Tuesday, February 05, 2008

Can Economic Justice Be Achieved Without Law?

by Thomas Storck



Today the radical differences between the type of life fostered by the Catholic Church and the type of life fostered by the modern world are becoming increasingly clear. While in the 1950s it might have seemed that the general culture and the culture of the Faith did not differ in too many respects, this is no longer possible to maintain. Moreover, the incongruity between Catholic life and modern secular life holds both for individual morality and conduct, as well as for the life of society as a whole. More and more we are seeing the connection between these two spheres, and that issues that seem to be matters purely of personal morality or personal choice - such as assisted suicide - have profound effects on the entire social order.

In this essay I want to take a look at a moral issue affecting all of society: the question of economic activity. Some people think that economics is a subject rather alien to Christian concern. After all, the Church exists to get people into Heaven, and while on earth our main concern ought to be avoiding sin and growing in holiness. Without of course denying that these matters are essential, nevertheless it is the case that many economic questions include questions of morality, and that because of this many popes, as well as saints, theologians and philosophers, have given considerable attention to the relation of economic activity to the Faith.

Moreover, the way economic activity is conducted in a given nation or society affects other vital matters, above all family life. The question of wages, for example, influences whether fathers will earn enough to support their families without requiring mothers to enter the paid workforce, while the question of the cost and availability of housing affects whether couples will be subtly encouraged to practice birth control.

Just as in other areas, so in economics, the Church has to contend with more than one error, for, as has often been said, truth is one but error is many. Socialism, for example, has been condemned by many popes since the middle of the nineteenth century; the definitive judgment of Pius XI in 1931, that "No one can be at the same time a sincere Catholic and a true socialist" (Quadragesimo Anno, no. 120) still holds today. But socialism is not the only erroneous economic theory, and here I want to take up another error about economics, an error also incompatible with Catholicism. That erroneous opinion is very succinctly put in the following quotation: "The way to have people make better choices is not to coerce their economic decision-making, but to inform their personal morality."

This was written by Fr. Robert Sirico, president of the Acton Institute, a libertarian think tank in Grand Rapids, Michigan. Let us take a look at the background to this statement, as Fr. Sirico has developed it in his publication, Acton Notes, in order to understand what it means and why it is wrong.

Earlier Fr. Sirico had begun this discussion by speaking of economics and its relation to the concept of scarcity. He had written "Simply put, economics is the study of human action with regard to scarcity." As Fr. Sirico says, "Scarcity is one of the inescapable facts of life." Nor is he unique in linking the notion of scarcity closely with the definition of economics. Standard economics texts do the same. But Fr. Sirico (and nearly all economists), it turns out, are not talking about scarcity as if they charged that there is not enough food or clothing or building material in the world. Rather they are saying that man's "wants and desires are always greater than the resources available to meet them; people are forced...to rank their alternatives and choose from those available options." And these scarce resources, as Fr. Sirico points out, can be not only a lack of money or goods but even a lack of time to do everything one might want to do.

Now certainly no one could disagree with this. But what one might disagree about is what this means and whether it is the right starting point for the study of economics. An example might help. If we said that human sexuality was concerned with scarcity - scarcity of available sexual partners, scarcity of time, scarcity of energy, and that the human sexual appetite was "always greater than the resources available" to fulfill it, all this would be true. But it would essentially misrepresent the true nature of sexuality. For if we began our discussion of sexuality this way, we would be focusing only on the disordered appetites of fallen man. Such a discussion, I suspect, might well become preoccupied in figuring out how to provide the greatest number of sexual experiences for tbe greatest number of persons in the shortest amount of time. It would reveal only how fallen man behaves, neither how he is supposed to behave nor what the real nature and purpose of sexuality are. But if we began by saying that human sexuality was about the God-given way of continuing the human race, about binding one man and one woman together for life for the procreation and education of children and the fostering of mutual love between the spouses, then, even though we obviously would have to take account of human sin, we would find our discussion going in an entirely different direction. Does this have any application to economics?

When economists, and others, characterize economics as essentially concerned with "human action with regard to scarcity" they have chosen not even to ask the preliminary and primary questions that ought to be asked before discussing any subject: What is it for? Why did God give this capacity and need to human beings? Economists are simply describing the various actions of fallen man, just as a "sexologist" might describe the various actions of fallen man. But to begin this way is to guarantee that we will not end up at the right destination.

