Democracy and Development

This is the second lecture Michael Novak gave at the Pontifical University, Santiago, Chili, May 3-5, 1983.

Fix in your mind the year 1800. Then imagine the course of development until today, in the brief period of 183 years.

In 1891, in his encyclical Rerum Novarum, Leo XIII turned the attention of the Catholic church to a new problem in Christian history: to the revolution in economics. Consider the poverty of Chile, or that of the United States, in 1891. And yet compared to the picture in 1800, consider how Europe — and the world — had already been transformed.

In 1776, in Britain, the largest factory had twenty employees. In 1820, there were only 220 factories in all of France, most of them small textile plants. Then, with gathering speed, industrialization occurred — for things as small as pins and silk stockings, as homey as Singer sewing machines, as large as locomotives. Human life began to be transformed.

In 1800, there were only 800 million persons on this planet. Today, only 183 years later, this number has grown to 4.4 billion. Moreover, one easily forgets how many poor and hungry ones there were in 1800. Someone has recently said that there are today 750 million hungry persons on this planet. What he did not say is that there were almost certainly that very number of poor and hungry in the year 1800. The difference today is that there are 3.5 billion who are living above the level of subsistence and who are not poor and hungry. The task is far from accomplished; but significant progress has been made.

If we use the year 1800 as a benchmark, then we can see that the reality pointed to by the word “development” has by now a history of not quite two hundred years and has not yet run its assigned course. Since 1949 alone, 110 new nations have come into existence. During virtually every decade since the year 1800, one nation and then another has come awake to the possibilities of development. Decade by decade, the various nations continue today to pass various milestones at various statistical levels: infant mortality, individual longevity, literacy, annual per capita income, years of education, the acquisition of technical and political skills, religious liberty, the building of institutions of human rights, and other measurements of human development. Not all nations move with equal speed past these milestones. Some dart ahead very quickly, and others, once moving briskly, suddenly begin for a while to decline. Some seem to move with immense lethargy, inefficiency, corruption even, and a certain hopelessness; others, equally poor at the beginning and often even more unfavored by nature, make steady and dramatic gains. The nations are not equal. The course of development is not uniform. For every nation, even the most advanced, there is yet a long way to traverse, as measured against our own ideals.

But whence come our ideals? The very idea of “development” is something that took a long time to “develop” in history. In many respects, Adam Smith was the very first to imagine a political economy based upon the imperative of development. He saw the immense poverty and misery of the world, and believed that it was not necessary. He was the first to foresee a world made interdependent and united in productive pursuits, law-like, pacific, and dynamic. With this vision began a great revolution. Karl Marx described it as follows:

The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature’s forces to man, machinery, application of chemistry to industry and agriculture, steam navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalization of rivers, whole populations conjured out of the ground — what earlier century had even a presentiment that such productive forces slumbered in the lap of social labor?

Recently, the American democratic socialist writer Michael Harrington has expressed concern about the possibilities of socialism in the Third World, on the grounds that one cannot simply “socialize poverty.” By contrast, the vision with which Adam Smith began was indeed a vision of almost universal poverty. The ideals behind democratic capitalism — that system which would be at once democratic in polity, capitalist in economy, and pluralistic in its moral and cultural institutions — was precisely designed to overcome poverty. Its aim was to unleash the creativity which the Creator had implanted in the human breast, making every human being a co-creator with Him. John Locke had observed that if one took the field in Britain most favored by nature, favored in the quality of its soil, its inclination toward the sun, its positioning for the weather, and the like, and at the end of the year counted up its harvest as yielded by nature itself. and, then, in the next year, applied to that same field the best of agricultural science even in the seventeenth century, one would find that that yield could be increased not simply twice, nor even by ten times, but by one hundred times. In other words, Locke concluded, nature has hidden within it far greater riches, placed there by the Creator, than it has yet entered into the wit of man to derive from it. The task of human beings is to become co-creators with God, and to discover in nature the secrets which nature’s Creator has hidden there. This is the vision which, implicitly, Pope John Paul II takes up in the opening pages of Laborem Exercens. He speaks about “the theology of creation.”

