Socialism, capitalism, and racism: part three–the last seventy years.

The aftermath of the Second World War found the United States in a new position in the world. Unquestionably, the nation was a superpower, no longer able to isolate itself from events happening on other continents. A second superpower, the Soviet Union, presented a different perspective on world politics and economics. The United States and its allies preferred democracy and capitalism; the Soviet Union and its allies held to totalitarianism and socialism, with the illusionary promise of communism down the road. Following a post-war recession, the economy of the United States flourished. New technology provided faster travel, faster communication, more information, more comforts and more luxuries, and new opportunities to explore the universe. New theories about education were tried in the schools. The ancient ideas of Socrates and Confucius—that people are good at heart and need merely to be taught how things work in the world—were applied to children in the classroom. By the end of the 1960s, authority was being widely questioned, countercultures were forming, and many Americans were eager for change.

Conspiracy theories also grew more common, and the Civil Rights movement was not immune to these theories. Some Americans—including J. Edgar Hoover, Director of the FBI—saw the Civil Rights movement and the anti-war movement as elements of a Communist anti-American conspiracy. Conversely, I’ve met people who consider the Civil Rights movement as part of a white conspiracy to destroy black communities just as they were beginning to achieve some measure of success after decades of struggle and growth.

The goals of the Civil Rights movement were and are appropriate: to provide equal opportunity for all citizens, regardless of culture or ethnic origin or of other inherent differences between individuals. The slave trade created inequity in the United States, and laws passed during the century after the end of slavery perpetuated that inequity. Confiscating and redistributing wealth was never going to make people equal; offering equal opportunity through education, assistance to the poor, and laws against discrimination were always the better path. Quotas in school enrollment and in hiring practices were controversial but were in some cases helpful to reduce cultural inequity. Desegregating schools to the point that students were bused from their homes and neighborhoods to distant school buildings was more controversial and less effective. Wealthier white families invested in private schools or moved to the suburbs. Many government programs instituted to combat poverty had negative effects—pulling apart families by granting more help to single mothers than to married parents, promoting students to higher grades while ignoring their failures to learn material usually required for promotion, and allowing some individuals and families to become dependent upon government funding rather than earned income. Some people took advantage of the system and its negative effects, while many others succeeded in spite of the system and its negative effects. Rhetoric of racism and deliberate discrimination was made socially unacceptable, and positive role models for blacks and other minorities were promoted in athletics, entertainment, and other fields.

Many activities of the Civil Rights movement were appropriate and beneficial: peaceful marches and protests, public speeches, sit-ins, and participation in political life all changed American society for the better. At times, though, the Civil Rights movement was used as an excuse for violence and destruction. From race riots in Birmingham, New York City, Philadelphia, Chicago, and Los Angeles in the 1960s to the Black Lives Matter riots of 2020, violent behavior has marred calls for justice and equality. The victims of that violence were often black business owners succeeding within the framework of capitalism rather than white capitalists deliberately continuing an unfair system. Indeed, at times it appeared that demonstrators were more interested in destroying the success of their fellow minority members than they were in building strong communities for themselves and for future generations in American cities.

It is not surprising that citizens protesting racial inequity and injustice would favor a new economic system to replace capitalism in the United States. But capitalism was never the cause of inequity and injustice. Socialism cannot keep its promises of better lives for all people or for most people. Socialism, as much as capitalism, would put power in the hands of decision-makers who might be honest and fair or who might be dishonest, prejudiced, and inclined to discriminate against minorities. Replacing capitalist investors with government bureaucrats cannot end injustice. Allowing the government to control prices, salaries, and decisions about production cannot make life fair for all people. Socialism consumes wealth, but capitalism creates wealth. Instead of redistributing wealth, socialism would distribute poverty; capitalism, on the other hand, offers a greater likelihood of increasing wealth for all citizens.

Historically, socialism has been tested and has failed. Over the years, people have fled socialist countries in search of freedom and opportunity. For the United States, winner of the Cold War, to strive thirty years later to adopt the failed policies of its defeated opponents would be laughable were the risks of such a change not so profound. For this reason, informed citizens need to continue defending and explaining capitalism, doing our best to keep what is working in America while continuing to improve whatever faults and mistakes we perceive in America. J.

Socialism, capitalism, and racism: part two–one hundred years of unequal freedom

In the 1840s, French political philosopher Alexis de Tocqueville foresaw difficulties the United States would face dealing with a population of Africans surrounded by a dominant culture of Europeans. De Tocqueville did not prophesy the Civil War, but he realized that slavery would end in North America. He warned that the African population would not be easily assimilated into the European culture of the United States, anticipating that conflict between the two populations was inevitable.

With the election of Abraham Lincoln as President in 1860, some southern states seceded and formed a Confederacy. Northern states answered Lincoln’s call to go to war to preserve the Union. The Confederate states seceded to preserve their practice of slavery, as their own documents from the time reveal. Northern states went to war, not to free the slaves, but to keep the country united; even Lincoln said that he would accept the continuing presence of slavery if it would keep the nation undivided. His Emancipation Proclamation did not free all the slaves—only the slaves held in the rebellious Confederate states. Only the thirteenth amendment to the Constitution ended slavery in the entire country, and that amendment was not passed until after the Civil War had ended.

