The Morality of Capitalism - Review of The Virtue of Prosperity by Dinesh D'Souza

March 2001 -- The Virtue of Prosperity . By Dinesh D'Souza. (New York: Free Press, 2000. 284 pp. $26.00.)

The beginning of the twenty-first century is a great time for capitalism. Socialism has been discredited. Countries around the world are opening their markets and removing barriers to trade. America has experienced the longest period of growth that the world has ever seen and produced an explosion of technology that promises to reshape social structures, increase freedom, cure disease, and extend the human life-span. It truly is a wonderful time to be alive.

But despite the prosperity that capitalism has brought to America and the West, it still suffers from an image problem. The old Left-wing critiques are fading; Marxist arguments are rare and social experiments in rent-control, welfare benefits, and the public ownership of capital are being abandoned. But in their place, a different critique of capitalism is catching hold.

This new critique--which, as it turns out, is not so new--does not challenge the effectiveness of capitalism. Capitalism, it acknowledges, is better than any other system at creating wealth, eradicating poverty, and developing technology. The new critique is aimed instead at the morality of capitalism; it asks if wealth, mass affluence, and technology are really such good things after all.

This new critique, offered by both environmentalists on the Left and by cultural conservatives on the Right, is troubling to many defenders of capitalism. Pro-market pundits have been arguing for years that capitalism's great promise was to improve our lives and free us from necessity. Now that the promise has been largely realized, these advocates find themselves faced with critics--often former allies--who question whether this grand experiment was even worth the trouble.

In the early part of the twentieth century, criticism of free-markets centered on issues of production. Critics argued that capitalism was inefficient and unmanageable, and that central, regulated economies would do better at harnessing capital and creating wealth. This was the standard line of the Left, and by the midpoint of the century it was universally recognized as a bunch of hooey. The Leftists then shifted their argument to matters of distribution. Capitalism, they said, might produce great wealth, but it distributes the wealth unfairly; the rich get richer and the poor get poorer. Capitalism, they said, is a zero-sum game; when one person wins, another loses; inequality and injustice are rampant. By the end of the century, however, the Soviet Union had collapsed and left millions of people mired in crushing poverty while the West was creating wealth on a scale never before dreamed of. The rich were certainly getting richer, but even the poor were rather well off. Even as income inequality was increasing, income mobility was accelerating. Affluence was becoming commonplace; poverty, in its traditional sense, was being eliminated. The Left was nearly out of arguments. So they borrowed the conservatives'.

Cultural conservatives had long been critics of the crass, materialistic tendencies in capitalist society, but they had been spending so much time attacking the Left's ridiculous economic policies that they failed to notice that their argument was being co-opted. Led largely by the environmental movement, the Left is now arguing against capitalism precisely because it is so successful. Capitalism and its attendant technology are spreading at a dangerous pace, they argue. Cultural institutions are being eroded, nature is being destroyed, and human beings are in danger of self-destruction if their orgy of consumerism, production, and technological advancement continues unabated.

Suddenly, the Left is sounding a lot like the Right. Traditional conservative defenders are given pause; they discover that not only do they have no answer to these charges, they are even starting to agree with them. Maybe unfettered capitalism and technology are not such good things after all?

THE PARTIES OF YEAH AND NAH

These are the themes of Dinesh D'Souza's latest book The Virtue of Prosperity. The author of The End of Racism, Illiberal Education, and Ronald Reagan: How an Ordinary Man Became an Extraordinary Leader, D'Souza is a research scholar with the American Enterprise Institute and was a senior domestic policy analyst in the Reagan White House. An often witty, always engaging cultural commentator, D'Souza tackles this new criticism of Western capitalism. His aim is to reconcile the values of tradition, family, community, and duty with the accelerating pace of technology and growth.

D'Souza recognizes that "capitalism has won the economic war, but it has not yet won the moral war." Yes, people are wealthier than they ever have been before, but are they happy? Are they moral? He quotes Gertrude Himmelfarb: "Look at our divorce rates, our illegitimacy rates, our rates of teen suicide and drug addiction. We have come to accept these as normal because we have become used to them. But they are not normal. They are deeply pathological." Capitalism, he fears, may be partly to blame. And if it is, he wonders, what should be done?