It is important to recognize that recent popes, especially Pope Paul VI, have begun to pick up Adam Smith’s theme of development. They have completed the thought of Leo XIII by adding to it a world perspective, and also by adding to it the perspective of development. They, too, almost two centuries after Adam Smith, have begun to imagine one interdependent world, moving towards an ever fuller development of the possibilities hidden within it by the Creator.

Adam Smith called his book (1776) not the “Wealth of Individuals,” nor even “The Wealth of Scotland” or Great Britain, but, rather, An Inquire Into the Nature and Cause of the Wealth of Nations — the wealth of all nations. His vision is of the human race as one community, a vision which will not be fulfilled until a sound material base has been placed under every single human being on this planet.

This vision has brought about a revolution in our ethics. Most treatises of ethics, under the heading of political economy, ever since the time of Aristotle and continuing on into our own time, treat the subject chiefly under the heading “distributive justice.” The assumption behind this heading is that the wealth of the world is both finite and known: The only remaining moral problem is how to distribute it. The insights of Adam Smith, and the real historical processes to which he pointed, changed all this. For now, confronting the actual poverty and misery of most of the world in the year 1776, and recognizing that human beings at last knew how to create new wealth, Adam Smith envisaged a new moral imperative. If there are so many poor and hungry, and if the human race can produce enough new wealth so that this poverty and hunger is no longer necessary, then, surely, we have a new moral obligation to produce such new wealth. In other words, there comes into existence something which might be called “productive ethics,” or the moral obligation of nations to develop.

Development, in a word, has acquired moral force. It is an imperative laid upon the entire human race. And one must now begin to study how this obligation is to be acquitted. It is not enough simply to have good intentions. If there are human beings suffering, and if new wealth may be created to alleviate this suffering, then one must struggle in the real world to bring about actual development. Those who act in the field of political economy must be judged not only by their intentions but also by the results they achieve. Ideas have consequences. Consequences matter.

Let us go back to consider how the world was changing between the generation during which Adam Smith wrote in 1776, and the generation in which John Stuart Mill wrote his Principles of Political Economy in 1848. Mill remarks that in his own living memory and that of his contemporaries, there were many landed aristocrats in Britain who were, in essence, consumers of their own wealth. They raised private armies. They erected grand castles and country homes. They managed large estates. They held sumptuous parties, balls, and entertainments. They supported large retinues. Mill observed that in former times even the ordinary people worked less hard than in the era in which he was actually writing. Their labors were many during the planting season and during the harvesting, but during the winter there were many long leisure hours and, indeed, often during the summer it was the same. But by 1848, more and more of the population were beginning to commit themselves to much longer hours of labor, and throughout the year. They deserved, he said, to receive recompense for this labor, whether or not the fruits of it were sold and for whatever price. They deserved a just wage.

On the other hand, more and more of the wealthy were discovering that it is not good enough simply to inherit wealth and to consume it; it is far better to invest it, to turn it to productive use, and to create new wealth. Thus, more and more wealth was being invested in new factories and new commercial enterprises of many sorts. Those who invested these funds, which had an obvious social and productive use, not only for themselves and for their laborers, but for the entire society, had a right, Mill thought, to have their investment repaid over the years. To recompense them for the time during which they did not spend these funds upon themselves, but rather invested them, they also had a right to a reasonable rate of return. Mill justified the wages of labor by the sacrifices of their own leisure which working men and women were willing to make. He justified a return on investment by the sacrifice of consumption and the risk which investors were willing to make. Indeed, this is how Mill distinguished capital from wealth; capital is productive, wealth alone is not.

Mill’s fundamental insight, like Smith’s, was that new wealth might be created. Thus, the national capital of Great Britain need not be in 1790 what it had been in 1780, or in 1848 what it had been in 1838. Indeed, for the first time in human history, a single nation was exhibiting a steady increment in national capital in virtually every single year, for a chain of years unbroken for much longer than a century. In other words, the word “progress” was no longer simply a dream, but was an obvious fact being accomplished day by day, tangibly and visibly.