Although the purchase and sale of slaves had operated until capitalistic practices, southern plantation owners perpetuated an economy that predated the rise of capitalism. After the war, they attempted to continue a feudal economy, treating the freed slaves as serfs who lived on white-owned land as sharecroppers and tenant farmers, leaving the white property owners in control of the political and social structure of the southern states. Northern reformers attempted to bring capitalism and equality to the south. They brought railroads, factories, and banks to the south. They established schools for black children and adults. They set up political systems that allowed black adults to vote, and some blacks were elected to positions in the local, county, and state governments. When this time of Reconstruction ended, the white power structure in the south reasserted their power. They instituted voting practices that kept black citizens away from the polls and prevented black candidates from being nominated. They reduced or eliminated black access to education. They used lynchings, race riots, and other crimes to terrorize the black population, keeping them under control of the same wealthy whites who had previously owned slaves.

National law, built upon the premise that all people are created equal and have certain human rights, allowed for the development of “separate but equal” benefits for white and black citizens. Schools were permitted to function, but taxes collected from white families funded schools for white children and taxes collected from black students funded schools for black children, perpetuating the poverty of black citizens and the predominance of white citizens. Businesses, medical care, and even train and bus transportation were segregated. Sometimes enforcement of the law bordered on the comic: a museum planation in Arkansas has preserved a doctor’s office which had separate entrances and separate waiting rooms for white and black patients but only a single room for treatment of all patients.

Many black workers traveled north, hoping for better opportunities in the big cities. Already those cities had traditions of separate neighborhoods for separate cultures—German, Swedish, Irish, Italian, Polish, and so on. Soon black neighborhoods were created, complete with black schools, black churches, and black businesses. Segregation, “separate but equal,” was as real in the north as it was in the south.

Would socialism have provided greater equality for white and black citizens at the end of the nineteenth century and beginning of the twentieth century? Definitely not. Every step in that direction continued to separate white and black, giving greater benefits to the white. White labor unions, among other expectations, were intended to keep factories from replacing white workers with black workers. Roosevelt’s New Deal provided much more help to white workers and families than to black. One reason for the disparity was that local direction of government programs always fell into the hands of the same powerful families that had managed the economy before the war and after Reconstruction. They had no intention of offering true equality to their black neighbors under any economic theory.

During this “separate but equal” era, some American blacks found ways to succeed. Black labor unions were developed for industrial and for agricultural workers. Black businesses, following the principles of capitalism, brought services to black communities and wealth to black entrepreneurs in both north and south. Black banks, black insurance companies, and black social organizations grew. Black schools, including institutions of higher education, improved. Although many schools for blacks limited their education to vocational training, others offered broader education. Black writers and poets, black musicians, and black historians and philosophers all gained an audience among both black and white Americans.

During these years, the United States did not meet its high standards of “liberty and justice for all.” Life was unfair for black citizens, native Americans, and immigrants from Europe and Asia; poverty persisted among populations of every culture and nationality. Prejudice and discrimination were widely practiced against blacks, Chinese, eastern Europeans, Catholics, and Jews. Capitalism was not the problem; socialism would not have solved the divisions and inequalities of American society. But in the later half of the twentieth century, new ideas and new approaches would make greater efforts to provide Civil Rights to all citizens of the United States. J.

Socialism, capitalism, and racism: part one–the trans-Atlantic slave trade

Slavery has existed in the world since the earliest historical records were written. Some slaves were prisoners of war; others became slaves as punishments for crime or as a result of debts they could not repay. In most ancient civilizations, slaves had rights that were protected by law. Some slaves did agricultural work or household chores, but others held highly respectable positions—private tutors for children of the rich, managers of property, and financial advisors. Joseph, son of Jacob, was a slave in Egypt who managed his master’s property. The Roman philosopher Epictetus was also a slave.

Even before the trans-Atlantic slave trade began, Africans were bought by Muslim traders and were sold in Arabia, India, and China. Even today descendants of African slaves live in China. But the tragedy of the trans-Atlantic slave trade was caused by sugar addiction. Crusaders first encountered cane sugar in western Asia. (Sugar cane is native to the Indonesian islands, but it had been sold and consumed in India, Persia, and Arabia for centuries.) Europeans had some natural sweeteners—honey and fruits—but the pure sweetness of cane sugar captivated European tastes. More than cinnamon, nutmeg, or cloves, the spice called “sugar” was in great demand as Europeans sought Asian spices from the silk roads. Italian investors tried to cultivate sugar cane on Mediterranean islands, but the climate was wrong and the crops failed.

