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The Spirit of Democratic Capitalism

Thursday May 2005


About the Author

Michael Novak is the George Frederick Jewett Scholar in Religion, Philosophy, and Public Policy at the American Enterprise Institute. He served as U.S. chief ambassador to the United Nations Commission on Human Rights in 1981, and also as the U.S. Ambassador to the Conference on Security and Cooperation in Europe. In 1994, he received the Templeton Prize for Progress in Religion and delivered the Templeton Address in Westminster Abbey. He is the author of 25 books, including the masterwork The Spirit of Democratic Capitalism, published underground in Poland in 1984, and subsequently  printed in Czechoslovakia, Germany, China, and Hungary. One reviewer called it “one of those rare books that actually changed the world.”

Event Transcript

by Richard Neuhaus

F. A. Hayek wrote a famous essay entitled “Why I Am Not a Conservative.” Michael Novak is very much in that stream of thought. He calls himself a Whig, claiming that Saint Thomas Aquinas was the first Whig. Michael Novak has not persuaded all Thomists of this, but he’s had a lifelong habit of—and an extraordinary skill at—stealing the best cards from the liberal deck.

In 1982, he published The Spirit of Democratic Capitalism. One hesitates to say of any book that it changed a way of framing a question forever, but if it can be said, you would have to include The Spirit of Democratic Capitalism in that category. This book is not an uncritical celebration of capitalism and certainly not limited to the economics sphere but is very much a cultural, moral, spiritual, and theological argument. In it, Michael Novak very persuasively turned around the conventional understanding of what is meant by idealism and what is meant by realism. He made the case that realism about God-given human nature and human nature’s ability to creatively exploit freedom result in greater social justice.

Michael disagreed with Hayek as to whether “social justice” is a term that ought to be admitted to the discussion. Michael made the case that those concerned with justice, especially for the poor and the marginal, should take more than another look at the market economy.

Before Michael Novak, capitalism was radically criticized for its evil intention in the intellectual world generally, and among moral philosophers and theologians particularly. Socialism, if it was criticized at all, was criticized for its failure to achieve its good intentions. Michael, at least in the worlds of moral philosophy and theology, changed that discussion more than any other person did. He knows that the battle is not won and that being a champion of capitalism with a good conscience necessarily entails sharp criticism of capitalists who fail to do what the possibilities of the enterprise make it possible to do. So he has been a critic of, if you will, the sins of commission and the sins of omission within the free market.

But for all these years, Michael Novak has been patient in making an argument again and again—and I frankly envy his patience. I’ve seen him sit down with the most obdurate, ignorant, prejudiced interlocutor in the world, as though he had nothing better to do with his life than to begin at square one and go over the argument again and again. Patience, persistence, hopefulness: these are the virtues of Michael Novak, and they are virtues that will be tested, no doubt, as he tries to persuade the world that there is a more promising future with respect to Islam and democracy.

It is not an easy argument to make.  But if anyone is going to make it, I can’t imagine anyone better equipped from our company than my dear friend Michael Novak.

Islam Tests Democracy
by Michael Novak

It is fitting that the first annual Friedrich Hayek Lecture at the Manhattan Institute should focus on the subject “Islam Tests Democracy,” since one of Hayek’s greatest books, on his most significant underlying theme, is The Constitution of Liberty. Following Lord Acton, Hayek in the epilogue to that book described himself as neither a “conservative” (which in those days meant, practically, landed gentry or Tory) nor a “progressive” (which in those days meant socialist or worse) but rather as a “Whig.” For Hayek, leaning on Acton, Whig meant the party of liberty, whose core concept, going back to Thomas Aquinas, is the beauty and dignity of the liberty of the human person.

