Toward a More Just Economy

I can only do justice to John Mueller’s magnum opus Redeeming Economics: Rediscovering the Missing Element (and it is “magnum,” with 470 dense pages and copious footnotes) by comparing it to Adam Smith’s Wealth of Nations, Ludwig von Mises’ Human Action, and the wrongheaded but immensely influential General Theory of Employment, Interest and Money by John Maynard Keynes, or Das Capital by Karl Marx. Mueller analyzes economists from Aristotle up to and including Stigler, Becker, Friedman, Rueff, Robert Mundell, and Arthur Laffer (he of the magic napkin and the supply-side revolution).

However, he does so from a broader perspective than most of his recent predecessors. That’s because Mueller is a full-bore Catholic who also draws not only on Augustine and Aquinas but the influential Rev. Heinrich Pesch, S.J., who profoundly affected the expression of official Catholic social doctrine after it was formally inaugurated by Pope Leo XII’s 1891 encyclical Rerum Novarum. Mueller also incorporates the papal teachings of the encyclicals of Popes Leo, Pius XI, John Paul II, and most recently Benedict XVI.

Wherever you stand on the political spectrum, it is becoming indubitably clear that economics as a positive science is not commensurate with biology, chemistry, physics, etc. The reason is simple. Those “positive” sciences deal with things that are created by God and about which new discoveries can frequently be made through observation and experimentation. Political economics, on the other hand, is finally and essentially about persons and families and the choices they make for a variety of reasons.

Mueller is the director of the Economics and Ethics program at the Ethics and Public Policy Center in Washington, D.C., and president of LBMC, an economic forecasting and analysis firm. He was a long-time advisor to the late Jack Kemp during the Reagan presidency and one of the main players in the supply-side revolution of the 1980s.

Mueller’s Redeeming Economics (published by ISI books) challenges the assumptions and equations of classical and neo-classical economists by looking backward to the fathers of the West — Aristotle, Augustine, and Aquinas — to rediscover the “Missing Element,” as he puts it in his subtitle. The three major schools of economics (Keynesian, Monetarist/Chicago, Austrian) and most of the minor ones (such as distributism, Georgism, social credit) are carefully and fairly examined by Mueller and found wanting.

According to Mueller, “The first revolution in economics had occurred five centuries before Adam Smith, when Thomas Aquinas offered a comprehensive view of human economic actions. All such actions fall into four categories: Humans produce, exchange, distribute and consume goods. Adam Smith eliminates the scholastic theories of consumption and final distribution.” Mueller’s hope and contribution is to reintegrate final distribution to make economics whole and healthy again.

He writes, “The stepping-stones of economics are the four essential facets of all economic decisions which were integrated at all three levels of human society: personal, domestic, and political. . . . These stepping-stones are the facts of human existence explained with elements originally derived from Greco-Roman philosophy, and the Bible.”

Mueller is both practical and realistic. Perhaps his most interesting chapters are those on policy recommendations and implications, all of which are based on marriage being

the first natural bond of Human Society and that the decision to have children boils down to two motives: People have children either because they love the children for their own sakes, or else because they love themselves, and expect some personal benefit from the children (or some combination of these motives).

Therefore, according to Mueller, both private savings and government insurance will reduce fertility. He also shows the connection between weekly worship and higher fertility. He analyzes marriage in this way: “In a certain sense the spouses are partners in a small business; and to make the most of their house resources, work out a coordination of economic roles.” There is much more, including an empirical analysis showing that halting all abortion would almost immediately solve the problem of the bankruptcy of Social Security, but I will let you discover these fascinating insights on your own.

 

With 15 blurbs and endorsements from well-known economists, writers, and academicians, this book stands by itself as a resounding challenge to both the Right and the Left to study and answer (if they can) Mueller’s recovery of the Missing Element. That element can make personalist economics a reality, ensuring a distribution of wealth that is both humane and just without the heavy hand of unnecessarily intrusive government attempting the impossible task of fine-tuning the trillions of economic decisions made daily.