One recalls that one of the villains of earlier literature had been the miser. Why was the miser conceived to be a villain? In the days when it seemed that wealth was limited and known, and when wealth was identified simply as the holding of gold, then anyone who “sat in his counting house counting up his money” was selfishly subtracting from the limited common store. This act of vanity and selfishness did in fact deprive others, when wealth was so limited. But, after Balzac, the figure of the miser as an archetype of evil disappears from literature. For once the insight had become established that new wealth can be created, and that wealth consists not in gold but in the inventive ideas and the products of human intellect which lead to productive investment, then the miser came to be seen not as a villain but as a fool. Instead of investing his wealth and thus creating new wealth, he was simply hoarding it. The miser became a figure of ridicule rather than of villainy.

It is important to see that development, if it means anything at all, means the creation of new wealth. It is a creative act. And it is rooted in intellect. Most of the things we today call resources were not known to be resources two hundred years ago. It was in 1809 that a man outside of Philadelphia figured out how to ignite anthracite coal; that such coal burned hotter and longer than bituminous coal was well known, but the problem had been in achieving a way of igniting it quickly and steadily. Once this secret had been learned, the anthracite coal fields of my native state of Pennsylvania (about which I have written on the struggle of the United Mine Workers in The Guns of Lattimer) were opened, steam travel on the oceans became possible, and also the railways and the heating of skyscrapers. It was in 1859 that the first oil well was dug in Titusville, Pennsylvania, and in 1878 that the first electric light was illuminated in New Jersey. So it is also with the use of natural gas and the discovery of electrical power through nuclear energy. And so it is also throughout entire fields of chemistry, electronics, metallurgy, and many others. The human mind is the primary source- of wealth. The inquiry which Adam Smith began into the nature and cause of the wealth of nations leads in every place to intellect, to inventiveness, to creativity.

But how does one design an entire society so that it will promote invention and creativity? Crucial in this process is the law of patents and the right to royalties. These new institutions provided both a structure of law and a system of incentives making it worthwhile for inventors to dedicate many years of research to developing new resources, processes and products. Further, it is important that new ideas, once invented, do not remain solely in the laboratory, in the university, or in the private knowledge of the inventor. It is important to move them as quickly as possible into production and distribution. For this, too, institutions are necessary.

I observed earlier that the vision of Adam Smith was not the vision of an individualist. It is a vision of the universal human family, in all the nations on this planet. I want to observe now that the production of wealth is also social. It depends on the existence of certain kinds of institutions, and on the cooperation of a great many diverse persons and institutions. There must first be a structure of law, and this is a social achievement. There must next be institutions like the patent office, and institutions which support discovery and invention. These, too, are social achievements. Finally, modern economic tasks are so complex that they cannot be achieved by one individual alone. Further, these institutions must be such that they will endure longer than the life of any one generation, for economic tasks are also too large for any one generation alone. In order to achieve new economic tasks, one must create new social institutions.

Fortunately, there was available a model for the development of such institutions. From the burial societies of ancient Egypt through the monasteries of Western Europe, there had developed a body of law for incorporated associations. As many monks banded together under St. Benedict, and as the monasteries continued from generation to generation, so also there had developed a body of law to regularize the relation of these new institutions to the rest of society. This body of law afforded the legal precedents for the development of corporations committed to economic tasks. These voluntary associations came to be known as business corporations.

When Adam Smith was writing, a large proportion of business corporations in Great Britain and elsewhere were conceived as monopoly grants from the crown, as though all economic rights inhered in the state, and these monopoly grants were given in recognition of services rendered to the crown. One frequently encounters reminders of this circumstance in the inscription on products from Great Britain: “By appointment of her majesty.” In the infant United States, by contrast, as the historian Oscar Handlin has pointed out, there were already by the year 1800 more private business corporations than in all of Great Britain, indeed in all of the world, combined. All that was required for their formation was that individual men and women make a contract with one another to accomplish certain economic tasks.

