In Defense of Capitalism

Church Leaders on Property, Wealth, and the Economic Order

Article

Contents

Capitalism, a system of free markets, free enterprise, and private control of property, is sometimes given credit only for being open to abuse. As it allows freedom of choice and action, it admits greed and oppression as well. Many people, including members of the Church, have mixed feelings about capitalism, their perception of abuses of the system coloring their view of the system itself. Some conclude, for example, that careers in business necessarily imply materialistic values and a propensity for unethical decisions and immoral actions.1

An antimarket viewpoint is expressed by a number of LDS scholars who find in the capitalist system too little of the integrity and virtue that ideally should characterize the actions of those engaged in commercial pursuits.2 Moreover, while suggesting that we strive to implement the United Order,3 which founds economic activity on higher, divinely revealed principles, they compare that conceptually perfect system with the capitalist system actually experienced today.4 Not surprisingly, in a comparison of the ideal with the real, capitalism is found wanting. Of course, there are problems with the market system. But in trying to teach the Saints that greed is evil, some teach that capitalism is evil as well. When scholars find fault with capitalism, their readers may be led to believe that the market system itself is fundamentally flawed.

Many LDS scholars, including myself, do not subscribe to anticapitalist beliefs.5 An alternative view of the nature of the market, or free enterprise, system is that free enterprise requires freedom, which can be misused or abused. Injustice and unethical behavior, which represent such abuse, should be condemned. However, it is, according to this view, inappropriate to equate unethical or immoral behavior with capitalism, free enterprise, or business. Let us, instead, call this behavior what it plainly is—sin. The inequalities of income distribution, the environmental effects attributed to “market failure,” and the nature and persistence of vice markets need not produce abhorrence for markets per se. A market is really just a social arrangement or institution enabling people to buy and sell products and services according to free choice. Markets are morally neutral. The market mechanism is merely the freedom to buy and sell.

Markets are flexible and spontaneous. They provide powerful incentives to be creative and industrious. They produce new jobs and new products, promote the satisfaction of work, and permit more abundant consumption, saving, and investment for society as a whole. Since markets are merely the activities and efforts of individuals, they do not preclude regulation. Even in a free market, regulatory efforts and effective institutional arrangements can, within bounds, redistribute incomes, subsidize underprivileged individuals and groups, restrict vice markets, protect the environment, and so on. As Adam Smith observed, the market system assures that all members of society will ultimately be better off, even if, within the framework of law and competition, individuals generally pursue only their personal interests.6 Those of us who have this positive view of capitalism even dare to hope that free markets will make the world’s peoples healthier, better educated, and more prosperous until a millennial order is ushered in by the Redeemer of the world.

In this article, I hope to show that leaders of the Church in our dispensation of the gospel support capitalism as the best economic system now available for the good of free men. After reviewing their written statements on private property, money and wealth, socialism, economic agency, capital, and the United States Constitution,7 I conclude that the prophets were prepared to condemn the capitalistic sinner but not the capitalist system; they found much to be praised in the market system. These views can be of assistance in our formulation of social viewpoints for today’s economy.

Private Property

Private property—material goods or ideas belonging to an individual or a nongovernment group8—is fundamental to capitalism. One prominent LDS scholar, Hugh Nibley, takes an essentially negative view of private property, claiming that it stands in the way of a perfect, celestial society.9 Indeed, many Latter-day Saints wonder about the value of a system of private ownership. Support for such concerns seems to come from Acts 4:32, which reports that the earliest disciples of Jesus “were of one heart and of one soul: neither said any of them that ought of the things which he possessed was his own; but they had all things in common.”

The first prophet of the modern dispensation to address the concept of common property was Joseph Smith, who wrote, “I answered the questions which were frequently asked me, while on my last journey from Kirtland to Missouri, as printed in the Elders’ Journal, Vol. 1, Number 2, pages 28 and 29, as follows. . . . ‘Do the Mormons believe in having all things in common?’ No.”10 A partial elaboration of “common stock principles” followed later when the Prophet suggested “that there be no organization of large bodies upon common stock principles, in property, or of large companies of firms, until the Lord shall signify it in a proper manner, as it opens such a dreadful field for the avaricious, the indolent, and the corrupt hearted to prey upon the innocent and virtuous, and honest.”11

One might argue that at this point the potential for abuses and free-riding was strong and that the Lord had not as yet announced the inauguration of the United Order. But Joseph’s statements appear to indicate that “having all things in common” was not the Lord’s plan. This expression may serve as a shorthand way of describing how none of the early Saints claimed that “ought of the things which he possessed was his own” (Acts 4:32; italics added). The Lord’s plan for this era actually called for a division of all the consecrated assets into private stewardships, with the Lord owning what stewards possessed. Brigham Young, who was instructed by Joseph, taught that the “true principle” was to place

emphatically everything we possessed upon the altar for the use and benefit of the Kingdom of God, and men shall be as stewards over that which they possess, not that everything shall be common or that all men shall be made equal in all things, for to one is given one talent, to another two, and to another five, according to their capacity.12

In our time, Harold B. Lee gave a more modern flavor to some implications of the United Order that seemed to be too little understood. He taught that “the United Order will not be a socialistic or communistic setup; it will be something distinctive, and yet it will be more capitalistic in its nature than either socialism or communism, in that private ownership and individual responsibility will be maintained.”13 Undoubtedly, conditions will be different in an eternal world in which time and other sources of desirable goods are unlimited. But in a mortal world in which humans are to learn and operate within the sphere in which they have been placed, private stewardships are part of the fabric of this creation and its purposes.