Redeeming Economics may be ignored by the elitist enemies of true freedom for the moment, but it will have its just influence over time. “The love that moves the sun and stars” (in Dante’s words) is that same Love that loves human persons; the only way toward a just economy must be based on the “sincere gift of self,” which exalts God and His children.

Pope Benedict XVI’s most recent encyclical on human development, “Charity in Truth,” caused no little controversy both in secular and Catholic circles. Mueller’s book is one well-documented way of making the encyclical understandable. As Pope Benedict put it:

The earthly city is promoted not merely by relationships of rights and duties, but to an even greater and more fundamental extent by relationships of gratuitousness, mercy and communion. Charity always manifests God’s love in human relationships as well, it gives theological and salvific value to all commitment for justice in the world.

If policy makers were to read and put into effect some of Mueller’s policy advice, and if every Catholic university in the country were to require the use of this book for Economics 101, we might be on our way toward a just and prosperous polity and culture where true freedom reigns and life is fully celebrated.

Rev. C. J. McCloskey III

By

Fr. C. J. McCloskey III is a Church Historian and a research fellow of the Faith and Reason Institute in Washington, D.C. After and while earning a degree in economics from Columbia University, he worked for two major firms on Wall Street. Visit his website at www.frmcloskey.com.

  • Mary

    Halting all abortions would help SS until women discovered that they didn’t have to conceive children they don’t want. Most would resort to contraception rather than abstinence, no doubt, but remember that births fell only a single-digit percentage after Roe vs. Wade.

  • MarylandBill

    Mary,
    I would say very few women plan on using abortion as a form of birth control. Rather, I believe most abortions are the result of either failed contraception or women who just failed to plan in the first place. Neither scenario suggests that banning abortion will be compensated for.

    Further perhaps the birth rate only fell a small amount, but it occurred at a time when birth rates should have been increasing rather significantly. 1973 was when the heart of the baby boom was entering their prime child bearing years. Instead of the boomers having most of their children from 1965-1980, when they were in their 20s, they had them in the 80s when they were in their 30s and 40s.

  • Chris

    To be more precise, Leo the XIII wrote Rerum Novarum.

  • Michael PS

    MarylandBill is right. The Baby-Boomers did start their families nearly ten years later than their parents, but they also had only about half the number of children. Women’s total lifetim fertility rates dropped from about 3.9 to 1.9 children per woman.

    Now, no increase in average family size, unless it rises to West African levels of 6+ children per family will reverse the decline. Thirty years of declining birth-rates means that there are not enough women of child-bearing age to reverse the inevitable aging of the population.

    These trends can best be studied in Japan, where they are uncomplicated by significant inward or outward migration.

    Any civilisation that fails to reproduce itself, not as a result of war or natural disasters, but from a lack of moral energy and faith in its own future, must be judged a failure, at the most basic level.

    That said, the USA has a higher fertility rate than almost anywhere else in the developed world, perhaps becasue so many emigrants came there to make a better life for their children and not just for themselves

    Projection is not prediction, but at their present rate of decline, in 200 years, most European languages will be spoken only in hell

  • MarylandBill

    Michael,
    The drop in fertility is perfectly understandable. Most studies suggest that fertility in women starts dropping off after age 30, so if a woman delays the start of her family from 23 to 32, its going to become harder to have kids to begin with. In addition, of course, she will have fewer years of fertility left in which to have kids.

    Now, I am not sure I entirely agree with you that our wives need to start having 6 kids to reverse the trend. What we do have to recognize however is that simply increasing average fertility in this country to say 3-5 kids per family is not going to solve the demographic problem over night. Rather it will take decades, indeed, probably generations, before the damage is undone.

    I also hold out more hope for the future. I think what might ultimately happen is that those who are more committed to traditional values, and who therefore have larger families, will ultimately over take the rest of our “culture” and ultimately they might restore both the fertility of the west and its cultural vitality.

  • Michael PS

    MarylandBill

    It is not the actual size of the population, but the age distribution within it that is the problem.

    The Baby-Boomer Generation was twice the size of the GI Generation. Generation X, however, was slightly smaller than the Baby-Boomer Generation. In other words, the TFR (Total Fertility Rate or lifetime number of children) of women of the Baby-Boomer Generation was about half that of their mothers

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