Many people in industrial countries sincerely believe that the capitalist system offers the best hope of prosperity and happiness. They are for free enterprise, with as little interference from the state as possible.

Millions of others are convinced that capitalism favors the few, to the detriment of the greater number.

The Birth of Capitalism

With the breakup of the feudal system, town and intercity trade grew. So did trade between nations. And ideas circulated more freely, particularly after the invention of the printing press. The influence of the Catholic Church began to wane.

Medieval Catholicism had been the greatest obstacle to the development of a new economic system. Yet pockets of capitalistic trading, manufacturing and banking had been growing toward the end of the Middle Ages right within Catholic Christendom. This was true in such Catholic cities as Venice in Italy, Augsburg in Germany and Antwerp in Flanders.

Then the Protestant Reformation broke out in the 16th century. While it would be an exaggeration to say that the Reformation fathered capitalism, it did release ideas that gave a decided boost to it. For one thing, Calvinism relieved legitimate business profit of the stigma of “usury.” Moreover, certain Protestant beliefs provided people with the incentive to work hard so as to succeed in life and thus prove they were among the “elect.” Success in business was considered to be a sign of God’s blessing. The resulting wealth became available “capital” for investment in one’s own business venture or some other one. Thus, the Protestant ethic of hard work and thrift contributed to the expansion of capitalism.

Not surprisingly, the capitalist economy developed faster in Protestant countries than in Catholic states. But the Catholic Church quickly made up for lost time. She allowed capitalism to develop in lands where she was powerful, and became an extremely rich capitalist organization in her own right.a

Capitalism undoubtedly provided an improvement over the feudal system, if only for the greater freedom it brought to the working classes. But it also brought many injustices. The gap between the rich and the poor tended to widen. At its worst, it brought about exploitation and class warfare. At its best, it produced an affluent consumer society in some lands, with material fullness. But it has also produced spiritual emptiness, and has failed to bring true and lasting happiness.

Is Communism the Way to Happiness?

The Protestant Reformation was a revolt against papal abuse of power and privilege. Yet it unleashed a flood of ideas that went far beyond what the original Reformers anticipated. These ideas​—sooner or much later—​were to produce revolutions in fields other than religion. Not only did the revolt against Rome boost the development of capitalism but it also contributed to innovations in the fields of science, technology and philosophy​—leading to godless beliefs.

With the advent of the steam engine and machinery, capitalism spread out from the field of commerce into that of industry. The latter part of the 18th century and the 19th century saw the creation of huge factories requiring a large labor force recruited among peasants, craftsmen and even children. But capitalist “exploitation of man by man” led to the creation of workers’ movements and revolutionary philosophies such as communism.

[Box on page 8]

Capitalism

The economic system in which all or most of the means of production and distribution of goods (land, mines, factories, railroads, and so forth) are privately owned and operated for profit, the owners (capitalists) hiring the labor services of capitalless persons (workers)

THE desire for material prosperity is not wrong in itself. But is it enough to bring true happiness? Have capitalism, communism and socialism forgotten the primary ingredient for true happiness? And could this important lack explain, at least in part, why these systems have failed to make people really happy?

The sincerity of men who devote their entire lives to efforts aimed at making capitalism, communism or socialism succeed cannot be denied. And each system has succeeded in raising the standard of living in certain countries, for certain people. But have they brought genuine happiness to the majority of those lands? Have they ended crime, violence and war? Has any one of these systems wiped out suicide, drug addiction or alcoholism? Do happy people commit suicide, “escape” by means of drugs, or “drown their sorrows” in alcohol?

The avowed purpose of these various human systems is to further a way of life that is considered to be the best for all or, at least, for “the greatest number.” They attach more or less importance to freedom or to equality as being basic to human happiness. Capitalism is willing to sacrifice equality in favor of freedom. Communism puts equality above freedom. Social democracy tries to make the best of both worlds. But not one of them has succeeded in changing human nature. Human selfishness brings out the worst in capitalists, making many of them unjust exploiters; it has converted communist experiments into state capitalism, the common people being exploited by the state instead of by individual capitalists or huge corporations; it has ruined socialist Utopian dreams.

In his book Religion and the Rise of Capitalism, R. H. Tawney denounces the “illusion of progress won from the mastery of the material environment by a race too selfish and superficial to determine the purpose to which its triumphs shall be applied.” He criticizes the idea “that the attainment of material riches is the supreme object of human endeavour and the final criterion of human success.” Additionally, he emphasizes the need of “a standard of values . . . based on some conception of the requirements of human nature as a whole, to which the satisfaction of economic needs is evidently vital, but which demands the satisfaction of other needs as well.”

Yes, for true happiness, man must have a “standard of values.” But the present state of the world shows beyond doubt that human philosophy, political economy, science and technology have all failed to supply man with a valid set of values.