Acton also observed that in actual historical fact the emergence of liberty as the main interpretive thread of human history is “coincident” with the history of Judaism and Christianity. Perhaps it doesn’t have to be that way, but that is how it has historically happened. And the reason is that both in the Jewish scripture and in the Christian, the main defining action is God’s free offer to each woman and each man of his friendship, which each is free to accept or to reject. “If friendship, then liberty,” is the underlying biblical maxim—God wished the friendship of free women and men, not of slaves. In Jefferson’s nifty sentence: “The God who gave us life, gave us liberty at the same time.”

The question posed to Americans ever since September 11, 2001, goes beyond this historical observation of Lord Acton, to ask this difficult question: Like Judaism and Christianity, is Islam also compatible with liberty? And in particular, with liberty in its political form? Is Islam compatible with democracy?

There are six or seven reasons to believe that the answer to that question is no. And there are six or seven other reasons to believe that the answer is yes. I have been asked to keep my remarks brief—less than half the normal length of a substantial evening talk. So I should say that a fuller answer to this question is written out in the first and ninth chapters of The Universal Hunger for Liberty. Further, excellent articles on the theme have been published in The Journal of Democracy of the National Endowment for Democracy. Some of the evidence for the more telegraphic arguments I must present this evening will be found there.

A recent reviewer thought my book a bit “idealistic” and even “utopian.” Yet I had written there, in 2003, that the chance of a democracy being launched in Iraq was about “forty percent.” That seemed to me to be fairly temperate. Yet two years later, we witnessed the magnificent “purple finger” election in Iraq of January 30, 2005. This was not long after the “orange revolution” in Ukraine in December, and within days of the “rose revolution” in Lebanon that forced the exit of occupying Syrian troops, and the remarkable green election in Palestine, bringing a fragile breath of fresh air to that suffering region. As a descendant of Eastern/Central Europe, I am made anxious from that much good news.

So let me deal with the bad news first. We all know that a political sect of Islamic extremists hates us, would destroy us if they could, hates democracy, and insists that democracy and Islam are notcompatible. We have known this from the heat of the orange ball of flame and the smell of ashes on September 11, 2001. We have witnessed other orange bursts in the multitude of homicidal car bombings and self-immolations, from young men (as their posthumous Internet messages say) dreaming of “virgins” who welcome young martyrs with kisses after death. We have heard Abu Musab Zarqawi rant on videotape that Islam is antithetical to democracy, and we have seen the photo of his masked thugs pulling five Iraqi election workers from their van on the busiest street of Baghdad, throwing them to their knees and putting bullets through their heads. This is what Islamic extremists are against: election workers—Iraqi Muslim election workers.

The ironic turn is this: these Islamic extremists have awakened a backlash among other Muslims, who despise their violence and their heedlessness about human life (even Muslim human life), despise their politics, and despise their version of Islam. Nonetheless, these extremists still have considerable power to disrupt democratic life with terror. “Islamofascists” they deserve to be called, after their models Hitler and Mussolini, whose methods they mastered during the German and Italian occupation in World War II.

Even apart from the extremists, however, Islamic teaching and tradition, while often wise and reasonable, weigh in heavily on the side of authority. The Koran itself makes very little of terms such as “freedom” and “liberty.” The philosophy through which Muslim scholars understand God goes very high and very deep. Yet a common strain of it emphasizes the arbitrariness, the will, the command of Allah, more than his understanding, reason, lawlikeness. Like the concept of God in Islam, so the concept of liberty seems different from that of Jews and Christians.

And now let me group several other difficulties as one.

Women have historically been excluded from most of public life. The ancient Shar’ia law is sometimes insisted on—for political rather than religious motives, it seems—with cruel rigor, instead of with reasoned adaptation, as wiser Islamic traditions counsel. No theory of “doctrinal development” is widely agreed upon, to sort out true adaptations in Islamic history from false. As Arab scholars themselves have begun to point out with admirable candor, the eighteen Arab nations, in particular, compared with other regional cultures of the world, suffer from a “freedom deficit” in many departments of life. Until recently, eighteen of eighteen were tyrannies.

