The Chips Begin to Fall Where They May
Jeffery Tucker recently wrote an article for Inside Catholic titled “Why Catholics Don’t Understand Economics.” Not only does it fail to address any concerns that Catholics have about economics, but in a fashion slightly removed from the Pythagoreans (who killed all who disagreed with them), Inside Catholic has banned anyone from making an informed comment against the Austrian position. Particularly, every member of this Review commenting on the site has had their IP addresses banned. Not that I generally read that fishwrap apart from this particular musing, so the parting is not quite so worrisome.Fortunately, we have neither such unwritten policies nor recourse to the Pythagorean solution to debate. Likewise, Mr. Tucker is welcome to discuss and comment here.In the first place, Tucker titles his post “Why Catholics Don’t Understand Economics”. Which Catholics? Does he mean all Catholics? Or Catholic laymen? Bishops? Priests? Maybe the Pope? Well, it seems that there is only one group of Catholics in history who have understood economics, and those were some 16thcentury Spanish Scholastics. That didn’t help Spain, which was caught in a backward economic situation for another two hundred years. Moreover, this is a false canard which has been seriously overused; the Spanish Scholastics never said anything approximating modern economics as Austrian-Libertarians mean it. Since translating and researching is well beyond the scope of this article (The collective teachings of the Salamancan fathers are in advance of 30 volumes) let us assume for the sake of argument that they were little Mises, Rothbards and Tuckers, the entire Catholic tradition as well as the Magisterium of the Church rejects these principles. So what of it?Never mind that for now. What matters is that according to Mr. Tucker, no Catholic except for a remarkable exception of some scholastics at the University of Salamanca [sic] has understood economics including many Popes. Including myself apparently, but I’m just a troll in a traveling sideshow (as I was referred to by Inside Catholic’s administrator, contrary to its own editorial policy) so what do I know? What’s more:
It's not just that the writers, as thoughtful as they might otherwise be on all matters of faith and morals, do not know anything about economic theory. The problem is even more foundational: The widespread tendency is to deny the validity of the science itself. It is treated as some kind of pseudo-science invented to thwart the achievement of social justice or the realization of the perfectly moral Catholic utopia. They therefore dismiss the entire discipline as forgettable and maybe even evil. It's almost as if the entire subject is outside their field of intellectual vision.[note]http://www.insidecatholic.com/feature/why-catholics-dont-understand-economics.html.[/note]
Let us consider this for a moment. We at the Review, just as carefully as the first distributists, have been quite careful to say that Distributism is an attempt to implement Catholic social teaching. One does not need to be Catholic to support and hold to Distributism. With this title Tucker is basically saying that Distributism is Catholic Social teaching. I can live with that. In fact we shall return to that at the end. Mr. Tucker further claims that we deny the validity of economics as a science in se. Firstly that is not true, but more importantly no one here believes in a perfectly moral Catholic utopia. Yet this is where we are at today, by saying that there needs to be justice in the market, that it is not sufficient to lower wages indefinitely and raise CEO pensions and benefits indefinitely, we are suddenly blind idealists in a Catholic utopia. I would challenge Mr. Tucker to ever find a distributist writer, old or new who thought that perfection would suddenly arise out of the Distributist ideal. In fact, in last year’s Capitalist-Socialist-Distributist debate, Thomas Storck speaking for Distributism, said explicitly “Distributism does not aim at realizing 100% of its ideal.” Why is that? What is the point of having an ideal if you can’t realize it 100%? Because man is a creature afflicted by original sin and its resulting imperfections, thus no system is going to fully realize any conception of justice. Yet does this mean we abandon the pursuit of justice because one cannot fully realize the ideal?A perfect example is a company which produces chemicals. There is a stream on its property. At a certain point the property ends but the stream continues to other tributary streams and constitutes a lot of groundwater for local homes. The chemical company decides, since the stream is on its property, to dump its waste into the stream since it saves them expensive disposal means and allows them to sell their products cheaper. The toxins in the water pollute the neighborhood groundwater and cause people to get sick, kill the fish in the stream and upset the local ecosystem. Under the libertarian schema there is nothing that can be done, because government can only intervene in the case of theft or fraud. The chemical company commits no fraud; neither do they take property that is yours. They