The Moral Foundations of Capitalism
It is important to understand that the moral foundations of a society do not extend only to its political system; they must extend to its economic system as well. America’s commitment to capitalism is unquestionably the best example of this principle. Capitalism is not, contrary to what those on the Left have tried to argue, an amoral system based on selfishness, greed, and exploitation. It is a moral system based on a Biblical ethic. There is no other comparable system that has raised the standard of living of millions of people, created vast new wealth and resources, or inspired so many beneficial innovations and technologies.

The wonderful thing about capitalism is that it does not discriminate against the poor, as has been so often charged; indeed, it is the only economic system that raises the poor out of poverty. Capitalism also allows nations that are not rich in natural resources to prosper. If resources were the key to wealth, the richest country in the world would be Russia, because it has abundant supplies of everything from oil, gas, platinum, gold, silver, aluminum, and copper to timber, water, wildlife, and fertile soil.

Why isn’t Russia the wealthiest country in the world? Why aren’t other resource-rich countries in the Third World at the top of the list? It is because their governments deny citizens the liberty to use their God-given talents. Man’s greatest resource is himself, but he must be free to use that resource.

In his encyclical, Centesimus Annus, Pope John Paul II addressed this issue. He wrote that the collapse of communism is not merely to be considered as a “technical problem.” It is a consequence of the violation of human rights. He specifically referred to such human rights as the right to private initiative, to own property, and to act in the marketplace. Remember the “Parable of the Talents” in the New Testament? Christ exhorts us to be the best we can be by developing our skills and abilities, by succeeding in all our tasks and endeavors. What better description can there be of capitalism? In creating new products, new services, and new jobs, we create a vibrant community of work. And that community of work serves as the basis of peace and good will among all men.

The Pope also acknowledged that capitalism encourages important virtues, like diligence, industriousness, prudence, reliability, fidelity, conscientiousness, and a tendency to save in order to invest in the future. It is not material goods but all of these great virtues, exhibited by individuals working together, that constitute what we call the “marketplace.”

The Moral Foundations of the Law
Freedom, whether it is the freedom of the marketplace or any other kind, must exist within the framework of law. Otherwise it means only freedom for the strong to oppress the weak. Whenever I visit the former Soviet Union, I stress this point with students, scholars, politicians, and businessmen—in short, with everyone I meet. Over and over again, I repeat: Freedom must be informed by the principle of justice in order to make it work between people. A system of laws based on solid moral foundations must regulate the entire life of a nation.

But this is an extremely difficult point to get across to people with little or no experience with laws except those based on force. The concept of justice is entirely foreign to communism. So, too, is the concept of equality. For over seventy years, Eastern Europe and the Soviet Union had no system of common law. There were only the arbitrary and often contradictory dictates of the Communist Party. There was no independent judiciary. There was no such thing as truth in the communist system.

And what is freedom without truth? I have been a scientist, a lawyer, and a politician, and from my own experience I can testify that it is nothing. The third century Roman jurist Julius Paulus said, “What is right is not derived from the rule, but the rule arises from our knowledge of what is right.” In other words, the law is founded on what we believe to be true and just. It has moral foundations. Once again, it is important to note that the free societies of America and Great Britain derive such foundations from a Biblical ethic.