What’s Wrong With Capitalism? 1: Definitions

Posted on October 31, 2009 at 8:46 pm,

dollarsignLast week I did a short talk outlining some of what the Bible has to say about money for an evening about managing your money well. That, and a number of other things I’ve spotted over the last month or so have made me particularly aware of the moral issues involved in the way we as a society handle our money. So I thought I’d offer a Christian critique of the system.

Capitalism (which, for the uninformed, is the economic system in which we live) has recently been described as “anti-Jesus” by campaigner Michael Moore. Whilst I wouldn’t go so far as to say that living in and contributing to a Capitalist economy is incompatible with Christianity, I do think that the system itself has some serious flaws, that it actively encourages some sins, and that Capitalism – at least as currently set up – has some “institutional sin” – it embeds certain sinful activity into the way our economy works.

But before we launch into this series of critiques, I want to start by offering some definitions, because before discussing the problems with a system, it is vital to ensure that you actually understand the basic nature of what you are criticising. I shall define not just Capitalism, but some of the beliefs and processes that go hand-in-hand with it in the 21st Century.

Capitalism
Capitalism is an economic system with the following characteristics:

  • The means of production are owned by individuals or companies
  • The workforce, goods, and the means of production are traded in free markets
  • Profits are either distributed to the owners or invested in technology and industry
  • The workforce are wage labourers

“Free” markets, private property rights, and power relationships between the owners of industry and the workers within it are the features that distinguish Capitalism from alternative economic systems.

Consumerism
Closely related to Capitalism is the mindset of consumerism. This is the belief that we obtain happiness or value through consumption – buying and using goods and services that we don’t need. Consumerism often means that we define ourselves in relation to the things we own, and makes us value things that cannot be bought and sold (like friendship) less.

Globalisation
Economic globalisation is the process by which local, national, and regional economies become more integrated into one big global economy. This happens as barriers to trade are removed, allowing local economies to be more dependent on imports, exports, and the activities of big business (in the form of trans-national corporations).

Neoliberalism
Neoliberalism is, essentially, Capitalism turned into an ideology. It describes the economic policies of Thatcher and Reagan, which have been adopted by all subsequent UK and US Governments to date. Basically, the theory is that by deregulating markets and privatising anything that can be privatised, you increase the rate of economic growth. Although this initially benefits the rich and not the poor, the theory is that this wealth will “trickle down” and everybody will, ultimately, be better off.

Markets
The concept of the “free market” is probably the most important in capitalist thought. It basically means that people and companies are free to buy and sell without interference from government. Advocates of capitalism believe that free markets are more “efficient” than the alternatives – that they naturally end up with goods being sold at the right price to balance out supply and demand for goods and services.

One Comment

  1. Posted November 1, 2009 at 9:41 pm | Permalink

    Looking forward to Part 2!

One Trackback

  1. […] is the second in my series on what’s wrong with Capitalism. I started with some Definitions, to help any readers who aren’t familiar with Capitalism and the ideas surrounding […]

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