Now how would we ask the proper preliminary and primary questions with regard to economics? We might say, Why did God make man so that he needs external goods? What is the purpose of the external goods we use and need and of the activity we engage in to procure them? Is economic activity an end in itself or is it for the sake of something else? Does the acquisiton of material goods or money have any intrinsic purpose by which all of us are bound, regardless of what an individual might will or desire? If we begin with these questions, then we might discover some important truths, such as that by making man as a material being God made him dependent on external goods, but that these external goods are not ends in themselves. That is, we engage in economic activity not for its own sake, but for the sake of human life as a whole, to provide the material goods we need so that we can devote ourselves to our family life, our social and community life, our intellectual life, our spiritual life. Economic life is simply a means, not an end. And we might also discover that, although scarcity does indeed reign with regard to man's wants, it is a somewhat different story with regard to his true needs. For God has made the bounty of the earth such that there is plenty of food, clothing and shelter for the human race, as well as the other goods that we require. Finally we might discover the great truth enunciated by Pope John Paul II in Centesimus Annus of "the universal destination of material goods," or as Leo XIII put it earlier, that "...the earth, though divided among private owners, ceases not thereby to minister to the needs of all" (Rerum Novarum, no. 7), and that therefore economics must be about more than what I do with my property, but must concern itself with the needs of the whole human race.

So if we begin speaking of economics by asking about God's purposes and about human nature and the nature of economic activity, we might well end up with a very different sort of economics. Nor is it the case that the kind of economic inquiry I am suggesting here applies only to unfallen creatures. As I pointed out in the case of human sexual activity, if we start only with what people in practice do, we will never truly understand the activity in question. Despite the Fall, human beings must be looked at from the standpoint of our nature as created by God, not by how we misuse that nature. This is not to ignore sin and human weakness, but to see them as they really are.

If our consideration of economics has begun with the idea of scarcity, however, then logically we go on to see that different people will make different choices in dealing with this scarcity. One person chooses to work very hard and make a lot of money; another person prefers to spend more time with his family even though this means be will obtain less money. Different people value different things; or as we say nowadays, different people have different "values." But what follows from that? Economics, as Fr. Sirico says, "cannot prescribe what people ought to value," but is concerned solely with "how to achieve" the things each person has decided that he wants. And since there are as many "values" as there are people, it seems reasonable that we should give everyone the maximum freedom of choice. So economics has now become a "value-free" technique for obtaining more of the resources that each person desires according to his own wants and "values." But what if, as Christians, we deplore the choices that some people make and want them to make better choices? "The way to have people make better choices is not to coerce their economic decision-making, but to inform their personal morality," Fr. Sirico goes on to say.

Is there anything wrong with this? After all, economics and ethics are not the same. Should we not recognize the existence of this body of knowledge about how to get what we want? In the traditional Christian and Thomistic understanding of knowledge, there was a hierarchy of intellectual disciplines. An intellectual discipline was indeed autonomous to a degree, but it could not violate the fundamental laws of its parent discipline. Thus philosophy, including ethics, in a sense ruled over all other disciplines, so that they could never be reduced to mere techniques which prescinded from questions of right and wrong.

If we believe that God created the world, that it did not arise by chance, then clearly, despite the Fall, all things are interrelated according to a divine pattern. Even though mankind constantly sins, this does not mean that this divine pattern no longer exists. To use my earlier example, sex is still related to procreation, and the further men and women misuse sex and look at it solely as a means of pleasure, without regard to the moral law, the more sex is misused and the worse society becomes. Similarly economic activity has a purpose, and the more this purpose is violated and disregarded, the more economic activity is deformed and society is harmed. For example, if we look on economic production not as an activity intended by God for making the external goods that mankind needs in order to live, but rather as something that an individual may use solely and only to create profit for himself, then we have deformed not just human nature, but the nature of economic activity itself, by turning one of the ends of production into the sole end.

Most sane people recognize that ethical norms governing sexual behavior must be inculcated by more than pious exhortations. Both human law and social custom are very important in restraining man's lust. It is not a violation of true sexual freedom that we proscribe and punish certain acts. For instance, although Fr. Sirico opposes restricting pornography on the Internet, clear-thinking people see that this is necessary if we are to attempt to keep society from being overwhelmed with degrading sexual images. Similarly with economic activity. Man's greed is as boundless as man's lust, and it is not a violation of true economic freedom to use both human law and social custom to restrain greed. To assert that we must rely only on moral exhortation to restrain wrong economic choices is entirely unfounded.

Often the opponents of any restrictions on sexual materials assert that if any harm comes because of these, it harms only the user of pornography. They would call these "victimless crimes" because (supposedly) only the one indulging in the behavior suffers any harm. But this is not true. Even were sexual misdeeds restricted to consenting adults in their own homes, they would still have grave and deleterious effects on the rest of us. The misuse of economic activity does the same thing. It affects all of us. When the notion becomes common, for example, that production is solely for the sake of profit, regardless of whether the product made actually serves the true ends of economic activity and human life, then a society will become filled with ill-made, useless and harmful goods, as long as these produce a profit for their producers and sellers. Or one might justify selling strategic goods to the enemies of one's country on the grounds that such sales are profitable. Of course, I am not suggesting that profits are wrong, only that profits are not all that is needed. Though profit is necessary in economic activity, such activity still must serve the real needs of mankind if it is to be true to itself.

