What’s Wrong with Capitalism? 2: The Love of Money

Posted on November 8, 2009 at 4:48 pm,

dollarsignThis 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 it.

The Bible talks a lot about money, and the main thrust of what it says is that, although money and possessions are good things, loving either is both sinful and bad for us. Hebrews 13:5 says this:

Keep your life free from love of money and be content with what you have, for he has said, “I will never leave you or forsake you.

Loving money gets in the way of our relationship with God and our ability to enjoy the good things in life.

So what does this have to do with Capitalism? Well, one of the most fundamental problems I have with Capitalism is that it both encourages and depends on this particular form of idol worship.

Capitalism Depends on the Love of Money

Whilst it is possible to imagine a free-market economy which does not depend on people wanting more and more stuff they don’t need, such a system is not the one we have. Capitalism is built on the idea that people acting in their individual economic best interest (i.e. doing as much as possible to increase the amount of money and stuff they have) is in the best interests of society. This is the core of the neoliberal approach to economics which dominates policymaking in the modern world, and can also be found in Adam Smith’s book The Wealth of Nations – the book that, essentially, created the Capitalist approach to economics.

In addition to this, Capitalism depends on economic growth in order to survive. Economic growth basically means that there is more money being spent than there was this time last year. I’ll come back to the problems with economic growth later in the series, but for now we just need to note that – except in the poorest societies – economic growth can only happen when either people or businesses spend more money on nonessentials. In other words, if people aren’t chasing after the latest fashion or the newest gadget, then everything grinds to a halt.

When a Capitalist economy isn’t growing, then it enters a recession or a depression. People lose their jobs, otherwise healthy businesses go bust, and people get far more anxious. This is, in fact, built into the structure of capitalism in the form of the boom and bust cycle. In the boom portion of the cycle, the economy is growing, and people start saying that something is a sure investment that will keep growing in value. As a result, lots of greedy people put their money in, and then eventually everything goes pear shaped, the value collapses in a very short period of time, and the economy starts shrinking again. This, in turn, leads to ordinary people who had nothing to do with it suffering.

Capitalism Encourages the Love of Money

Under a Capitalist system, businesses that make less profit than their competitors are frequently bought up by their competitors, or can be undermined by them. This means that every business has an incentive to make as much profit as they can. Which, in turn, means that they are committed to promoting consumerism, As a result, millions, if not billions, of pounds are spent on advertising that tries to convince us that our lives will be complete if only we had whatever product they happen to be selling. And over time this message becomes ubiquitous. It’s there on TV and radio, in newspapers and magazines, on billboards and buses, and of course it’s all over the internet.

Now there are ways to ditch advertising and other incitements to consumerism without ditching the Capitalist system, but instead of just banning advertising, society may well be better off reforming or replacing the system that both relies on and encourages us to covet things we don’t need and chase after riches in the vain hope that they will miraculously make us happy and fulfilled.

4 Comments

  1. Posted November 8, 2009 at 5:34 pm | Permalink

    I completely agree that the love of money is idolatry.

    “No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.” — Matthew 6:24

    “For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.” — 1 Timothy 6:10

    “Put to death, therefore, whatever belongs to your earthly nature: sexual immorality, impurity, lust, evil desires and greed, which is idolatry” — Colossians 3:5

    I think we agree on this. But is the capitalist system itself at fault, or rather is it the human heart which is at fault?

    Would people stop being greedy in alternative systems, e.g. communism, feudalism or whatever. Evidently, greed was a problem in Bible times, well before Adam Smith was born. Perhaps capitalism encourages greed more than other systems, but I am not convinced.

    “In other words, if people aren’t chasing after the latest fashion or the newest gadget, then everything grinds to a halt.”

    The word “gadget” possibly implies something fancy, but trivial. But consider that we are talking via the internet, on computers. This is all relatively new. The fact that most people have computers whereas they didn’t only 20 years ago means that the economy must have grown in that time. Is that wrong?

    Of course, many people spend money on trivial things, but that is the problem with humanity, rather than capitalism. If people want noble things, e.g. things to help them keep in touch with relatives, books to help them grow in knowledge and wisdom, etc, then the market will produce these. The market responds to human demand. While people are sinful, there will be demand for rubbish, whoever owns the means of production.

    Our “socialised” health service responds to human demand, and pays for abortion, IVF, and some cosmetic surgery, as well as lifesaving treatments.

    “As a result, millions, if not billions, of pounds are spent on advertising that tries to convince us that our lives will be complete if only we had whatever product they happen to be selling.”

    There are objectionable adverts. But I think many adverts are not offering as grand as complete lives. Most offer fairly un-objectinable things, e.g. this is slightly cheaper, more comfortable, safer, quicker, than rivals.

  2. Posted November 13, 2009 at 8:51 pm | Permalink

    I am interested to see the current debate about whether capitalism has now failed (see Stepahnie Flanders’ blog on the BBC) and am sympathetic to Ben’s view that the human heart is more at fault than the economic system. Even in command economies greed and opulance exist. Twenty years ago as the Berlin wall came down it was frightening to see the lives of people like Ceausescu in Romania.

    I do agree though that our culture shapes and reinforces our thinking and that capitalism is no different. It certainly has a downside. One question would be: what alternative do you suggest?

  3. Posted December 27, 2009 at 5:08 pm | Permalink

    Hello!

    I have just added a link from this blog to my blog. I am not a Christian but I am enjoying your posts.

    Capitalism collapses if we are not greedy, it is a system that encourages greed, the Nobel prize winning economist Elinor Ostrom has done some excellent work on the commons, forms of economics based on social sharing and community.

    Of course there is room for theological discussion but we need economic systems that don’t depend on the worst aspects of human behaviour

    any way thanks for the blog

  4. Armchair Critic
    Posted January 15, 2014 at 8:35 pm | Permalink

    I don’t believe that capitalism encourages the love of money.

    Capitalism is the only system that could provide you and your family with the standard of living that you currently enjoy.

    You might pontificate here and moan about its being but you would be complaining much louder if you standard of living fell to that of the average Cuban.

    Money is neither good nor bad. People are good or bad. I know people with huge amounts of money and they are incredibly generous with it.

    Socialism is bad. It removes people’s drive and ambition and levels everyone downwards. The scourge of socialism can be seen throughout the English education system.

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