Kenneth J. Barnes, Redeeming Capitalism. Wm. B. Eerdmans, 2018. xiv + 233 pp. Foreword by Miroslav Volf.
Capitalism is a subject, not an object. … Capitalism is nothing more than the result of countless individual and corporate decisions and for good or ill, the capitalism we have is the capitalism we have chosen; its redemption rest on the choices we are yet to make.
This is how Kenneth J. Barnes, a senior international executive and now holder of the Mockler-Philips Chair in Workplace Theology and Business Ethics at Gordon-Conwell Theological Seminary, opens his new book on “virtuous capitalism”. The outline of the book is simple. After discussing the effects of the 2008 financial crisis (introduction and chapter 1), he takes the reader on a tour of the historical evolution of capitalism, covering pre-capitalist economies (chapter 2), the work and thought of Adam Smith (chapter 3), Karl Marx’s critique of capitalism (chapter 4), Weber’s “Protestant ethic” thesis (chapter 5), postmodern capitalism (chapter 6), and the political uprising of utopianism (chapter 7). After this historical overview, he addresses “God and Mammon-A Biblical Perspective” (chapter 8), “Theology and Ethics” from Augustinian, Thomistic, and Calvinist perspectives (chapter 9), the roles of “Common Grace, Wisdom, and Virtue” (chapter 10), the theological virtues (chapter 11), and how we might redeem capitalism “from the bottom up” (chapter 12) and “from the top down” (chapter 13).
While this is a good book to give to incoming students wanting to study business or economics, there are some serious problems with Barnes’ arguments. First is his inadequate treatment of the history of capitalism. His chapter on pre-capitalist economies fails to mention the rise of finance in the middle ages and the development of political economy in the works of Aquinas and the late Scholastics, as documented by Robert Lopez in his book The Commercial Revolution of the Middle Ages, 950-1350 (Cambridge University Press, 1971) and historians of medieval economic thought. While several names come to mind for those wishing to explore the later topic, Alejandro Chafuen’s Faith and Liberty: The Economic Thought of the Late Scholastics (Lexington Books, 2003) and Samuel Gregg’s For God and Profit: How Banking and Finance Can Serve the Common Good (Crossroad Publishing Company, 2016) both have the virtue of being scholarly introductions for laymen. These thinkers had a decisive influence on Gershom Carmichael and Francis Hutcheson, both whom Adam Smith read as a college student. Of course, one cannot discuss the history of capitalism without mentioning the names of Friedrich Hayek and John Maynard Keynes and the impact their debates on capital theory and macroeconomic had on subsequent generations of economists; sadly, one only finds a critique of Milton Friedman’s NYT op-ed on business ethics in Barnes’ book.
Aside from his simplistic history of capitalism (as well as important theological traditions in business ethics), some of his policy prescriptions might raise an eyebrow or two. For example, Barnes erroneously states that the living wage is premised on “the minimum wage” (138). Yes, the minimum wage interferes with the operations of a free market, but the living wage does not have to. As Acton Institute scholar Dylan Pahman points out in his article “Giving the Just Wage Its Due”, this approach to economic justice errs “in focusing on the universal to the neglect of the particular”:
Justice, classically defined, is to render to each what is due. A just wage, then, is that wage which remunerates a worker with proper regard to his or her particular contribution, need, and other circumstances. The focus on a living wage reduces this criterion to need alone and furthermore presumes that the need of each worker is the same. But is this actually the case? No, it isn’t.
Such factors include the price of housing in a given area (Grand Rapids, Michigan is much cheaper than anywhere in California) and the experience of the employee in question (a working father working full-time versus an unskilled teenager working weekday afternoons). While “Scripture is clear in its mandate to pursue justice, love mercy, and to respond with care to those in economic need” (Dennis Hollinger, Choosing the Good, quoted in Barnes, 136), these “exceptionless moral norms” do not come prepackaged with specific policy proposals.
A third issue I have with the book is its lack of discussion of the ethics of money production. Not once did I see that famous line from John Paul II’s Centennius Annus that a properly functioning economy requires “stable money” (paragraph 48). It is because we do not have a stable monetary system that we have had worldwide economic problems since the Bretton Woods agreement, the 2008 financial crisis being the most severe. Those interested in this issue are encouraged to read Jörg Guido Hülsmann’s The Ethics of Money Production (Ludwig von Mises Institute, 2008) and Denis Fahey’s Money Manipulation and Social Order (Brown and Nolan Limited, 1944).
Despite these criticisms, there is much to appreciate in Barnes’ book. His distinction between the short term and long term highlights an important aspect of ethical entrepreneurship, and his discussion of economic justice is long overdue. While I do not hope Barnes’ book is the end of the discussion of these matters, I sincerely hope it marks the beginning.