Among the angels who rebelled against God and followed Lucifer in Milton’s “Paradise Lost,” Mammon is the most intriguing. He was the “least erect” of the angels because he was forever lowering his eyes to the golden pavements of heaven. He turned away from the creator of those riches to fall in love with the luster of gold, missing the essential value of God’s work. Gold became the idol to worship.

Readers of Milton’s epic invariably ask how an angel could have greedy thoughts in heaven. But the angels, like Adam and Eve (and the rest of us), were granted free will to make moral choices, thus “free to fall.” Since that fall the devil is in the details, and tension persists across the polarities. At one end, there’s an appeal to a moral good for the self and community, at the other end self-interest and Mammon.

Politics lacks the elegance of the poetry of Milton (although there was no poet more political than he), but political debates through history have focused on the tension between the moral good and the temptations of the glittery. We’ve fought fierce intellectual battles over how to balance this tension with the mechanisms of socialism vs. capitalism. Capitalism has the edge now, but a fragile one. Winston Churchill famously observed that “the inherent vice of capitalism is the uneven division of blessings, while the inherent virtue of socialism is the equal division of misery.” The misery-mongers haven’t given up.

But the old capitalism, as we knew it, is giving way to a new capitalism, whether we like it or not. “The day has passed when the engine of capitalism, the financial market, will be allowed to operate more or less unimpeded by government,” the provocative economist Irwin Stelzer told a lecture audience the other night at the American Enterprise Institute, a Washington think tank. He cautioned that his remarks were a “thought experiment,” not a blueprint for analysis of the present economic predicament. He threw out several challenges of the status quo:

“If market capitalism is to survive the assaults of statists and populists, the former far more dangerous than the latter, we need what might be called a neo-orthodoxy – the development of new adaptations of the basic truth taught by great economists from Adam Smith to John Maynard Keynes. From these adaptations might emerge a new capitalism, the latest form of this most resilient of economic systems.”

He warns against raising a full-scale intellectual defense of the old capitalism, suggesting a kind of capitulation that will invite future rewards. He cites one conservative hero and one conservative heroine to make his point. Both Ronald Reagan and Margaret Thatcher accepted aspects of a socialistic past they didn’t construct and didn’t like because they recognized futile fights in dismantling the past and fertile soil in which to plant their own new ideas.

Ronald Reagan, for example, accepted advice from Irving Kristol, who told him that conservatives should accept much of the New Deal even though it ran counter to their philosophy because it was now part of the economic architecture of America, “complete and irreversible.” Reagan went on to change attitudes and spread a revolution of the values of individual obligation and responsibility.

Swallowing hard, Margaret Thatcher left socialized medicine in Britain intact, but successfully privatized many of the enterprises Labor governments had stifled under state control. Tony Blair, who succeeded her, made the changes permanent, putting limits on the uncontrolled trade unionism that crippled British initiative and innovation.

“Capitalism without failure is like religion without sin,” observes economist Allan Meltzer. The new capitalism, attempting to alleviate the pains caused by the old capitalism, has, for example, created policies to enable certain homebuyers, delinquent on their mortgages, to stay in their homes anyway. This absolves them of their “sin,” only to allow them to sin again. But what politician will be so foolish as to evict them?

The challenge for conservatives is to find a way to balance tolerable levels of pain and risk. Market capitalism, Stelzer observes, must temper its “creative destruction” to be “less destructive, even if it means being less creative.” One of the most difficult challenges for liberal and conservative alike is to figure out how to weigh the benefits of globalization for consumers against the costs to earners of high wages.

The underlying argument is for conservatives to pick their games carefully, and like good poker players play the hand they’re dealt, not the hand they wish they had. Capitalism can remain resilient. Paradise lost can become paradise regained.

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