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Ralph AncilIn this paper I argue one cannot be a Christian and libertarian with any pretense of consistency. The argument comes in three major parts: the theological, the logical and the historical. The theological argument identifies and examines the significance of the concept of transcendence underlying three major social encyclicals that deal with economic matters, Rerum Novarum, Quadragesimo Anno and Centesimus Annus. Notwithstanding obvious differences and discontinuities due in part to changed conditions or changes in emphasis or changes in the historical circumstances that occasion the writing of these papers, the concept of transcendence remains the common cornerstone of all three documents.

To reinforce the encyclicals and their theological argument the paper digresses into the works of what may be called “humane writers” who have dealt with economic and social and political questions from within the conservative, Christian tradition. These include economist Wilhelm Roepke of the German Ordo-liberal tradition; English professor Richard Weaver of the American tradition of Southern Agrarians; G.K. Chesterton, author, journalist and humorist of the English Distributists; and the well-known C.S. Lewis.

The remaining two main parts deal with economic theory and business experience. In the second section, the logical arguments from within the discipline of economics will be discussed to show the inconsistency of “immanentist” views in theory. And in the third and final section, historical examples are given to show their deleterious consequences in practice.

The Encyclicals: The Theologic Argument

If we believe the economic world can basically be divided up into two pigeon holes only, namely, an economic policy that either affirms a laissez-fairist approach or one that is more or less socialist/welfarist, on-the-road-to-communism approach, then the encyclicals make no sense. They seem to be all over the policy board. They affirm private property but they also affirm public authority and government intervention. They deny the validity of socialism and yet they deny the validity of the individualist ideology too; as we read in Quadragesimo Anno, for example, we are “to avoid the reefs of individualism and collectivism…” (para. 110). What, then, exactly are they affirming? The answer is insoluble unless we are willing to expand our theoretical world to include at least three pigeon holes. The third hole is not a halfway house or mixture of the extremes on a spectrum defined by two theoretical positions but rather an alternative faithful to its own set of principles. That is what Roepke meant when he spoke of the “third way” and of a “humane economy.”

The reason for this third approach is rooted in the traditional, orthodox insistence on the importance of transcendence and the recognition that both other alternatives, while making good observations and contributions to policy, while sometimes showing remarkable insight, ultimately fail because they reject transcendence in favor of a false immanentization which, crudely put, is idolatry. Thus, the laissez-fairist rejects any form of government intervention to the economy because the market system is thought to be complete in itself and not to need an external reference, an outside support to validate its claims or judge its actions or results. Hence we receive the familiar assurances about the “automatic harmony of interests” of historical liberalism. The error of the libertarian, as William F. Campbell reminds us, is that he strains all social reality through one principle, the competitive market.

A corresponding error characterizes the thought of socialists/welfarists, or communists, who assure us that government will achieve perfection here and now through its actions, e.g., equality of opportunity, or better education for all, based on humanist values without reference to higher ideals or religious teaching.

In both these cases their adherents are also guilty of a modern form of “gnosticism” which Eric Voegelin defined as the belief in “immanent perfection achieved through an act of man.” Man is sufficient unto himself to achieve his goals here and now in this world. Direction comes from within the material and human world only. There is no higher world that needs to be referred to.

In contrast, the economic aspects of social encyclicals are founded on the truth of transcendence, that is, the recognition that this world is not all, there is a higher reality man must be aware of even as he acts in this world, and that as a by-product of so doing, his efforts will be more fulfilling and enduring. Let us sample the relevant documents.

In Rerum Novarum we read:

We cannot understand and evaluate mortal things rightly unless the mind reflects upon the other life, the life which is immortal. If this other life indeed were taken away, the form and true notion of the right would immediately perish; nay, this entire world would become an enigma insoluble to man. Therefore, what we learn from nature itself as our teacher is also a Christian dogma and on it the whole system and structure of religion rests, as it were, on its main foundation, namely, that, when we have left this life, only then shall we truly begin to live. (para. 33)

Similarly in Quadragesimo Anno, the battle against immanentism is strongly indicated, when Pius the XI states:

Just as the unity of human society cannot be founded on an opposition of classes, so also the right ordering of economic life cannot be left to a free competition of forces. For from this source, as from a poisoned spring, have originated and spread all the errors of individualistic economic teaching. Destroying through forgetfulness or ignorance the social and moral character of economic life, it held that economic life must be considered and treated as altogether free from and independent of public authority, because in the market, i.e., in the free struggle of competitors, it would have a principle of self-direction which governs it much more perfectly than would the intervention of any created intellect. But free competition, while justified and certainly useful provided it is kept within limits, clearly cannot direct economic life – a truth which the outcome of the application in practice of the tenets of this evil individualistic spirit has more than sufficiently demonstrated. Therefore, it is most necessary that economic life be again subjected to and governed by a true and effective directing principle. (para. 88, emphasis added)

And finally, in Centesimus Annus we find three strong statements rejecting the immanentism of market idolatry:

Of itself, an economic system does not possess criteria for correctly distinguishing new and higher forms of satisfying human needs from artificial new needs which hinder the formation of a mature personality. Thus a great deal of educational and cultural work is urgently needed, including the education of consumers in the responsible use of their power of choice, the formation of a strong sense of responsibility among producers and among people in the mass media in particular, as well as the necessary intervention by public authorities. A striking example of artificial consumption contrary to the health and dignity of the human person, and certainly not easy to control, is the use of drugs. Widespread drug use is a sign of a serious malfunction in the social system; it also implies a materialistic and, in a certain sense, destructive `reading’ of human needs….Drugs, as well as pornography and other forms of consumerism which exploit the frailty of the weak, tend to fill the resulting spiritual void. (para. 36)

If economic life is absolutized, if the production and consumption of goods become the centre of social life and society’s only value, not subject to any other value, the reason is to be found not so much in the economic system itself as in the fact that the entire socio-cultural system, by ignoring the ethical and religious dimension, has been weakened, and ends by limiting itself to the production of goods and services alone. (para. 39)

Here we find a new limit on the market: there are collective and qualitative needs which cannot be satisfied by market mechanisms. There are important human needs which escape its logic. There are goods which by their very nature cannot and must not be bought or sold. Certainly the mechanisms of the market offer secure advantages…Nevertheless, these mechanisms carry the risk of an `idolatry’ of the market, an idolatry which ignores the existence of goods which by their nature are not and cannot be mere commodities. (para. 40)

It is difficult to imagine a more forceful and systematic rejection of the immanentism with its assumption of self-containment or self-sufficiency that underlies the libertarian view. One is reminded of Goedel’s proof in mathematics that such systems, in fact, are impossible. (Stanley Jaki makes a similar argument in his treatment of the rise of modern science in his The Road of Science and the Ways to God.) It also reminds one of the Gospel paradox that he who would lose his soul will save it but he who would save his soul for transcendent truth will surely lose it.

Some Humane Writers

To reinforce this theological perspective one may sample briefly the writings of authors concerned about the economy who, because they were steeped in the traditions of the Christianized West, were able to bring deep insights about these matters. The German Ordo-liberal economist Wilhelm Roepke explains in his classic study The Social Crisis of Our Time the errors of historical liberalism and laissez-faire economics. They deluded themselves into thinking a sound idea, be it democracy for government or free markets for the economy, can be absolutized without becoming self-destructive. As he explains this error of historical liberalism as it applies to democracy:

One of the chief concommitants of this delusion is the framing of the liberal principle in such an absolute form that its enemies profit by it too, and are, in the name of freedom, given every conceivable opportunity to put an end to liberal democracy…It is obvious that this absolute tolerance even towards intolerance, this intransigent dogmatism of the liberals, which gives a free hand to all trouble makers and agitators, thereby condemning itself to death with open eyes, must ultimately reduce `pure democracy’ to the defenseless victim of anti-liberalism, to a sort of gambling club whose rules include their non-observance. (p. 50)

So far as applying this point to the economy goes, one recalls the removal of all anti-monopoly laws in 1824 by the British government.

C.S. Lewis makes a similar point when he has one devil, Screwtape, advising his nephew Wormwood on the proper handling of humans. Relying on Aristotle, he states:

Nor of course must they ever be allowed to raise Aristotle’s question: whether `democratic behaviour’ means the behaviour that democracies like or the behaviour that will preserve a democracy. For if they ever did, it could hardly fail to occur to them that these need not be the same….Even if they don’t read Aristotle…you would have thought the French Revolution would have taught them that the behaviour aristocrats naturally like is not the behaviour that preserves aristocracy. (The Screwtape Letters, pp. 161-2, 169-70)

Like not mowing over the cord of an electric lawnmower, there simply are some constraints necessary to preserve continuity of action or of being which legitimize or promote the other, derivative freedoms involved.

This is also the conclusion of other Ordo-liberal economists. Walter Eucken expressed it best when he said that “`what the experience of laissez-faire goes to prove is that the economic system cannot be left to organize itself'” (The Social Market Economy, p.109). Certain basic restraints on economic freedom were recognized as logical, as a “`legitimisation of economic freedom in order to prevent this freedom from destroying its own prerequisites.'” (p. 149)

Therefore, when writing on the conditions and limits of the market, Roepke insists that “…the ultimate moral support of the market economy lies outside the market. Market and competition are far from generating their moral prerequisites autonomously. This is the error of liberal immanentism. These prerequisites must be furnished from outside…” (A Humane Economy, p. 126). This harmonizes with John Paul II’s statement that “prior to the logic of fair exchange of goods” (CA, pr. 34) certain relationships and values exist that take precedence over market mechanisms, freedoms and contracts.

In his widely read and controversial little book Ideas Have Consequences, Richard Weaver spoke of the shift from the older Christian view to the one that would be the basis of the modern world, a shift that occurred in the fourteenth century with the rise of nominalism. Our entire world view changed including our view of man, nature and the economy. Regarding nature, that is creation, for example, he writes: “Whereas nature had formerly been regarded as imitating a transcendent model and as constituting an imperfect reality, it was henceforth looked upon as containing the principles of its own constitution and behavior” (p. 4).

