Special to the Catholic Business Journal—2019 Napa Institute, Napa, CA—Dr. Andrew Abela, in a keynote talk at the just completed Annual Napa Institute, said that we have taken the bait and are trying to defend something that cannot be defended. Capitalism, a term created by Karl Marx as an “ism,” is ambiguous and does not rightly define our economic system but rather, defends an ideology that is vulnerable to attack.
“While we cannot escape the term capitalism,” Dr. Abela said, “we can and should redefine it to better describe and defend the reality of our economic system.”
It is more appropriate to define our system as as a market economy. One that is characterized by private property ownership and trade. Market-based economic systems, not socialism, have lifted the global standard-of-living for billions and has enabled the United States to become the wealthiest country in the world.
Dr. Abela offered evidence disputing the claim by adherents of socialism that the condemned system promotes the common good and is tolerant. Within the socialist system, all socialist programs are mandatory. It is a system based on force not freewill or individual choice.
“You cannot decide what to do with the other guy’s money unless you are committed to using force to take that money from him…,” underscored Abela. “and those in charge believe they can use any means to bring utopia into being.”
To illustrate this point, Abela pointed to the mass murders that characterize socialist countries:
- 40-70 million killed. China under Chairman Mao. Single Party Socialism. 1958-61 “The Great Leap Forward”.
- 20 million killed. USSR under Joseph “socialism in one country” Stalin. 1936-52 “The Great Purge”.
- 40 million killed. USSR under all other leaders.
- 4 million killed. Cambodia under Pol Pot. Communist. 1975-79.
- 6 million murdered; 4 million killed in hard labor. North Korea under Kim Il Sung. Independent socialist State.
“Democide – the murder of any person or people by their government, including genocide, politicide and mass murder – is clearly an undeniable feature of socialism.”
What attracts young people to socialism?
If socialism results in increased murders, severe food shortages and more, then why are young people attracted to socialism today?
Abela answered by highlighting key departures from a market economy that serves the common good:
- Contract or part-time hiring of people to avoid paying benefits and taxes
- Advertising that material things will lead us to happiness.
- The promotion and sale of addictive product
- Crony capitalism (Solyndra)
- The 2007-2009 recession and housing crisis that led to reduced income and the loss of jobs by their parents
Abela said we can look at these through the lens of segmentation and then examine each by looking at value creation and value capture. He proposed two segments – entrepreneurial capitalism and imperialistic capitalism.
Entrepreneurial capitalism is characterized by creating and capturing value. Value creation contributes to the common good because it serves all stakeholders. Abela showed how it increases productivity, economic justice and care for others.
Imperialistic capitalism, on the other hand, is characterized by extracting and capturing more value than was created. Value that is extracted and not created comes at a cost to most if not all stakeholders. Imperialistic capitalism rewards greed and selfishness.
“We must avoid the temptation to argue that the positives outweigh the negatives.” Rather to save economic system, we must emphasize entrepreneurial capitalism which rewards courage and creativity and has been shown to support church, education, family and civil society.”
Andrew Abela is provost, the founding dean of the Busch School of Business and Economics and Associate Professor of Marketing at The Catholic University of America, in Washington, D.C. He is the co-editor of “A Catechism for Business”.
The 9th Annual Napa Institute was held at the Meritage Resort and Spa in Napa Valley with a record 700 scholars and Catholic leaders attending. The Institute was formed to help Catholic leaders face the challenges posed in the “next America” — to continue the work of the Apostles and their successors, the Bishops, heeding Christ’s call for ongoing evangelization.
Thomas M. Loarie is the CEO of BryoLogyx, a rotating host of THE MENTORS RADIO SHOW, and a senior editorial advisor and columnist for Catholic Business Journal. He may be reached at TLoarie@CatholicBusinessJournal.biz, or comment below.