In the 1400s, Portuguese explorers and traders began to look for short cuts in the silk roads, ways to obtain valued items such as gold and spices while bypassing some of the middle steps. (Taxes from governments and profits from merchants heighted the costs of Asian goods in Europe, so naturally western Europeans wanted to create and pursue any shortcuts they could find.) Traveling down the coast of Africa, the Portuguese found African civilizations eager to trade, and among the commodities offered by these Africans were slaves—prisoners captured from nearby tribes during disputes over land and wealth. At the same time, the Portuguese discovered islands off the coast of Africa that were uninhabited and were ideal for cultivating sugar cane. The Portuguese traded for African slaves and used them to grow and harvest sugar cane. When other explorers happened upon the Caribbean islands, they again found land ideal for sugar cane, and slaves purchased in Africa were transported across the ocean to labor in fields from Spanish Florida south to Portuguese Brazil. Slaves were soon introduced into British colonies north of Florida as well.

The plantations and haciendas established by Spain and Portugal in the New World were not capitalist ventures. They belonged to an economic philosophy now called mercantilism. In mercantilism, thinkers assume that the wealth in the world is limited and stagnant—one individual or nation can become richer only as another becomes poorer. Wealth from the New World—precious metals, crops (including sugar, cotton, coffee, rubber, and tobacco), animal furs, and fish—was transported to the Old World to enrich governments in Europe. Capitalists from Great Britain and the Netherlands did engage in the slave trade. Their ships traveled in a triangle: they traded with the Africans, selling European commodities and buying slaves; they sold slaves in the western hemisphere and bought New World wealth; they sold materials from the New World in European ports and gained European commodities. With each sale, they made a profit, much of which was distributed among investors.

But emerging capitalism in Great Britain and the Netherlands was accompanied by an abolition movement, an insistence that all people—even Africans and native Americans—possess human rights and should not be treated as property. The Industrial Revolution, created and funded by capitalism, replaced human labor with machinery, reducing the need to enslave human workers. Britain abolished the slave trade in 1807, followed by the United States the next year. All slavery was abolished in the British Empire in 1833. Compromises in the American government allowed slavery to persist in some states until the Civil War. Worldwide, slavery was not declared illegal in all countries until the 1960s.

Between 1500 and 1800, more Africans were introduced into the western hemisphere than Europeans. Sixteen million Africans (most of them sold by other Africans) were purchased in Africa and put in ships to be taken to the western hemisphere. Twelve million survived the trip and were sold as slaves. The death of four million Africans on those trading ships is one of the shameful facts about the slave trade—human beings were treated as an expendable commodity like any other crop. Treatment of slaves in the New World was a mixed package: some were treated with kindness and respect, but many were abused, tortured, and worked to death. Twenty-first century historians and moralists find it easy to condemn slavery and the trans-Atlantic slave trade. Dealing with the aftermath of those three hundred years is a different kettle of fish. J.

Socialism, totalitarianism, and the Cold War

In the aftermath of the Great War (that is, World War I) came the Great Depression. These combined perils caused the citizens of several countries to surrender their individual rights to their governments, hoping in return to obtain economic security, national pride, and protection from hostile forces within and beyond their countries’ borders. In Russia, Lenin’s Bolsheviks became Stalin’s Communist Party. In Italy, the Fascist Party rose under Mussolini; in Germany, the Nazi Party rose under Hitler. All three parties exercised totalitarianism, government control of the population that restricted freedom and human rights, controlled communication, and punished citizens who disagreed with the government’s policies.

Earlier dictators may have wished for totalitarian control of their countries, but twentieth century technology opened avenues to government power that had not previously existed. Governments could exercise total control over the printed word of newspapers, magazines, and books. They could exercise total control over spoken word of radio broadcasts. They could monitor private communication between citizens that used the postal service or the telephone. Rapid communication made control of schools easier than earlier times. Teachers were required to spread government propaganda in their classrooms and to report to the government any dissent represented among their students or noticed in the families of their students.

Stalin’s government was openly socialist—the official name of the country was the Union of Soviet Socialist Republics. Hitler and Mussolini did not advocate socialist economies. Meanwhile, the United States government, led by Roosevelt’s Democratic Party, offered New Deal that increased government participation in the economy but did not directly threaten individual freedoms. Communication and education were not totally controlled by the government. Citizens were not arrested for openly disagreeing with government policies.

The Second World War defeated the Nazis and Fascists without overthrowing Stalin’s Communist Party. The Soviet Union was permitted to set up totalitarian governments and socialist economies in several nations, from Poland and East Germany to North Korea. Shortly thereafter, Mao’s Communist Party won control over most of China, establishing a government that was also totalitarian and socialist. The Cold War had begun. On one side of the Cold War stood totalitarian and socialist governments promising a Communist world when they had prevailed. On the other side stood democratic and capitalist governments promising a free world when they had prevailed. The rhetoric was more stark than the reality. Many allies of the United States maintained dictatorships rather than democracies, and some American allies in Europe experimented with socialist economies.

