Dave Ramsey and the Spirit of Capitalism

Three blog posts began circulating last week that I think give us the opportunity for some serious reflection on the relationship of Christianity to economy. The first was an article written by Tom Corley that appeared both on his own website and then on Dave Ramsey’s site called 20 Things the Rich Do Everyday. A commentary addendum was tacked on to the end of the list: A response from Ramsey answering all of the negative criticism the post received. In this response, he calls negative respondents “doctrinally shallow” and “spiritually immature,” telling them to “Grow up.” This sparked a host of immediate responses, most notably Rachel Held Evans who wrote this response on CNN’s religion blog in which she points out the obvious fallacy in the list Ramsey defends: Correlation does not equal causation. That is, many of the “habits” of the poor likely stem from their poverty rather than the other way around. This point was emphasized strongly in the most recent blog to circulate: 20 things the poor do everyday.

What’s most interesting to me are the strongly polarized conversations regarding capitalism and Marxism that crop up when stories like this break. Quite the same thing occurred last week in response to Pope Francis’ first major treatise that in part questioned the dominance of global capitalism in the context of the need to care for the poorest among us–an economic position on social justice which the Catholic Church has held for quite some time and is not necessarily Marxist.

A major part of the problem, it seems to me, is that most people don’t have a clear understanding of what capitalism really is to begin with. A view that seems to circulate strongly among Christians (and many others) is that capitalism means “free enterprise” broadly, or variously, defined. That is, what capitalism affords is the freedom to be able to be compensated for labor, for a skill, for an invention, a business of one’s own choosing through the effort of hard work and thus be able to achieve success that will allow one to live and hopefully live comfortably. The problem is that this conception of what it means to work in order to survive is not unique to contemporary capitalism. All sorts of capitalistic endeavors, from speculation to the financing of wars for monetary gain have existed in many places and times. This is one of the early arguments that drive’s Max Weber’s The Protestant Ethic and the Spirit of Capitalism. Weber, whose aim is to define and then locate the primary originating factor of “the spirit of capitalism,” emphasizes the importance of understanding that modern capitalism is not simply a matter of earning in order to survive. Furthermore, he notes that the existence of an aristocracy, a bourgeois class, is not limited to capitalism either. Capitalism cannot be defined as unlimited greed. That is, greedy rich people have existed in other economic systems as well. Ultimately, the spirit of capitalism, Weber argues, is the rationalization of the accumulation of wealth for the sake of wealth itself.

To illustrate this point and the difference between this definition and the others, he cites a passage from The Autobiography of Benjamin Franklin in which Franklin espouses this financial advice:

Remember this saying, The good paymaster is lord of another man’s purse. He that is known to pay punctually and exactly to the time he promises, may at any time, and on any occasion, raise all the money his friends can spare. This is sometimes of great use. After industry and frugality, nothing contributes more to the raising of a young man in the world than punctuality and justice in all his dealings; therefore never keep borrowed money an hour beyond the time you promised, lest a disappointment shut up your friend’s purse forever.

The passage cited is much, much longer. Weber notes that what Franklin advises is not just a way of simply surviving in the world–there is a particular ethic here. This is absolutely crucial: Franklin is not simply giving sound financial advice. Weber describes the ethic thus:

Honesty is useful, because it assures credit; so are punctuality, industry, frugality, and that is the reason they are virtues […] In fact, the summum bonum of this ethic, the earning of more and more money, combined with the strict avoidance of all spontaneous enjoyment of life, is above all completely devoid of any eudœmonistic, not to say hedonistic, admixture. It is thought of so purely as an end in itself, that from the point of view of the happiness of, or utility to, the single individual, it appears entirely transcendental and absolutely irrational.

The telos of this sort of wealth-earning is not to live an absurdly extravagant lifestyle (i.e. hedonism)–which may seem counterintuitive to what we normally think of when we think of the “evils of capitalism.” There is a necessary frugality, a temperance which ensures that money will always be earned and nothing else.

Weber’s central thesis, that it is a particular Reformed Protestant ethic originating from the doctrine of predestination that gives rise to this spirit of capitalism, certainly contains flaws and for a long time has not been taken seriously. Let’s set that aside for a moment and take the fact that Ramsey is a Reformed Protestant as coincidence. Regardless of the origin of the spirit of capitalism, Ramsey’s emphasis on “virtuous choices” is hauntingly similar to Weber’s analysis of Franklin (Weber published this text as an article in 1904-5 and then as a book in 1920.) Note Ramsey’s three factors of poverty:

1. Personal habits, choices and character;
2. Oppression by people taking advantage of the poor;
3. The myriad of problems encountered if born in a third-world economy.

He separates out the third as irrelevant to the first two (which is absolutely baffling.) Even more baffling are his next few sentences:

If you are broke or poor in the U.S. or a first-world economy, the only variable in the discussion you can personally control is YOU. You can make better choices and have better results. If you believe that our economy and culture in the U.S. are so broken that making better choices does not produce better results, then you have a problem. At that point your liberal ideology has left the Scriptures and your politics have caused you to become a fatalist.

What happened to the second factor on his list? The spirit of capitalism dictates his dismissal of it. On Ramsey’s account, the second is actually the fault of the poor themselves. The cultivation of character (virtue) is the primary factor in determining one’s financial success, and it is an autonomously willed endeavor. One has the ability to transcend all environmental factors in order to participate in this ethic. If the poor don’t, then they are subjecting themselves to oppression by allowing themselves to be taken advantage of. (The state lottery is Ramsey’s example of this.)

I think understanding capitalism this way is important because it moves the conversation about how best to serve the poor away from a capitalism/Marxism distinction (which is absurd anyway), away from a debate about “hard workers” and “lazy people,” and toward an important conversation about the role of money in the life of a Christian. 

That is, we do need to raise questions about systemic oppression, but we also need to help people see how money functions in their lives. There isn’t anything wrong with Dave Ramsey wanting to help people get out of debt and take control of their finances. I’m sure my wife and I could benefit a lot from what he has to say. That itself is not necessarily a capitalistic or oppressive endeavor. Yet, Ramsey would probably answer the comparison of himself to Franklin (or Weber’s sketch of Franklin) by saying that one earns wealth not for the sake of wealth but in order to “Live like no one else so you can give like no one else.”

Here’s where Weber is important in reading this: Giving generously is all well and good, but unfortunately, one is still earning money for the sake of money–it’s just money one can give away.

Can giving money to charity accomplish some good? Absolutely. But what is vastly more important than that is being able to see the role that money plays in our lives in forming an ethic that drives how we see the world around us. If we firmly believe that one’s situation is solely determined by a particular set of capitalistic virtues that one cultivates, then of course one is going to see everyone in poverty as having failed at or been too lazy to cultivate those virtues.

Contrary to Ramsey’s claim, there is nothing Biblical about earning money for the sake of money. One could more or less make the case that honesty, frugality, punctuality, and industry are virtues that can be found somewhere in the Bible, but, as Weber notes, they are not necessarily connected to the capitalistic spirit–the capitalistic spirit made them that way. Jesus, on the other hand, has some more direct things to say about our relationships to others. They usually have to do with serving the poor, disdaining wealth, allowing yourself to be taken advantage of–all for the sake of the Kingdom of God. There’s no such thing as a taker who doesn’t work hard enough–just a division between those who give all to serve the poor and those who oppress them.