According to Brigham Young, private property plays a positive role in the plan of happiness for mortals:

Efforts to accumulate property in the correct channel are far from being an injury to any community; on the contrary they are highly beneficial, provided individuals, with all that they have, always hold themselves in readiness to advance the interests of the Kingdom of God on the earth. Let every man and woman be industrious, prudent, and economical in their acts and feelings, and while gathering to themselves, let each one strive to identify his or her interests with the interests of this community, with those of their neighbor and neighborhood, let them seek their happiness and welfare in that of all, and we will be blessed and prospered.14

John Taylor rejected Pierre-Joseph Proudhon’s challenge that property is theft. To President Taylor, writing in 1852, private ownership was to be encouraged, and thus public confiscation of individual property without a compelling public interest was tantamount to theft. He exclaimed that “to level the world . . . to say the least, is a species of robbery; to some it may appear an honorable one, but, nevertheless, it is robbery. What right has any private man to take by force the property of another?”15

In a statement on the importance of loving one’s neighbors, Joseph F. Smith implied that private property is inviolable. If you love your neighbor, he averred, and see his property in danger of injury, you should “protect his property as you would your own, as far as it lies in your power.”16

Heber J. Grant insisted that “every faithful Latter-day Saint believes, beyond a shadow of doubt, that to each individual the free exercise of conscience, the right and control of property, and the protection of life are inherent rights of which he should never be deprived.”17 Commenting on Doctrine and Covenants 134:2,18 he observed that “these principles are fundamental to our belief, fundamental to our protection. And in the providences of the Lord, the safeguards which have been incorporated into the basic structure of this nation are the guarantee of all men who dwell here against the abuses and tyrannies and usurpations of times past.”19

David O. McKay spoke out even more boldly on the principle of private property, suggesting that faithful Saints should actually “preach that the plan involves the belief that governments were instituted of God for the benefit of man [D&C 134:1]. Man was not born for the benefit of the state. Preach ‘. . . that no government can exist in peace,’ and I quote from the Doctrine and Covenants, ‘except such laws are framed and held inviolate as will secure to each individual the free exercise of conscience, the right and control of property, and the protection of life’ (D&C 134:2).”20

Ezra Taft Benson—who while a member of the Quorum of the Twelve served in Dwight D. Eisenhower’s cabinet with the approval of President McKay—expressed astonishment that people could consider the abolition of property and property rights once they understood the gospel and principles of liberty:

No property rights! No contractual relationships to buy and sell, since title to possessions of goods could not be granted. No property rights! No recognition of divine law that prohibits man from stealing and coveting others’ possessions (see Exodus 20:15, 17). One cannot steal that which belongs to everyone, nor can he covet that which belongs to everyone, nor can he covet that which is not another’s! No property rights! No possibility of the sanctity of one’s own home and the joy that comes from creation, production, and ownership. . . . Charity, that greatest of godly virtues, would never be possible without property rights, for one cannot give what one does not own.21

For some time, the United States government has been striving to obtain global recognition of intellectual property rights. Even before the recognition of intellectual property rights, President Benson called our attention to the fact that “a free-market philosophy recognizes property rights as sacred” and that “the individual is entitled to ownership of goods and property that he has earned.” He also reminded us that James Madison long ago “recognized that property consisted not only of man’s external goods—his land, merchandise, or money—but, most sacredly, he had title also to his thoughts, opinions, and conscience.”22

Money and Wealth

Money is the means by which societies value property and the medium by which it is exchanged. Heber J. Grant observed that “money is the life blood of a nation. It is exactly like the blood in our bodies; it is the circulating medium.”23 He also taught that money can be either a blessing or a curse:

Dollars and cents, my friends, are not blessings from God, only so far as we are blessed with intelligence, with wisdom and with the Spirit of God to use them in a wise and proper manner, and to advance God’s kingdom on the earth. If we are blessed with an abundance of this world’s goods and it shall blind our eyes, . . . then instead of being a blessing from God it is a blessing from the opposite direction.24

Nibley takes the position that money is a useful human invention but one that engenders greed, “creates values that do not exist,”25 imposes a “growing burden of evil . . . on the human race,”26 and in fact is itself “‘the root of all evil.’”27 He sees “the law of the marketplace [as] that of an expansive, acquisitive, brittle, untrustworthy, predatory society.”28 This antimarket position is more extreme than the standard liberal viewpoint, which would view excessive corporate profits and an inequitable distribution of income as wrong and unjust but which would refuse to condemn money itself as an evil. Most people agree that it is the abuse of money or the love of money that is problematic, making wealth a particular challenge to the rich trying to enter heaven. As Elder Joe J. Christensen taught in the April 1999 general conference, “Money in and of itself is not an evil, . . . it is the love of money that is the root of all evil (1 Tim. 6:10). There are some of the wealthy who deal with their prosperity very well using their resources to bless others and build the kingdom. For many, however, wealth presents major difficulties.”29

The leaders of the Church have condemned neither money nor wealth outright. The Prophet Joseph emphasized that the use of wealth was most pleasing when it helped to establish and build the kingdom of God on earth. He called the attention of the Saints to the fact that he and his fellow workers had received commandments from God to go forth and preach the gospel but also “to build a house for the Lord, and prepare for the gathering of the Saints.”30 Land had to be purchased to accommodate the arrival of the Saints—first at Kirtland and later at Nauvoo. He called on members of the Church abroad with resources

to come with their money, take these contracts, relieve their brethren from the pecuniary embarrassments under which they now labor, and procure for themselves a peaceable place of rest among us. This place must and will be built up, and every brother that will take hold and help secure and discharge those contracts that have been made, shall be rich.31

Brigham Young renewed that challenge to put all resources to work and thereby to build the kingdom:

Then do not hoard up your gold . . . but put out every dollar to usury. Instead of your soul being bound up in your . . . property, put it all where it should be placed for the benefit of the Kingdom of God on earth and for his glory.