A recent demographic factor must also be noted. Since in all cultures demoralized young males are the major source of social turmoil and violence, the unusual disproportion of young males in Muslim populations today, especially in a time of vast unemployment, and lack of economic and cultural opportunity, is a weighty negative.

Yet another factor is that for several generations now, Muslim cultures have been politically vulnerable to movements that claim to be “more radical than thou.” Political gravity slopes toward the more primitive texts and more violent methods, while more reasoned voices are subject to intimidation. Regimes change power more often by way of assassination and coup than by election.

The spiritual emptiness of Western secular states is yet another reason for pessimism about the chances of democracy among Muslims. Muslims draw back from the costs of loss of religious faith, not only in morals but also in morale and purposiveness. The enervation of the secularized young dismays them.

Finally, let us note the huge burden of historical resentment built up in a proud culture, once the most glorious on earth, after the military and cultural defeats at Malta in 1565, at Lepanto in 1571, and at Vienna in 1683—the high-water marks of Muslim expansion. Since that time, proud peoples have watched others shoot past them in preeminence, and they felt cut off—and cut themselves off—from the cultural sources of that historical dynamism. These resentments help to explain the severe touchiness of Muslim populations to perceived lack of respect and their quick turn to riotous tantrums.

I have been trying to be realistic and honest in listing painful reasons why the success of democracy in the Muslim world seems to some so unlikely. For cultures already immersed in the ideas and practices of liberty, democracy is hard enough. How can democracy possibly take root, some not unreasonably think, in cultures in which so many factors tell against it, including positively passionate resistance from important leaders of opinion?

Reasons for Optimism

I count approximately the same number of reasons for hopefulness. The first of these is nearly always overlooked by Westerners. I call it the Via Negativa—the Path by way of trying all other ways that don’t work, a Path that has turned into a way of cruel suffering. This Via Negativa was thrust upon many hundreds of millions of suffering people during the twentieth century. Consider solely the Arab Muslims. How much they have endured since 1900 under the turmoils of world war, the tide of decolonization, and the pretenses of Arab nationalism and Arab socialism (influenced by models from Italy, Germany, and the socialist East). They have also suffered bitterly under enforced secularization, under Baathist Party terror, under the Taliban, and under terrorist gangs lavishly funded and armed and often directed from abroad. And even when in oil-rich states they received welfare benefits, there was little real work or opportunity for the poor. Instead, there was the omnipresence of secret police and religious police and tax police.

Why not democracy? All other systems have been tried, and the misery has been almost universally felt. The piles of corpses already number in the millions.

Political analysts make too little of the desperation of many good and ordinary people in the Muslim world for a better life for their young, for some opportunity to discover and to use their individual talents, and to live in some decency and freedom. Many of them want to continue to be devout Muslims, but they see no reason why that should bar them from living as decent, prosperous, and free people in lands of opportunity. They want a new way to be Muslim.

Here I want to say a word about the power of the Muslim idea of God. Imagine a desert culture in which water and even shade are relatively scarce and in which one can feel, under the high and faraway blue sky, the blinding power of the sun and the sudden fury of the sandstorm. One learns early the sheer fragility of life, which can so easily wither like a blade of grass cut and fallen in the heat. One feels under the vast stars the greatness of the Almighty. In the silence, one senses the immense greatness of the ineffable, unspeakable Allah. A sense of communion with Allah is a daily habit.

If you are capable of sympathizing with this profound experience of God in Muslim life, you can perhaps understand some of the love that more than a billion people have for Islam. You may sense, then, the struggle within the soul of many ordinary Muslims today as they try to balance out the conflicting demands of their existence. They want what they sense the promise of democracy may bring them—but they fear what they may lose in the process.

If Muslims can regain the insight that democracy may, in fact, be consistent with a sense of religious reality and that a regime of religious freedom may be a way for people of all religions to live together in peace—if they can regain what once could be seen in Lebanon—there might be a way out from the Via Negativa to a more positive way forward.

