Does there exist in the world a system that can lift up the marginalized and the poor, providing them with greater economic opportunity and happiness? Which systems restore human dignity and make way for human potential? These are the central questions Arthur Brooks, president of American Enterprise Institute (AEI), seeks to answer in the documentary film, The Pursuit. Brooks travels around the world to answer these questions and presents three pieces of evidence as to why free market capitalism is the best system through which to improve people’s lives.
1. Free Markets Have Reduced Poverty in India and Beyond
In the film’s introduction, Brooks underlines an important statistic: since 1970, poverty in the world has been reduced by 80 percent—that’s 2 billion people lifted out of poverty. According to the World Bank, half of this reduction has happened in just the last 25 years since the collapse of the Soviet Union.
Brooks shows that this connection is no coincidence. With the collapse of the Soviet Union in the 1990s, countries around the world began to privatize and liberalize their economies and open themselves up to globalization. Brooks says that they adopted the core elements of capitalism, namely: globalization, free trade, property rights, rule of law, and competition.
He focuses mainly on India as a prime example of economic growth. Brooks first visited India when he was 19 years old and witnessed true poverty for the first time. The film shows that since the 1990s, India has been one of the leading countries in the developing world in alleviating poverty and is among one of the fastest growing economies in the world. According to the International Monetary Fund, this growth is the result of a wide range of fiscal and structural reforms.
As India’s economy has grown, there has been a corresponding dramatic reduction in worldwide poverty. This growth can be directly linked and ascribed to policy reforms that brought about a greater level of competition and opened these societies up to the free market system.
2. Democratic Socialism in Scandinavia Is a Myth
There is a popular new wave of socialism with growing political support in the U.S.—“democratic socialism.” The champions of this system often point to Scandinavian countries, such as Denmark and Sweden, as examples of democratic socialism’s success in the world.
In the film, Brooks makes clear that a. Denmark is not a democratic socialist country and b. it would be difficult to apply lessons from Denmark to the U.S. What many in the democratic socialist party fail to acknowledge is that countries like Denmark were economically successful before they built the current welfare systems that we see in place. According to economics professor Jeffrey Dorman,
Those productive economies, generating good incomes for their workers, allowed the governments to raise the tax revenue needed to pay for the social benefits. It was not the government benefits that created wealth, but wealth that allowed the luxury of such generous government programs.
Ironically, while democratic socialists are touting Denmark as a model, the Prime Minister of Denmark explicitly has refuted claims that Denmark is socialist country. The film shows an instance where the PM Lars Løkke Rasmussen is speaking at Harvard’s Kennedy School of Government and states: “Denmark is far from a socialist planned economy. Denmark is a market economy.”
Regardless of what you call the system that countries like Denmark have in place, the film makes a very important point as to why we can’t look to them as templates for the United States: Denmark is a boutique country of about 5 million people. Furthermore, Denmark is extremely homogeneous. By contrast, the U.S. is a population of more than 300 million and is extremely heterogeneous. According to WorldAtlas, nine out of every 10 residents in Denmark identify as ethnic Danes. This shared cultural and ethnic background is part of what defines the apparent “success” of Denmark’s economy and is one reason why it would be difficult for the U.S. to model itself after Denmark.
3. The Welfare System Has Failed Us
A welfare system alone is not going to fix our poverty problem. The film points out that we have spent more than $23 trillion on U.S. social programs and still have not fixed the problem. Brooks says, “We trap people in poverty when we treat them as liabilities to manage versus assets in a family.”
The film’s main critique of the welfare state is that it has led to generations of dependency, which robs able-bodied workers of the dignity found in a real job. Brooks says that people don’t want more handouts, they want more work. His conclusion is that the free market produces more jobs and, in turn, “substantiate(s) the greatness that is in each person.”
I have seen this idea to be true in my own work. About four years ago, I started my own pursuit to provide opportunity to those who need it most. After meeting a group of women artisans in a small country in the Horn of Africa, I was inspired to help lift them out of poverty. How? Through free market enterprise.
I recognized that the best way to impact these women’s lives was not to give them handouts, but instead to provide an opening for them to sell their goods in a larger market. I launched Dreamer & Co with my co-founder, Jessica Gardner. Dreamer & Co is a social impact jewelry company providing job skills and a steady income to our partner artisans in the Horn of Africa, helping them realize their potential and feel empowered, dignified, and in turn, flourish in their daily lives. By providing these women access to a larger market, we have helped double their income in a year. More than that, we have helped empower them to see their God-given worth and to know their full potential.
So, Is Capitalism the Only Answer?
Throughout the film, Brooks does not shy away from nuances or promote capitalism as a pure system above reproach. He acknowledges the criticisms of capitalism and points out in the film that, “capitalism has a bad rap.”
This is especially true among those of my generation (yes, I mean millennials). When many people think of capitalism, Brooks says they see exploitation, discrimination, and environmental degradation. This is where the film falls short of fully answering the question it sought out to answer: Does there exist in the world a system that can lift up the marginalized and the poor, providing them with greater economic opportunity and happiness? The film briefly points out that a virtuous society is required to sustain capitalism but doesn’t show us how we get there.
In order to answer the film’s question, as Christians, we should first look to the Bible and, from there, determine the system that most closely aligns with it. When we do this, we find that key aspects of capitalism are consistent with biblical principles, such as private property and limited government. In contrast, socialism cannot be biblically defended. Art Lindsley states in Counting the Cost: Christian Perspectives on Capitalism,
the Bible does not teach socialism…[and] asserting that the Bible teaches capitalism would be anachronistic. But I think it is possible to suggest that the Bible teaches principles that are conducive to markets or free enterprise.
So, if markets and free enterprise align with biblical principles, why do so many people still view capitalism as a corrupt system that makes the rich richer and the poor poorer? The answer to that lies in the sinful nature of man—and this is true of any system. Whether it be capitalism, socialism, or democratic socialism, when these systems are run by fallen people in a broken and fallen world, they are bound to contain elements of corruption and abuse.
Our goal at IFWE is to educate believers about the importance of their work and to help them recognize that there is no sacred/secular divide. By starting with a foundation in biblical principles, we see that we are called to understand and protect the best system that will produce the most flourishing. We can then educate our fellow brothers and sisters in the faith and help bring Christian virtue and social responsibility back into capitalism.
Editor’s Note: On “Flashback Friday,” we take a look at some of IFWE’s former posts that are worth revisiting. This post was previously published on June 12, 2019.
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