A man has no right with property . . . if he does not want to use it; he ought to possess no more than he can put to usury, and cause to do good to himself and his fellow man. . . . Never hide up anything in a napkin, but put it forth to bring an increase. . . . Go to with your mights to put all your property to usury.32

Whereas European leaders of Catholicism and Protestantism had railed for centuries against “usury,” or using money to make money as earned interest,33 the pragmatism of early LDS Church leaders was noteworthy. Honest financial practice between parties with free negotiating power is perfectly acceptable in building the kingdom of God.

In a similar vein, Wilford Woodruff declared, “I do not find fault with a man getting rich, I find fault with our selling the kingdom of God, our birthright, selling the gospel and depriving ourselves of eternal life, for the sake of gratifying the lusts of the flesh, the pride of life and the fashions of the world; and setting our hearts upon these things.”34 He repeated the theme that riches might damn a person: “Riches are dangerous unless we can use them so as not to destroy us; if we cannot use them to the glory of God and for the building up of his kingdom, we are better without them.”35

Lorenzo Snow likewise encouraged a prudent use of wealth to those blessed with it, as Jacob 2:13–19 recommends:

Charity brings happiness. Men and women of wealth, use your riches to give employment to the laborer! Take the idle from the crowded centers of population and place them on the untilled areas that await the hand of industry. Unlock your vaults, unloose your purses, and embark in enterprises that will give work to the unemployed, and relieve the wretchedness that leads to the vice and crime which curse your great cities, and that poison the moral atmosphere around you. Make others happy, and you will be happy yourselves.36

Harold B. Lee gave an interesting interpretation of Doctrine and Covenants 104:16 (“the poor shall be exalted, in that the rich are made low”): “The rich being made low isn’t communistic; it isn’t socialistic.” It is simply that those “who have leadership, who have skills, who have means, who are willing to contribute, can be put to work with the one who is in need.”37 He believed the time for the exaltation of the poor had come. They would be exalted

or in other words stimulated to success and pride, and uplifted because the rich have been made low—or in other words, because the rich have been made humble and willing to give of their substance, their time, their talents, their wisdom, and their example that the poor might be thus guided and directed. I have seen teamwork and cooperation grow, and I have seen the priesthood take its place in blessing this church temporally and spiritually in a most glorious way.38

Spencer W. Kimball spoke of “clean” money and of “compromise” money:

Clean money is that compensation received for a full day’s honest work. It is that reasonable pay for faithful service. It is that fair profit from the sale of goods, commodities, or service. It is that income received from transactions where all parties profit. . . .

Compromise money is filthy, graft money is unclean, profit and commissions on the sale of worthless goods, contaminated as is the money gained from other deceptions, excessive pricing, oppression to the poor, and compensation which is not fully earned. I feel strongly that men who accept wages or salary and do not give commensurate time, energy, devotion, and service are receiving money that is not clean. Certainly those who deal in the forbidden are recipients of filthy lucre.39

Note that workers as well as corporations and capitalists can compromise themselves in the false pursuit and use of money.

President Benson allowed not only for the honest and upright use of capital but also for the notion of venture capital:

Profit is the reward for honest labor. It is the incentive that causes a man to risk his capital to build a business. If he cannot keep or invest that which he has earned, neither may he own, nor will he risk. Profit creates wealth; wealth creates more work opportunity; and more work opportunity creates greater wealth. None of this is possible without incentive.

There is another benefit to profit. It provides man with moral choices. With profit, man can choose to be greedy and selfish; he can invest and expand, thereby providing others with jobs; and he can be charitable. Charity is not charity unless it is voluntary. It cannot be voluntary if there is nothing to give.

Only saved profit, not government, creates more jobs. The only way government can create jobs is to take money from productive citizens in the form of taxes and transfer it to government programs. Without someone’s generating profit that can be taxed, government revenue is not possible.40

In sum, money itself is not evil; it is a tool to be used to build the kingdom, to receive reward for honest labor, and to lift others.

Agency—Fault the Sinner Not the System

In Marxian thought, capitalists or imperialists are fundamentally evil. They stand in the way of social justice and ruthlessly exploit the working class. But that which permits the expression of these vices is allegedly far more evil and detestable: the capitalist economic system. If the system were totally obliterated, its alienation and exploitation would disappear, and man would begin to heal. Under a new economic order, there would be no tendency for men to exploit other men; rather, men would work together to exploit nature for the benefit of mankind. The real evil, then, for Marxists, was the capitalist system itself.

The idea of the inherent evil of capitalism also affects many who have anticapitalist views. Presidents of the Church have not shared this perception. Being both realistic and theological men, the prophets have not overlooked the fact that capitalism provides necessary opportunities for unprincipled individuals to choose to take unjust advantage of others. They have frequently condemned such behavior. But economic sin is treated as an individual, not systemic, problem by the Presidents of the Church. Their response has not been that the capitalist system is evil but that those who take advantage of economic freedom to commit evil should be taught personal repentance.