In any case, the power of this Via Negativa should not be discounted. Democracy may not be the best system imaginable, but it is not so hard to imagine that it may well be better than the systems under which Muslims have experienced so much suffering in recent times. This feeling, I believe, underlay the joy we saw as millions of ordinary Iraqis braved multiple threats against them and their children to vote last January 30, and held their purple fingers aloft to Zarqawi with exultation and pride.

A second reason for hope is that, underlying everything, Islam is also, like Judaism and Christianity, a religion of rewards and punishments proportionate to deeds and misdeeds. On this scheme, for instance, is based the Muslim cult of martyrdom. Yet hidden behind this proposition lies another: how humans use their freedom matters. Every religion of reward and punishment is implicitly a religion of liberty.

From at least the time of Moses Maimonides (1135–1204) and Thomas Aquinas (1225–74), Judaism and Christianity have made human freedom the center of Jewish and Christian humanism. There have been many Muslim forays in this direction, too, especially since the nineteenth century, and especially in ethics. We may expect this effort to be carried forward into Islamic political thought quite vigorously under the spur of popular demand for democratic liberties. In the past 365 days alone, it is said, more newspaper articles and books have been written on Islamic democracy than in the past hundred years. Fouad Ajami wrote in the Wall Street Journal just this week that in his recent four-week trip through the Middle East, the turn of the United States from supporting stability to supporting democracy has fired the imaginations of everybody he talked to.

Third, one should not forget that more Muslim intellectuals are working abroad in democratic nations than at any time in history. Many of these scholars and educated professionals have learned by experience that one can combine a devout Muslim life with a rich democratic public life. All over the Middle East today, former expatriates and those who studied abroad are playing active roles in democratic movements. Within Muslim nations, those brave few who have upheld liberal traditions during the past fifty years feel encouraged as never before.

Fourth, even for ordinary people who have no opportunity for travel abroad, television is increasingly a window on the outside world, along with cell phones, the Internet, and videotapes. They see in pictures how other people live, dress, work, and behave. While much of what they see on television offends them, much also inspires them, gives them new self-images and expectations, and teaches them what they, too, might hope to experience. New possibilities of respect for their own human rights arise in their consciousness, and a new sense of their own potential dignity in action. They imagine new ways of relating government to themselves, and themselves to government.

Let me tell a brief story. In 2002, I was privileged to give a week of lectures to the top forty or so guerilla leaders in the Sudanese resistance, about half of whom were Muslim. They pressed me to speak more and more about the foundations of democracy in religious belief, how Jews and Christians came to terms with democracy, and the pitfalls and benefits of democracy. One, a professor in a major Western university, said that they were all disgusted that Bin Laden, in trying to develop a twenty-first-century version of Islam, chose as his model Hitler and Stalin, rather than the Universal Declaration of Human Rights or the movement toward democracy. Why not the best, rather than the worst? They all said that they wanted to be devout Muslims and also free, with dignity, their human rights respected. They bared for me the turmoil in the Muslim soul today, struggling against heavy odds to put all their dreams together. Here they were, leading a rebellion against a Muslim government, risking their lives in the jungle for the sake of their own people’s dignity.

Next come a bracket of reasons within Muslim experience that have prepared the soil for key democratic concepts. For instance, the very insistence on the greatness of Allah, great beyond any other, relativizes all potential political claims. Compared to Allah, no political ruler amounts to very much, nor does any political regime. All seem pitifully limited.

Going in this same direction is the tremendous diversity among Muslim regimes both in history and across the world’s geography today. Some are in Asian cultures quite different from one another, some in Africa, some in the Middle East among Persians, Kurds, and others who are not Arab. Muslims have lived, and live today, under a wide variety of regimes. Muslim political thought increasingly takes account of this variety and does not absolutize any one model. As various texts of the Koran announce, such pluralism of ethnic group and regime is itself from Allah. Had he wanted uniformity, he could have produced it. Diversity is his will.