The “Communist” governments during the Cold War portrayed capitalists as a wealthy and powerful minority who crushed the majority of their fellow citizens, forcing them to work long hard hours for insufficient wages, forcing them to live in substandard housing with little medical care or hygiene, and denying them any real control of the political process that ran their lives. The “Free” governments during the Cold War portrayed communists as radical subversives, trying to overthrow the established order to take control, abolish religion, end all freedom, and enslave the entire world.

Democratic socialism and dictatorial capitalism were quietly ignored. Yet the stereotype of the “godless Communist,” as described by leaders in the “free world,” contained truth despite their exaggerations. During the decades of the Cold War, capitalist nations thrived while socialist nations struggled. As the standard of living rose in capitalist nations, so did individual freedoms. Dictatorships were replaced by democracies. Meanwhile, the totalitarian socialist governments regularly had to crush opposition with military force. People fled totalitarian socialist nations for free capitalist nations, forcing the former to build walls to contain their own people. Even China eventually chose to reestablish a capitalist economy, while remaining under control of a totalitarian government that still identified itself as the Communist Party.

Thirty years since the Cold War ended, its rhetoric and its reality continue to shape politics in the United States and around the world. American families who escaped totalitarian socialist governments in Poland, East Germany, China, Vietnam, and Cuba remain suspicious of politicians who speak well of socialism or who advocate greater government control of the American economy. Freedom, democracy, and capitalism remain linked in the minds of many people. Old pictures of capitalistic oppression, once fostered by the Soviet Union and its allies, are sometimes reiterated in political debate in the twenty-first century. Some American citizens, especially younger people born after the Cold War, sometimes forget why our side prevailed in that conflict. But advocates of socialism are rightly portrayed as isolated, huddling in the cold, bundled to resist reality while they continue to call for an economic system that has never worked.

Although democratic socialism exists as an option, it contains more threats to freedom than capitalism contains. Government control over prices and wages reduces freedom. Government decisions about which products to produce reduces freedom. As silly as it may seem, freedom to choose among dozens of brands of toothpaste or coffee or beer is far better than a single, mass-produced, government-controlled monopoly of toothpaste or coffee or beer. One free pair of shoes given each citizen once a year can never satisfy the human spirit as well as freedom to choose among many kinds of shoes, spending one’s own hard-earned money for the shoes one truly prefers.

The pendulum of politics swings to the left and then to the right. Free elections often reveal massive divisions of philosophy within a national population. True freedom allows both sides to state their case and invites voters to choose between them. Those who gain power cannot maintain their grasp indefinitely; the tighter they cling to power, the more it slips from between their fingers. Reversals happen, but the long course of history shows that freedom prevails over tyranny.  The future of America and of the world is bright, because free people will always work to remain free. J.

Taxes

Governments require taxes. Governments need money raised through taxes to pay their elected and appointed leaders and the many other servants who fill out the departments of these leaders. They need money to build and maintain government buildings, to provide roads and schools and other services wanted by citizens, to train and equip and maintain armed forces, police departments, fire departments, courts, prisons, and other needed facilities. The Bible requires Christians to pay taxes: “Give to Caesar what is Caesar’s” (Matthew 22:21); “pay taxes when taxes are due” (Romans 13:6).

A dictatorship can set tax rates, demand taxes, and punish those who fail to pay. A democratically chosen government must listen to its citizens. On the one hand, many of them want lower taxes; on the other hand, many of them want more government services for themselves or for others. Leaders in a democracy must strike a balance—when the louder demand is for services, they must provide those services and raise taxes to pay for them; when the louder demand is for lower taxes, they must decide which services to reduce or eliminate.

The simplest tax is a head tax—everyone pays the same amount. Income taxes can require the same percentage from every worker, or they can be graduated, demanding a higher percentage of the earnings of higher-paid workers. Taxes are levied on property. Taxes are assessed and collected when things are bought and sold. Taxes appear as fees: vehicle license plates, drivers’ licenses, hunting and fishing licenses, marriage licenses, and so forth. Businesses are assessed taxes on their productivity and on their property; an increase in business taxes means that consumers will be paying higher prices.

A second purpose for taxes is the encourage some behavior and discourage other behavior. Do you want to persuade people not to smoke? Tax tobacco. Do you want to persuade them not to drink? Tax alcohol. Do you want to persuade them not to waste gasoline with inefficient cars? Tax gasoline. At the same time, offer tax incentives for efficient cars and for electric cars. Offer tax incentives for using alternate sources of energy. Use the tax structure to encourage people to enroll in higher education, to save money for their retirement, and to contribute money to charitable organizations.

In a pure socialist state, the government provides people with everything they need: food, clothing, shelter, medical care, education, legal services, even entertainment. The same government demands much from its people, both in taxes and in limitations upon freedom. Without competition of the free market, people accept the food and clothing and shoes and medical care that is provided. They have no choices. Their jobs are provided by the government, but most of their income returns to the government through taxes. Those who complain might be ignored, if they are lucky; often, those who complain are punished for resisting the will of the government. History shows that people tend to migrate away from such societies and to try to find homes in free market societies. The Berlin Wall eloquently illustrated the difference between socialism and the free market.