In the premortal existence, Christ and Michael led the forces of the righteous in a conflict over whether there should be agency and human freedom or whether, since these values would also give rise to harmful choices and sin, there should be a system of enforced security. “If agency permits offense, eliminate agency” was the minority point of view. Karl Marx held that if freedom of enterprise establishes exploitation, one should eliminate the system and establish one that eliminates capitalists, capitalism, and private property in the means of production.41 Some people confuse this approach with that of the approach followed under the United Order, which does not call for the elimination of anyone, nor even necessarily of an economic system. The United Order could work, conceptually, within a capitalist system, were the practitioners spiritually prepared to apply true and virtuous principles.

Through its emphasis on agency and self-determination, the theology of the LDS Church supports “honest business,” according to Stephen D. Nadauld. These principles, he adds, “provide fertile conceptual soil for fostering business attitudes of free enterprise.”42 Several Presidents of the Church have elaborated on the theme that using money as a tool in the exchange of private property offers individuals the opportunity to exercise their agency.

Lorenzo Snow taught that we should change ourselves and voluntarily turn away from the sinful possibilities the economic system might offer, avoiding the worldly in business: “We must dedicate our time, talents, and ability. . . . In all our business occupations we must prove ourselves better than any other people, or we forfeit all. We must build ourselves up in the righteousness of heaven and plant in our hearts the righteousness of God.”43

President Kimball, himself a businessman in his professional years, indicated that there were opportunities in all walks of life for dishonesty. Economists have recognized as well the omnipresence of “moral hazard,” the opportunistic actions that occur when behavior cannot effectively be monitored. “Shun dishonest business practices,” was the plea of President Kimball:

In every walk of life there are chances for the stories of dishonesty. Professional people are said to be charging prohibitive prices for service: “All that the law will allow.” Colored water sold as a costly prescription, a few cents’ worth of drugs for many dollars, poor material in the hidden places in building construction, improper billing, “cutting in” by clerks, so-called borrowing without consent by one entrusted with money . . . the workman who steals time, the employer who oppresses and takes advantage of his employees, the missionary who soldiers on the job, the speeder, the merchant selling inferior goods at marked-up prices, the constant close-out sales intended to misrepresent and deceive, the mark-up of prices in order to show remarkable sales values, the adjusted scales and measures, raising rents because of house shortage not because of increased costs of maintenance or interest rates.44

Heber J. Grant, also a businessman by career, urged people in business to be “meticulously honest” and fair: “Good business is profitable to the buyer and the seller. . . . Perhaps the real test of one’s business would be if he can pray for guidance in developing it and ask the blessings of the Lord upon his completed service.”45

Those who abhor markets tend also to find corporations immoral or evil. President Grant, however, revealed no such disrespect for or prejudice against corporations as such. In fact, in discussing personal finance, he identified himself as the president of a corporation.46 Of corporate leaders, President Kimball said:

Business is bigger, industry more varied, and leaders are commanding more men—but even industrial giants have not learned much better to command themselves, and they still give way to temper, emotions, appetites, and passions. The same great human urges properly controlled and directed could make them world leaders and exalted men.47

The desire to protect the domain of free agency against encroachments has lead several Church leaders to speak out strongly against government policies that would limit opportunities for individual economic choice or accountability. In the spirit of Adam Smith, many analysists have readily found the existence of monopolies and their attendant abuses to be socially detrimental. Ezra Taft Benson drew the same conclusion on religious as well as social grounds. Again the problem lies in the establishment or misuse of a favored position, not in the economic system itself. President Benson was ahead of his time in favoring policies promoting competition rather than those establishing regulated monopolies. He decried ineffective and misguided regulatory policies and practices giving rise to regulated monopoly power that unduly eliminated free competition:

The governments—both state and federal—by making grants and giving exclusive licenses to railroads, banks, and public utilities, created artificial government monopolies. Free competition in these fields was prohibited by law. One had to possess a certificate of convenience and necessity to enter business and these were given to only a select few.

The solution, he felt, was in promoting fair and open access to markets, withdrawing all exclusive privileges, and allowing anyone who has the desire to enter into these fields of economic activity.48 If all interested individuals and groups are allowed to choose to compete “and if the consuming public is left completely free to select those with whom they do business, the public will always be served by those who offer the best product at the cheapest price.” Moreover, he believed that “when the exclusive power to make or break business concerns rests in the hands of the consumers, we may rest assured there will be no monopolies. Public opinion can break a business overnight unless the government steps in and forcibly prohibits competition.”49

Likewise, Howard W. Hunter’s view on the beneficial effects of free agency, responsibility, and free enterprise gives that system credit for fostering the freedom and prosperity enjoyed in the United States of America:

Under a free enterprise economy, little more than 6 percent of the population has produced nearly half of the world’s goods. We can today best wage a war on poverty by working on the roots of prosperity, not by sapping their vital strength. To sap the self-reliant spirit of enterprising independent souls in the development of a “Welfare State” can only bring “poverty equally divided.” When the responsibility for their own welfare is completely shifted from the shoulders of the individuals and families to the state, a lethal blow is struck both at the roots of prosperity and our moral growth.50

Socialism

President Hunter recognized that a secular society offers only one alternative to a free market system—a system of strong central direction and control generally referred to as some form of socialism or communism. Such systems, however, unduly encroach on agency regarding the use of private property if government is allowed to assume rights that belong to the individual and to private entities.