The state did not create business corporations. They were voluntary associations. They had standing in law, which was recognized by the state and by all individuals. But what I most wish to stress is that business corporations are social institutions. The primary mover in the economic system of democratic capitalism is not the individual, although that is what some ideology would lead one to think, but rather the voluntary association. The corporation is a social organization. It develops and nurtures its own form of community, different from the spontaneous community of the pre-capitalist village. This new community is partial, voluntary, associative, cooperative, and utterly dependent upon a high degree of social skills among its many members. It has as its preconditions many spiritual qualities. To make it function, its participants must practice many spiritual, moral, and social disciplines. It depends upon a respect for law and a capacity to cooperate well and easily with others. As against familism, it depends upon a certain objectivity and recognition of due process and internal regulation.

Finally, business corporations can only function within political systems of certain sorts. Their existence and their success depends to an extraordinary degree upon the character of the law. To function well, business corporations depend upon many sorts of governmental regulation: all competitors must be held to similar rules. The law must have sufficient stability to allow long-term contracts to be entered into without excessive anxiety.

A capitalist economic system is often presented as a system based upon individualism. One can see how this happened. Invention and creative ideas normally do occur to one person at one time. One can see why emphasis is placed upon individual initiative and individual imagination. But the larger truth is that no idea can be brought into reality except through the complex process of economic activities, and these activities are in the most important respects social and even communitarian. They depend upon a great deal of trust as between individuals, respect for law, mutual cooperation and mutual dedication. The aristocrat tends to be a much more highly developed, not to say eccentric. Individual than does the person who succeeds at making a business corporation function well. The most original invention of democratic capitalism is not the individual but, rather, the voluntary business corporation. This is a social invention.

This is not the end of the matter. I have said that the source of wealth is intellect, especially practical intellect, inventive and creative intellect. How should a society go about multiplying the activities of practical intellect? Intuitively, most people will want to say that development will occur best if very brilliant people sit down and make a plan for it. In this way, it seems at first, they can best create a rational design, so that all efforts will be bent to a single purpose, and so that little will be wasted or lost. In reality, however, this approach sometimes works; most often, it does not. And this high-frequency failure is for a systemic reason. Economic tasks are so complex, and depend upon the satisfaction of the ideals, wants, and desires of so many diverse citizens, that to limit creative intelligence to the small elite of rational planners is to impoverish the entire community. In practice, one achieves a greater critical mass of intelligence by actually multiplying the number of inventive and creative intellects who make their own choices. This method seems, at first, counterintuitive, but in practice it does seem to work best.

This decision is not made by ideology. It derives from a practical judgment, concerned about probable consequences. Practically speaking, an economic system seems to work best on a counterintuitive principle: not by rational command but, rather, only if one allows as much liberty as possible to every actor in the economic process, and thus multiplies the number of originating agents of insight and choice. Some such reasoning, for example, lay behind the Homestead Act in the United States, which multiplied the number of economic activists and property owners in the American West. Marx speaks somewhere of the “idiocy” of rural life. Such a characterization is no doubt too harsh in any environment, but it may refer to the passive attitudes of peasants who work entirely for a landed aristocracy, and have few if any rights of initiative on their own. It certainly does not characterize the multitude of independent farmers of the Middle West of the U.S., each working as intelligently and creatively as possible, amazing in their capacity for practical invention, for improvisation, and for immense productivity.

The “land grant colleges,” further institutionalized the American conviction that the source of wealth lies in the human intellect. These state universities were intended to develop new research and new methods, to be carried to every rural neighborhood through the statewide extension services. Finally, the state had further roles to play in the development of the North American West through the building of dams, the Highway Act, the Rural Electrification Act, farm credit, farm price supports, and in many other ways.

It is wrong to think that the system of democratic capitalism is a system of laissez-faire or free enterprise alone. On the contrary, the political system plays a role every bit as legitimate and every bit as necessary as that of the economic system. In democratic capitalist theory, the state is an active state. It is a major task of government “to promote the general welfare.” As Madison saw, the state must promote the diversity of commerce and industry. Alexander Hamilton’s work on the national bank, and on the banking system generally, and his Report on Manufactures also belong to the working practice of the political economy of democratic capitalism.

