Summary Many Christians accept Capitalism as broadly in line with biblical teaching. Its economic success appears to vindicate attribution of its origins to Christian theology.[3] This confidence in Capitalism as the best available economic system has meant that Christians have failed to recognise that it is one of the main drivers of social and moral breakdown in Western societies. This paper will highlight five failings in the philosophical foundations and institutions of Corporate Capitalism, pointing to their devastating impact on families and communities, and how they bring about the growth of giant corporations and centralised state power. Christians need to search urgently for a new economic order based on biblical revelation. One such alternative will be set out in a future issue of Cambridge Papers. snip
Five moral flaws of Corporate Capitalism
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1 An exclusively materialistic vision
As generally understood, Capitalism is concerned with the deployment and use of capital, although it has highly significant social ‘side effects’. Capitalism rests unashamedly on the pursuit of business profit and personal gain: it promotes the idolisation of money, which Jesus refers to as ‘Mammon’.[17] The moral dangers of Corporate Capitalism are similar because the modern corporation is driven primarily by shareholder materialistic self-interest. Adam Smith provided a moral framework for this pursuit of wealth by pointing out that as each person pursued personal gain, the outcome was, miraculously, the collective economic good. But pursuit of self-interest is a far cry from the biblical focus on ‘love’,[18] requiring other-person-centredness.
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2 Reward without responsibility
Economists argue that capital markets ensure money is allocated to those in society who can pay most for it, i.e. to those who will use it most efficiently and increase society’s wealth fastest. Capital providers are to be rewarded just for allowing their capital to be used by somebody else. However, Jesus seems to understand the basis for rewards differently. In the parable of the talents, Jesus puts into the mouth of the Master, when addressing the lazy/fearful servant, that ‘earning’ money through interest on a loan is ‘reaping where you haven’t sown’,[21] i.e. as contrary to natural justice. Investors lending at interest may be accepting some small element of risk; they are not accepting any responsibility for how or where the money is used. In contrast, Jesus seems to focus on the relational implications of how money is used; this includes the impact on a person’s relationship with God and on his or her relationship with neighbour.
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3 Limited liability of shareholders
The corporation, which had only the smallest of roles in early Capitalism, is today the chief engine of economic growth. In the mid-nineteenth century, companies were permitted to become legal persons, separate from their shareholders; they own their assets and have many of the legal rights and privileges of an individual ‘person’. If they register as limited liability companies, shareholders have no liability beyond the amount of capital they have subscribed or paid for their shares.
Limiting liability is contrary to biblical teaching because, exceptionally in the law of contract, it allows debts to be left unpaid in cases of insolvency. This contradicts a fundamental moral obligation.
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4 People disconnected from place
In the Old Testament, the Jubilee laws required that all rural property was returned to its original family owners every fiftieth year, free of charge. This ensured long-term rootedness for every extended family in a particular place,[26] strengthened loyalty to God and contributed to family solidarity. These goals are highlighted by their antithesis in the story of Naboth’s vineyard.[27] An important by-product of the Jubilee land laws was to ensure a measure of equity in the distribution and ownership of property which ensured a broad distribution of political power.
In contrast, Capitalism regards land and property as assets without relational significance.
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Economists have constantly ignored the economic and relational ‘externalities’ of mobility, i.e. the costs to wider family and society as a whole when an individual or nuclear family moves from one area to another.
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5 Inadequate social safeguards
The legal framework within which Corporate Capitalism operates is the result of prevailing economic and political philosophies, and the power of opposing interest groups. However, Capitalism does not itself have any concept of protecting the vulnerable through constraints on the market.
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