In the History of the Church, the Prophet Joseph Smith used the word socialism in reference to a lecture he attended on September 14, 1843, just eleven years after the term socialist was coined.51 He writes, “I attended a second lecture on Socialism, by Mr. Finch; and after he got through, I made a few remarks, alluding to Sidney Rigdon and Alexander Campbell getting up a community at Kirtland, and of the big fish there eating up all the little fish. I said I did not believe the doctrine.”52 At that point, the Prophet turned the time over to Elder John Taylor, who “replied to the lecture at some length.”53

The writings of John Taylor make it apparent that he was well informed on matters of this new philosophy. He saw the secular communist and communitarian movements as a union of individuals striving for a new order but often doing so on mistaken principles contrary to those of revealed religion:

Another principle has many advocates on the Continent of Europe at the present time; a principle of Socialism. . . . The leading object of many of these people is to have a community of goods and property. Some of them discard Christianity altogether. . . . [I]f skepticism is to be the basis of the happiness of man, we shall be in a poor situation to improve the world. It is practical infidelity that has placed the world in its present position.54

Elder Taylor also remarked on the inability of these movements to improve society without the truly unifying powers of heaven:

As regards Communism, in the abstract, or on the voluntary principle . . . pick out a number of men in Paris, London, Berlin, or any other city, associated with all the evils and corruptions of those cities, and organize them into a community. Will the mere removal of them from one place to another make them better? Certainly not. If they were corrupt before, they will be after their removal; and if they were unhappy before, they will be after. This temporary change will not make a difference; for men in possession of different religious, and political, and moral views, never can be united in harmony.55

If one had the impression that early Church leaders, spiritually attached to the United Order, had a natural feeling of kinship to other kinds of socialist principles, it would be necessary to read only these few lines of Elder Taylor’s writings to see why this was not the case. He felt, as did all the prophets who followed him, that socialist systems uniformly lack the characteristics that would have made them functional, let alone ideal or utopian.

Not many years after the establishment of Marxist-Leninist socialism56 in the Soviet Union, leaders of the Church began to comment on communism. None of their statements was positive. To those who might have wondered if communism or other related “isms” might be construed as preparatory to the United Order, John A. Widstoe made an unequivocal reply:

An emphatic “No!” is the answer to the question. Untruth is never a preparation for truth. Modern communism, fascism, nazism, socialism, and other related systems, are all the same in essential theory. They oppose religion, except as they themselves claim to be revelations, and they reject Christian morality. They prohibit free speech and action; eliminate private ownership and initiative; hold without exception the state above the individual; regiment the people; allow the strong to dominate the weak; they take government out of the hands of the governed, and place it in the hands of a self-appointed, selfish, self-styled, super-group, and they culminate in dictatorships. The free agent has no place in their systems. Their claim that they believe in human equality, as shown by their tyrannical behavior, is false. Force and terrorism are their weapons. All that makes for human security and happiness is destroyed.57

David O. McKay also had very strong feelings against communism:

Communism is antagonistic to the American way of life. Its avowed purpose is to destroy belief in God and free enterprise. . . . The fostering of full economic freedom lies at the base of our liberties. Only in perpetuating economic freedom can our social, political, and religious liberties be preserved.58

Who is this man [referring to the premier of Soviet Russia] who presumes to tell the United Nations what to do? He is a man who rejects the divinity of Jesus Christ and denies the existence of God, who is imbued with the false philosophy of Karl Marx, whose aim in life was “to dethrone God and destroy capitalism.”59

In an address at Brigham Young University and again—at the request of the Brethren—in the April 1966 conference, Marion G. Romney gave an exceptional address in which he repudiated socialism and sharply contrasted it with the United Order. He noted that socialism is based on “the wisdom of men,” but the United Order is founded on belief in God as the Lord of the earth; “socialism is implemented by external force,” but the United Order relies on “the voluntary free-will actions of men”; “the United Order is operated upon the principle of private ownership and individual management . . . while socialism deprives [men] of it”; “the United Order is nonpolitical,” but socialism, being political, is “exposed to, and riddled by,” corruption; and finally, unlike the undergirdings of a socialist system, “a righteous people is a prerequisite to the United Order.”60

Organized Labor

Church leaders have also warned about another possible encroachment upon agency and the use of private property—excesses on the part of organized labor. Early in the twentieth century, Joseph F. Smith argued for recognizing that “there is a limit to the pressure which capital can endure by the demands made upon it.” He decried “arbitrary demands which labor unions are now making in many cases upon their employers.”61

Church Presidents have admonished fair play in the struggle between capital and labor, have enjoined respect for the dignity of the laborer, have pled for the freedom of the laborer against encroachments by labor unions, and have warned against abuses in labor’s rightful efforts to secure just outcomes for workers. For example, President Smith worried about labor’s demands for recognition and wrote that “if recognition means the exclusive right of any class of men to gain a livelihood by their work, then recognition should be persistently and forcefully resisted.” His view was that “while there is no reason why workmen should not join together for their own mutual protection and benefit, there is every reason why in so doing they should regard the rights of their fellows, be jealous of the protection of property, and eliminate from their methods of warfare, boycotts, sympathetic strikes, and the walking delegate.”62