In his last book, Visions of Order, Weaver looked at the false immanentization in the area of art and technology. And it is not hard to extend his analysis, mutatis mutandis, to include that of economies or economic theories. He explains:

The source of the evil we are endeavoring to isolate thus lies in a false immanentization. When its products and expressive forms are no longer judged by their referential relations but take on a kind of inner authority and an inevitability, they begin to encroach upon other sensibilities which have their own legitimate roles to play in the life of the spirit. (p. 234)

Wherever a culture tends to institutionalize and divinize its creations, it begins to levy an excessive tribute upon the human beings for whom these things exist. It falls into the temptation of thinking that there is some principle of immanence in them which justifies extortion, in many different forms, of the people. (p. 235)

When, therefore, the institutions seemed threatened…they were given immanent authority and a tribute of sacrifice was offered to them. What had been created in response to the human spirit and had referential justification began to be autotelic and make its own demands. The forms broke away from the informing impulse and set up an autarchy. (p.235-6)

In his The Outline of Sanity, Chesterton presents an entire social criticism based on the imperative of transcendence. This world is not self-contained but must refer to something beyond itself for meaning and validity. And yet the secret of success in this world lies in grasping the transcendent. He writes near the end of that book: “And that same mysterious and to some divided voice, which alone tells that we have here no abiding city, is the only voice which within the limits of this world can build up cities that abide” (p. xx).

The libertarian – like the socialist – is in part enthralled by the aesthetic appeal of the intellectual properties of formal economic and political theories and as a consequence is similarly willing to sacrifice the lives of others on its alter for the sake of its purity. That is the meaning and the source of these vehement objections to any form of intervention from outside. The economic system is thought to be complete or perfect within itself and therefore any intervention must necessarily reduce this completion or perfection and so is to be shunned.

The Logical Argument of Economics

In conventional, and especially laissez-faire, economics the above theological insights are neglected in favor of a theory that tries to make self-interest the exclusive basis of market action. Yet without appealing to these insights, it can still be shown that such a position is weak on logical grounds. For example, it should be obvious that if “values” and choices are all arbitrary, subjective preferences, then so is the desire for or choice of a free market. And yet to admit the existence of objective values that are trans-economic or meta-economic is to admit the contingency and incompleteness of the market’s existence and structure and ultimately the possibility that principled intervention may be necessary. Indeed, though there are ways to hedge on this, the mere existence of objective values and the market’s dependent nature, necessarily limits and qualifies its operation in any logically sound and consistent economic theory. The dilemma for the conventional economist, then, and especially for the laissez-fairist, is that the market can be defended on the basis of those objective values which at the same time necessarily delimit and circumscribe it, while any theory that absolutizes the market by making it perfectly self-sufficient, destroys itself logically.

The logical difficulty in libertarian thinking is also seen in a particular form of the fallacy of composition: what’s true for one is thought to be true for all, or what is true in the short run is true in the long run, etc. So the libertarian thinks a collective good (such as national defense, law enforcement, etc.) is ipso facto an individual good and looks for ways in which the individual’s rational self-interest will provide the collective good as if it were a private one. An example, given to this author while working in a prominent think-tank in Washington a few years ago, ran something like this: it is evil for the government to have a strategic petroleum reserve (a collective good); private oil companies should be able to provide for this need under the profit system (as if it were an individual good) and if they can’t, then we shouldn’t have it. That there might be a need for such a reserve but no adequate private incentive to provide it, was simply unthinkable. Such dogmatists also spend time trying to invent schemes for private armies, private law courts, private police, and so on.

As a second example, consider the argument some make that if an individual wanted to live like Roepke outlines and have a garden for growing his own foodstuffs – or Chesterton and the English distributists outline, or as the Southern agrarians envision – there is nothing to prevent him from doing so under a genuinely capitalistic system, while others remain free to live in a different manner. (Implicitly those making this argument are saying their preference is objectively better.) But obviously in a parallel case even a libertarian couldn’t live his own life-style in a socialist society and in fact would strain to change the laws to compel a libertarian one. An entire way of life, including a libertarian one, is by its nature a collective, not a private, good and its implementation is costly in the sense that other ways of life must be given up; those who prefer the alternatives lose. Ultimately, the libertarian is asking us to accept a vision that disparages collective goods – a vision which is itself a collective good. Can a Cretan say Cretan’s always lie?

More broadly, what the secular economist really wants is a system where each one looks out for his own self-interest while not internalizing in his calculations the self-interest of others, that is, not manipulating them for his own use. They want the self-interest of others respected, like private property. But the obvious problem is that respect is not primarily a matter of self-interest. It is sometimes in one’s interest to violate the property of others. But respect is just the opposite of pure self-interest since it is a limiting of the will – and thus of one’s interest – for some other, higher reason; it is in fact a form of piety. A self-interest-alone policy means expanding the ego while respect means limiting it. The former is limited at best only externally by the expanding egos of others while the latter concept is a moral check originating within the individual. Whence, then, comes this respect? It does not arise from an exclusive consideration of self-interest but implies a transcending source of value lying outside the domain of mere self-interest.