might damage something that is yours, but it matters little as it is all to the dynamics of the market. Now an economy based on justice and the common good rather than the concept that greed eventually makes for the common good in the form of lower prices, would say it doesn’t matter if the company has a stream on its property, it does not have the right to pollute water which affects so much locally.So at the outset what is occurring is not that Mr. Tucker understands economics while Catholics do not. We simply have a different foundational principle around which economic theory is based. Secondly, for Mr. Tucker the “laws” of economics are as fixed and certain as the laws of gravity. The problem with this is that while what goes up must come down, it doesn’t follow that person (a) must invest his money, or that person (b) must pay his workers this, while CEO must be paid that. Economics properly speaking is a social science, not a physical or mathematical science. Human choices are not fixed and finite under certain conditions. In general, some things can be held to be true, such as that during times of infrastructure collapse most people will horde. Yet what if they don’t? As long as we are talking about human choices, that is a possibility, unless one believes in determinism.Nevertheless Mr. Tucker thinks he has the solution as to why the trolls [sic] do not understand economics:
I have what I think is a new theory about why this situation persists. People who live and work primarily within the Catholic milieu are dealing mainly with goods of an infinite nature. These are goods like salvation, the intercession of saints, prayers of an infinitely replicable nature, texts, images, and songs that constitute non-scarce goods, the nature of which requires no rationing, allocation, and choices regarding their distribution.
Aha! That is it! Why haven't we figured this before? We don't live in the real world. That is why we don't understand economics. We deal in saints, grace, songs, sacraments. We don't buy food, or eat and drink, or drive cars, or buy gas, or have jobs, or make business decisions, or own houses. Nope. We mainly deal in spiritual goods that are non-scarce and have no earthly value.Seriously, does he think we sell indulgences to make a living?In the meantime, most Catholics do not deal mainly in goods of an infinite nature. We do that too, but here this shows that the Catholic faith must be beyond Mr. Tucker's intellectual vision. It follows from what was discussed above, he sees the world from the standpoint of atheistic economic principles (to such a level that God and the life of the soul are blasphemously reduced to goods), while Catholics see the world through the principles of justice and grace. But we still see the world! Contrary to whatever rose-tinted glasses accompany Tucker's bow-tie, Catholics deal in the earthly world of goods and services on a daily basis. Since some form of trade and exchange is necessary for 99.9% of people to live their lives, it is inconceivable that anyone could live and work where his main concerns were dealing in spiritual things, and that he was so stupid that he treated economic things of this world in the same manner. This is what Tucker is suggesting. He already suggested that Catholics that don't see economics his way are stupid (it is beyond their intellectual vision), and he is saying it again that since we look to the next life and not this one, we have no idea how to conduct ourselves in this life.Moreover, he goes on to say that these goods take on no space and can be reproduced infinitely. This is however far from reality. Images, texts, music (with respect to CDs and sheet music) are all bought and sold; a man who wishes to put religious items in his home must buy them. A man who wants to purchase a statue must buy them. Now obviously prayers, grace, sacraments etc. cannot be bought (because that is the sin of simony), his proof already fails because Catholics do in fact deal with money, commerce and exchange in the things Tucker mentions.
So let us back up and consider the difference between scarce and non-scarce goods. The term scarcity does not precisely refer to the quantity of goods in existence. It refers to the relationship between how many of these goods are available relative to the demand for goods. If the number available at zero price is fewer than people who want them for any reason whatever, they can be considered scarce goods. It means that there is a limit on the number that can be distributed, given the number of people who want them.
Scarcity is the defining characteristic of the material world, the inescapable fact that gives rise to economics. So long as we live in this lacrimarum valle, there will be no paradise. There will be less of everything than would be used if all goods were superabundant. This is true regardless of how prosperous or poor a society is; insofar as material things are finite, they will need to be distributed through some rational system—not one designed by anyone, but one that emerges in the course of exchange, production, and economization. This is the core of the economic problem that economic science seeks to address.