In pure capitalism, people buy what they can afford and do without the things they cannot afford—including food, clothing, shelter, medical care, and all the rest. In a free market, the government intervenes to provide some care to its poorer citizens. Food programs, government housing, Medicare, and other programs have been devised to assist people. Free education is provided through the twelfth grade, but not without competition from private schools and home schooling. Some citizens desire more government participation in health care—more care available for all people, treating health care as a human right rather than a privilege. Others want the free market to govern costs and expenses of health care, fearing that government control leads to higher costs and lower quality care. Unfortunately, the Affordable Health Care Act of 2010 focused more attention on medical insurance than on actual health care (although its many provisions did include some health care regulation beyond insurance coverage). In a future post, I will offer some alternate suggestions regarding affordable health care, measures that allow the free market to work but still ensure that needy citizens are not excluded from necessary care.

Taxation sometimes has unintended consequences. Wanting to discourage wasteful use of gasoline, state and local governments raised the tax on gasoline. They also offered tax incentives for more efficient vehicles. Their program was successful—drivers bought more efficient vehicles, and gas consumption fell. But the gasoline tax funded highway repair in those localities. Reduced gasoline usage meant less revenue from the tax that maintained the highways, to the point that some government officials proposed taxing electric cars and fuel-efficient vehicles to recover the missing income.

One of the most famous unintended consequences of taxation happened in 1990. The United States Congress approved a ten percent tax on the sale of luxury boats, any boat costing more than $100,000. The idea behind this tax was that wealthy people who could afford yachts could also afford to pay more money in taxes—money that could be used to help the poor, the needy, and the unemployed. Under the new tax, yacht sales fell from 7,500 in 1990 to 3,500 in 1992. Thirty thousand jobs were lost in the boatmaking industry. Instead of gaining additional tax revenue to help the poor and unemployed, the government increased the number of unemployed who needed help. Wiser minds prevailed, and the tax was eliminated. Lawmakers who try to reverse economic inequity through taxation of the rich must beware of such unintended consequences. J.

Freedom, government encroachment, and compromise

The range of options between pure socialism and pure capitalism is a spectrum which includes free market capitalism and the welfare state. Sometimes advocates of capitalism accuse their opponents of promoting socialism when those opponents only want more restrictions for the benefit of workers and consumers without desiring socialism. Sometimes people even call for socialism without realizing that what they truly want is not socialism but merely a more comprehensive welfare state. Labels can be slippery tools in our hands, especially when we exist on a spectrum of options.

One of the clearest guides to distinguishing capitalism and socialism is intent. Those who want a few more regulations to protect workers and consumers are still working within the free market system. Those who want to spread the wealth—to take money away from the rich and give it to the working classes, or to give away for free what was formerly bought or earned—by taxing and penalizing wealth are clearly working for socialism and against capitalism.

Here is one example I have seen online: imagine a society where the wealthiest people are earning $50,000 a year and the poor are earning only $25,000 a year. Imagine a change that brings the wealthiest people up to $100,000 a year and lifts the poor to $50,000 a year. Someone inclined to support capitalism will rejoice that all the people in the society have seen improvement. Someone inclined to socialism will complain that the disparity—the difference between the wealthy and the poor—has doubled because of the change, and that disparity is not fair.

Kurt Vonnegut, in one of his novels, imagined a society that tried, by law, to make life fair for everyone. People stronger than average were forced to carry weights. People smarter than average were forced to wear earpieces that distracted them with random noises. People more attractive than average were forced to wear clothes and makeup that made them ugly. Such efforts to make us more equal in every way clearly cause more harm than good. Bringing the higher-level people down to average does not necessarily help lift the lower-level people up to average. In fact, every attempt to reduce the wealth of the richest people through taxes and other legislation only causes them to move their wealth away from the places where it is vulnerable. It discourages them from making more wealth by selling improved products, hiring more workers, and performing other tasks that increase the wealth of the rich and also add benefits to the working classes and the poor.

Government’s job is to protect the rights of all people and to defend citizens from those who would harm them. A right to life includes protection from invasion and from crime; reasonable people still differ and debate whether that right to life also includes guaranteed food, clothing, and shelter for all citizens. In a democracy, the government is chosen by the people to do the will of the people; however, doing the will of the people means more than following and obeying the latest opinion polls. Those elected to govern are expected to learn and understand what is best for the people. Elected officials and their appointed staffs consider proposals, research them, and ultimately vote whether to enact them. Opinion polls might show that more than half the population wants college to be free for all students. Elected officials must still study and learn whether free college would be a benefit to most citizens or whether the cost of free college, assumed by the government, would become a burden to most citizens. Those who govern balance benefits and burdens. They speak to each other about these benefits and burdens. Their votes represent, not only the opinions of the people they represent, but also the best interests of those they represent. As a result, their votes often disagree with the opinions of the majority of the population.

