to bear in mind that we cannot have it all so we need to balance differing objectives.

The Economics of Belonging (published 2020) appears to be aimed at the kind of person who reads the Financial Times. Sandbu argues that Western liberal democracy is under threat from within owing to the erosion of a sense of economic belonging. He presents a radical programme for dealing with this threat and, although much of what he says is contentious and unconvincing, the problem is real and those concerned about the current situation will benefit from reading what he has to say.”

The starting point of A World of Insecurity is similar to that of The Economics of Belonging. The author. Pranab Bardhan, adopts a broader perspective than Sandbu, focussing on India and China as well as the West, and the book is interesting in parts. However, it appears to be primarily written for those on the Left who are in search of a programme. It is unlikely to convince those who don’t share its ideology and even those on the Left would be better off reading The Wolf at the Door.

Thomas Piketty’s Capital in The Twenty-First Century has achieved almost cult status but its arguments require careful critical evaluation. After Piketty edited by Boushy, DeLong and Steinbaum (published 2017), is a significant academic contribution to this process. Most of its authors are left-leaning but the book as a whole is by no means uncritical of Piketty’s thesis. It suffers from a number of flaws and there are parts of it that non-economists will find challenging but it is well worth reading.

Economics for the Common Good by Jean Tirole (English edition published 2017) is an excellent book written by one of the finest minds of our time. It is long (563 pp) but it is aimed at the general public and Jean Tirole, is masterful in using simple language to convey highly complex issues. It focuses on both the purpose of economics and the challenges that the world now faces. Although no book is value free and few readers will agree with all that Tirole says, he does not adhere to any clear cut ideological line, leaving the readers free to make up their own minds.

The target audience of The Power of Creative Destruction (published 2021) is less clear but anyone who is interested in the economics of innovation and is not put off by innumerable graphs will find it valuable. The authors draw attention to a number of studies that should challenge those from all parts of the political spectrum and challenge policy makes to accompany the process of creative destruction without obstructing it.

Capitalism Without Capital (published 2018) is an ambitious attempt to analyse the influence of the growth and influence of intangible assets. It is perhaps best suited to a reader who has a specific interest in the world of financial markets and it requires some basic literacy in finance and macroeconomics but it does not make excessive use of technical jargon. It brings a compelling perspective on the implications of the intangible asset economy and there is a lot in it to applaud.

The Ethical Capitalist by Julian Richer (published 2018) is by no means uncritical of modern capitalism but Richer believes that it is the only viable economic system and, when pursued responsibly, a force for good. He thus focusses on what “good capitalism” looks like, drawing on his experience as a successful entrepreneur. Some of his comments lack depth but he makes many challenging points and the result is a book that, overall, is compelling, well evidenced and convincingly nuanced.

Although recently published, How Will Capitalism End? by Wolfgang Streeck (published 2016) largely comprises a collection of previously published papers, which gives it an unstructured feel. It is deeply pessimistic in tone and the author’s structuralist view of society pervades the analysis. This viewpoint needs to be understood and considered but this book does not provide positive suggestions and its approach is philosophically flawed.

The End of Growth: Adapting to Our New Economic Reality by Richard Heinberg (published 2011) is also gloomy in tone. It suggests that economic growth as we have become accustomed to it over the past century or so is over and done with. It is well written and thoroughly researched but those looking for a balanced account of the long-term economic outlook should look elsewhere.

The Future of Capitalism by Paul Collier (published 2018) overtly builds on the philosophical foundations laid by David Hume and Adam Smith and nineteenth century American pragmatists. Collier believes that capitalism is the only economic system that can generate mass prosperity. He seeks to restore ethics with the state, firm, family and world and presents a plethora of idea for restoring an inclusive society.

Platform Capitalism by Nick Srnicek (published 2017) has many defects and, were it longer, these might outweigh its merits. However, it is short and is worth reading as a brief analysis of the digital age phenomenon of “platform companies”. It should assist understand of the way in which the business world is moving and reduce the risk of outdated solutions being proposed to modern business problems.

The authors of Global Business (published 2018) come from a business background and, unsurprisingly, come from a very different viewpoint form Srnicek. The book is short (158 pages) but attempts to cover a wide range of issues relating to the world economy. It is thus lacking in depth but it sets out great deal of material in a concise and readable way and may well act as a reasonable introduction to a number of contemporary issues.

Saving Capitalism: For the Many, not the Few by Robert Reich is another recent contribution to the debate (published 2016). It also comes from the left of the political spectrum (although it is not Marxist) and it sees redistribution of wealth and other activist governmental intervention as the solution to the issues that it perceives exist in capitalism. It is more polemical and directly political that most of the other books that we have reviewed but it is a worthwhile read. Although we have categorised it as a book about capitalism, much of its concern is about poverty and might be read alongside Wealth, Poverty and Politics by Thomas Sowell (see our reviews relating to “Wealth and Poverty” in the tab below) which advocates a radically different, free market, approach to the alleviation of poverty.

