Benefits of capitalism

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THE UNIVERSAL HUNGER FOR LIBERTY: WHY THE CLASH OF CIVILIZATIONS IS NOT INEVITABLE

By Michael Novak

Basic Books, $26,

310 pages

Our nervous globe witnesses a clash of civilizations, of religions, a confrontation of cultures, some of them open to terrorism if not war, of nations in a vengeful mood as blood spills. Yet in Michael Novak, holder of the George Frederick Jewett Chair in Religion, Philosophy and Public Policy at the American Enterprise Institute, we behold a welcome peacemaker, one who lays down an engrossing groundwork so belligerents, actual and potential, can meet and see common cause. They can begin to wage peace rather than war. They can see and practice what St. Augustine said in his "The City of God" (427 A.D.): "Peace is our final good."

Mr. Novak is an upbeat Catholic scholar who won the prestigious Templeton Prize for Progress in Religion in 1994 and who has received 23 honorary degrees here and abroad. He has served as an ambassador under both Democrat and Republican administrations and penned 25 perceptive books, one of them titled "The Spirit of Democratic Capitalism." In his intriguingly titled new book, "The Universal Hunger for Liberty," Mr. Novak's thesis is that the racial and religious differences that divide our world are secondary, strategically, to the common hunger for personal dignity, and for the personal liberty from which that dignity springs.

To Mr. Novak liberty is a moral precept of mutual respect. It finds vital dignity in the individual person everywhere. The author finds common roots in the Bible, the Torah and the Koran. So he sees a core philosophical unity among Christians, Jews and Muslims. He also sees "a gold-and-scarlet thread" woven in the entire fabric of human history, a thread signifying the basic liberty and dignity of each person. He finds solace and strength in the words of Jefferson: "The God who gave us life gave us liberty as the same time."

Life and liberty thrive all the more so in Mr. Novak's idea of "democratic capitalism," by which he means that capitalism and democracy are intertwined, up from common soil. He reminds us of other economic basics: that lunch never comes free and that one man's gain does not involve another man's loss. And he knows that trade is based on mutual gain and on creating wealth out of otherwise dormant resources.

Mr. Novak applauds the realism of economist Thomas Sowell for noting the coexistence of the iron law of scarcity and man's desire to want more than there is, which create a situation that requires that man master division of labor and engage in trade and in social cooperation. He credits the late economist Julian Simon for defeating the Club of Rome's empty contention of "Limits of Growth." And he hails Austrian economists Friedrich Hayek and Ludwig von Mises who predicted the implosion of socialism in the Soviet Union for its lack of "economic calculation" and price-clearing markets.

No surprise then that Mr. Novak maintains that "capitalism qua capitalism is the organization of an economic system around the human mind, around invention, discovery, and the sort of enterprise that creates new things that never before existed." In like manner, he maintains: "Business is a noble Christian vocation, a work of social justice, and the single greatest institutional hope of the poor of the world. If the poor are to move out of poverty, no other institution can help them as much as business, especially small business."

My only reservation is Mr. Novak's failure to note how Mr. Mises lit up an unknown yet highly effective factor called daily democracy, giving it a critically needed political dimension. In 1922 in his book "Socialism," he saw democracy at work in our vast and vibrant marketplace. According to Mr. Mises, "When we call a capitalist society a consumers' democracy we mean that the power to dispose of the means of production, which belongs to the entrepreneurs and capitalists, can only be acquired by means of the consumers' ballot, held daily in the marketplace." Democracy? Voting daily, hourly, or even more often than that, and on a voluntary and most direct basis? Mr. Mises stood on solid ground.

That reservation aside, Mr. Novak here serves us insight that Islam and democracy will catch hold in places like Iraq and Afghanistan, as it has, if imperfectly, in other Muslim states like Indonesia and Pakistan. Much remains to be done. Still, in this vital book the author tells how peacemakers can capitalize on man's universal inner longings for liberty and mutual respect, and so restore calm to a stressed-out world.

William H. Peterson is an adjunct scholar with the Heritage Foundation and a contributing editor to the Foundation for Economic Education's Freeman: Ideas on Liberty.