When we discuss “democracy and development,” therefore, we find ourselves confronting two sets of problems. First, we must create the sorts of political institutions which make democracy real, and especially the actual observance of the human rights of all. Secondly, and just as urgently, we face the problem of creating economic institutions, and precisely those sorts of economic institutions which actually produce results. Every developing nation must produce sufficient new wealth to meet the growing expectations of its people. In thinking about political economy, therefore, it is necessary to think carefully about both poles of that expression: both about the institutions of the polity and about the institutions of the economy. Furthermore, both of these sets of institutions must be constantly criticized in the light of certain moral principles and of the human spirit. For it is the purpose of political economy to serve the development of human beings. And human beings are not solely political animals, or solely economic animals, but also, so to speak, inspirited animals, moral beings, children of God.

We come, then, not to two sets of institutional problems but to three. We want to create democracy. We also wish to effect development. Both of these tasks, to be accomplished well, make tremendous demands upon the social virtue and the human spirit of all citizens. Democracy and development are also, then, moral and spiritual tasks. They require healthy institutions, of culture, education, the press, and religion.



While recent popes have begun to speak more and more frequently about the moral imperative of development, there is not yet a great deal of theological writing, particularly practical theological writing, about how such an imperative may actually be fulfilled. Suppose that an entire people wished to produce both democracy and development. What ought they to do? What qualities of the human spirit should they emphasize and nourish? For it is inconceivable that one might produce democracy and development from just any spiritual premise at all. If for example, individuals are not able to govern themselves, how can they create self government in the polity? If individuals are not able to deny themselves pleasures today, in order to save and to invest for tomorrow, how then will they be able to produce new wealth in the nation as a whole? If a people do not develop habits of initiative, creative imagination, and invention in their personal lives, then how will the society as a whole manifest a creative dynamism? A practical theology of development depends upon a practical pastoral theology, which will nourish effective habits both in individuals and through specific institutions.

In the Catholic tradition since at least Leo XIII, we have a habit of speaking of social justice. This is an important concept. It indicates that justice is not solely a matter of the ethics of individual and family life, but also of the workings of social institutions. Frequently, too, appeals are made to charity. Yet it is remarkable how little thought we have actually given to the virtues of development, the virtues of democracy, and the virtues of a political economy of pluralistic cultures. The habits and dispositions for living well in such a world are surely different in practice from those of the world before democracy, before development, before pluralism. When development was not even a dream, let alone a possibility, for example, one necessarily taught oneself the virtues of pazienza, reconciliation, resignation, and even obedience. When the will of God, however, seems rather suddenly to call for development, quite new virtues are clearly called for — not pazienza but inquiry, not fatalism but a search for practical measures of improvement, not resignation but imagination and self-reliance, not obedience only but the acceptance of one’s own responsibilities for action. We need, in a word, to think again about the virtues without which democracy, development, and pluralism are not practicable.

I am by no means ready to answer fully the question I am here raising. But at least this much is clear. There are two different ways of thinking about virtue that will both need to be developed more fully. The first way of thinking is classical. Just as Aristotle described from acute observation of life around him in Athens the virtues held dear by Athenians, so also we must imagine the virtues which are dear to those who cherish democracy, development, and pluralism. This way of thinking leads to virtues in the classical sense of dispositions and habits of the individual person.

The second way of thinking is a little more difficult to conceptualize, but it corresponds to the general intention signified by the phrase social justice. It points less to the habits of individual persons than to the institutions which both depend upon and engender habits in individuals.

Let me employ what may at first seem like trifling examples: the institutions of baseball and soccer — each of which teaches virtues useful to development.

Baseball has several important characteristics. It is played by an association, whose success depends on each player. It celebrates the individual, each of whom is singled out by every movement of the ball, and each of whom, as batsman, must match wits and courage against the pitcher. It celebrates law, since every contingency is lovingly regulated by rules and every single play requires legitimation by an officer of the law, an umpire. It celebrates wit, since size and power are not decisive. It celebrates checks and balances, since every distance, height, weight, and length is calculated with concern for proportion and percentages.