It is appropriate perhaps to emphasize here that we can’t know our own self-interest by considering self-itself only. Rather, we do not know what is in our self-interest until we know something more than the self. Only when meaning is found is life worthy of the trouble to know and promote what is in one’s own interest. Roepke liked to say, he who knows economics only, does not even know that well. Similarly, knowing or having a consciousness and pre-occupation only of the self, is inadequate for individual well-being and for any theory premised on this assumption. In Christian thought, to know the self fully requires consideration of the ends transcending the self and man, of his ultimate end and good which is God. This knowledge is necessary not only to order individual goods but to order the broader goods of public policy. Strictly speaking, self-interest becomes unintelligible or meaningless when it is absolutized and made comprehensive, exhausting all human action or behavior and, in fact, becomes pure selfishness.

Some people, of course, may object that we should distinguish between “self-interest” and “selfishness.” This is a valid point but not one secular economists are entitled to make for two reasons. First, total or complete self-interest is selfishness, for with nothing to transcend the self only selfishness remains. (Here, too, the libertarian commits the fallacy of composition: what’s true for one isolated or qualified statement, namely where some self-interested behavior is valid, is true for the statement when generalized or unqualified, i.e., when everything becomes mere self-interest.) Second, such economists’ own insincerity in the application of this maxim makes it a distinction without a difference. For the expression “self-interest” is preferred because it allows room to imply the existence of non-self-interested or charitable behavior. But if everywhere we turn for examples of such altruistic behavior, that altruism is denied, then we have universalized self-interest to the point where this implication of transcendence is effectively excluded. In this manner libertarians may still point to the option of virtue that is theoretically allowed in their system of limited government, but by implicitly denying transcendent truth, they eliminate the motivation to exercise it. Such is the effect of what may be called the laissez-fairist’s “doctrine of inescapable selfishness.”

That this is no exaggeration, let us refer to the guru of laissez-faire thinking, Ludwig von Mises. In his book Human Action he plainly states: “What a man does is always aimed at an improvement of his own state of satisfaction. In this sense – and in no other [i.e., without making arbitrary subjective value judgements praising or condemning this fact] – we are free to use the term selfishness and to emphasize that action is necessarily always selfish. Even an action directly aiming at the improvement of other people’s condition is selfish” (emphasis added, p. 242; cf. pp. 499, 677, 735).

This egocentric subjectivism is inseparably connected with his moral relativism. In speaking of “the allegedly eternal and absolute values,” Mises asserts: “There is…no such thing as a perennial standard of what is just and what is unjust” and that the “idea of natural law is quite arbitrary” (p.720). Not surprisingly, he concludes: “It is… the social system which determines what should be deemed right and wrong. There is neither right nor wrong outside the social nexus” (p. 721) – an interesting view for a Nazi refugee. Yet for this reason – the absence of any objective standard of truth – all economic intervention by government is arbitrary, including that envisioned by the social market economists (p. 723) which includes Roepke. Yes, even the evils of free drug use are to be preferred over government efforts to stop it (pp. 733-4). The only test for policy is, not truth or values, but social expediency which is apparently based on what is taken to be the only rational and objective elements of the subject, namely, the means or procedures to accomplish subjectively chosen ends. And the economy best suited for this condition is itself a tool: totally free, Simon-pure, capitalism.

Other economists are not so confidently dogmatic and instead try to refute the charge that economics broadly teaches selfishness by framing the question in terms of costs and benefits. The authors of one economic college textbook (Gwartney and Stroup in Macroeconomics, Private and Public Choice) insist economics claims only that: “The choices of both the humanitarian and the egocentric individual will be influenced by changes in personal costs and benefits.” But they go on to argue both will be more likely to try to save a small child from drowning in a three-foot swimming pool than in the swift current near Niagara Falls. Why? Because “the latter alternative is more costly than the former.” They conclude: “Economics deals with people as they are – not as we would like to remake them. Should people act more charitably? Perhaps so. But this is not the subject matter of economics” (p.9).

But do people really think the way these authors suggest? Are decisions of this kind really done in terms of (subjective) costs and benefits for the individual alone? Or is there something more to understanding human action?

While it is certainly true that people are self-interested and are affected by costs and benefits, this type of analysis is incomplete if not entirely inappropriate. To argue, as these authors do, that they accept people as they are – not as they ought to be – is misleading. That is like writers of cheap fiction who like to show every private and intimate aspect of life under the title of being “realistic”. The effect, of course, is to promote the baser instincts of man which they so implicitly accept. Similarly, constantly show-casing the selfish side of man in the name of realism promotes that selfishness. Realism would also require us to accept the altruistic aspect of human nature.

