The Canadian Red Ensign

The Canadian Red Ensign

Wednesday, August 12, 2015

The Tory and Capitalism

If you were to ask most people today whether conservatives believed in capitalism or not the answer you would receive would be yes. The neoconservatives, a species of liberal who regard liberal democracy, especially in its American form, as the crowning achievement of human civilization and wish to make it universal, through military force if necessary, would certainly agree. What about Tories, the foundation of whose classical conservatism is belief in the duty of royal and ecclesiastical authority, rooted in tradition and prescription, to work together for the common good of the society?

To answer this question, we must first answer another, namely, what do we mean by capitalism. This is not an easy question to answer because the word capitalism is used to denote the actual economic system that has become predominant in Western countries over the last two-and-a-half to three centuries, a theoretical system of economic organization, and an economic activity and, although it has become the habit of capitalism’s enemies and detractors to jump from one of these senses to another as if they were synonymous, they are not always in harmony with one another. The actual capitalism of history has never looked like quite like what theoretical capitalism looks like on paper, and to complicate matters further historical capitalism has not remained the same throughout history, looking very different at the beginning of the twenty-first century, than it did at the beginning of the nineteenth.

The word capitalist entered the English language in the eighteenth century with the basic meaning of someone who owns capital, in other words a property-owner or businessman. The word capitalism appeared later in the nineteenth century, at first simply meaning the condition of being a capitalist, of owning capital. By the end of the nineteenth century it had taken on its other senses through the influence of Karl Marx, although he himself used it sparingly.

The pre-Marx meaning of capitalism survives in its usage in reference to an economic activity. In this sense, capitalism is what the capitalist or businessman does. He owns productive property, which he either works himself or hires others to work for him, trades or sells the product, the profit of which, that is to say the difference between what he receives for the product and the expense of production, is his income to live off of, save, or reinvest.

Capitalism, in this sense of the word, has been around for as long as men have dwelt in towns and cities – since the dawn of civilization, in other words – and the Tory recognizes it to be an indispensable part of civilization and one which is a positive benefit to human life and society. While the Tory will condemn dishonest and dishonourable business practices, such as the cheating of customers and the underpaying and overburdening of workers, and the like, he cannot and will not join with those who condemn business, commerce, and the ownership of property as being immoral or unjust in and of themselves. Samuel Johnson, the most distinguished Tory of the eighteenth century, in his The Adventurer, No. 67 praised the booming trade of London for the way in which “by a thousand unheeded and evanescent kinds of business, are the multitudes of this city preserved from idleness, and consequently from want” (1) and is quoted by his friend and biographer James Boswell as having said that “'There are few ways in which a man can be more innocently employed than in getting money.”

The other meanings of capitalism can be traced to Karl Marx, who used it in the historical sense to denote the economic conditions brought about by the Industrial Revolution. That Marx, a progressive, atheist, revolutionary, who built his entire philosophy upon a visceral hatred of the civilization in which he flourished, in other words the embodiment of everything the Tory opposes, made himself the archenemy of capitalism, might be considered reason enough for the Tory to identify with capitalism were it not for the fact that the liberals reasoned that way first and attached the label capitalism to the system of economics they advocated. That system, however, the Tory can only endorse with many qualifications.

In 1776, Scottish moral philosopher Adam Smith published his treatise An Inquiry into the Nature and Causes of the Wealth of Nations. That which Dr. Johnson spoke of admiringly in The Adventurer, the way commerce generates an abundance of goods through numerous and diverse specialized crafts and trades that allow each person to find profitable employment in his own particular niche, Smith subjected to in-depth analysis. From this analysis he concluded that the market – not any actual marketplace but the activity that goes on there, the exchange of goods and services through the medium of currency, considered in the abstract – is a self-regulating mechanism, in which the forces of supply and demand maintain equilibrium, which takes the self-interested actions of its participants and directs the outcome for the common good. He used this conclusion to argue against mercantalism, the government practice at the time of regulating and protecting trade so as to maximize the inflow of bullion, and in favour of a government policy of allowing the market to operate on its own.

This is the doctrine of economic liberalism and, after the publication of Karl Marx’s Das Kapital in the late nineteenth century, liberals began to refer to their theoretical system in which the market operates freely under a state that practices laissez-faire (2), as capitalism. Thus was born the ongoing debate between classical liberals who argue for capitalism, meaning the free market system, and the followers of Marx who argue against capitalism, meaning the post-Industrial Revolution Western economic system, with a sort of mutual agreement between the two to pretend not to notice that neither means quite the same thing that the other does by capitalism.

The Tory does not quite agree with either. The idea of the market as a self-regulating system that contains its own equilibrium is one that the Tory can accept, especially since it is so evidently true that even the socialists more or less accept it today, but not in its usual liberal formulation. The problem the Tory has with liberal economics is the same problem he has with liberalism in general – the false assumptions that the individual is prior to society and that society is an artificial construction of the individual, that freedom is the natural state of man outside of society rather than the natural state of man inside society and made possible by the social order, and that freedom involves man emancipating and following his passions and appetites rather than ruling over them.