D'Souza sees this new criticism of capitalism as evidence of a cultural divide that transcends traditional political or ideological boundaries. The new debate about capitalism and technology is being waged between two opposing camps that he refers to as the "Party of Yeah" and the "Party of Nah." The Party of Yeah is characterized by an abundant faith in capitalism and the prospects of technological advances. The Party of Nah is, for lack of a better word, more conservative. They distrust capitalism and are wary of unfettered technological advancement.

D'Souza sets himself up as the moderator of the debate between these warring factions, the unbiased arbiter who presents the best arguments on each side and then renders his verdict. In the first part of the book, D'Souza explores the economic arguments leveled against capitalism from both the Left and Right. D'Souza quickly reveals his allegiance to capitalism as an economic system. On questions about inequality, for example, he provides ample evidence for class mobility, the elimination of poverty, and a general rise in living standards, effectively destroying traditional economic arguments against capitalism. In later chapters, he moves on to what he considers to be the more essential cultural critiques in the latter parts of the book. There, he presents what he clearly thinks is the most significant argument against technological capitalism: the loss of institutionalized virtue that was present in the pre-Enlightenment world. D'Souza is ultimately unable to reconcile traditional values with technological capitalism. His economic allegiance is too rooted in capitalism for him to give much credit to the criticisms of the Party of Nah, his conservatism too deeply rooted for him to join the Party of Yeah.

THE CULTURE OF CAPITALISM

The cultural critique argues that the increase in divorce rates, the vulgarization of art and culture, a growing sense of alienation form the environment, and the fracturing of small, local communities are the cost of capitalism. D'Souza refers to what he calls the Schumpeter-Bell-Fukuyama thesis. "Schumpeter warned that technological capitalism, based as it is on novelty and change, looses a 'gale of creative destruction' that uproots traditional social institutions and transforms human attachments and mores. . . . Bell concluded that the consumer vices produced by affluence could be expected, over time, to erode the habits of industry, thrift, and deferred gratification on which the productive success of capitalism depended. . . . Fukuyama draws on the arguments of Schumpeter and Bell to show how technological capitalism has undermined the traditional family." The argument is that while capitalism may indeed accomplish all that it sets out to, those accomplishments may not be worth their accompanying sacrifices.

The values D'Souza finds missing in capitalism are best represented by Wendell Berry, a writer and rancher who regrets the loss of local community, a connection to the land, and a family-oriented, civic-minded lifestyle. Berry rejects the pace of technological advance and has chosen to return to an older, and more spiritual, way of life. D'Souza acknowledges that he himself doesn't quite have what it takes to milk the cows, and chop the wood, but he has deep sympathy for Berry's arguments. "I must confess at the outset that I cannot see myself living like Berry. But perhaps that only means that I, like so many others, have been so warped and corrupted by the cosmopolitan urban lifestyle that we have closed ourselves off to a more difficult, but ultimately rewarding, mode of living."

What D'Souza misses is the place that virtue held in the pre-Enlightenment age. He contends that the pursuit of virtue, or the "life that is good" was the primary social concern in pre-Enlightenment societies. To be sure, D'Souza recognizes that the these societies existed in a constant state of strife and war and depended heavily on the institution of slavery--and he has no desire to resurrect those harrowing vices--but he clearly feels that a commitment to communal enterprise, an "aspiration for greatness," and a dedication to duty, obligation, and virtue are sorely missed in today's consumerist, materialist society.

D'Souza traces the loss of these virtues to the revolution of the Enlightenment. He acknowledges that the Enlightenment changed the prevailing culture of the West from a feudal society to a capitalist meritocracy, and he regards that shift as, by and large, a good thing. But as the Enlightenment promise was realized, and as wealth spread, the struggle against necessity became less and less necessary. In ancient times, he argues, "the battle for dignity and against degradation . . . provided a seriousness to life, a sense of victory over the elements, an unquestionable moral depth." D'Souza thinks that modern technological capitalism lacks this moral depth; the material wealth that capitalism brings results in a profound spiritual emptiness. As D'Souza says, "We want to be rich ourselves . . . and we want our society's affluence to promote some vision of a civic or common good."

The Enlightenment, he realizes, created a new economic and social order, but failed to justify that new order morally. D'Souza does not himself seek to provide a new justification, but rather proposes a return to the older moral order. He hopes that "the new economy may help undo some of the damage inflicted on social institutions by the old economy."