Those who object to what I have been saying, that is, to the use of law to guide or restrain economic activity, generally assert that, however well-intentioned, such laws inevitably result in statism, inefficient central planning and poverty. Of course, the example of the communist regimes is held up as a warning for us, that once we walk down the road of creating restrictions on economic choices, then we will end up with the evils and horrors of the Soviet Bloc. But this is to set up a kind of logical "straw man," a caricature of an argument. It is true that socialism and communism purported to ensure that economic activity was conducted for the good of the whole, and it is also true that both of them resulted in great evils. But this by no means proves that all means that are used to restrain the economic activity of fallen man will always produce such evils. Until the 18th century Christian states always assumed that it was part of their task to moderate the effects of economic activity and attempt to guide it toward the common good. Obviously such attempts were not perfect and sometimes they resulted in stupid regulations that promoted needless inefficiency. But just because something is hard to do does not argue that it should not be attempted.

Moreover, the Catholic Church has made it clear beyond doubt that the conception of economic activity as unfettered by civil law is at variance with her own. In showing this, I will confine myself to the encyclical Centesimus Annus (1991) of John Paul II, an encyclical wrongly regarded by some as containing the Church's long-overdue embrace of the free market. But there is no difficulty in finding teaching in Centesimus Annus that upholds governmental restrictions on economic activity. Let me begin with this quote:

If Pope Leo XIII calls upon the State to remedy the condition of the poor in accordance with justice, he does so because of his timely awareness that the State has the duty of watching over the common good and of ensuring that every sector of social life, not excluding the economic one, contributes to achieving that good, while respecting the rightful autonomy of each sector. (no. 11)

Or later, when speaking of the kind of society that we should desire and work toward, John Paul says,

Such a society is not directed against the market, but demands that the market be appropriately controlled by the forces of society and by the State, so as to guarantee that the basic needs of the whole of society are satisfied.(no. 35)


Particularly crucial is the discussion in this encyclical of the essential bond between human freedom and truth, so that freedom which refused to be bound to the truth would fall into arbitrariness and end up submitting itself to the vilest of passions, to the point of self-destruction. (no. 4)

The Pontiff returns to this theme later in the encyclical (see no. 41), and what is noteworthy here is that although Fr. Sirico would strongly agree that man can and does misuse his freedom, unlike him, the Holy Father is not shy about the need for the power of the state to intervene when necessary to protect society from this misuse of freedom. Fr. Sirico does not want to "coerce" people's "economic decision-making." "Coerce," of course, is a loaded word, for one might just as well say that Fr. Sirico does not want to limit man's destructive application of his pseudo-freedom. Nowhere in Centesimus can one find the idea that the only way to prevent men from making bad use of their freedom is "to inform their personal morality." Of course, no one would disagree with Fr. Sirico that moral suasion is an important part of guiding men's economic choices. And social sanctions, which can be described as institutionalized moral suasion, are possibly even more important than legal sanctions in promoting healthy economic activity, as well as healthy sexual activity. But in each case, appropriate legal sanctions are also necessary, and likewise in each case, these legal sanctions do not violate anyone's economic or sexual freedom, but rather guide our conduct toward what sex and economics are truly about. There is no reason to regard the greed of fallen man as somehow worthy of protection by state policy, any more than the lust of fallen man.

The real issue here is whether economic activity, more than any other type of action engaged in by mankind, is worthy of entire autonomy, so that the state must keep a hands-off policy toward it. Human freedom can be misused, and when, as is often the case, this misuse of freedom hurts others, then the authorities do have the right and the duty to intervene. The fact that various kinds of intervention in the past have been disasters for both human freedom and even human prosperity, does not negate what I am saying here. We must remember that attempts to order human behavior toward the common good long predate Marxism, and have long been associated with Christianity. Libertarianism, even when it acknowledges the existence of the good and the moral necessity to embrace it, errs when it imagines that the economic order has no essential good of its own and no ordered relation to the rest of human life. But like any other thing created by God, economic activity has its own nature and good, a good related to the rest of human society and God's creation, and one which cannot be expected to appear spontaneously without human thought and effort. Thus the "way to have people make better choices" in "their economic decision-making" is, yes, "to inform their personal morality," but also to see that "the market be appropriately controlled by the forces of society and by the State, so as to guarantee that the basic needs of the whole of society are satisfied" and that no man suffers needless injustice at the hands of his fellows. Only in this way will we have a truly Catholic approach toward economic activity, and only in this way can we promote the rule of Jesus Christ over society as a whole, over our individual lives and our common life. And only thus will we cooperate with the Holy Spirit in renewing the face of the earth and preparing this world for the return of its King.

©Thomas Storck
Original version of article published in New Oxford Review, vol. 67,no. 9, October 2000.

Interview with Thomas Storck

On Cooperative Ownership

John Médaille Interview in Romania

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