The market, the Tory maintains, works the way liberal economists describe it, but only within the context of a stable and secure social and civil order, and especially one whose culture has been shaped and continues to be influenced by the classical and Christian moral traditions. In these traditions, patterns of moderate behaviour in which man rules over his appetites are praised as virtues, whereas habits of indulgence in the same appetites are condemned as vices. The basic appetites for sex, food, and material acquisition are not sinful or vicious in themselves, but when indulged in to excess and allowed to rule over a man, become the vices of lust, gluttony, and avarice, which are three of the Seven Deadly Sins, albeit the three least in the traditional ranking. Business is there for the production, distribution, and acquisition of material goods, and the market is there to facilitate business. Neither business nor the market are intrinsically avaricious, despite the claims of socialists whose entire system of thought, as we will see in our next essay about socialism, is built upon the greater sin of envy, but they require the restraints of the classical and Christian moral and cultural tradition to help men rule their appetite for acquisition and keep it from turning into avarice.

Without these moral and cultural restraints, the Tory insists, market capitalism becomes a force that erodes the very social and civil order that provides the context that allows the market to function. Capitalism, as it has played out in history, has frequently been that force, uprooting communities, dissolving traditions, and attacking the moral, social, and civil order and today, in its international, globalist, corporate form it is aggressively laying waste to what is left of the older traditions, as most recently evidenced by the way the large corporations intervened in the American courts against traditional marriage. Karl Marx saw the way in which capitalism uproots and dissolves the traditional order as something for which the bourgeoisie deserve praise. The Tory sees it as that for which capitalism most deserves condemnation.


(2) This literally translates as “let do”. The basic idea of laissez-faire is that of a “hands off approach”, in which the government lets business operate on its own.


  1. I agree that this is the fundamental error of the liberal and neo-conservative economics.
    "the individual is prior to society and that society is an artificial construction of the individual, that freedom is the natural state of man outside of society rather than the natural state of man inside society"

    There is yet a third sense of the "capitalism" that is used by authors such as GK Chesterton and in papal encyclicals--the state of affairs in which the productive enterprises are owned by a few men who employ a mass of wage-earners.
    Indeed, the word "capitalist" always meant a person that employs a lot of wage-earners to labor on an industrial enterprise. I do not think a person that "owns productive property, which he either works himself" could be called a capitalist.

    So, I wonder if you would admit of the distinction that Catholic thought introduces and the utility of this distinction.

    1. Dr. Johnson's Dictionary defined a capitalist as "he who possesses a capital fund", giving "Burke", as the authority. I suspect this was added by Todd and Walker in their early nineteenth century edition, as the Oxford Dictionary traces its earliest use to the 1790s. At any rate it is an indication of how it was first understood.

      Chesterton's understanding of "capitalism", like that of the papal encyclical Rerum Novarum, to a large degree accepts Marx's definition, while rejecting his diagnosis of what is wrong with it, and his prescription of socialism and violent revolution. Chesterton offered the alternative diagnosis that what is wrong with capitalism is that "there are too few capitalists".

      I think that any system will place control, if not ownership, of productive property in the hands of those who are few in number in relative comparison to those employed for their labour. This was true even in Communism - perhaps more so than in capitalism, because state ownership of all capital means that it is all controlled by the party elite. It would seem odd, therefore, to make this a defining characteristic of capitalism, although it is interesting to consider in light of Belloc's prediction that capitalism and socialism would converge in the "servile state".

      If we do accept this as an essential part of the meaning of capitalism, we should probably look for another word to denote a market economy. Russell Kirk preferred "private enterprise". His favourite economist was Roepke, who accepted Mises and Hayek's theories about the superiority of a market economy, but influenced by Chesterton and Belloc, taught that it could only function in the context of a moral, social, and civil order informed by the Christian cultural tradition, which, as I argued in the essay above, is basically the Tory position.

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  3. Consider too the concept of "several property" introduced by Hayek (Constitution of Liberty) which is identical to the distributed property of Chesterbelloc. Liberty flourishes best when power is widely dispersed and the key thing is not 'private property' but 'several property'.

    Classical capitalism is defined by the situation of a few capitalist owners and a mass of wage-earners. But now, the situation is even more dire: there are no owners any more. Everything is anonymously and diffusely owned.
    Enterprises are owned, not by individuals but by giant pension funds, mutual funds, hedge funds etc While the individuals own only a tiny share in any fund. This is what the decay of property that Chesterbelloc wrote about.

    The virtues of the stewardship are hardly cultivated by this kind of remote and fractional ownership. Properly speaking, ownership is a stable and public relation between a thing and a person. Financial ownership of some units in a fund that owns a part of some giant enterprise is hardly a true ownership that Adam Smith wrote about and that Catholic Church dogmatically defends.

    1. Roger Scruton's excellent defence of property in "The Meaning of Conservatism" is based on precisely what you have described - that the family home is the basis of a true concept of property that is defensible precisely because it creates a relationship between people and "things" that gives it a social context.