First of all, this analogy of non-scarce goods does not hold. If an icon can be copied indefinitely why is it that they cost between $30 and $100? An icon as a work of art is repeatable, but it must be written on a block of wood, with paint that must be acquired, by an iconographer who must be paid for his time. Sure, in theory I could produce all the icons myself by crushing my own scarabs and plants for dye and paint, cutting my own tree for wood, and producing my own brushes without exchanging a dollar, but even then I must apply capital and labor in order to produce a product which is desired for its religious value. While reference to prayers or the acquisition of grace or anything else spiritual follows, items of devotion do not follow as "non-scarce" goods. In fact they themselves are scarce goods, so Mr. Tucker is shooting himself down with his own example. Moreover if we remove things like books or art and stick to purely immaterial things, then the distinction is redundant at best since it is to the nature of a spiritual thing to be immaterial and hence not acquired as a clock or ... as an icon, just as it is in the nature of food, tools, cars and religious goods to be material and therefore scarce. There is no question of these things. Yet it is a misnomer to claim economics is the science of scarce objects, since this would necessarily embrace Communism, which believes the state is the best administrator of scarce goods, or Distributism which believes scarce goods are regulated by justice. It most certainly deals with scarce objects, yet archeology deals with erosion and I know of no definition of archeology that calls it the science of erosion. Economics is a social science, a study of human choices, Mr. Tucker's human choices are based on two principles, namely the unlimited use of private property and prevention of theft and fraud. Ours is based on the justice of man's acts in economy.What this boils down to is that Tucker is claiming that because Catholics pray they have no concept of how material things work, as if Catholics did not live in the real world and have need of employment, buying food, buying clothes, selling clothes, taking out loans or starting businesses. We're all too busy praying to know what all of those things are about! Therefore we don't know anything about economics. On top of that I'm a troll in a traveling road show, but I was a manager at Wal-mart for 4 years, much to my own chagrin as a Distributist, but I made it. I wasn't walking the floor rosary beads in hand worried about non-scarce goods such as grace, virtue or the "scarce non-scarce" Icon. I was doing a job (irrespective of my misgivings about it) for which I was remunerated and could then purchase more scarce items for my family's consumption, in the way of food, clothes, gas and diapers, while making a house payment with my second job. Most Catholics are in the same boat. The thesis that focusing on our spiritual end causes us not to understand the use of temporal goods is nonsense. What it does is cause us to have different ideas about a social science, which Mr. Tucker somehow perceives that his minority opinion within the realm of economics constitutes science.Mr. Tucker concludes his point arguing:
But consider people who have dedicated their life to the work of these non-scarce goods. One can easily imagine that they find immense power and glory in these goods. I certainly do. They are the things to which all religious people have devoted their lives. This is a fantastic thing—and truly, without non-scarce goods, the whole of civilization would come crashing down to the level of the animals.
At the same time, the world does not only consist of non-scarce goods. The economic problem deals with the issue of scarce goods. And this is just as important to the flourishing of life on earth. All things finite are subject to economic laws. We dare not ignore them nor ignore the systems of thought seeking to explain their production and distribution. Note that Jesus' parables deal with both realms. So should we all.
There we have it in a nutshell. Catholics only live in the world of non-scarce goods (as if we were all in some kind of Carthusian order), but Jesus lived in both; let's be like Jesus. After all, St. Thomas Aquinas, Pope Leo XIII, St. Pius X, Pius XI and John Paul II did not live in both realms, they were stuck in the realm of non-scarce things, that is why they did not understand economics!Why can't those old Popes be more like Jesus?Yet Jesus also said something else to the apostles, he told them "He who hears YOU, hears Me." (Mark XVI:16) What does this mean? Catholics know what this means; it means that Jesus Himself invested the Church with His authority. When the Church binds men with His authority, they are bound. Yet this could get pretty tyrannical, so Christ put Peter in Charge and guides him. As Vatican I declared,
The Holy Spirit was not promised to the successors of Peter, that by His revelation they might make new doctrine, but that by His assistance they might inviolably keep and faithfully expound the revelation or deposit of faith delivered through the Apostles.
