America’s Crisis of Civic Virtue

The world is losing faith in capitalism and democracy-what a generation ago would have been unthinkable. Many blame "the other party." Others would point to the flaws in capitalism, how market systems increase inequality, which is perforce undemocratic, and believe that the only way to take control of modern economies is to strengthen government and weaken market forces. That's a false conclusion, because in fact, capitalism does reinforce democracy, and they both are under attack. But that attack is in the decline in civic virtue, honesty and civility, in politics, in the media, academia amongst other things, which restoration we should address as number one.

"A republic, if you can keep it."

That was the famous response of Benjamin Franklin to the question, "Well, Doctor, what have we got, a republic or a monarchy? ", made by Elizabeth Willing Powel as he left the just-concluded Constitutional Convention on 17 September 1787.1 We have been trying to keep it ever since. To Alexis de Tocqueville in the early nineteenth century, democracy was the nation's defining characteristic, giving him the title of his most famous book, Democracy in America.

Democratic values have been promoted as superior to all others at home and around the world through diplomacy, development, and military action as well as cultural and intellectual institutions — including this very journal — by U.S. leaders for almost 250 years. The economic system provides another familiar explanation: Most fault modern capitalism for democracy's failings. It is the free enterprise system, it is said, that emboldens avarice and graft, that confers too much power on an affluent minority to influence our political system and the laws5. Whenever voters appear poised to force policies aimed at the redistribution of income or greater taxation, corporations and the wealthy use their inflated influence to thwart the democratic will. This blocking of democracy eventually reduces public faith in our institutions.6 The belief that capitalism subverts democracy is not limited to the left, however, especially recently. Those calling themselves "national conservatives" make many of the same arguments. Their basic complaint, which gained traction with Donald Trump's presidency, is that global capitalism harms ordinary Americans by outsourcing jobs and insourcing immigrant workers.

Homegrown workers find themselves devalued and disenfranchised, victims of cozy — and decidedly nondemocratic — relationships between moneyed elites and policymakers.7 The answer, for critics of capitalism both left and right, is stronger government control of economic institutions so that they can resist elite pressures. Taxes, many of these critics add, should also be more redistributive, and some critics appeal as well for stricter limits on trade and immigration.

A recent survey of ideas from academic experts for how to balance capitalism with democracy took note of how they unanimously held that "the single most important step is re-empowering governments, though they diverge on whether that means more-effective regulation, progressive taxation, wealth taxes, or other measures."8 In other words, it stated that stronger democracy requires weaker capitalism. This assessment of the effect of capitalism on democracy is mistaken, and so also this policy prescription. Capitalism in and of itself does not weaken democracy; capitalism can actually make democracy stronger and more vital. This is only in the case where a third variable enters-civic virtue in the form of public honesty and civility. Today, the problem for democracy is not capitalism but a decline in public honesty and civility required to govern free markets and central to democratic life.

Weakening capitalism as a scapegoat will not solve the real problems of American democracy but wastes time and resources, entails lower growth and prosperity while ignoring the problems that really face us.

Civic Virtue, Capitalism, and Democracy

Civic virtue refers to the set of personal qualities associated with a civil or political order. It is a shared set of behavioral norms and basic moral rules that make the functioning of the order possible. Tocqueville believed this undergirded the American experiment with democracy and free enterprise, which could not be guaranteed by laws and coercion but only by voluntary adherence to virtuous behaviors such as honesty and civility.9 Some of the Founders harbored doubts that the common American had sufficient civic virtue to make democratic self-government a success. The following is from a January 1776 letter to Mercy Otis Warren written by John Adams, a half-year before declaring Independence: "there is So much Rascallity, so much Venality and Corruption, so much Avarice and Ambition, such a Rage for Profit and Commerce among all Ranks and Degrees of Men even in America,