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Mar 8, 2019

Capitalism Isn’t Ruining Communities—People Are

In an economic system characterized by consumer sovereignty, people’s values determine the outcomes markets deliver.

For the past few years, capitalism has taken a severe beating from all sides.

That’s not anything new from the left, but many on the right have hopped on the capitalism-bashing bandwagon, claiming that markets are undermining family and community. In January, Tucker Carlson’s now-infamous on-air monologue reignited the anti-capitalist firestorm by tearing into American elites and accusing them of not caring about most Americans. He described them as free-market ideologues seeking to profit at any expense to their fellow countrymen. It’s a sentiment that spread when Notre Dame political theorist Patrick Deneen, another prominent right-wing critic of markets, published his 2018 book Why Liberalism Failed. Deneen goes so far as to praise a form of Marxism, claiming it will better protect family and community.

But critics like Deneen and Carlson have misdiagnosed the problem. As a result, they have no hope of fixing it.

Market critics attack American consumerism and lament that, as Carlson described, “deliveries of plastic garbage from China” won’t make people happy or help them find meaning. They claim that market forces are responsible for destroying family and community and that GDP has come to be seen as an end in itself. And they’re right: material goods will not make people happy. They’re also correct to be concerned about the collapse of family and community, the institutions that give “stability and meaning to existence” in the words of sociologist Robert Nisbet.

But markets are not to blame for the collapse of these important interpersonal relationships. This confusion seems to stem from a misunderstanding over what the market actually is—the result, unfortunately, of a dearth of economic literacy.

In his screed, Carlson remarked that “market capitalism is a tool, like a staple gun or a toaster.” And indeed, the market is a tool. It’s a method of efficiently allocating resources to where they will find their highest valued use. But free-market critics seem to ignore the fact that the efficient use of resources is determined by the consumers. “Plastic garbage from China” doesn’t show up on Walmart shelves because it rains down from the sky: it’s there because people want it. If they didn’t, they wouldn’t buy it, and Walmart would stop trying to sell it. The market is a tool, and it’s a tool that everyone—not just elites—use to get what they want.

It may well be that people should have different preferences, but that’s hardly the market’s fault. In fact, the economist Ludwig von Mises, someone Carlson would likely label a “market fundamentalist,” argues that it is the fault of society’s elites for not persuading the masses “to drop their vulgar tastes and habits,” one of the very points Carlson makes.

But whether or not elites care about the well-being of people in Middle America doesn’t affect the shape of the U.S. economy. It’s the consumers—the vast majority of whom comprise Middle America—who decide what the economy will look like in the end. Mises called this “consumer sovereignty,” writing, “the captain is the consumer. Neither the entrepreneurs nor the farmers nor the capitalists determine what has to be produced. The consumers do that.”

Walmart doesn’t replace small main street shops because they send in tanks and crush them. Walmart replaces these shops because they are better at providing what people want. It may be more variety, the quality of service, or low prices. But, for whatever reason, people preferred to shop at Walmart and not the smaller stores. That might not be good for human flourishing, but that is another conversation altogether.

Market critics like Carlson and Deneen blame capitalism for disrupting the family and ruining community. But Robert Nisbet, the mid-century conservative sociologist who wrote extensively about community, didn’t agree. According to Nisbet, capitalism isn’t “the primary agent in the transmutation of social groups and communities.” Rather, Nisbet points to the rise of highly centralized and powerful political states as the main culprit.

Conservative critics should be concerned about the collapse of important institutions like family and community. We lack meaningful social relationships, and indeed, those are vital components of meaning in people’s lives. Yet, when they blame markets, critics are attacking a symptom rather than the disease. Many people attempt to fill the void in their lives left by the lack of meaningful social relationships with consumerism, but removing the coping mechanism will not cure the illness.

No, what we truly ache for is a change in our values—values that determine our conduct in the market. Capitalism doesn’t make people work too much or accumulate more material possessions than they need. People make those decisions and the system delivers. What we should, instead, ask is why they’re making these decisions.

With the decline of the important associations that help give meaning and existential context to our lives—such as family—people have sought to fill this void with work, pleasure, materialism, and even drugs. The market, ever the obedient servant, has striven to fill these desires. But if the desires change for the positive, the market will, over time, mirror that change.

But the process begins in the home. Philosopher John Cuddeback’s excellent suggestion that people should begin to reclaim the concept of the household as a place of shared work and unity—and therefore existential meaning— is where we ought to start. Unlike many relationships in life, household activity is not merely guided by seeking to accomplish an end (say manufacturing a widget or building a shed) but the “shared action toward that end is itself an intended good” in that “the family is not together just for the sake of some end; it is together for the sake of being together.” The reclamation of this important relationship would go a long way in addressing the hyper-consumerist market that critics bemoan.

Unfortunately, it’s harder to do this than it is to rail against the evils of capitalism.

We have met the enemy, and he is us. Attacking capitalism fails to address the truth that capitalism merely gives people that for which they ask. If we want to change what capitalism is producing we must first invest in the difficult work of cultivating a virtuous and ordered people who value the things in life that are truly important. Blaming the market is not the answer to the problem.