No one denies that the moral climate of the place into which parents introduce their children may give an upward or downward push to their children’s ability to grow up with good habits, among good companions, in a culture that encourages the good and the beautiful. A sharp moral decline throughout the culture is deadly to children. President Barack Obama has said that climate change is the greatest threat facing our generation, but the ecology of the culture in which we live and move is even more important for the expansion of economic opportunity and overall well-being than is the ecology of the biosphere.
I began writing about democratic capitalism in the 1970s in an effort to explain just what the American new order (the Novus Ordo Seclorum) is. This could not be learned simply by reading the political philosophers and political scientists, who did not write much about economics or culture. Nor could it be learned by reading only the economists, who for the most part wrote not nearly enough about the polity, the presence (or absence) of the rule of law, natural rights, and a culture of creativity. Nor did the literary figures and humanists seem to explore the new model of society in which it was their privilege to dwell (a society that heretofore had “no model on the face of the globe,” as Madison put it in Federalist No. 14).
Therefore, it seemed, a lot of work remained to be done to put into words the nature of our tripartite system: a culture, a polity, an economy — all three in a distinctive framework of checks and balances and obligated to respect the natural rights of every man and woman along with the common good. Each of the three systems of democratic capitalism depends on the other two.
- The economy cannot work without a polity of law respectful of natural rights, as well as the cultural habits necessary to support all three systems in one;
- The polity cannot work without the habits of the heart that respect both the ordinances of the law and the rights of every other person in the political system — habits that constitute a culture of civic republicanism; and
- The culture can barely survive under a hostile economic system that is driven by cupidity, envy, smothering control by the state, or personal moral heedlessness. Nor can it survive under a hostile polity that is contemptuous of truth, justice, law, and beauty.
Further, this culture will fall into lassitude and nihilism unless it maintains its longing for the transcendent, its upward thrust into the future, and the highest aspirations of the human heart. As Tocqueville saw, without that upward thrust, belief in the inviolable dignity of every single person will not survive, nor will respect for truth in public discourse. Our Founders thought that belief in immortality and the certainty of divine judgment are indispensable supports of public virtue. Sheer materialism will suck the breath out of the human spirit.
In other words, an economy without beauty, love, human rights, respect for one another, civic friendship, and strong families (the tutors of moral habits) is not likely to be loved, to be worthy of human persons, or to survive very long. Those who focus almost exclusively on markets or even enterprise do not wholly capture the American system as it has functioned ever since the beginning.
The essence of capitalism is not what many people think it is. It is the spirit and practice of creativity: invention, discovery, using one’s head. Virtually every business and industry in the United States today is based upon a new insight into the creation and distribution of goods and services: The greater the number of people who are served, the wealthier the society (and also the inventor) may become.
This is a pedestrian and humble system, but it serves the common good better than any other along some important dimensions, using a device that gives incentives to inventors, discoverers, and creative persons in almost all fields. In this humble way, the about-to-become-wealthy are led to serve many (not all) elements of the common good. Incentives drive them to serve more and more people.
This incentive system is not the perfect ideal that purists might wish, yet Pope John Paul II in Centesimus Annus (1991) praised the happy chance of having both the interests of the common good and the interests of the human person served in one fell swoop:
Moreover, man, who was created for freedom, bears within himself the wound of original sin, which constantly draws him towards evil and puts him in need of redemption. Not only is this doctrine an integral part of Christian revelation; it also has great hermeneutical value insofar as it helps one to understand human reality. Man tends towards good, but he is also capable of evil. He can transcend his immediate interest and still remain bound to it. The social order will be all the more stable, the more it takes this fact into account and does not place in opposition personal interest and the interests of society as a whole, but rather seeks ways to bring them into fruitful harmony. 
Economic opportunity in our nation relies fundamentally on cultural conditions that foster personal creativity, responsibility, freedom, the love for community through association and mutual cooperation, the aim of bettering the condition of every person on Earth, the cultivation of the rule of law, respect for the natural rights of others, the preference of persuasion by reason rather than by coercion, a powerful sense of the sinful drag on human souls and the need for checks against it.
Personal responsibility matters. Incentives matter. Personal labor and earning your own bread by the sweat of your brow matter. Responsibility for one’s own dependents and for needy neighbors matters. As Franklin D. Roosevelt stressed in his 1935 State of the Union Address, “The lessons of history, confirmed by the evidence immediately before me, show conclusively that continued dependence upon relief induces a spiritual disintegration fundamentally destructive to the national fiber. To dole our relief in this way is to administer a narcotic, a subtle destroyer of the human spirit.” 
Persons struck by sudden misfortune (a divorce, say, or the abrupt loss of a job, the surprise diagnosis of a terminal disease, or an incapacitating automobile accident) often do need a helping hand. Given that hand, many are back up on their feet in just a year or two, living without government help but with plenty of help from their families, churches, and many associations.
The ensemble of all of those institutions that support creative and inventive minds is what is meant by capitalism rightly understood. These include a polity and a culture that nourish the habits that create wealth rather than merely consume it and that instill ambition, discipline, and self-denial for the sake of future good rather than merely indulging in what one receives from others.
As the former motto of Amsterdam put it, Commercium et Pax. Commerce needs and encourages peace. It does so through its reliance on and encouragement of the rule of law. Without wise laws and policies, widespread commerce cannot prosper. Planning projects that require time before being able to produce goods requires the reliability of law.
The combination of the three systems — the democratic republic, a creative and dynamic economy, and an open, free, and pluralistic culture — in one has a proven modern record surpassed by none in raising up the poor. It generates unparalleled progress in every sphere from medicine to the cultivation of the arts, the spread of the rule of law, the protection of natural rights, and the search for justice for all.
Nothing, however, says that such a system cannot burn out into the darkness of human history like a comet. That outcome depends on each succeeding generation. The free society is the most fragile of all societies because any one generation can become oblivious to its multiple living principles, live unworthily of them, hand over the keys, and walk out into darkness.
Only one generation is required. Yet in practice, the downward slide usually begins three or four generations earlier than the final collapse. Our own generation sometimes seems to be hurtling downward.
We have hardly begun to address the rapid decline in the social ecology of our time. Many evils and self-destructive behaviors run rampant. Moral ecology is the new frontier of political economy: the culture in which the free society thrives — or destroys itself. The scouts at The Heritage Foundation who have contributed to and compiled this Index of Culture and Opportunity are leading the way in the most crucial exploration of our time.
— Michael Novak, retired American Enterprise Institute George Frederick Jewett Scholar in Religion, Philosophy, and Public Policy, is an author, philosopher, and theologian. 
Click below to take a deeper look at the 2016 Index of Culture and Opportunity
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- John Paul II, Centesimus Annus, May 1, 1991, § 25,
(accessed May 9, 2016).
- Franklin D. Roosevelt, “Annual Message to Congress,” January 4, 1935, http://www.presidency.ucsb.edu/ws/?pid=14890
(accessed May 9, 2016).
- This essay is revised and extracted in part from The Spirit of Democratic Capitalism Thirty Years Later (McLean, VA: Institute for Faith, Work, & Economics, 2015).
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