In Defense of Capitalism

I and Unification Church publications-with the ex- ception of the Causa Lecture Manual-a reluctance to consider capitalism asa viable economic system that could that have exploited and abused. their workers. Somepeople even consider the American worker as “spoiled”- underworked and overpaid, thus making it difficult for be espoused by UnificatioNst theology and philosophy. America to compete internationally. Many Unificationists see Divine Principle1 and capitalism Capitalism has brought a standard of living higher than as mutually exclusive. They seem to lean toward socialism that of kings or the privileged few of one hundred or two Dr feudalism as economic systems more compatible with hundred years ago. How many kings had cars or ‘ooats or Divine Principle. I disagree. I believe that capitalism or flew in airplanes? How many kings could routinely travel “free enterprise” is consistent with the fundamental prin- through their city, s tate, nation, or world? How many Ci ples of Divine Principle. If there is such a thing as an kings had indoor plumbing, refrigeration, heating, air “ideal economic model,” I believe it will be capitalism or an conditioning, or microwave ovens? How many had the economic model very similar to it. educational opportunities, universities, museums, or li- On page 447 of Divine Principle is a chart that shows the braries so abundant today? Things we take for g ranted as “History of Economy” asendingup with three final stages: necessities today would either be considered luxuries or ‘’’The Capitalist Society,” ‘1mperialist Society,” and “the were not even imagined one hundred years ago. Society of Socialism.” The author of this chart (whom 1 Capitalism has been a major factor in the development believe was not Rev. Moon) was mistaken. Capitalism has of this unheard of prosperity. Certainly God has inspired neverev~lved into imperialism and socialism ison the way people with innovative ideas. But an economic system out due to its great inefficiency. If there was ever any must allow God to work . Economic systems such as s0- “imperialism” it preceded capitalism. cialism, feudalism, or various traditional mooels prevent It would be accurate to identify the three final stages of and inhibit God from working to provide prosperity to that modem economic development as the “three stages of SOCiety. Capitalism, as imperfect as it is, allows God to capitalism.” From Divine Principle we learn that all things work and pour down his bleSSing upon the people of that have a period of growth-and capitalism is no exception. society. But what is capitalism? From Adam Smith’s Wenlth of Nations written in 1776, until now, capitalism has evolved, adapted, and developed What Are Capitalism and Socialism? according to the political, historical, spiritual, cultural and economic circumstances. Without getting overly technical I will try to describe The early stages of capitalism were quite primitive and each of these economic systems. Socialism is an economic barbaric. Workers were often exploited by being paid very system characterized by the abolition of private property low wages and being forced to work in hazardous and and centralized planning. Capitalism is characterized by unsanitary conditions. There were huge profits for the private property and a decentralized economic system privileged few and often poverty for the multitude of allowing free access to markets and competition among the workers. People like Marx did have some valid criticisms market participants. of capitalism. But Marx’s biggest mistake was in viewing Centralized planning means that a few people in the capitalism as static rather than the dynamic, adaptable, and government make the major business decisions, such as evolving system that it is. what sector to invest money in, what price a product The economic system of capitalism, toupled with the should sell for, what wages to pay, where to obtain the political system of democracy and the culture and religion financing, what interest rates should be, and where to of Christianity, makes for a society thafis remarkably able obtain raw materials. An obvious drawback of centralized to adapt and respond to the challenges and problems of planning is that it is impractical in a society of hundreds of SOCiety. Certainly, Marx did not see the rise of unions to millions of people. It simply doesn’t work; and the econo- deal with the exploited workerorthemynad of government mies of eastern Europe, the Soviet Union, and North Korea regulations and agencies that promote safety at the work show how inefficient and unproductive socialism is. Also, place-- such as OSHA and workers’ compensation. Neither if acentral planner makes a bad decision, thewholecconomy did Marx see how~mpetition has produced such a plethora may be affected. of consumer goods and services to the consumer. Ironically, InAmerica’sdecentralized economy, the major decisions it is the capitalist countries that have .brought incredible are made by the tens of thousands of corporations, part- nerShips and sole proprietorships in the country. The decisions are made by those people most affected. by their . 1.ln this paper I shall use Divine Principle, Unificationism and Unificationisl Philosophy interchan8eably to refer.to the teach- consequences. These people know best their company’s ings put forth by Divine Principll, Unificat~n Thought and Rev. Sun situation as well as how workers, investors, lenders, and MyungMoon. consumers will respond to their decisions.