VIRTUE AND VALUE

For D'Souza, technological capitalism is good because it promotes prosperity, and prosperity is generally good because it gives us the means to do good. But prosperity also gives us the means to avoid good works and in that respect can increase temptation to vice. Like most conservative thinkers, D'Souza believes that morality is essentially the quest for virtue, and that virtue is found in the renunciation of vice. For him, "the life that is good" stems from the virtuous act of self-restraint. D'Souza's ultimate conflict is that technological capitalism is inimical to self-restraint and is a dangerous incentive to vice; by encouraging endless production and great wealth, capitalism feeds envy and greed.

The traditional conception of vice, to which D'Souza subscribes, is an indictment not only of the excesses of capitalism, but also the very acts of production and trade. In his view, it is the acquisitive nature of capitalism that leads to the degradation of virtue--not simply excess acquisition. D'Souza refers to Bernard Mandeville's argument that under capitalism private vices are transformed into public benefits and says of Adam Smith that "he agreed with Mandeville that the traditional vices of selfishness and greed were the indispensable foundations of a commercially prosperous society." D'Souza quips that "capitalism civilizes greed, just as marriage civilizes lust." In other words, prosperity, the reward of capitalist enterprise, is the result of harnessed vice.

In the ABC News special Greed, hosted by John Stossel, David Kelley alluded to the question of value versus virtue by asking, "Who has done more for the world, Michael Milken or Mother Teresa?" D'Souza takes this question and gives it a new-economy spin (although he refers elsewhere to Greed, he leaves this question unattributed) asking, "who has done more to eradicate poverty in the Third World, Bill Gates or Mother Teresa?" His answer is both surprising and illuminating, "To the extent that he has placed the power of information technology at the disposal of millions of people, the obvious answer is Gates. It doesn't follow that Gates deserves a higher heavenly perch than Moral Teresa." The conflict between virtue and vice is really about virtue and value. A value is something we act to acquire; valuing is inherently acquisitive, and for D'Souza that makes the pursuit of value inherently suspect. Capitalism rewards the accumulation of value, not the virtue of self-sacrifice; so it represents a significant threat to the virtuous life.

D'Souza's conflict over value and virtue leads him to conclude that technological capitalism, while it clearly provides mankind with enormous material benefits, does nothing to further man's spiritual quest for virtue; "the good life" and "the life that is good," while not wholly incompatible, are still largely separate. Ultimately what D'Souza tells us is that prosperity gives us the means by which we can be virtuous--if only we do not succumb to the inherent vice that prosperity brings.

THE PROBLEM OF THE MIND

But if self-restraint and sacrifice are the essence of morality, then any successful capitalist is already guilty of immoral behavior. In an article in Forbes magazine, D'Souza accepts that as a necessary truth. "Across the political spectrum philanthropy seems to have become the modern equivalent of indulgences purchased by the rich to atone for their participation in the sin of money-making. . . . The moral divide over affluence and technology doesn't just run between ideological camps; it runs through our own hearts." This natural moral divide between affluence and morality may be bridged only by deliberate acts of sacrifice. Thus, it is only by renouncing the selfish foundations of capitalism that virtue becomes attainable.

But D'Souza believes that the temptation to succumb to capitalism's vices may be very nearly overwhelming, for he seems to follow the traditional conservative and Christian view that man is a truly wicked creature of base instinct. Moreover, wealth and prosperity tempt the flesh and inspire men to vice. D'Souza reminds us that the poor suffer from the vice of envy because they have less prosperity than the rich. The rich, for their part, are equally immoral because their wealth offers them more opportunities to indulge in vice. In both instances, the inclination to vice is fundamental.

To say that human nature is morally flawed is to embrace a standard of morality outside of human nature. This view is fundamentally religious. D'Souza hesitates to make his argument in explicitly religious terms, preferring instead to refer to a cultural foundation for morality, ethics, and virtue. But for D'Souza, these terms are synonymous with, and dependent upon, a shared religious foundation. And for D'Souza, that religious foundation should occupy a seat of social and cultural authority. The religious sense that he seeks is a collective one.

D'Souza recognizes that a collective religious sense is a relic of the pre-Enlightenment era, and that the Enlightenment engineered religion's fall from the socially dominant position it enjoyed in pre-Enlightenment times. The effect of the Enlightenment's doctrine of religious freedom, as D'Souza sees it, " . . . was to downgrade religion from a publicly acknowledged truth to a privately held opinion." In D'Souza's mind, this rendered religion ultimately relativistic.