Under the long experience of tribal life in the desert—the original breeding ground of Islamic experience—it became clear that the tribe was secure only when it was ruled by broad consensus from all parts. Leaders became accustomed to long meetings in which consensus slowly emerged from complex and subtle conversations, gestures, favor trading, arguments, and negotiations. This process of consensus forming is not exactly the same as democratic traditions of compromise, coalition building, backroom bargaining, and the continuing work of a loyal opposition, but it is not an altogether faulty preparation for it. Cultures vary in how the search for consensus proceeds. It is a comparative advantage of democracy that its methods can be adapted by various cultures to fit their own proclivities.

Again, Muslim culture values “saving face” and recognizing the dignity of each person, no matter how humble. Even the highest authorities must evince humility before Allah and must also, even if grudgingly, recognize the dignity that Allah bestows even on the humblest persons. Secular analysts tend not to grasp the role of the high transcendental status accorded Allah, in guaranteeing the relative subordination even of the most pretentious potentate, as well as the relative dignity of Allah’s humblest creatures. These valuations are potentially of great use in the formation of democratic habits.

Finally, since economic development (through some form of capitalist system) is in historical fact a necessary, but not sufficient, condition for democracy, we should not neglect a primary Hayekian point. Muslim cultures have developed superior commercial habits over many centuries and have shown great capacities as enterprising peoples. Given the right economic system, a flood of opportunity for the young among them is almost certain to alter their horizons for the future.

These, then, are some of the background reasons for being hopeful about the prospects for democratic movement in the Muslim world. Human dignity is founded in the human capacity to make individual choices about individual destiny. It would be an odd world, indeed, if Jews and Christians and secular humanists were endowed with liberty and had reasons to be confident in their individual dignity, but Muslims did not. Such a prospect is as morally repugnant as it is inconceivable.

Concluding Reflections

One thing we learned on January 30, 2005, with the elections in Iraq, is that a majority of Muslims in that nation did not stand with Zarqawi’s Islamofascists. They bravely acted like democrats. They formed a government out of their own consent. They did so under considerable risk of bodily harm to themselves and to their own families.

We learned also that those the mainstream press calls “insurgents” are actually the “violent lunatic fringe” of a small minority. They showed themselves willing to slaughter mullahs, imams, pilgrims, worshipers, and ordinary Muslims at will and to bomb mosques. Their motives are plainly not religious but political. We saw the same courage and the same results in Afghanistan.

Our forebears believed that liberty is God’s work. It will not hurt us at all if the world’s Muslims also come to believe that. There are even grounds for hoping—the provisional Iraqi constitution of last year is one such ground—that Muslims will come to recognize with us that God wishes to be served by women and men free to exercise their own religious consciences, while fully respecting those whose consciences follow different inspirations.

The work of liberty is done very deep in the human soul, at its very bottom, so to speak. Yet even those among us who are uncomfortable at such depths, and more sure of ourselves in pragmatic matters, can see much that can be done to help the vast majority of Muslims come to enjoy the blessings of liberty during this century, along with the rest of the world.

It is a cause of enormous importance to our own story, our own destiny, and our own vocation as human beings in the land of the free. And it matters a lot to a billion others—women and men who are Muslims—scattered across the face of the earth.

Permit me, though, to end on a hard truth. The road ahead will be long. The cruelty, tactical imagination, resourcefulness, and bitter determination of those who wish to force Islam to become a cult of violence must not be underestimated. They run against the grain of human nature, and they act as if there were no truth but theirs. They offer nothing positive for the future, but they can warp many lives and make democratic progress exceedingly difficult.

Solzhenitsyn once wrote that the idea of Truth is more powerful than all the arms in the world, and what he wrote seemed in 1977 so unlikely of realization—and yet we saw the Soviet tanks halt before flowers held by civilians in 1991. We who have witnessed the power of the Spirit in our time should not fail to bear witness to what we saw.