Strengths of a Capitalistic Economic System

The strengths of capitalism are to be seen in its preponderance of good fruits. President Benson attributed much of America’s success—our prosperity and freedom—to our economic system. “Past material advances,” he said, “have been the fruit of our freedom—our free-enterprise capitalistic system, our American way of life, our God-given freedom of choice.” He likewise believed that

progress of the future must stem from this same basic freedom. Because our forefathers—yours and mine—fought for the ideal of freedom; because our fathers preserved that ideal through the free competitive enterprise system under our God-given free agency; because they were willing to make religion the vital force of daily living, all of us have climbed through the years to new heights of well-being and inner strengths.63

Just as President McKay often expressed an appreciation of the importance of the principle of agency and the good fruits it bore, President Benson also taught that

nothing is more to be prized, nor more sacred, than man’s free choice. Free choice is the essence of free enterprise. It recognizes that the common man will make choices in his own self interest. It allows a manufacturer to produce what he wants, how much, and to set his own price. It allows the buyer to decide if he wants a certain product at the price established. It preserves the right to work when and where we choose.

In his first inaugural address, Thomas Jefferson said that the sum of good government shall leave citizens “free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned.”64

President Benson deprecated the tendency of some individuals to make reference “continually to weaknesses of the private-enterprise system without any effort to point out its virtues and the comparative fruits of this and other systems.”65 In expressing one such virtue, namely reducing unemployment, he observed:

If the government were genuinely concerned about full employment and real prosperity, it could do much in bringing it about. It could support the proven and successful free-market system, the law of supply and demand, where the buying public, not the government, is the deciding factor in what shall be produced and marketed, including energy products. The bureaucrats ignore the lessons of American history that freedom works and that the ability of individuals to come to mutually beneficial agreements is the very essence of a free society.66

Conclusion

Capitalism has been deprecated as a social system, and negative outcomes have been attributed to its operation. Anticapitalism has even been viewed as a gospel-mandated intellectual position, since members of the Church are keenly aware of the more sublime United Order. But to compare real-world, warted capitalism (as opposed to the conceptual or theoretical model of capitalism) to a theoretical, scriptural United Order (as opposed to the actual model experienced by the Latter-day Saints) may have the power to distort the preferences of the unwary.

As has been demonstrated above, the prophets have been strongly inclined to praise the fundamental elements of the market system—freedom of choice and action, private ownership of property, incentives for investment and productive effort, and so on. A great advantage of capitalism for this precelestial world is that it can work successfully with imperfect people. It can work especially well in peacetime among people of order and law. It provides incentives that are wanting in social experiments that hope to avoid primary reliance on markets. It does not abnegate the possibility of regulatory constraints on corporate activities; even better, it allows for policies that stimulate competitive corporate performance. Historically, no other system has provided the freedom and encouragement that has sometimes stimulated phenomenal productive creativity in modern capitalism.

Consecration is of a higher order. But its implementation on a large scale would require sanctified, service-oriented people. It may be possible for consecration to succeed, under special conditions or in specific regions dominated by market institutions, for the limited purposes of teaching and conditioning inhabitants of goodwill to appreciate communitarian social arrangements. But it does not appear likely that socialist or other experimental forms of organization can succeed on a mass, secular scale, after the many, many failures of such experiments on several continents over the past two centuries.

While capitalism is the best system available to us today, its risks and weaknesses are generally apparent.67 All of us would join free-market critics in their condemnation of greedy commercialism or the irrational pursuit of industrialism without regard to ecological costs or social consequences. At the same time, the market system has brought Western economies unparalleled prosperity and is bringing other countries out of poverty. It also provides an environment in which Saints can live the gospel and apply the welfare system of the Church, gradually approaching the values of consecration.

In one respect, freedom, money, and capitalism are alike: they all offer opportunities for good and evil, for use and abuse. Certainly, to do away with any or all of these elements of capitalism would eliminate abuses. Satan was prepared to eliminate all abuses by eliminating agency altogether; without that factor, there would also be no capitalism. While it is appropriate to defend the capitalist market system, it is also requisite to heed the plea of Church leaders, who remind the Saints to use their agency to make markets moral and to help adjust for inequalities in ways that harm neither the vulnerable nor the powerful. Elder Christensen has said, “I am confident that we will literally be called upon to make an accounting before God concerning how we have used [our resources] to bless lives and build the kingdom.”68 One implication of this statement and others in this article is that honorable participation in the market can actually strengthen personal righteousness and promote the kingdom of God.

About the author(s)

Phillip J. Bryson is Professor of Managerial Economics and Associate Director of the David M. Kennedy Center for International Studies at Brigham Young University.

Notes

1. For example, Stephen Nadauld teaches a course in BYU’s MBA program entitled “Spiritual Issues in Management.” Early in the course, students discuss whether the choice of a business degree and career inescapably implies selfishness and greed. A surprising number of students have serious concerns about this possibility, causing some of the faculty in the program to fear that talented, honest people are being discouraged from considering business careers.

2. Some of the negative outcomes attributed to free markets include dramatic disparities in the distribution of personal incomes; the production and distribution of “bads”—the commodities and services of vice markets that we avoid and teach our children to shun; markets that generate effluents, congestion, and other environmental hazards; and the unethical and immoral transactions of unscrupulous business people.

3. These individuals generally conceive of a scriptural, idealized United Order to compare with a capitalism very much of this world. L. Dwight Israelsen, “United Orders,” in Encyclopedia of Mormonism, ed. Daniel H. Ludlow, 4 vols. (New York: Macmillan, 1992), 4:1493–95.