Curiously, the authors only consider costs, not the benefits, which influence people’s choices. One can only conjecture why this omission is allowed. If they were to deal with the issue of “benefits” – always a difficult aspect of cost-benefit analysis (CBA) – they would be faced with two possibilities: either (1) there is a world of objective “oughtness” or values, in which case the proposed action is an obligation (you ought to help your neighbor) and is in some sense still a cost; or (2) no such world exists objectively and the choice of action is consequently evaluated by purely subjective preferences, no different than choosing between flavors of ice cream.

If the first case is true, it contradicts the aim of the method. The very purpose of cost-benefit analysis is to allow the individual to evaluate whether a proposed course of action is worth pursuing or not. It is optional. But if there is a world of moral obligation, that is, a world of the morally non-optional, then CBA is inappropriate. Why try to see whether or not it is rational to pursue a line of action when that line of action is obligatory? Choice between options that carry no moral obligation, like flavors of ice cream, and choice between obeying an obligation or not, are not the same things. And importing the concept of CBA which is literally appropriate to the one but only metaphorically true for the other constitutes that very smoke-and-mirrors reasoning that makes us lose sight of the subtlety and important differences in human action and motivation.

On the other hand, if they pursue the latter course, their point, that economics does not exclude altruistic behavior or require selfish behavior, would be lost. They would in effect be arguing that the reason I act altruistically is because I want to maximize my utility – which again tends to teach the inescapable selfishness they implicitly accept but explicitly deny. So altruism and its benefits can be quietly dropped from analysis as much as from practice.

The authors assume a charitable posture toward charity but its sincerity is belied by their method. Theoretical recognition of the possible existence of charity as an objective value, while being treated in analysis as a mere subjective preference, is not good enough. We cannot be charitable to charity, that is, to the precept of charity, or any other objective value. We can only do it justice by giving it its do – which is obedience for the individual and recognition in analysis for the social scientist. To be realistic in economic science and theory, it is not enough to recognize that some people may believe, subjectively, that objective values exist and treat that belief as another subjective preference and so imply there is nothing transcending the world of subjectivity. That means understanding that any utility or benefit derived from a charitable or altruistic act is merely an accidental by-product achieved precisely by the willingness to set it aside in the name of higher values. Here the logical and theological overlap: to save one’s soul is to lose it and to lose it for the transcendent reality is to find it.

Indeed, if what is seemingly an altruistic act is only really the outcome of calculations based on an all-absorbing self-interest, if no room is allowed for a pre-rational but objective realm of “oughtness,” then even CBA, the evaluation of personal costs and benefits, becomes meaningless. And the same result casts doubt on the validity of an economic theory and science that insist there is no disinterested pursuit of truth but whose results must be the product of personal (subjective) costs and benefits of the relevant social scientists. If everything is optional, there is no truth or meaning, even for economics. (Welcome to the world of junk science!) The world consists only of the arbitrarily choosing self which nothing transcends. Nihilism gives “freedom” in proportion as meaning is eliminated. But because laissez-fairists, in their penchant for committing the fallacy of composition, can’t see this, they believe that expanding choice will substitute for truth. This is the essence of the laissez-faire advocacy of the free market economy. But the reality is that the meaningfulness of an alternative is reduced, as its range is increased. Choice is meaningful only in a world of unchosen truth, and people are starved for meaning – not choices.

The choice of framework or point of departure for analysis, the self and what it wants or has a right to and departures from the self, prejudices the analysis in favor of egotistic calculations of the CBA kind. If economic analysis were to begin with altruism and duty to others, and then consider egotistic behaviour as a departure from this norm, thus reversing the secular order, it would put quite a different colour on the matter. One could likewise ask if people should act more or less egotistically: an interesting issue, perhaps, but not the subject matter of economics.

Of course, one can hear the cries from the gallery of secular economists screaming “Foul!” This approach would be significantly unrealistic, say they; such a reversal would be a phantom because it would not do justice to the fact that egocentric calculations are by far the dominant type of motivation in human economic action, etc.

But this example is not quite so hypothetical or unrealistic as it appears. In the New Testament we are told to look out for each other’s interest not just our own, indeed to prefer the interest of the other party over our own. Even the injunction to work to provide for ourselves is understandable this way, namely, in order not to be a burden on others. And while this mainly applies to fellow believers, in the context of the overall teaching of charity even for our enemies, it cannot be confined to believers alone. The habit of charity doesn’t stop at the church door.

How realistic would we think a psychologist who sought to explain dreams only in terms of other dreams and systematically excluded the data of wakefulness as having no proper place in his analysis? Or if he sought to explain the data of wakefulness in terms of the dreams or still worse treated wakefulness as nothing but another dream? Clearly, no matter how strong our dreams are, we explain their lower reality in terms of the higher reality of consciousness and not vice versa. Similarly, for the self-interest motive to be meaningful, it must be placed in the “wakeful” context of a higher reality.