Soccer, by contrast, is a game played by a collective, full of dash and figura. Although collective strategy, tactics and team assistance are fundamental, each individual is free to play with brio and individual flair. Although law is present, it is scarcely obtrusive and players can do whatever they can get away with. It teaches self-denial and patience, but also the quick seizing of sudden opportunities. It is in this way like investment. It demands great self-discipline and an instinct for the actions of others; it is in this way like corporate life. A little less admirably, but like American basketball, it also teaches a knack for feint and deception, and the ability to take swift advantage of the errors of others; it is an intense matching of wits rather than of brute strength. Soccer resembles in some of these ways North American basketball and in others North American football. It is gaining in popularity in the U.S.

The two games teach admirable qualities, but not the same ones.

What is true of baseball and soccer is true of other institutions. We must ask which specific social virtues are required for and nurtured within educational systems of various sorts, in armies of various sorts, in business corporations of various sorts, in ecclesiastical institutions of various sorts, and in every other sort of institution. Clearly democratic institutions depend upon and nurture virtues different from those of classic authoritarian regimes. Institutions are social forms. They inculcate certain practices gal and attitudes.

If we are ever to have an adequate theology of the world, a theology of the laity, and a theology of work, we must have a detailed taxonomy of the virtues which inform and are informed by the major institutions of modern life.

In closing, then, I would like to make at least a few tentative remarks about some of the virtues required by and inculcated through those economic institutions which create new wealth, the institutions of development. This list is not complete; and my remarks are mainly exploratory.

(1) Stewardship. It is Christian to recognize that the goods of the earth belong to all, and that those which come to owners of private property carry with them responsibilities for all. It is wrong to imagine that democratic capitalism demands laissez-faire, indifference to the lot of others, or self-centered consumption. Those who practice such vices poison the soil of the system they depend upon. For such a system is a social achievement; planted in barren land, property rights will speedily wither. The soil of a system of property rights depends upon the exercise of vigilant stewardship, so that the poorest and those in need are enabled to enter into its benefits and to contribute to its activities. If such a system is to win the loyalties of all, it must fairly reward the efforts of all, stimulate their talents, and promise and deliver opportunities to better their lot. Government must usually play a role in such stewardship, lending the weight of law to concern for the poor and needy. There are many debates about which methods best achieve results. Those societies in which all citizens become economic activists, however poor their origins, greatly multiply the sources of social intelligence.

(2) The alleviation of poverty.  In a society aspiring to be just, several criteria must be met. (i) From decade to decade, the absolute and relative numbers of the poor ought to decrease. (ii) From decade to decade, the standard of what counts as poverty ought to rise. (iii) Institutions must be permeable and show such social fluidity that individuals, once in poorer categories, will rise into higher categories, and individuals once in higher categories will fall into lower ones. There should be some upward mobility, and some downward. (iv) All the poorest without exception should have a realistic hope of bettering their own lot during their lifetime.

(3) Sacrifice for the future. In order to produce new wealth for the future, citizens must set aside at least a small percentage of their present wealth, for savings and investment. Such virtue is indispensable. Obviously, it is less burdensome for those who live above subsistence levels. On the other hand, those who earn more must invest more. The wealthy, in particular, must be encouraged to save and to invest, rather than merely to consume. In a purely hedonistic society, in which citizens live solely for the moment, the disciples of a growth economy cannot be met. In traditional societies, the wealthy frequently squander their wealth in conspicuous consumption. Saved and invested in productive industries and commercial enterprises, by contrast, their wealth is put to social use. This is true even if, in so doing, their wealth remains in their own ownership and even if it grows. What is most decisive is that local wealth be withdrawn from consumption and be invested in providing goods and services of great social utility to others. Such investment stimulates invention, provides employment, and multiplies available goods and services. The virtues of investment must be taught.

