Thursday, February 15, 2007

Can Economic Justice Be Achieved Without Law?

From the archives of New Oxford Review

FALLEN MAN & FALLEN MONEY-MAKING
Can Economic Justice Be Achieved Without Law? October 2000
By Thomas Storck

In economics as in other areas, the Church has to contend with more than one error at a time, for truth is one but error is many. Socialism, for example, has been condemned, and 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. But here I want to take up another error about economics equally incompatible with Catholicism. This error is succinctly put in the following sentence: "The way to have people make better choices is not to coerce their economic decision-making, but to inform their personal morality." The writer is 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, to understand what it means and why it is wrong.

Fr. Sirico begins his discussion by speaking of economics and its relation to the concept of scarcity. He writes, "Simply put, economics is the study of human action with regard to scarcity," adding that "Scarcity is one of the inescapable facts of life." Nor is it unusual to link the notion of scarcity closely with the definition of economics. Standard economics texts do the same. But Fr. Sirico means, as do nearly all economists, not actual scarceness of resources (lack of food or clothing or building material) in the world. Rather they are talking about a kind of disproportion. Fr. Sirico says 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." Scarce resources, he adds, can include not only a lack of money or goods but even a lack of time in which to do everything one might want to do.

Who could disagree? The questions remain: What does this mean? And, is it the right starting-point for the study of economics? An example might help. If we declared that human sexuality is concerned with scarcity -- scarcity of available sexual partners, scarcity of time, scarcity of energy -- and that the human sexual appetite is "always greater than the resources available" to fulfill it, our statement would not be untrue. 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. We might go on to calculate how to provide the greatest number of sexual experiences for the greatest number of persons in the shortest amount of time. But our whole system would be based on how fallen man behaves. We would not know how he is supposed to behave or what the real nature and purpose of sexuality are. Now if, by contrast, we began by saying that human sexuality is concerned with the God-given way of continuing the human race, with 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 into account human sin, we would find our discussion going in an entirely different direction.

Back to economics. To characterize economics as essentially concerned with "human action with regard to scarcity" is to fail even to ask the preliminary and primary questions: What is it for? Why do we do it?

So how would we frame proper questions with regard to economics? We might ask, 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 acquisition 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 a material being God made him dependent on external goods, but that these 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 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 almost always plenty of food, clothing, and shelter for the human race, as well as the other goods we require. Finally we might discover the centuries-old truth repeated by Pope John Paul II 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; it must concern itself with the needs of the whole human race.

If our consideration of economics begins with the idea of scarcity, however, we soon see that different people 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 he will make 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 almost as many "values" as there are people, it seems reasonable that we should give everyone the maximum freedom of choice. So economics becomes 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? To repeat Fr. Sirico's key statement: "The way to have people make better choices is not to coerce their economic decision-making, but to inform their personal morality."

Is there anything wrong with this? After all, economics and ethics are not the same. Should we not recognize the existence of a body of knowledge -- economics -- that is concerned with how to get what we want? In the traditional Christian and Thomistic understanding of knowledge, there is a hierarchy of intellectual disciplines: An intellectual discipline is indeed autonomous to a degree, but it cannot violate the fundamental laws of its parent discipline; philosophy (including ethics) in a sense rules over all other disciplines, such that economics can never be reduced to mere techniques which prescind 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 divine pattern. Even though mankind constantly sins, this does not mean that this divine pattern no longer exists. To use my earlier example, sex: Though disordered, it is still related to procreation, and the more men and women use sex solely as a means of pleasure, without regard to the moral law, the worse they and their society become. 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 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 sensible 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 exhortations to restrain wrong economic choices is unreasonable.

Often the opponents of any restrictions on, say, pornography assert that if it harms anyone, it only harms the user. They would call this a "victimless crime" (and not even a crime) because only the one indulging in the behavior could suffer any harm. But this is not true. The pornographic mentality and sensibility have had gravely deleterious effects on the rest of us. The misuse of economic activity also 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 glutted with useless and harmful goods, as long as these produce a profit for their producers and sellers. (One might just as well justify the selling of 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 the use of law to guide or restrain economic activity generally assert that such laws inevitably result in statism, inefficient central planning, and poverty. The Communist regimes are held up as a warning for us, that once we create restrictions on economic choices, we will end up with the evils and horrors seen in the Soviet bloc. But this is a straw man, a caricature. It is true that socialism and Communism purported to ensure that economic activity was conducted for the good of the whole; it is true that both of them resulted in great evils. But this by no means proves that all means used to restrain the economic activity of fallen man will always produce such evils. Until the 18th century Christian states always understood that it was part of their task to moderate the effects of economic activity and guide it toward the common good. Obviously such attempts were not perfect and sometimes they resulted in stupid regulations that promoted inefficiency. But just because something is hard to do does not mean 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 vision.

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