4. See, for example, James W. Lucas and Warner P. Woodworth, Working toward Zion (Salt Lake City: Aspen, 1996).

5. See, for example, Stephen D. Nadauld, “Business: LDS Attitudes toward Business,” in Encyclopedia of Mormonism, 1:239–40.

6. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, ed. R. H. Campbell, A. S. Skinner, and W. Todd, 2 vols. (1776; reprint, Oxford: Clarendon, 1976), 1:26–27.

7. Examining the full text of statements made by past Presidents of the Church on these topics confirms that information used in this paper has not been taken out of context and that the limited passages presented here do not distort more general positions. I have compiled a large collection of statements by each of the past Presidents (in possession of the author), which makes clear that all the prophets had very similar views of the social order. It exceeds the scope of this publication to include that full collection.

8. The ideals of private property extend to individuals and corporations.

9. Hugh Nibley, Approaching Zion, ed. Don E. Norton, vol. 9 of the Collected Works of Hugh Nibley (Salt Lake City: Deseret Book; Provo, Utah: FARMS, 1989), 396, 520.

10. Joseph Fielding Smith, comp., Teachings of the Prophet Joseph Smith (Salt Lake City: Deseret Book, 1972), 119.

11. Smith, Teachings of the Prophet Joseph Smith, 144.

12. Brigham Young, in an address before the School of the Prophets, Journal History of the Church, November 21, 1868, cited in Leonard J. Arrington, Great Basin Kingdom (Lincoln: University of Nebraska Press, 1958), 25; italics added.

13. Harold B. Lee, Stand Ye in Holy Places (Salt Lake City: Deseret Book, 1974), 280–81.

14. Brigham Young, in Journal of Discourses, 26 vols. (Liverpool: F. D. Richards, 1855–86), 3:330, June 8, 1856, cited in Discourses of Brigham Young, John A. Widtsoe, ed. (Salt Lake City: Bookcraft, 1978), 302–3.

15. John Taylor, The Government of God (Liverpool: S. W. Richards, 1852), chapter 3. In the same passage, President Taylor elaborated as follows: “Wealth is generally the representation of labour, industry, and talent. If one man is industrious, enterprising, diligent, careful, and saves property, and his children follow in his steps, and accumulate wealth; and another man is careless, prodigal, and lazy, and his children inherit his poverty, I cannot conceive upon what principals of justice, the children of the idle and profligate have a right to put theirs hands into the pockets of those who are diligent and careful, and rob them of their purses. Let this principle exist, and all energy and enterprise would be crushed.”

16. Naturally, President Smith would not have placed the inviolable rights of property above those, for example, of life and liberty. The statement cited appeared in F. W. Otterstrom, “‘A Journey to the South’: Gems from President Smith’s Talks to the People on the Way,” Improvement Era 21 (December 1917): 103, 104. See also Joseph F. Smith, Gospel Doctrine (Salt Lake City: Bookcraft, 1998), 270.

17. See Heber J. Grant, Gospel Standards, ed. G. Homer Durham (Salt Lake City: Bookcraft, 1998), 133.

18. At the end of Nibley’s Approaching Zion are seven pages of scriptural references cited in the text. D&C 134:2 is not among those listed.

19. See Grant, Gospel Standards, 134 .

20. David O. McKay, Gospel Ideals (Salt Lake City: Deseret Sunday School Union Board, 1957), 310; italics added.

21. Ezra Taft Benson, Teachings of Ezra Taft Benson (Salt Lake City: Bookcraft, 1988), 608. If one were to read a mixed collection of unsigned statements of President McKay and President Benson on the subject of communism, it would be difficult to distinguish between the two.

22. Benson, Teachings of Ezra Taft Benson, 608.

23. Grant, Gospel Standards, 138.

24. See Journal History, October 30, 1892, 5. See also Grant, Gospel Standards, 108.

25. Nibley, Approaching Zion, 517.

26. Nibley, Approaching Zion, 518.

27. See Nibley, Approaching Zion, 480; see also 520, although on other occasions he more accurately identifies the problem as residing “in the search for private gain” and in the “love of money” (39; emphasis added).

28. Nibley, Approaching Zion, 478.

29. Joe J. Christensen, “Greed, Selfishness, and Overindulgence,” Ensign 29 (May 1999): 9; italics in original.

30. Smith, Teachings of the Prophet Joseph Smith, 113.

31. Smith, Teachings of the Prophet Joseph Smith, 113.

32. Brigham Young, in Journal of Discourses, 9:191, February 2, 1862; Brigham Young, in Journal of Discourses, 1:252, June 5, 1853, cited in Discourses of Brigham Young, John A. Widtsoe, ed., 312–13.

33. For the fascinating history, see R. H. Tawney, Religion and the Rise of Capitalism (New York: Harcourt, Brace, and World, 1926). Biblical law, properly understood, did not prohibit usury in a commercial setting between parties with equal negotiating power but did do so between a rich lender and an impoverished borrower. Ze’ev W. Falk, Hebrew Law in Biblical Times: An Introduction (Jerusalem: Wahrmann Books, 1964), 98–99; George Horowitz, The Spirit of Jewish Law: A Brief Account of Biblical and Rabbinical Jurisprudence with a Special Note on Jewish Law and the State of Israel (New York: Bloch Publishing, 1953), 486–87.