In Defense of Capitalism 15

Authority must be accom panied by responsibility. It be given the opportunity to grow spiritually by sharing his may be easy fo r some faceless bureaucrat to make deci- property with others. sions that may hann hundreds of thousands of people The American idea of having a blend of private and working in a business enterprise in a centralized economy. publiC lands seems to work quite well. We have public But” the authority to make that decision should appropri- property for schools, government facilities, highways and ately reside with those who are closest to the situation and parks. But we also have private property for business, have the most at stake in the business. religion, recreation, sports, and housing. “Free access to markets” means workers may choose where to work, employers may choose whom to hire, Democratic-Capitalism consumers may choose what to buy, companies may choose what to sell, and stockholders may choose what venture to One of the best writers on capitalism is Michael Novak, invest in. a former leftist priest turned conservative scholar who is This should result in healthy competition from market now a fellow at the American Enterprise Institute. Novak participants. If competition becomes unhealthy and de- sees America as a tri-parti te system of democracy (politics), structive, then the law steps in with various anti-trust laws capitalism (economics), and Christianity (culture), which and regulations a bou t unfair business practices, to promote he tenns “democratic capitalism.” This name appropri. a healthy competition that is beneficial for society. ately recognizes the interplay and relationship among the The market is the best and most efficient way to allocate political, economic and cultural spheres of American so- the production, distribution and consumption of goods ciety. and services, and the best detenniner of prices, profits, Nobel Prize laureate (for economics) Milton Freidman wages and interest rates. Why? Because the market price is points out the relationship between economic freedom and the value society places upon your goods or services. political freedom. One cannot flouri sh without the presence Therefore the market price is a functi on of your contribu- of the other. If we do not have political freedom, then our tion to the whole purpose-that is society . If consumers do economic freedoms will be limited. In allowing maximum not buy your goods or services, it is because society d oes political freedom, democracy is compatible with capitalism, not value it and you will soon be out of business because which allows maximum economic freedom. you are not contributing to society.In a centralized economy, Democratic capitalism is certainly compatible with re- wages, prices, etc. are not determined by social valuations ligious freed om. Some may argue that the polity of the but by bureaucratic decision. Protestant churches, which are governed from the bottom Is it evil or selfish to advocate private property? The up, is more compatible with democratic capitalism than d ebate over private property has been going on at least the polity o f the Catholic churches, which are governed since Aristotle condemned Plato for ad voca ting the abolition from the top down. H owever, the Catholic church has also of private property: demonstrated itscompatibilitywithdemocraticcapitalism. American political economy is very decentralized and Such legislation may have a specious appearance thus efficient and prosperous. Not only are there thousands of benevolence. Men readily listen to it and are easily of businesses and thousands of churches, charities and induced to believe that in some wonderful manner social organizations, but the political system is divided everyood y will become everybody’s friend, especiaUy into three different powers - executive, legislative, and when someone is heard denouncing the evils now judicial- with federalism further dividing political power existing in states, suits about contracts, convictions among federal, state, county, city and town jurisdictiOns. for perjury, flatteries of rich men and the like, which Meanwhile, constraints on bu siness from the political are said to arise ou t of the possession of private branch, including enforcement of anti-trust legislation, property. These evils, however, are due to a very work to prevent a centralization of capital. different cause - the wickedness of human nature. 2 Tlze Corporate Form Plato, like the socialists and Marxistsof today advocated the abolition ·of private property. But it is not private The corporation, although much maligned, is a very property that makes men selfish or wicked. Rather, that is efficient and productive organizational form. It brings a problem .of the spirit. Furthermore, how can we be people, money, and resources together for a common generous and giving if we have nothing to give? Certainly purpose. Each sta te has adopted its own statutes govern- a prerequisite to sharing is having something to share. ing corporations (as well as sole proprietorships and The third blessil)gofDivine Principle gives us dominion partnerships). The corporate fonn has evolved. over time. over crea tion. Private property is necessary to fulfill this It allows investors to invest money with ‘1imited liability.” third blessing. Each person must learn how to care for his They risk losing only the money they invest into the or her house,garden orronsumergoods. Each person must corporation. In many corporati0;ts, the board of directors who are elected by the shareholders, run the corporation. Thus the corporation itself is democratic. It is a myth that 2. Aristotle, Politics, Book II pp. 44-45. just a few capitalists own corporations. There are well over

