Canon Fodder

Exploring the origins of the New Testament canon and other biblical and theological issues

Is Capitalism Based on Greed?

Ever since Gordon Gekko’s character in Wall Street uttered the phrase, “Greed is good,” there has been a wide-spread and oft-repeated myth that capitalism is based on greed. And, so the argument goes, if capitalism is driven by a sinful desire (greed), then it must be rejected as an immoral system.

Such misconceptions are even prevalent in the evangelical world, as preachers like Tony Campolo insist that the greed principle underlies the modern capitalistic system of America.  Many well-meaning evangelicals, who have a genuine care for the poor, find themselves drawn to the rhetoric of people like Campolo and their disdain for capitalism.

In light of this anti-capitalistic climate, I am grateful for Jay W. Richards’ book, Money, Greed, and God (HarperOne, 2009).  Richards sets out to dispel many myths about capitalism, and is particularly intent on showing that it is not at all contrary to the teachings of Jesus and Christianity, as so many suppose.

Chapter five is devoted to the myth that capitalism is driven by greed, and Richards makes a number of useful points:

1. The fact that individuals in a capitalistic society happen to be greedy, does not mean capitalism is actually based on greed.  Richards is quick to distinguish the greedy intentions of individuals (which, unfortunately, are prevalent), with the capitalistic system itself.

2. There is a difference between selfishness and self-interest.  Capitalism is based on people operating out of their own self-interest, says Richards, not operating out of selfishness.  Self-interest is not in itself immoral.  Indeed, many of our daily actions are based on self-interest, such as brushing our teeth, looking both ways before crossing the street, and eating healthy foods.  One might even say, our self-interest is an act of stewardship of the things God has given us.

3. Thus economic exchanges in a capitalistic system are mutually beneficial. Because capitalism is built on self-interest, then it means that people only engage in economic activity when it is mutually beneficial. When Joe buys meat from the butcher he does so out of the belief that the meat is more valuable to him than the money it costs.  Thus, he exchanges the money for the meat willingly.  He is not forced to beg for the meat, nor is he forced to buy the meat. He buys it because it gives him a benefit.

Likewise, the butcher also sells the meat willingly.  He sells the meat because he believes the money is more valuable than the meat he is selling.

Thus, argues Richards, in a capitalistic system both parties benefit.

4. Capitalism does the best job of channeling selfishness for good ends.  Although capitalism isn’t based on selfishness, it does do a very good job at channeling it towards a good outcome. Imagine an economic system that required everyone to act selflessly–it would be doomed to fail.  Instead, capitalism, argues Richards, accounts for the fact that some (most?) people will act selfishly and guides their actions into a good outcomes.  If the butcher is selfish and tries to sell a piece of spoiled meat, he cannot force people to buy it in a free economy.  Thus, it is in his best interest to offer meat that the consumer actually wants.  Richards comments, “The cruel, greedy butcher…has to look for ways to set up win-win scenarios.  Even to satisfy his greed he has to meet your desires” (123).

5. Capitalism actually encourages generosity.  Richards points out, contrary to popular opinion, that there is no evidence that America is more greedy just because its capitalistic.  In fact, America is the most generous country in the world when it comes to charitable giving–by a landslide.  Richards also observes that there is an inverse relationship between taxation and giving. “The more the government confiscates the less people give. Conversely, the freer the economy, the more people give” (124).

In sum, Richards’ book (particularly chapter five) reminds us that capitalism is not opposed to Christian thinking, but actually is consistent with the Christian understanding of human nature. It recognizes the proper role of self-interest.  It encourages freedom, not coercion.  It recognizes people are fallen and sinful and channels bad behavior towards good ends. And it ends up providing more prosperity out of which people can give generously.

Comments

      • I guess you could say in Acts they had an ultimate and perfect regulatory system. It is probably good we don’t have that today as I would hate to have people dropping dead at Sunday worship.

        • Or rebukes like Simon the sorcerer where monetary gain or the ability to buy “the Spirit” for personal gain. I was coming from a general understanding that with communism there is a strong emphasis on communal sharing, which to me also played a role in the OT Theocracy.

          How tricky is it anyway with trade agreements & legal technicalities. But in principle then, capitalism is not so bad, just like money, its what we do with it that really matters the most, not how much we may or may not have.

  2. This is helpful. Thank you for posting.

    Sometimes, I feel a certain tension because the more anti-capitilist rhetoric sounds very Christian in some of its principles, while advocates of capitilism seems, as this blog states, greedy.

    I suppose, Christians think about government, we need to consider, not only intension, but pragmatism.

