The Spirit of Democratic Capitalism

The Spirit of Democratic Capitalism is a 1982 book by philosopher Michael Novak, in which Novak aims to understand and analyze the theological assumptions of democratic capitalism, its spirit, its values, and its intentions. Novak defines democratic capitalism as a pluralistic social system that contrasts with the unitary state of the traditional society and the modern socialist state. He analyzes it as a differentiation of society into three distinct yet interdependent power centers: a political sector, an economic sector, and a moral-cultural sector. Democracy needs the market economy and both need a pluralistic liberal culture. Against the continuing growth of democratic capitalism, modern socialism has contracted from a robust utopian program into vague "idealism about equality" and overwrought criticism of capitalism, most notably in the "liberation theology" of Latin America. Novak ends with the "beginnings of a theological perspective on democratic capitalism" illuminated by the journey from Marxism to Christian realism of Reinhold Niebuhr.

Irving Kristol described Novak's book as "unquestionably a major work for our times." The Spanish translation of the book served as inspiration for the Chilean lawyer and politician Jaime Guzmán where he was not satisfied by Hayek's thought.