16 CURRENTS Spring 1991

50 million Americans who own corporate s tock. undue portion of the profit produced jointly bycapi- In the early stages of capitalism, corporations wereoflcn taJists and laborers.) irresponsible and (elt they owed. no allegiance to their workers, customers or the environment. However, in the The ideal corporate fonn will have all the workers as past twenty years, many companies have recognized a owners. Each worker thus has a stake in the company, “social responsibility” towa rds SOCiety. Many companies providing incentive for quality work. have realized. that it is in their own self-interest to protect Unificationism affirms the family, not the government, the environment, to guarantee their products and services. as the cornerstone of the Kingdom of God. Thousands of Many companies make large do nations to charities, educa- fami ly businesses have sprung up under capitalism. In a tional institutions and other worthy causes. family business, children can learn how to work and even In themidsto(SouthAfricanapartheid,General Motors eam money to go to college. Give and take action is an adopted the “Sullivan Principles.” sponsored by oncci its essential component of ca pi talism yet is virtually nonexist- board of directors. GM adopted. the policy of no discrimi- ent in socialist economies. Under capitalism the exchange nation in its hiring of workers, d ealings with suppliers, etc. of goods and services is voluntary and thus there is true This was an example to other companies and was a de- give and take action that benefits all parties. Milton nunciation of the policies of the racist South African gov- Friedman points out: ernment. The key insight of Adam Smith’s Wealth ofNation5 Capitalism is Consistent with is misleadingly simple: if an exchange between two parties is voluntary, it will no t take place unless both Divine Principle believe they will benefit from it. Most economic According to Divine Principle, man has freedom and re- faUaoes derive from the neglect of this simple inSight, sponsibility and is the temple of God. Capitalism more from the tendency to assume that there is a fixed pie, than any other economic system allows people to use their that one party must gain at the expense of the an- freed om and responSibility to foster economic prosperity. other.’ If God dwells within each individual, then certainly that person should have the right and authority to have his own Thus in a voluntary transaction both parties gain ben- business. DivinePrincipledoes not say only central planners efit. This is the essence of true give and take action. There of the government are the templeof God, but thatall people is no zero sum gain - the pie gets bigger. are to be the temple of God. Price regulates supply and d emand and fosters the give As mentioned earlier, capitalism doesan excellent job of and take action. In a socialist command economy rather harmonizing the individual and whole purposes. If a than both parties benefiting both parties lose or only one business is successful, then it is serving the whole purpose party gains. In capitaJism, if both parties do not gain, there because of its many customers. If a company fails to serve is no transaction. the society, it will gooutofbusiness. Even if a businessman’s Capitalism m ore than any other economic system gives motivation is totally selfish, he or she must still serve people incentive to work and produce goods and services. customers with a d ecent product or risk failure. Rev. Moon inan interview witha Soviet;oumalist indicated In line wi.th this is the biblical maxim, “What a man that incentives must be an essentiaJ component of an sows, so shall he reap.” If a person does work hard provid- economic system. ing a quality product or service for consumers, shouldn’t Divine Principle affirms creativity as an attribute of hu- that person also benefit? Certainly some executives seem man nature. Only in capitalism is creativity fostered to its to get excessive bonuses. Butif a person like Lee Iaccoca can utmost. Capitalism thrives on creativity, innovation and single-handedly salvage from bankruptcy a large company inventions. Through our patent and copyright laws one is like Chrysler, which employs thousarlds of workers, he rewarded for their creativity while simultaneously aJlowing should be compensated accordingly. · ’ SOCiety to benefit by the invention . The market is the best detenniner of how much Iaccoca Divine Principle affirms man as lo rd of creation. Man was and o thers should receive. The amount of wages or profits not created tornerelyobeyorders froma “central planner:’ a person or company makes isa function of how much they like angels do. But man is to explo re, initiate and create to contribute to society. Dr. Lee,author of Unification Thought, better serve humanity. Capitalism is the economic system says: best suited to do this.