But unfortunately, it is one of the fallacies of laissez-fairism, as well as of conventional economics, to overestimate the egocentric aspect of human nature to the detriment of the higher side. The reason such inefficient economic systems as Soviet Communism and National Socialism could last as long as they did is not merely because of oppression and fear, but because they appealed to the humanitarian side of human nature, to the desire to find meaning in the losing of the egocentric self in some higher cause, however misconceived, a need not fulfilled by materialistic, self-centered capitalism. As Roepke himself rightly pointed out in an endnote titled, “The overestimation of self-interest as a sociological motive”:

Collectivism has proved that men can be controlled and moved not only by promises but even more by demands on and appeals to their capacity for sacrifice and devotion. It has also shown what tremendous forces can be released by altruism, enthusiasm and the struggle for a supra-personal goal, and the rest of the world has by no means yet drawn all the conclusions and learned all the lessons from this discovery. (Social Crisis, pp. 26-27)

And actually, as he indicates in A Humane Economy, unlimited self-assertion is “an infallible way of destroying the free economy by morally blind exaggeration of its principle” (p. 128).

Whether genuine altruism is trivialized by not being deemed worthy of inclusion in analysis or absorbed as merely another form of self-interest, the result is the same: a furthering of that demoralizing tendency toward commercialization of life which in turn furthers social and economic corruption but which is compatible with the egocentric model of secularized economic science. In this sense, capitalism, and perhaps economic science, have been their own worst enemies.

Let us not be deceived by those analyses that pretend to fairness but which really smuggle in moral reductionism in the guise of hard-headed thinking. It is as unrealistic as it is unscientific for the economist to ignore the data of altruistic human motivation and claim it is no part of his science. To argue that altruistic behavior is not denied but simply doesn’t form a part of legitimate science sounds increasingly like a placebo thrown to people who rightly suspect its implicit moral reductionism. Such glib and facile examples are at best disappointing and rather than dispel common folk’s doubts about what economists teach, tend rather to reinforce them, all the more so as people intuitively grasp that the doctrine of inescapable selfishness when put into practice is a form of tyranny.

Instead, logic and realism requires us to admit certain complexities of human thought such as the fact that people often accept certain values as objective even when they do not scrupulously adhere to them, or fail to act in accord with their own highest preferences; and that people do not always act in their own long-term self-interest. They demand that we admit altruism often means ignoring costs rather than counting them, and failure to incorporate this fact robs economic theory of important insights. Logic and realism require us to reject the preference economists have for procedures and means rather than ends and final states. The procedures of competitive markets, and rational calculation of costs and benefits, must be steadfastly linked to the ends of man if economics and the economy are to be humane and meaningful.

Historical Examples

In actual practice, the system of “self-interest-alone” breaks down as soon as people realize they can advance their own immediate self-interest by manipulating the self-interest of others. When objective values and ideals are chased away or ignored, the moral vacuum is filled by an expanding egotism. The lack of inner discipline, those inner moral checks which Burke speaks of, not to mention the outer checks whose absence also facilitates the free flow of goods, are dissipated. People litter and practice discourteous driving habits. The manipulation of government policy between congressmen and lobbyists also becomes more frequent (which reduces incentives to work and savings and invites still more policy manipulation). Its consequences are also manifest in the historical deformities that arose at the same time the market economy arose thus confusing the essentially good nature of the market with the historically conditioned situation where political and economic power unjustifiably obtained, caused enormous, unnecessary suffering among the people of England and elsewhere.

Can only politicians be wicked and not entrepreneurs? Not likely. A good economy and a good government go together. But if there is widespread corruption in government, there is likely to be the same in the economy. Therefore, the glee which some feel in a recitation of the wickedness of politicians and the folly of their policies is short-sighted and superficial. A free economy like a free government requires that the individuals involved all accept certain axioms that will, in addition to prices, harmonize their actions. This is all the more true when we see that the market economy especially offers numerous opportunities for sin (exploitation and opportunism). Freedom presupposes virtue.

But to keep things simple, we may illustrate a few pointed cases to show that the false immanentization of laissez-faire, and respect for private property, often don’t harmonize and to counter-balance those laissez-fairists who thrill at the recitation of the evils of government policies by showing the unethical practices of businessmen as part of the historical experience of the self-interest-alone school. Consider the following rather commonly known examples:

