TDR: You are mostly known for your writings on Fatima and the crisis since Vatican II in The Remnant Newspaper and Latin Mass Magazine, but not so much for economics. What sparked your interest in Catholic social teaching as it pertains to economics and the market? Were you ever of a libertarian persuasion?
CF: First, a quick course correction. Contrary to what certain liberal Catholic sophists have suggested, I have not written about “economics” as a purely academic discipline involving such technical matters as supply and demand curves or theories of price formation in neo-classical economics, including the “Austrian School.” Rather, I have written about the Church’s binding teaching in the realm of moral theology and natural justice concerning human affairs that happen to involve the exchange and distribution of goods in society and the moral limits on what can be bought and sold.
The Church, in line with the entire Western tradition since Aristotle, considers economics to be a branch of ethics oriented to the just exchange and social distribution of goods oriented to the life of the family as the basic unit of society—hence the etymology of the very word economics, derived from the Greek oikonomeia, which denotes “household management.” The Church’s social teaching thus defends the order of justice related to the support of the family in society. No “law of economics” can trump that teaching, which looks to the moral accountability of human actors whose actions are not determined or excused by any such law. So, for example, no “law of economics” can possibly justify the way Scrooge treats Cratchit, the family man. And yet, as I show in the book, liberal sophists of the “Austrian School” cite “economic law” precisely—I am not joking—“in defense of Scrooge.”
What sparked my interest in writing about the social teaching was the attack upon it by Catholics of the so-called “Austro-libertarian” movement—a combination of the “Austrian School” of laissez-faire capitalism and radical libertarianism. We are dealing here with yet another post-Vatican II Trojan horse in the City of God, whose occupants openly defy the command of Pope Saint Pius X in Singulari quadem that Catholics must “obey and firmly adhere to and fearlessly profess the principles of Christian truth… most wisely laid down in the encyclical letter ‘Rerum Novarum’…”—that is, Pope Leo XIII’s veritable summa of the social teaching, which was always present in the Magisterium but which he and all of his successors have developed and refined for modern circumstances.
Was I ever a libertarian? Back in my college days I flirted, for about an hour-and-a-half, with Ayn Rand’s sententious drivel, and for much a longer time I dutifully observed the bourgeois liberalism I had thought was “conservative”—that is, what is good for Big Business is good for mankind. But that was before I returned to the practice of the Catholic faith in my late twenties. It was then that I realized that such works as Henry’s Hazlitt’s Economics in One Lesson and Frederic Bastiat’s The Law were superficial appeals to a bourgeois liberalism that insinuates itself into Catholic minds as “conservatism” by resorting to the spectre of socialism, defined as any “interference” in the “free” market and “free” interactions of other kinds among men. The Church’s teaching is the antidote to the poison of the false dichotomy—“freedom” or “socialism”—that has brought our entire civilization to the brink of self-destruction.
He responds to a question on whether there has been a change in Church teaching on usury by saying that there has been a change in its application. He continues:
CF: Belloc speaks of usury as taking interest on an unproductive loan. Such indeed is usury. If I loan you a bottle of wine and demand two in return, that is usury. If I loan you ten dollars today, and demand twenty tomorrow, that is usury.
But what if I lend you ten dollars today and you propose to pay me back ten dollars five years from now? In the modern economy, the question of usury in that case is not so simple as saying the loan is unproductive, for money today is essentially an unstable claim on goods and services in the form of currency whose value declines over time due to inflation and manipulation of the money supply, so that a lender who receives a year from now the same ten dollars he lent a year earlier has actually suffered a compensable loss.
Now, Catholic moral theology, even at the time of Vix Pervenit, has always recognized a title to “compensatory” interest when a lender actually loses value and thus suffers harm in the transaction. Moreover, in today’s financial markets a lender who advances funds foregoes opportunities to “grow” those funds by investments. Catholic moral theology has also always recognized a title to interest to compensate a lender for a legitimate foregone opportunity that he had to give up in order to make the loan.
The second claim seems shaky to me -- is there such a thing as a "certain" return on a possible investment? And is one entitled to that? If I there are two businesses in which I can invest, can I say that the one I pick owes me something because I chose to invest in it and not the other? The claim seems a bit greedy. (See David W. Cooney's comment.)
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