34. Wilford Woodruff, in Journal of Discourses, 18:121, September 12, 1875.

35. Wilford Woodruff, in Journal of Discourses, 18:39–40, June 24, 1875.

36. Clyde J. Williams, Teachings of Lorenzo Snow (Salt Lake City: Bookcraft, 1984), 63.

37. Lee, Stand Ye in Holy Places, 264. In the April 1999 general conference, Elder Joseph B. Wirthlin commented on the same passage: “The poor are exalted because they work for the temporary assistance they receive, they are taught correct principles, and they are able to lift themselves from poverty to self-reliance. The rich are made low because they humble themselves to give generously of their means to those in need.” “Inspired Church Welfare,” Ensign 29 (May 1999): 77.

38. Lee, Stand Ye in Holy Places, 282.

39. Spencer W. Kimball, The Teachings of Spencer W. Kimball, ed. Edward L. Kimball (Salt Lake City: Bookcraft, 1982), 356.

40. See Benson, Teachings of Ezra Taft Benson, 630.

41. Karl Marx and Friedrich Engels, Manifesto of the Communist Party (New York: International Publishers, 1948).

42. Nadauld, “LDS Attitudes toward Business,” 1:240.

43. See Williams, Teachings of Lorenzo Snow, 44.

44. Kimball, Teachings of Spencer W. Kimball, 196. Note that it is not their affiliation with corporations or corporate leadership that will keep these capitalists from the kingdom but their temper, emotions, appetites, and passions. Otherwise, we could be talking about world leaders and exalted men.

45. Kimball, Teachings of Spencer W. Kimball, 195.

46. Grant, Gospel Standards, 112.

47. Kimball, Teachings of Spencer W. Kimball, 171.

48. Benson, Teachings of Ezra Taft Benson, 680–81.

49. Benson, Teachings of Ezra Taft Benson, 680–81.

50. Howard W. Hunter, “The Law of the Harvest: As a Man Sows, So Shall He Reap,” in Speeches of the Year, 1966 (Brigham Young University: Provo, Utah, n.d.), 9.

51. It was coined in 1832 according to Alec Nove, “Socialism,” in The New Palgrave: Problems of the Planned Economy (New York: W. W. Norton, 1990), 228.

52. Joseph Smith Jr., History of The Church of Jesus Christ of Latter-day Saints, ed. B. H. Roberts, 2d ed., rev., 7 vols. (Salt Lake City: Deseret Book, 1971), 6:33.

53. That President Taylor was considered an expert on socialism by Church leaders is apparent from a reference by Brigham Young, in Journal of Discourses, 14:21, on May 6, 1870, where he reports: “We heard Brother Taylor’s exposition of what is called Socialism this morning. What can they do? Live on each other and beg. It is a poor, unwise and very imbecile people who cannot take care of themselves.”

54. See Taylor, Government of God, chapter 3.

55. Taylor, Government of God, chapter 3.

56. Having written on the subject of socialism in East Europe for many years, I personally find it difficult to refer to this as communism, since Marxists refer more strictly to the Soviet system merely as socialism. The former term is reserved by its advocate for that future era when the political state will have “withered away.” To conform to a more journalistic tradition, however, I will refer to Marxist-Leninist socialism as communism.

57. John A. Widtsoe, Evidences and Reconciliations (Salt Lake City: Bookcraft, 1963), 377.

58. David O. McKay, excerpt from Inaugural address for Dr. Henry A. Dixon, President of Utah State University, March 18, 1954, Logan, Utah, copy in possession of author.

59. David O. McKay, “What about Jesus Christ?” Improvement Era 63 (December 1960): 904.

60. Marion G. Romney, Annual Conference of The Church of Jesus Christ of Latter-day Saints (Salt Lake City: The Church of Jesus Christ of Latter-day Saints, 1966), 95–101. See also Marion G. Romney, “Socialism and the United Order Compared,” March 1, 1966, in BYU Speeches of the Year 1965–66, Special Collections and Manuscripts, Harold B. Lee Library, Brigham Young University, Provo, Utah.

61. Smith, Gospel Doctrine, 416.

62. Smith, Gospel Doctrine, 415, 416. In the same source, President Smith elaborated: “The unions are forcing our people into an inconsistent and dangerous attitude when they compel Latter-day Saints within the union to make war upon their brethren who are without the union, and thereby denying the most sacred and God-given rights of one class of Saints that another class may gain some advantage over a third person, their employer. Such conduct is destructive of the liberty which every man is entitled to enjoy, and will lead in the end to the spirit of contention and apostasy” (415).

63. Benson, Teachings of Ezra Taft Benson, 634.

64. Benson, Teachings of Ezra Taft Benson, 627.

65. Benson, Teachings of Ezra Taft Benson, 632.

66. Benson, Teachings of Ezra Taft Benson, 632; italics added. See also Ezra Taft Benson, This Nation Shall Endure (Salt Lake City: Deseret Book, 1977), 78. The part of the above statement that has been emphasized reads remarkably like a simplified version of the Coase Theorem, popularized by Nobel Prize–winning economist Ronald Coase. Its point is that lacking legal, strategic, or informational barriers, people can communicate and negotiate about an asset of common public interest. If property rights are clearly defined, they can be expected to reach an efficient outcome without governmental intervention. The political implications of the Coase Theorem also seem to prescribe the political attitude expressed by President Benson in the earlier part of the above statement.

67. See Richard L. Bushman, “Joseph Smith in the Current Age,” in Joseph Smith: The Prophet, the Man, ed. Susan Easton Black and Charles D. Tate Jr. (Provo, Utah: Religious Studies Center, Brigham Young University, 1993), 42.

68. Christensen, “Greed,” 11.

 

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