And the Weak Suffer What They Must? Europe, Austerity and the Threat to Global Stability (published 2016) was written by the Professor of Economics of the University of Athens (Yanis Varoufakis) who, as Finance Minister of Greece, was at the heart of the bail out negotiations between the EU and Greece in the first half of 2015. It analyses key aspects of modern European economic and political history and draws some depressing conclusions as well as implicitly imposing some important questions relating to the direction of politics and economic policy in Europe.”

The Job by Ellen Shell (published 2018) considers the issue of the future of work in the digital age. It is an easy read and includes memorable stories and phrases. Unfortunately, however, it is deeply flawed. Whilst many will enjoy reading it and will be stimulated by parts of it, those who are seeking careful analysis and clearly worked through proposals need to look elsewhere (perhaps to some of the other books that we have reviewed).

The Rise of the Robots and The Second Machine Age address broadly the same issue: the impact of technology upon work, business and society. Both recognise the benefits that technology has brought but the former is largely pessimistic about its future impact whilst the latter is largely optimistic. They both contain serious thought and insight and they are worth reading together, allowing one to challenge the other.

Democratic Capitalism at a Crossroads (published 2021) is a further book that considers the impact of technological change on society. It does so by exploring 19^th Century Manchester capitalism, 20^th Century Detroit capitalism and 21^st Century Silicon Valley capitalism. It is well written, comprehensively researched and undogmatic, presenting arguments both for and against its various proposals.

Free Trade under Fire (fifth edition published 2020) is, as the title suggests, a defence of international trade. It aims to explain some basic economic principles and empirical evidence regarding international trade and trade policies. In an age of increasing nationalist rhetoric, we need to examine afresh the issues, to re-educate ourselves and this book is an excellent step in that direction.

Money and the Rule of Law (published 2021) is more specialist than most of the books that we have reviewed: it deals with the question, whether discretionary central banking is a good or a bad thing. It nonetheless deserves to be widely read since it raises issues of societal importance that deserve to be debated far more widely than they are. The authors argue that there are practical reasons for rejecting discretionary central banking and, more fundamentally, that it is inconsistent with the rule of law and thus incompatible with liberal democracy. The book is US centric but the issues are of general applicability and, despite being technical in part, is not a difficult read.

In Defence of Public Debt presents a thorough history of public debt from its origins in Greek city-states, weaving in a history of taxation and monetary systems. The book promises a “balanced account” but in fact it fails adequately to analyse the evidence of a negative link between public debt above a tipping point threshold and economic growth or the moral issues associated with such debt. Nonetheless, it contains much of value to those interested in economic history.

In Global Discord, the former Deputy Governor of the Bank of England, Paul Tucker draws attention to the deep cleavage in modern international affairs and suggests how Western democracies should respond to this. The book is not an easy read and is not specifically about capitalism, business or wealth and poverty but the issues that it discusses are of crucial importance to all of these thing and those who take the trouble to read it will find it rewarding.”

Behavioural Economics and Anthropology:

We have reviewed two very different books that consider the implications of the findings of modern behavioural economics:

Humanomics by Vernon Smith and Bart Wilson (published 2019) resurrects Adam Smith’s first book, The Theory of Moral Sentiments, to explain the results of modern two-person trust gain experiments. The authors suggest that Adam Smith’s theory has a predictive force that is lacking in the concept of utility maximisation, which has been a governing model in economics for many years. The book is thought provoking and, although not an easy read for the non-specialist, should be read by those who want to think further about human economic behaviour.

The Community of Advantage by Robert Sugden (published 2018) also addresses the results of modern behavioural economics. It aims to meet head on the challenge that these present to the liberal tradition. Robert Sugden shares Hume’s scepticism about human rationality and rejects previous attempts to meet this challenge on the basis of assumed “latent preferences”. He suggests that the use of what he calls the “Individual Opportunity Criterion” is the key to doing so. The book is heavy going and many will question Sugden’s moral relativism but it is worth persevering with it.

Our final review relates to a collection of essays in economic anthropology: The Politics and Ethics of the Just Price edited by Peter Luetchford and Giovanni Orlando (published 2019). The approach of the authors is academic and some of the language is unnecessarily turgid but the book is fascinating and the essays include real insights, extraordinary contexts, complex history and genuine engagements with the relationship of social and economic considerations in markets and pricing.

The Wealth of Religions (published 2019) is an unusual book. It explores both the interplay between religion and economic growth and issues associated with the connection between religion and the political economy. There is an element of miscellany about it but it addresses interesting and thought provoking questions and the diversity of its material should ensure that a wide range of readers will be interested in at least some parts of it.

Winners and Losers: The psychology of foreign trade (published 2021) seeks to understand what determines public attitudes to free trade (which tend to be far more negative than those of economists). Mutz summarises her own research and considers the evidence gathered by others, draws conclusions and reflects on their implications. The result is fascinating and should be considered by all those who wish to see democratic countries pursue free trade.

Capitalism

List of Books Reviewed:

Christian Viewpoints:

Contemporary Issues:

Behavioural Economics and Anthropology:

The Business World

Capitalism

Wealth & Poverty