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On Michael Novak’s Democratic Capitalism


By Charles K. Wilber & Laura M. Grimes | May 1992
Charles K. Wilber is Professor of Economics at the University of Notre Dame, and was one of the major advisers to the U.S. Catholic bishops in the preparation of their 1986 pastoral on Catholic social teaching and the U.S. economy. Laura M. Grimes is a doctoral student in Theology at the University of Notre Dame. This is the final installment in a three-part series.

In The Spirit of Democratic Capitalism, Mi­chael Novak sets out his case for the economic­-political ethos he calls democratic capitalism. Though published a decade ago, it remains his central theoretical work.

Novak is none too shy about its impor­tance. While he has been a critic of Catholic social teaching, he claims that there are paral­lels between Spirit and Pope John Paul II’s 1991 social encyclical Centesimus Annus (CA) and hints that in CA the Pope showed that he has learned from Spirit, noting that Spirit was translated into Polish and adding that, “I know the Pope got a copy….” Novak also claims that CA “has brought economic liberty…into Catho­lic social teaching, just as Vatican II brought religious liberty,” leaving one with the impres­sion that Novak may see himself as the John Courtney Murray of our era. Needless to say, many authoritative commentators read CA — not to mention its lineage — quite differently. For example, La Civilta Cattolica, the Rome-bas­ed Jesuit magazine whose editorials are re­viewed by the Vatican Secretariat of State before publication and often reflect Vatican thinking, said in an editorial on CA that the point is “correcting” capitalism and “in a cer­tain sense, surpassing it.” The editorial praised democratic-socialist movements that “have ob­tained notable success” in producing “substan­tial changes in capitalism,” pointing in particu­lar to Scandinavian and German social democ­racy.

In Spirit Novak argues for democratic cap­italism’s superiority on political, economic, moral, and theological grounds. Curiously, in theory he repudiates unrestrained free markets, arguing that the political system and cultural­ moral system operate to check and balance the economy. But he sees most state intervention as unproductive and a threat to economic and political liberty. So in practice he puts the bur­den of proof on the critics of unrestrained markets. For Novak capitalism is to be ap­plauded and praised. Its failures and abuses are the result of human sinfulness; govern­ment efforts to curb this sinfulness lead to tyranny.

One of Novak’s primary theological con­cepts is co-creation. As he puts it:

Creation left to itself is incomplete, and humans are called to be co-crea­tors with God, bringing forth the po­tentialities the Creator has hidden. Creation is full of secrets waiting to be discovered, riddles which human intel­ligence is expected by the Creator to unlock. The world did not spring from the hand of God as wealthy as hu­mans might make it.

Correspondingly, humans are to be “inventive, prudent, farseeing, hardworking — in order to realize by their obedience to God’s call the building up and perfecting of God’s kingdom on earth.”

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