(4) Creativity and invention. God bestows rare talents without regard to social category, so that a just society ought so to arrange its institutions as constantly to draw out from them the hidden talents and gifts dispersed even among the poorest and most humble. For often the greatest musicians and writers, mathematicians and generals, inventors and creators of enterprises are among those born poor. In The American Challenge, the French author Servan-Schreiber points out that the secret to the invention of new wealth is a society organized to find and to nourish creative talents wherever they may be found. And economists concerned with international economic development are coming more and more to stress the decisive importance of “human capital”: that is, what goes on in the minds and spirits of citizens.

(5) Associative skills. Human beings are social animals, but in a different way from all other animals. For, while each has unique dignity and personhood, a sort of autonomy before God, they are properly neither individualists nor collectivists. When theologians write about “community,” they tend to employ images derivative from the village life of the medieval era and the modern small town or rural village. Yet there is a new form of community available and often practiced in modern societies: the community of voluntary association. In such associations, of many varied forms, individuals join together to accomplish common tasks or to seek common purposes. Typically, an individual belongs to many such associations, while belonging totally to none. In this sense, each lives a full and complex social life, not a lonely life. Yet no one association provides his or her total community. In such associations, especially when they are varied and multiple, each learns a wide range of social skills. In such a world, we do not bring up our children to be “rugged individualists,” but to enjoy meeting others, to delight in habits of cooperation and dissent, to take pleasure in taking initiative and to experimenting in new ranges of human endeavor. The assumption is that each individual is complex and many-sided, and properly discovers in many different associations new dimensions of self-realization and fresh dimensions of sympathy. Sympathy, fellow-feeling, benevolence, tolerance, civil disagreement, a sense of fair play, a spirit of compromise and other-regarding are taught in such associations. In them is developed what might be called “the pluralistic personality” or the “communitarian personality” — a distinctive modern type.

(6) Entrepreneurial and commercial skills. Classical philosophy regarded the merchant as a sub-moral type, and classical writers who praised the liberal arts often did so at the expense of the commercial arts and the industrial arts. In classical times, leisure was considered a high achievement. Today it is called unemployment. And, in most modern economies, the chief creator of new jobs is the small business sector. Thus anyone who sees unemployment as a moral problem — and in its effect upon family life, self- reliance, and independence of spirit, it is clearly a moral problem — must do everything possible to promote the multiplication of small businesses. This means high praise for the creators of new enterprises. This means praise for thrift and savings, for investment and risk taking, for honest accounting, for courteous service, for concern for the tastes, desires and needs expressed by the changing market, and for an entire range of human skills which measure the distance between success and failure. Those who create businesses serve the public, create employment, and enrich the public wealth by every increment of new wealth which they produce. Moreover, in contemporary industry, workers everywhere can work on exactly the same type of machines. What makes the difference is attention to quality — and quality is a fruit of the human spirit, not of machines. “Made in Chile” assesses the spirit with which Chilean workers accomplish their work: their pride, their attention, their sense for value and craftsmanship. The virtues of commerce and industry are virtues of the human spirit.



The creation of democracy and the achievement of development, in a word, depend on building institutions which engender such virtues as these, and which discourage their opposite vices. To be complete, one would also have to study the range of personal virtues, taught more properly in the family, in neighborhoods, in churches, and in schools, which are also required among peoples who aspire to achieve both democracy and development. I must be content, however, if I have said enough to justify the saying of Charles Peguy, one of my favorites: “The revolution is moral or not at all.” A revolution of the human spirit is required to make both democracy and development living realities. That is reason enough for a poor theologian to be concerned with such this-worldly subjects.


  • Michael Novak

    Michael Novak (1933-2017) founded Crisis Magazine with Ralph McInerny in 1982. He held the George Frederick Jewett Chair in Religion and Public Policy at the American Enterprise Institute and was a trustee and visiting professor at Ave Maria University. In 1994, he received the Templeton Prize for Progress in Religion. He was also an emissary to the United Nations Human Rights Commission and to the Conference on Security and Cooperation in Europe.

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