At the beginning of the 19th century, only duchesses wore silk stockings; by the end, even working girls did. At the beginning of that century, few had eyeglasses; by the end, eyeglasses were in frequent use. Dental care advanced somewhat (much more so, however, in the 20th century). Longevity rose steadily, and infant mortality began to decline (again, much more so in the 20th century).
Moreover, during just the past 30 years, two of the nations on earth with the largest number of poor persons — China and India — liberated more than a half billion of their citizens from poverty.
This was the swiftest, largest advance out of poverty in history. These nations used the very secrets uncovered by Adam Smith: private ownership and personal initiative.
What is the cause of the wealth of nations? At root, it is invention and discovery — such as the invention of the pin machine, which Smith describes in his very first chapter of “The Wealth of Nations.” It is the use of the mind in organizing work efficiently (with less wasted time and effort), and in finding new ways of doing things. It is supplying the incentives that prompt people to do things with energy and desire, rather than being coerced into what they are doing.
The new economy in which we live is often called “the free market economy.” But markets are universal. Markets were central during the long agrarian centuries, through biblical times, in all times. For this reason, the term “the market economy” or even “the free-market economy” somewhat misses the mark.
More accurate is the “initiative-centered,” the “invention-centered,” or in general the “mind-centered economy.” More than anything, mind is the cause of wealth today. The Latin word caput (head) — the linguistic root of “capitalism” — has inadvertently caught the new reality quite well.
“The free economy” captures only part of the secret — it emphasizes the conditions under which the mind is more easily creative, in the fresh air of freedom. Freedom is a necessary condition, but the dynamic driving cause of new wealth is the initiative, enterprise, creativity, invention — which use the freedom.
Freedom alone is not enough. Freedom alone can also produce indolence and indulgence. To awaken slothful human beings out of the habitual slumber and slowness of the species, the fuel of interest must normally be ignited. One must move the will to action by showing it a route to a better world. Since humans are fallen creatures, mixed creatures, not angels, the fuel of interest is a practical necessity. The fire of invention lies hidden in every human mind, the very image of the Creator infusing the creature. To ignite it, one must offer incentives, a vision of a higher, better human condition, not only this-worldly, but also nourishing the expansion of the human soul and easement of bodily infirmities.
There is a natural desire in every human being, although it is often slumbering, to better his or her condition. And it is good for a woman to liberate herself and her whole people from the narrower horizons within which they find themselves. It is good for humans to catch glimmers of new possibilities for human development.
This, or something very like this, is the famous, celebrated and usually misunderstood “spirit of capitalism.” This is not a spirit of greed or avarice, which are grasping and small, not creative. It is an esprit, a gift of the spirit rather than of the body.
It is sometimes found even in a single isolated human breast (as in that of Robinson Crusoe, in the famous parable). But it is also capable of being lit like a prairie fire across an entire culture, and transforming its entire attitude toward life.
The spirit of capitalism is far from being entirely materialistic, even miserly. Far from it. This spirit teaches people to turn away from what they now have, to put that at risk, to stop clinging to the safe things of the past, and to set off bravely toward inventing new futures. It is a spirit of risk. It is a spirit of adventure. It is a spirit of creativity. It is a spirit that incites dreams, and in a quiet undertone murmurs, “Why not?”
The spirit of capitalism belongs more to the human spirit than to the relatively inert flesh and matter of the past.
• Michael Novak is currently teaching a course on Human Ecology at the Busch School of Business and Economics at The Catholic University of America. He is former ambassador to the United Nations Human Rights Commission and author of numerous books, including “The Spirit of Democratic Capitalism” (1982) and his most recent, “Social Justice Isn’t What You Think It Is” (2015). This essay is excerpted from “Creation Theology in Economics: Several Catholic Traditions,” which appeared in “Culture Matters in Russia — and Everywhere” (Lexington Books, 2015).