Apparently not when they are talking about economics. Then suddenly they are just too bound up with non-scarce goods to have any idea about what they are doing.However the Popes did not think so. Leo XIII and Pius XI's teachings are already well quoted on this website and elsewhere. St. Pius X, attempting to defend Pope Leo from dissent, insisted that Catholics are in fact required to submit to the Church's social teaching:
We first of all declare that all Catholics have a sacred and inviolable duty, both in private and public life, to obey and firmly adhere to and fearlessly profess the principles of Christian truth enunciated by the teaching office of the Catholic Church. In particular We mean those principles which our predecessor has most wisely laid down in the encyclical letter "Rerum Novarum."[note]Singulari Quadam, no. 2.[/note]
Pius XI, after his swoon over non-scarce items, turned the Church's attention to the scarcely understood scarce:
Many believe in or claim that they believe in and hold fast to Catholic doctrine on such questions as social authority, the right of owning private property, on the relations between capital and labor, on the rights of the laboring man, on the relations between Church and State, religion and country, on the relations between the different social classes, on international relations, on the rights of the Holy See and the prerogatives of the Roman Pontiff and the Episcopate, on the social rights of Jesus Christ, Who is the Creator, Redeemer, and Lord not only of individuals but of nations. In spite of these protestations, they speak, write, and, what is more, act as if it were not necessary any longer to follow, or that they did not remain still in full force, the teachings and solemn pronouncements which may be found in so many documents of the Holy See, and particularly in those written by Leo XIII, Pius X, and Benedict XV.
There is a species of moral, legal, and social modernism which We condemn, no less decidedly than We condemn theological modernism.[note]Ubi Arcano, no. 60-61.[/note]
As far as the good Pope is concerned, the teachings on the just price, just wage and government intervention to protect them are in fact part of universal ordinary magisterial teaching. This has been a constant teaching in the Catholic Church, at first in practice, but later in more explicit doctrine.Mises recognized this, and declared:
The fate of Civilization is involved. For it is not as if the resistance of the Church to liberal ideas was harmless...The Church, Catholic as well as Protestant, is not the least of the factors responsible for the prevalence of destructive ideals in the world today.[note]Socialism, Chapter 29; cf The Church and the Libertarian, 74.[/note]
In the end, when Tucker asks "Why Catholics Don't Understand Economics" he means why do distributists not get economics, since claiming to be a Catholic himself he could scarcely say no Catholic gets economics. He certainly means that Distributism is Catholic social teaching, and it is the enemy, just as surely as Mises himself saw any religion, grace, all those nice non-scarce items Tucker extolled earlier as an evil against "economic law".[note]For those who wish to read what Ludgwig von Mises thought of Jesus Christ, our Redeemer, click here.[/note] Yet whose economic law? The Marginal Theory of Value?The real battle ground has nothing to do with those neat little categories Tucker goes through, or the opprobrium he throws at Catholics who accept what the Church has handed down about justice in society. It has everything to do with foundations. There is no such thing as a free market in any sense. Every market must be directed. The question is how? In a vacuum of government direction the wealthy will direct it, being the most powerful unit. In a Socialist state the government directs the division of capital and labor, their production and remuneration for work. The distributist says justice should direct it. Now since economics is a social science, as we said, it is not like a mathematical law, or a physical law, any given equation can be directed, or for that matter will be directed. Economic laws are not to be ignored, nor passively felt such as gravity, but used and subordinated according to justice, because they are not inherent. Markets are not natural creations, they are social constructs, and what's more they vary from culture to culture. Trade in Carthage was different from trade in Greece, just as today trade in New York is different from trade in Afghanistan. All principles in markets and values necessarily reflect the culture which creates or modifies them, yet justice remains constant because it is written on the heart of man in the natural law. If Mr. Tucker paid attention to non-scarce things, he might have some intellectual vision of that.