Moreover, a representative government cannot condone injustice, even if the majority wants to be unfair to the minority. In protecting human rights, the government considers all the people, not most of the people. Even though the government has fallen short of it duty in the past, permitting oppression and abuse of some of its citizens, the solution is not to be unfair to a different group. (Two wrongs do not make a right.) We cannot change the past; we can only start with the current situation and move forward, seeking to make things better for all people.

Every person running for office states positions to attract like-minded voters. Different candidates have different priorities among the number of issues that matter. Elected officials work together for the common good. Each official holds some positions that cannot be compromised and others that can be compromised. Negotiation and compromise are part of the art of politics; they are necessary skills for anyone who seeks and gains elective office.

When a government gives each benefit that some citizens wants and then forces all the citizens to pay for all the benefits, that government cannot last long. The value and cost of various benefits must be considered; agreements and compromises must be reached. The more a government encroaches upon the freedom of its citizens—even with the encouragement of many or most of those citizens—the more that government fails to govern wisely and successfully. Sooner or later, the government that offers too much and promises too much and charges too much will collapse. The social contract is canceled when government demands too much of its citizens, because they still retain their basic rights to life, to liberty, and to property. Government does not give these rights to people, and it cannot take them away. J.

The welfare state

Already the free market economy reflects a compromise between pure capitalism and pure socialism, although the free market preserves the benefits of capitalism and permits only necessary legislation to moderate the economy. Governments limit pollution of the air and land and water. They make sure that the products sold to consumers are safe. They also regulate work areas for the safety of the workers. Governments even place limits upon who can work—setting minimum working ages to keep children out of the work force—and they limit the number of hours per week required of workers and demand rest times and meal times for workers.

A further compromise between pure capitalism and pure socialism is called the welfare state. Although some kinds of government welfare can be detected in ancient times—the Roman government subsidized bread and circuses for the people—the real welfare state began in the late nineteenth century as a result of the conflict between the ideas of capitalism and socialism. Otto von Bismarck introduced the welfare state to the newly-formed country of Germany in the 1880s. Fifty years later, Franklin Roosevelt introduced aspects of the welfare state to the United States as part of his New Deal, an attempt to overcome the troubles of the Great Depression.

Behind the welfare state lies the concept that all people have rights and that governments exist to protect those rights. In the original definition of human rights (life, liberty, property), the work of the government was largely negative. The government was not to deprive people of their rights without due process (a declaration of war or a criminal trial, for example). The government was to protect the rights of some citizens from enemies and criminals that would violate those rights. But, at first, no one said that the government should guarantee life by positive efforts to support the lives of all citizens.

People have basic needs. We need food and drink, clothing and shelter, and other physical supplies. When John Locke and Thomas Jefferson wrote about a right to life, they did not intend for the government to feed and clothe and house all citizens. People who work are given money, and they use that money to purchase what they need. People who do not work receive care from their families—children, the elderly, and the ill generally expect their families to feed and clothe and shelter them. Churches, community groups, and other charitable organizations care for those who are lacking the support of a family and those whose needs surpass the capacity of their family to meet. The government, therefore, had no role in supporting and protecting the poor beyond its essential task to keep enemies and criminals from taking advantage of those who were poor.

God gave his Law to his chosen people, the Israelites. He said that poverty would not exist if his Law was obeyed, but God acknowledged the reality of sin when he said, “You will always have the poor with you.” Jesus calls his people to be loving and generous, caring for those in need. If every Christian obeyed those commands to their fullest extent, poverty would not exist. Today’s Christians must confess that we have not perfectly followed the commands of Jesus. The poor, the needy, the homeless, and the oppressed among us reveal our shortcomings, our sins, our need for forgiveness. Christians are forgiven. Jesus paid the debt of all sinners in full on the cross. Being forgiven, Christians are being transformed into the image of Christ, doing what Jesus would do. Because the transformation is not complete, the poor and needy and homeless and oppressed are still among us.

Socialists point to the poor and oppressed and blame capitalism for their plight. Rather than acknowledging the sinful nature of all people, they focus their accusations upon the wealthy, the business owners, the people who benefit most from capitalism. Bismarck and Roosevelt did not want to renounce capitalism and endorse socialism. Instead, they used the authority of the government to require more help for the needy from those who could afford to offer help. Businesses are required to give their workers health insurance, disability insurance, and retirement plans. Under Social Security (part of the New Deal), workers are taxed to provide the government money; that money pays other people—chiefly the elderly and the disabled—not to work.

Does its defense of the right to life require the government to guarantee food, clothing, shelter, education, and health care to every citizen? This question defines the debate between conservatives and liberals in Europe, North America, and much of the rest of the world. The more services the government undertakes to feed the hungry, shelter the homeless, and provide medical care for the ill and injured, the more money it must collect from all its citizens. Government programs tend to be less efficient and more expensive than comparable programs under private ownership. Wealthy capitalists and their foundations often provide help for the poor that addresses their needs more specifically and more completely than government programs. On the other hand, when citizens begin trusting the government to solve the problems of the poor, those citizens often become detached from the problems of the poor, losing their compassion and their willingness to help their neighbors one person at a time.