His point is not simply that freedom allowed differing beliefs to develop in relative peace, but that freedom equalized all religious beliefs--suddenly, there was no central authority to rule upon the veracity of any particular belief, and all belief became subjective. D'Souza seems to believe that the only answer to relativism is a recognized social authority; facts, or objective truth, are largely irrelevant. He proposes the following thought experiment. Imagine that the government was prohibited from advancing or establishing mathematical knowledge. "We would all enjoy 'mathematical freedom,' which means we get to solve equations and come up with answers in our own way. Would such a doctrine--that mathematical truth is relative to each individual or group--be viewed as a triumph for mathematics? I doubt it." But of course, mathematical truth is not relative. And we know this not because of some cultural commitment to a shared faith in the power of mathematics, but because the facts of reality prove mathematical truths. D'Souza's implicit commitment to religion is ultimately a rejection of reason. This central moral authority that D'Souza seeks has no objective grounding. It is not a commitment to a objective value that D'Souza finds missing, but a cultural commitment to the power of faith.

D'Souza's argument is sharply defined by the following passage, where again he asserts that facts are ultimately irrelevant in the face of a sufficiently impassioned dogma:

The problem, in the right-wing view, is that we have given up this world of virtue, happiness

and wholeness. It is no answer to this charge to say that the old world never really existed,

that it was only a 'city in speech,' and so on. Even if it was never realized, it was the governing

ideal. The best thinkers in the old world made an attempt to move their communities, to make

asymptotic progress, toward this ideal. . . . The force of the right-wing argument is that we have

given up trying to achieve the good society, we have sold our souls for money.

That he pines for a world of pure fiction is immaterial. That the "best thinkers" whom he reveres for their moral sagacity defended the institution of slavery or constructed societies that reveled in the act of war is irrelevant; they were the thinkers who, in all of human history, "thought hardest about the content of the good life and the virtues that make it possible"

Nowhere is D'Souza's rejection of reason and his commitment to faith more apparent than in his denunciation of cloning. He relies most heavily on the arguments of Leon Kass, a professor of social thought at the University of Chicago. D'Souza refers to Kass as "the most influential bioethicist in the United States" and goes on to say, "indeed the typical bioethicist is to Kass what a Sunday school teacher is to a prophet." But Kass's arguments against human cloning, with which D'Souza clearly agrees, is that such technology is repugnant. Why? Because it is. It is a repugnance that cannot be rationally justified or articulated--Kass and D'Souza freely admit this--but no matter, it is still repugnant. The argument is that there is some shared wisdom in the repugnance, and that the wisdom stems in part from the fact that the feeling is unarticulated.

The result of a position that argues that reason and science can provide no relevant insight to questions of morality. Consequently, when a moral challenge is offered to reason, science, or technology--no matter how irrelevant or poorly articulated--defense becomes impossible. D'Souza would like to champion capitalism; he would like to defend its wealth, affluence, and opportunity; but ultimately when it comes to the question of moral justification he finds himself unable to articulate a proper defense.

THE CONSEQUENCES

D'Souza's moral ambivalence over the nature of capitalism leads him to an advocacy that seems begrudging. He appears, throughout the book, as an apologetic defender of free markets. He seems defensive when confronting the moral issues he himself raises, and this leads him to some odd, awkward comments.

D'Souza is not alone with this problem. Conservatives have found themselves afflicted by a sense of moral unease. The rise of capitalism in the West has not been accompanied by a return to the virtue-based moral system that they long for. The worry is that capitalism itself may be to blame. Their views about the nature of value, the role of reason, and the place that systems of authority have in a culture have led many contemporary conservatives to become champions for a kind of "compassionate conservatism." This new compassion is extended as a form of self-sacrifice on the part of the capitalist, and amounts to a tacit acknowledgment that the wealth is a product of vice and represents ill-gotten gain.

But if the defenders of capitalism cede the moral arguments to its critics, they will find themselves in the ultimately untenable position of advocating what they have already acknowledged to be morally unjust. The olive branches that the new conservatives are offering to the critics of capitalism will never be enough; as long as the critics can legitimately demand that capitalism be restricted to promote justice, they will win their concessions.

Conservatives face another obstacle in their quest for a cultural reformation. To the extent that the marketplace leads people away from pre-Enlightenment morality, conservatives must find alternate means to inculcate that morality. If they strive to limit the scope of government, they diminish their only institution with enough social authority to challenge the incentives of the marketplace. At that point, the lure of government authority may prove to be too tempting. If man is naturally inclined to vice, then it is eminently justifiable to limit man's exposure to vice, and such limitations can be accomplished only through the exercise of governmental authority--usually in coercive manner.

