(This article appeared in The Wall Street Journal, Dec. 27, 1994. Michael Novak died Friday at 83.)
Democracy, Winston Churchill once said, is a bad system of government, except when compared to all the others. Much the same might be said of capitalism. It is not a system much celebrated by the poets, the philosophers or the priests. From time to time, it has seemed romantic to the young; but not very often. Capitalism is a system that commends itself best to the middle aged, after they have gained some experience of the way history treats the plans of men.
My own field of inquiry is theology and philosophy. From the perspective of these fields, I would not want it to be thought that any system is the Kingdom of God on Earth. Capitalism isn’t. Democracy isn’t. The two combined are not. The best that can be said for them (and it is quite enough) is that, in combination, capitalism, democracy, and pluralism are more protective of the rights, opportunities, and conscience of ordinary citizens (all citizens) than any known alternative.
Better than the Third World economies, and better than the socialist economies, capitalism makes it possible for the vast majority of the poor to break out of the prison of poverty; to find opportunity; to discover full scope for their own personal economic initiative; and to rise into the middle class and higher.
Sound evidence for this proposition is found in the migration patterns of the poor of the world. From which countries do they emigrate, and to which countries do they go? Overwhelmingly they flee from socialist and Third World countries, and they line up at the doors of the capitalist countries.
A second way of bringing sound evidence to light is to ask virtually any audience, in almost any capitalist country, how many generations back in family history they have to go before they reach poverty. For the vast majority of us in the U.S. we need go back no farther than the generation of our parents or grandparents. In 1900, a very large plurality of Americans lived in poverty, barely above the level of subsistence. Most of our families today are described as affluent. Capitalist systems have raised up the poor in family memory.
The second great argument on behalf of capitalism is that it is a necessary condition for the success of democracy—a necessary, but not a sufficient, condition. The instances of Greece, Portugal, Spain, Chile (after Pinochet), South Korea and others allow us to predict that once a capitalist system has generated a sufficiently large and successful middle class, the pressures for turning toward democracy become very strong. This is because successful entrepreneurs speedily recognize that they are smarter and more able than the generals and the commissars. They begin demanding self-government.
As has been recognized since ancient times, the middle class is the seedbed of the republican spirit. Capitalism tends toward democracy as the free economy tends toward the free polity. In both cases, the rule of law is crucial. In both, limited government is crucial. In both, the protection of the rights of individuals and minorities is crucial. While capitalism and democracy do not necessarily go together, particularly in the world of theory, in the actual world of concrete historical events, both their moving dynamism and their instincts for survival lead them toward a mutual embrace.
On this basis, one can predict that as the entrepreneurial spirit grows in China, particularly in its southern provinces, we can expect to see an ever stronger tide in favor of democratic institutions begin to make itself felt. The free economy will unleash forces that propel China toward the free polity.