Theca pitali st is naturally entitled to receive a part Conclusion of the earnings of the enterprise because he has exerted o:eative power either engaging in business Some Unificationists eloquently and vehemently cri- activity or by prOviding capital for it. . . [T]he tique Marxism but then adopt the Marxist critique of exploitati on of laborers by capitalists is not that capi talists seize the surplus value (profit)’produced 3. Unification Thought, p. 284 by the laborers, but rather that’capitalists take an 4. Free to Choose, Avon Books, 1979, p. 5

In Defense of Capitalism 17

capitalism. Thisisabsolutely wrong. We must stopcritiqu· astonishingly successful for these Confucian and Buddhist ing the early stagesof capitalism and recognize, accept and based. cultures. It also has proved quite successful in analyze the democratic capitalism of the 19905. Christian based countries as Max Weber pointed out with As shown in this paper the politicaJ.-economic struc- the “Protestant work ethic.” tures of democratic capitalism provide optimum opportu- Capitalism may take different forms, but the substance nities [or a healthy and productive economy and society. is the same. In Japan there is more cooperation between The problem, as Aristotle pointed out, and all serious government and business. American capitalism is typified critiques of capitalism reneet, is the “wickedness of human bya more confrontational relationship betweengovemment nature.” Thereot problem with capitalism is not capitalism and business. Each country adapts to the principles of itself, but the spiritual and moral state of the people. As capitalism according to their own culture, history, grog. Henry David Thoreau stated in his Essay on Civil Disobe- raphy and other circumstances. dience, “a corporation of conscientious individuals is a Ultimately, whatever works will determine the appro- conscientious corporation.” As people become more God- priateness of an economic system to a country. However, centered and moral, then capitalism will become more after an analysis of current political economies and God~ntered and moral Unificationism, it is apparent that the fundamental prin- The success of capitalism has brought about the age of ciples of capitalism- private property, a decentralized consumerism. Neithertheownersnormanagementdictates political economy and free access to markets characterized the direction of a company or the economy-the consumer by healthy competition to best serve the customers-are does. A company must please and serve its customers or the best alternative. ultimately it will not survive. Consumer protection laws Democratic capitalism has come a long way since its and competition itself have made the customer king. An early stages and it still has a long way to go. Despite its unfair business practice is predicated on whether or not the faults, democratic capitalism has shown a remarkable ability consumer is hurt or benefited. However, in centrally to adapt, develop and respond to the changing needs of the planned socialist economies the government is king and various societies that have adopted it. As Unificationism dictates the direction of the economy. spreads and people become more spiritually elevated and Capitalism can be applied differently to each country. God-centered, then so will democratic capitalism. Capitalism has shown itself remarkably adaptable to dif· ferent cultures. The capitalism of Japan and the newly Jim Hewes is a graduate of the Unification Theologicnl indusbialized counbies of the Asian rim have proved SemiMry and is currently a law student in Detroit Michigan.