    Do you think that Christians are morally responsible for the practical implications of their views of government? For example, a liberal Christian may have very Christian motives in advocating for “big government” in regard to it’s percieved ability to care for the needy. Would they be morally responsible for voting toward that kind of government if it’s outcomes ultimately, in the long-term, did not help our society? If so, do you think someone’s intensions lessen their culpability?

    • I definitely think Christians are morally responsible for how they vote. Certainly, Christians cannot foresee all the outcomes of their votes, so in this way our intentions do matter. But good intentions cannot replace a serious biblical and common-sense analysis of the political systems we advocate.

  3. Communism breeds laziness and communism has no way to channel that vice towards a good end. The result is that as a communist system collapses, force must be used to sustain it. And I think that is the reason communist systems always turn totalitarian. It has nothing to do with greed and corruption.

    • Could I then argue Capitalism breeds a false sense of achievement & success which draws people away from family & God in a 24/7 cycle of seeking money which itself becomes the god.

  4. Interesting post Dr. Kruger. You wrote:

    “In sum, Richards’ book (particularly chapter five) reminds us that capitalism is not opposed to Christian thinking, but actually is consistent with the Christian understanding of human nature.”

    On a small scale (think of the town shops in Little House on the Prarie) capitalism works pretty good. The problem with an unrestrained form of capitalism is that greed does take over to the detriment of many people. The consolidation of industry into the hands of a few people or business entities has historically shown the base nature of humans. Whether it is the mines and factories of the Victorian Era which worked people to death, or the garment sweat shops that exist now in China, India and other countries, people are abused by large business owners who only care about making money.

    That said, capitalism when restrained by an appropriate use of governmental authority has shown itself to be the economic systemn that is the most capable of raising people’s standard of living. Does this make capitalism a “Christian” economic system that we should be supporting as Evangelical Christians? I don’t believe so. It is still inherently flawed by the evil which has haunted the world since the Fall. As a Christian we need to be ready to advocate for the creation or modification of economic and political systems which are responsive to the needs of people, especially the poor and the oppressed.

    I don’t disagree with your post, I just think that we need to be conscious of the negatives in the capitalistic system and be willing to advocate for appropriate limits on unjust exercises of power.

    • Thanks for your thoughts, Tim. Of course, I never said I was for unrestrained and unbridled capitalism. Any system can be abused and laws need to be enforced to ensure that doesn’t happen. However, I will point out the irony that the none of the countries you listed as an example of such abuse are in fact really capitalistic! (Victorian England is the closest, but certainly not China!). Indeed, the greatest governmental abuses in history have been in totalitarian or communist regimes, not capitalist ones.

      Also, you mention that capitalism is not responsive enough to the poor and oppressed. I disagree. I think capitalism is the best system for helping the poor because it brings the greatest prosperity to everyone. Just note Bono’s recent affirmation that capitalism has helped more poor than any government program ever could. Most people assume that rich people are rich because they oppress the poor. But Roberts addresses this myth in his book as well. You should check it out.

      • I am not an economist but I wonder, or maybe should say I doubt, capitalism could ever function very long if at all apart from rule by law. If you think about it, all the documentation etc. that goes along with financial exchange is a result of society defining what constitutes legal exchange. I was recently involved in the sale and purchase of a couple cars. I thought it was remarkable how the process clearly defined who owns what and how one properly exchanges property so that all parties are protected within the rules. That is not to say there is never abuse or that the law is always right and fair, but that is markedly distinct from practice in many countries where financial and property exchanges may be conducted in a less clearly defined manner.

        Then when you think about buying and selling commodities or financial instruments on international exchanges …. That would not be possible apart from clearly defined rules and enforcement.

  5. I heard a fascinating discussion on NPR with an African economist. In sum he said “The problem with capitalism is that some countries don’t have it.” For example, in third world countries a farmer buys or sells at most a few cows at a time and the value is unknown, set by personal negotiation. Under a capitalist system with rule by law etc. and markets one can buy and sell hundreds or thousands at a time without ever seeing them. The same principles apply to everything one might buy or sell and even personal things like obtaining a birth certificate or marriage license. There is no way for a barter system (for example) to support the kind of economic prosperity that a capitalist system can support. Healthy capitalism assumes rule by law. There was more to it than that but thought it was interesting.

    Also, there are greedy people in every economic system. Communist systems still enrich certain people, especially government officials. No matter what the system your still dealing with sinful people.

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I am President and Samuel C. Patterson Professor of New Testament and Early Christianity at Reformed Theological Seminary, Charlotte, NC. In addition, I am an ordained minister in the Presbyterian Church in America and serve as an Associate Pastor (part-time, of course) at my home church, Uptown PCA.

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