Many Americans who say that they support socialism are actually longing for a more complete welfare state. They do not necessarily want their government to run all the factories, all the farms, all the hospitals and clinics, and all the means of production. They merely want a guarantee that all the hungry will be fed, all the homeless will be sheltered, and all the sick will receive the care they need. Calling for socialism, they blame the wealthy for creating and perpetuating the needs of their neighbors, and they accept no personal responsibility for causing or for solving those needs. The welfare state is not as bad an answer to human problems as is pure socialism; but it falls short of being the best answer available. J.

The richest Americans

A frequent complaint against capitalism is that it permits the rich to get richer, even at the expense of the poor. Capitalists reply that the success of rich business leaders helps all people, providing jobs for workers and products for customers. Over the years, who have been the richest American citizens, and how did they make their money? For this study, I chose to take a snapshot of the country’s wealthiest citizens every fifty years, beginning in 1820.

Stephen Girard was one of the richest citizens of the United States in 1820. He made his first profits from shipping, and then increased his wealth through banking. John Jacob Astor is another wealthy American alive in 1820. His initial wealth came from the fur trade, but he then increased his fortune through buying and selling real estate. Banker Thomas Willing and real estate mavin Stephen Van Rensselaer were also among the richest men in the country two hundred years ago.

In 1870, Cornelius Vanderbilt was one of the richest people in the United States. His money came from railroads, as did that of another wealthy American, Jay Gould. Alexander Turney Stewart became wealthy from selling textiles and dry goods. In 1870 Frederick Weyerhauser was beginning to build his fortune from the timber industry.

One hundred years ago, John D. Rockefeller had become one of the wealthiest citizens of the United States through his profits from Standard Oil and the petroleum industry. Henry Ford was one of the richest Americans due to the automobile industry. Brothers Richard Mellon and Andrew Mellon began as bankers but increased their fortunes through steel, oil, and railroads. Andrew Carnegie barely misses the cutoff of 1920, having died the previous year, but his fortune came from railroads and the steel industry.

H. L. Hunt and J. Paul Getty both gained wealth through oil. But by 1970 the richest American was Howard Hughes, whose wealth came from air travel and the movie industry. Another wealthy American in 1970 was Sam Walton, the founder of Walmart.

And in 2020, the wealthiest Americans include Bill Gates (Microsoft), Elon Musk (Tesla and SpaceX), and Jeff Bezos (Amazon). Another wealthy American is Warren Buffett, whose fortune came from the clothing and retail business.

Of course, all these wealthy Americans are white and male. Their opportunities for success were probably greater than potential competitors who were female or non-white. Looking beyond that impression, though, all of these men became rich by giving what consumers what consumers wanted. Railroads, cars, gasoline, steel, computer technology, and innovations in shopping mark the majority of these highly successful individuals.

Beyond that, most of them are known for philanthropy, for using their wealth for the benefit of others. Carnegie, Rockefeller, Walton, and other men on this list devoted much of their wealth to projects that helped others—combating disease and malnutrition, establishing opportunities for future entrepreneurs, and making libraries, concert halls, and museums available to the public. Most of these wealthy men and their families created foundations to continue their work beyond their lifetimes. Meanwhile, as they made their wealth by giving consumers what consumers wanted, they also created bountiful jobs for American workers.

Would railroads or automobile travel have been as affordable under government ownership and control? Would they have opened as many jobs as quickly as private investment made possible? If Walmart and Amazon were operated by the federal government, would they benefit as many shoppers? It is hard to imagine a scenario in which government control of these businesses would have been nearly as successful as they became under private ownership and control. J.

Blessed are the poor…

  Jesus says, “Blessed are you who are poor, for yours is the kingdom of heaven. Blessed are you who are hungry now, for you shall be satisfied. Blessed are you who weep now, for you shall laugh… But woe to you who are rich, for you have received your consolation. Woe to you who are full now, for you shall be hungry. Woe to you who laugh now, for you shall mourn and weep….” (Luke 6:20-21, 24-25)

What does this mean? Are poor Christians the only good Christians? Are wealthy people banned from the kingdom of heaven? Is money a sin and wealth a crime? Should all Christians give away their possessions and live in poverty until the Day Christ appears in glory?

Some Christians have taken the words of Jesus in that way. Others have read the rest of the Bible and have found more context for these sayings of Jesus. God has blessed the wealthy—he did not reject Abraham or David or Solomon or Lydia because they had worldly wealth. He allowed Job’s wealth to be stripped away from Job, but at the end of the test he gave Job twice as much wealth as he had at the beginning. If Jesus wanted all Christians mired in poverty, he could not expect us to give food to the hungry, clothing to the naked, or shelter to the homeless. If Jesus wanted all Christians to be mired in poverty, he would not expect his people to set aside money to help the poor, to do the work of the Church, and to support workers who spend their careers working for the Church and Christ’s kingdom.