  1. Richard Arkwright, often considered the father of industrialism, actually stole his main invention, the spinning machine, from one Thomas Highs, an inventor with whom he was for years acquainted. Highs sued in court and won (c. June, 1785).
  2. Samuel Slater stole the Arkwright “invention” by memorizing all the parts and emigrated to America to set up shop here (c. late 1780s).
  3. Joseph Peavey invented the lumberman’s cant hook but it, too, was stolen from him (c. 1860).
  4. William Thomas stole Elias Howe’s share of the English royalties for the latter’s idea of the sewing machine (c. 1846).
  5. In the early oil drilling days, during and shortly after the Civil War, caravans of oil in barrels loaded on wagons were driven over farms in defiance of trespass laws to make new roads. Teamsters would crack their whips at landowners who tried to stop them. In a similar vein, the railroads tried every trick of obstruction and destruction against the later-installed oil pipelines. They dug them up just as the teamsters had done.
  6. Overdrilling with derricks was disastrous but voluntary efforts to ration oil extraction failed and government regulation was necessary.
  7. In mining, water was used in environmentally damaging ways (e.g. hydraulic mining using nozzles) but this method also damaged downstream farms from the silt it loosened.
  8. Voluntary associations to protect timber stands were only partially successful because of the classic free rider problem and state government (state foresters) was needed to enforce compliance with the regulations.
  9. The attitude of [mostly 19th century] lumbermen was to “cut out and move on.” They considered forests an inexhaustible and free resource that, of course, required no tending or management or conservation efforts. The attitude was that maximum production meant constant production and was driven in part by the need to pay off the debts incurred to purchase the newer sawmill technologies. The result was often overproduction and cut-throat competition. They were also often hostile toward private or public ownership of forests. Such property was regularly attacked, trespassed and vandalized. Fraud, robbery and sometimes murder were involved. The reason for this appalling record according to one researcher was the general belief in “laissez faire, rugged individualism, and the legend of inexhaustibility.”
  10. Similarly, stockmen of both sheep- and cattle-raising insisted upon “open access” pasturage and resisted efforts at privatization or regulation.
  11. Shippers in the last century so overloaded their vessels as to endanger both crew and cargo in the fierce competition for profits. Governments had to interfere to impose restrictions on vessel drafts to insure safety.

All this may be laughingly put off as entrepreneurial high spirits but we may seriously question the stability of an economic system where such practices are common and so become socially harmful.

That instability with its harmful social effects is perhaps more evident, not in the practices cited above, but in the ideology of unlimited economic growth based on modern technology. British economist E.J. Mishan in his book Economic Myths and the Mythology of Economics gives us thought-provoking examples in this regard. For instance, in considering the problem of drugs he points out that German scientists working for the Bayer Company thought they had found something non-addictive that would be useful for treating morphine addiction which was highly touted in the medical journals. It took ten years for them to discover that this new drug under the trade name “heroin” was just as bad or worse. Later, German scientists in World War II discovered methadone which was also at first thought to be helpful for heroin addicts. This view was reversed a few years later when it was found also to be addictive and dangerous. Not knowing how to undo this evil, many laissez-fairists want to legalize drugs. They reason that strong enforcement against these drugs will only give us a police state. Waving the objection that such enforcement does not necessarily constitute a totalitarian government, we may rightly be concerned that the alternative may well be a welfare state as more and more people suffer from drug addiction.

Indeed, if we are to worry about a police state there are other possibilities which many laissez-fairists insouciantly support. We might be concerned, as Mishan argues, that the additional growth of government caused by civilian and military uses of nuclear power is worrisome. Or we may ponder the rise of computer technology that gives such power to the centralized government that we face being monitored in where we seek medical treatment and where we work and similar applications that threaten our liberties (e.g., laser readings of bar codes to assess tail-pipe emissions but which would also allow the government to monitor where one travels). It gives power as well to large corporations to monitor their employees as well as to illegal uses that aid criminals, especially organized crime, which in turn calls for more government activism and consequent loss of individual liberty. This applies also to the more recent developments over the proliferation of chemical and biological weapons to crackpot dictators and criminal organizations. All of this “may be an unavoidable consequence of the very direction and pattern of economic growth” (p.137).

Further, Mishan gives a Burkean argument: “Thus as the moral order upon which any viable civilization has to be founded is eroded in the name of personal emancipation, so in the name of security must the state expand its powers. In effect, as repressive mechanisms internal to the individual are scrapped, repressive mechanisms external to him have to be forged. The permissive society, it may be inferred, is precursor to the totalitarian state.” (p.161) We may conclude with him that the consistent application of the laissez-fairist, or libertarian, ideology leads to the totalitarian state and therefore “the libertarian economist cannot consistently claim also to be a pro-growth economist.” (p. 138) The importance of transcendence is implied when he rightly observes “…a moral consensus that is to be enduring and effective is the product only of a general acceptance in its divine origin. A moral order, that is, can rest secure only on religious foundations. It cannot be raised on humanist principles, or on enlightened sweet reason…” (p. 160).

Finally, one may argue that the laissez-faire policy contributes to the growth of the welfare state for reasons other than those mentioned above. By making true charity impossible, the transcending of one’s own self-interest, they add to our demoralization, to that “sinking in of the moral being” which Yeats mentions, and this in turn reduces the desire to act charitably privately [since there is no difference between this form of self-interest and any other, people tend to choose the “other” – immediate selfishness – a difference in behaviour that suggests a difference in nature after all] which in turn adds to demands for government welfare programs; and also creates a passive acquiescence to government expansion, including welfare expansion, which again reinforces the lessening of private charity. Special interest and the growth of government are the result of libertarianism: everyone including politicians seeks his own immediate interest, not that of the common good or of social justice. They are simply being good political entrepreneurs putting the laissez-faire ideology into practice in government.