To be fair, D'Souza goes to some length to assure his reader that he is not calling for government interference in the economy. He is most definitely an advocate of free markets, but he is ultimately, and quite unfortunately, a poor advocate. He salutes capitalism, roots for it, and pats it on the back, but by rejecting its moral foundation, he ultimately cuts it off at the knees. His ambivalence is best expressed in his discussion of bioethics, genetic engineering, and human cloning. Human cloning and genetic engineering, for D'Souza, represent man's ultimate hubris. They represent such a gross violation of human nature as to warrant an immediate global ban. In exploring this issue, D'Souza reveals to the reader his ultimate distrust of technological capitalism. One can well imagine D'Souza writing this book thirty years ago and advocating a ban on in-vitro fertilization techniques or fifty years ago and arguing the danger of nuclear power. This view is best articulated when D'Souza summarizes Jeremy Rifkin as thinking that "new technology is unprecedented, so we should be very cautious in developing it. It poses grave risks to human health and the biosphere, so it's not safe to develop right now." D'Souza is not a big fan of Rifkin's, but he calls these "important concerns." But new technology is always unprecedented. That is what makes it new. All technology, from fire to the hammer, poses a potential risk to human health. What D'Souza calls an "important concern" is no less than a call for a repeal of the information revolution, the industrial revolution, the agricultural revolution, and probably the first stone axe.

WHAT NEXT?

For D'Souza, the success of capitalism has not demonstrated that self-interest, productivity, and the relentless pursuit of knowledge are good things. Prosperity is a good thing because it eases poverty, but the underlying requirements for prosperity--a commitment to creating and acquiring value, a reliance on self-interest, and confidence in the power of reason--are shrouded in moral doubt.

What capitalism requires, if it is to weather its criticism, what freedom requires if it is to be taken seriously as a moral imperative, is a defense that can justify the self-interested, egoistic nature of both. Self-interested action is still largely considered to be the essence of immorality. Egoism's alternative, altruism, still enjoys broad, popular appeal and can still count among its many adherents even the traditional defenders of capitalism. While D'Souza considers egoism briefly, he ultimately rejects it out of hand.

In a book in which D'Souza repeatedly marshals the comments and critiques of opposing commentators to make his points, he dismisses the most cogent defender of the morality of capitalism in less than a paragraph. He says, "The indispensability of self-interest as a driving force behind business has led other defenders of capitalism, such as philosopher Ayn Rand, to proclaim selfishness itself as a virtue. . . . For Rand it is altruism that is shameful and unethical. . . . Consequently Rand finds herself positively enthusiastic about selfishness as the ground of human happiness. . . . This is a weird and unpleasant doctrine, and indeed Rand was a weird and unpleasant woman."

The ad hominem attack is the sum total of D'Souza's analysis of Rand's arguments, which have so far been conspicuously absent from the cultural debate. That's unfortunate, because Rand's defense of a moral system grounded on the power of reason addresses exactly what is in question in the modern debate over capitalism: the moral status of the pursuit of value.

For Rand, morality lies in the pursuit of happiness, not its renunciation. Prosperity, as one of the elements of happiness, is a worthy value to strive for--no apology needed. And we achieve prosperity through rationality, productiveness, courage, and integrity, which Rand sees as the core moral virtues. By emphasizing that morality concerns the pursuit of value, and not the renunciation of wealth, Rand marshaled a defense of capitalism that dealt with the moral criticisms leveled at it. She realized that capitalism cannot be reconciled with pre-Enlightenment values, that the traditional Judeo-Christian virtue ethic was inimical to capitalism, and that as technological capitalism shook traditional social structures, it also shook traditional moral structures. D'Souza's project to reconcile the values of the ancient world with technological capitalism fails because it is the wrong project. D'Souza titled his book The Virtue of Prosperity: Finding Values in an Age of Techno-Affluence. But a better quest would have been for the valueof prosperity and the virtue of productivity.

Until such time as Rand's arguments are accepted into the popular defense of capitalism, it is only natural to see such tepid, apologetic arguments as D'Souza's. And until that time, capitalism's most prominent adherents will remain its most dangerous detractors.

This article was originally published in the March 2001 issue of Navigator magazine, The Atlas Society precursor to The New Individualist.

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