At times, Jesus seems sympathetic toward capitalism. He tells parables about investing money, expecting a profit (Matthew 25:14-30, Luke 19:11-27). In fact, Jesus told more stories about money and investment and business than he told about planting seeds, tending crops, or taking care of sheep. Jesus knew that his followers would be involved in the world. He always intended to bless some of them with worldly wealth, making it possible for them to love their neighbors and to provide for the needs of the poor and the oppressed.

The problem is not with how much money people have; the problem is with how much money people want. A poor person can still be guilty of idolatry, dreaming about the wealth and riches he or she desires. The Ten Commandments close with warnings against coveting—wanting the property of another person. God blesses some people in poverty and some people in wealth. Being poor in spirit is not a matter of how much you own; being poor in spirit is a matter of how much your possessions own you.

The Bible endorses no economic system. Through history, most Christians have accepted whatever economic system surrounds them, doing their best to love God and serve their neighbors with any blessings God provides. When given a choice, though, the Christian does not only ask, “What is best for me?” The Christian asks, “What is best for my neighbor? Which system offers the greatest promise of helping the poor and oppressed, of making life better for all people?” In the rare instances where Christians may choose, their choice should reflect love for neighbors rather than greed and self-centered thinking.

Jesus said, “For it is easier for a camel to go through the eye of a needle than for a rich person to enter the kingdom of God.” When those who heard it asked, “Then who can be saved?” Jesus did not answer, “the poor, and those who give away all their possessions to become poor.” Instead, he said, “What is impossible with men is possible with God.” Salvation comes only from the work of Jesus Christ. It is not earned by being poor or by becoming poor. Jesus endorses neither capitalism nor socialism; Jesus condemns neither capitalism nor socialism. He rescues sinners whether they are rich or poor or middle class; he rescues sinners whether they live in a capitalist country, a socialist country, or any other kind of country. The work of Jesus is for all people; Christianity transcends politics and economics. J.

Rescuing capitalism

Under capitalism, the rich try to become richer. In the process, they provide jobs for workers and products for consumers, stimulating the economy. As businessowners compete with one another for customers and for workers, they try to achieve the best balance of price and quality for their products. They try to find the right wages to pay their workers, high enough wages to keep the best workers, but low enough wages to keep their products affordable.

The Industrial Revolution offered a glut of workers because the population was growing, agricultural workers were being pushed off their land, and machines were making it possible to accomplish more work with fewer laborers. Socialists (and other enemies of capitalism) recognized the problems that the system contained; they saw the poverty of the working class. At the same time, industry and the growing population of the cities led to other problems not directly due to capitalism, such as pollution and disease. Blaming all these problems on capitalism, socialists assured their audience that changing economic systems would fix these problems and would offer workers a better life.

Karl Marx predicted that the workers would violently overthrow business owners, along with political and religious leaders and others who supported the status quo. He further predicted that the overthrow would happen earliest at the places where the Industrial Revolution began—the British Isles, followed by western Europe. Marx could not foresee a response to capitalism that would fix its problems from within. But certain things were already happening in Marx’s lifetime that would rescue capitalism from its dangers by improving the lives of the working class.

Even Moses and the prophets pronounced laws against greed, oppression, and unfair practices. They denounced cheating weights, scales, and measures; they spoke against mixing the chaff and the sweepings with the grain. According to the Bible, government represents God’s authority among people to enforce the laws, to protect the people, to limit the power of greed and other sinful tendencies. Governments in western Europe used their authority for the good of the people. They inspected stores and businesses to make sure their practices were fair and honest. They restricted pollution of the air, land, and water, establishing sewage treatment plants, water purification plants, and other needed responses to the pollution caused by industry and by urbanization. Governments placed limits upon the age of factory workers; they also limited the number of hours that could be required of workers. In many ways, governments used the force of the law to reduce the problems within capitalism, industrialism, and urbanization—and they did so without seizing the means of production, without taking farms and factories and stores out of the hands of their capitalist owners.

God’s law demands perfection. Human law cannot mandate the same level that God requires. Food contamination laws permit a small amount of insect parts, rodent hairs, and other contaminations; reading those permissions can be stomach-turning. Questions are raised, and will always be raised, about how much regulation is necessary and how much is too much. The political system exists to address such questions, and negotiation and compromise will always be part of the answer to these questions.

Perhaps the most important laws prompted by the Industrial Revolution were those that permitted workers to organize labor unions, leaders who represented the workers and negotiated with business owners for higher salaries and better working conditions. At first, business owners tried to break the unions, but governments supported the unions and insisted that business owners hear their demands and negotiate with them for the good of the workers. This process, unexpected by Marx and other revolutionary socialists, preserved capitalism in western Europe and North America. Eventually, much of the rest of the world would be persuaded to follow the same economic system. People turned to capitalism because it works. J.