Would it not be better, then, in formulating policy to take a humbler view of matters and remember that the evils of big government are only part of the story? The evils of the big corporation, of the ego-centric economy in practice, and of the laissez-fairist and unlimited growth ideologies are also part of our modern experience.

Conclusion

Our choice of political economy is clear: one rooted either in secular immanentism or traditional transcendence. For all their talk of freedom and human dignity which advocates of the former proclaim, the ultimate effect of immanentism as shown above is quite inhumane. This conclusion is perhaps most fittingly illustrated by an account told to this author by the executive vice – president of a non – profit educational organization. In the early sixties, he reported, he was horrified to hear a prominent “conservative” economist argue that the federal government’s ban of thalidomide was unnecessary because eventually the market would have stopped the production and sale of the drug anyway. Of course, the key word is “eventually” since time would be needed. During that time, how many children would have been born with these serious birth defects while we waited for the market – eventually – to correct the matter? This economist was willing to sacrifice, literally, real humans to keep the purity of his intellectual system intact in practice as well as in theory. For this reason alone one can’t be libertarian and Christian. Unless we are willing to explore other possibilities, such as the humane economy of Roepke, Chesterton, or Weaver, with an uncompromising insistence on the fullness of our humanity in the economic world, our economy will become increasingly inhumane. We will sacrifice even more than we are doing – actual human lives – on the Moloch of the market

Books referenced in this essay may be found in The Imaginative Conservative Bookstore

 Read the series introductory essay here.]

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6 replies to this post
  1. And by slowing down the release of new drugs to save us from the visible victims of thalidomide, countless millions of invisible victims die waiting while other perfectly safe drugs are put through unnecessarily long trial periods.

  2. It is doubtful that any drug is "perfectly safe." The point of the thalidomide srtory is that because of the market imperfections involved in health care drugs, the government has a prudential role to play to disicpine corporations that may rush drugs to market without adequate testing. That government today may overdo the regulations, is no reason to abanadon the principle involved. That would be like someone who fears anorexia advises obesity instead. It is a matter of maturity and judgement in a healthy society to balance conflicitng concerns like these.

    R.Ancil

  3. Echoes of the Church social teaching can be heard as "economic liberalism" or unbridled capitalism ushers in collectivist socialism.

  4. I am a traditional Catholic with deep respect for laissez faire and Austrian economics and deep suspicion of all statism/socialism. I agree that certain libertarians have their defects, assuming that everything is self-interest or that freedom is an end in itself. But are those essential aspects of libertarianism? I don't think so.

    Instead, the central principle of libertarianism is the non-aggression principle. In other words, respect the dignity of other human persons and their property. I see nothing inconsistent with Catholic moral principles here. I also wholeheartedly agree with the popes that the church should lead in developing and promoting these moral principles, which have their root in the dignity of the human person. Whenever the popes or other conservatives, however, call for intervention, I am somewhat baffled. Not only do most (or all) interventions have unforeseen economic consequences, but those that intervene on behalf of the state seem highly likely to be rogues and legal plunderers. I recognize that humans have free will. But why should we grant a monopoly of power to the State so that certain humans will have the power to coerce the rest of us into doing their will. When these statists blunder, they then do so catastrophically, with incalculable harm.

    Regardless, I actually agree with many parts of the article. Anyone that adheres to materialism or imminentism is wrong. I've also read Roepke and find his views quite consistent with other Austrian economists. He is a strong defender of the market and the price system.

  5. It seems like Mr. Ancil has linked libertarianism with egotistical materialism, rightly shown that egotism and materialism are wrong, and concluded that libertarianism is as well.

    Here is a clear statement of the nonaggression principle, the central principle of libertarianism, as Will B said: Use no violence against any person or property except to stop them from using it on someone else. By implication, everyone has the authority to prevent aggression: this is the true source of the state's authority, and its limit. Obviously it is completely impossible for a society to follow this principle and become totalitarian.

    Egotistical self-interest is not a necessity for libertarianism. But it is an undeniable fact of English syntax that people act according to their will. They may very well will what is good for another, or what God wills solely because He wills it, or what they mistakenly believe God wills. But that is what they do, and that is where Austrian economics begins.

    Materialism is not a necessity for Austrian economics, though it is for socialism, which does tend to descend into totalitarianism. Austrian economics states, for example that if a person values/prioritizes life in a monastery (or God's will that they join it) higher than a motorcycle, a girlfriend, and a good career, they will give them up to join the monastery. Austrian economics uses the CBA, but it does not state that only material things have costs and benefits, as socialism does.

    Mr. Ancil is correct in denying materialism, egotism, and imminentism. He is wrong to group libertarianism with them.

  6. Like so many critics, Ancil fails to interact with a single scholarly representative of Christian libertarianism. This, despite the length of his essay. Christian charity and Christian integrity demands that Christian scholars represent their opponents in the strongest way possible. Ancil doesn’t even represent them at all.

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