Why Catholics Don’t Understand Economics

For years I’ve puzzled over the question of why Catholics have such trouble coming to terms with economics. This problem applies only to modern Catholics, for it was Catholics in 15th- and 16th-century Spain who systematized the discipline to begin with. That was long ago. Today, most of what is written about economics in Catholic circles is painful to read. The failing extends left and right, as likely to appear in “progressive” or “traditionalist” publications. In book publishing, the problem is so pervasive that it is difficult to review the newest batch.

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.

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.

None of these goods take up physical space. One can make infinite numbers of copies of them. They can be used without displacing other instances of the good. They do not depreciate with time. Their integrity remains intact no matter how many times they are used. Thus they require no economization. For that reason, there need to be no property norms concerning their use. They need not be priced. There is no problem associated with their rational allocation. They are what economists call “free goods.”

If one exists, lives, and thinks primarily in the realm of the non-scarce good, the problems associated with scarcity — the realm that concerns economics — will always be elusive. To be sure, it might seem strange to think of things such as grace, ideas, prayers, and images as goods, but this term merely describes something that is desired by people. There are also things we might describe as non-goods, which are things that no one wants. So it is not really a point of controversy to use this term. What really requires explanation is the description of prayers, grace, text, images, and music as non-scarce goods that require no economization.

 

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.

It is almost impossible to think of a finite good that is non-scarce. We can come up with a scenario, perhaps, like two people living in paradise surrounded by an ocean of bananas. In this case, the bananas would be a non-scarce good. They could be eaten and eaten forever, provided that the bananas do not spoil. Another proviso is that there can be no free trade between paradise and the rest of the world, else one of the inhabitants might get the bright idea to arbitrage between non-scarce bananas in paradise and scarce bananas everywhere else. In this case, the bananas would obtain a price and would therefore have to be called scarce goods, not non-scarce goods.

In the real world outside of the banana paradise, non-scarce goods are of a special nature. One feature is that they are typically replicable without limit, like digital files or the inspiration one receives from an icon that can be copied without limit.

 

As an example, consider the case of the loaves and fishes, an incident in the life of Jesus recorded by all four Gospel writers. Jesus is speaking to the multitudes, and the listeners grow hungry. The apostles only have five loaves and two fishes: These are scarce goods. They could have thrown them into the air and created a food riot over who got what. They could have opened a market and sold them food at a very high price, rationing them by economic means. Both solutions would produce outrageous results.

Instead, Jesus had a different idea. He turned the scarce bits of food into non-scarce goods by making copies of the scarce food. The multitudes ate and were full. Then the food evidently turned back into scarce goods, because the story ends with Jesus instructing his disciples to collect what is left. Why collect what is non-scarce? Clearly, the miracle had a beginning and end.

The story nicely illustrates the difference between a scarce and non-scarce good. Jesus often used this distinction in His parables, which are mostly stories about the scarce world told in order to draw attention to truths about the non-scarce world. Think of the merchant who bought pearls at a low price and sold them at a high price. One day he found the pearl of the highest possible value, and he sold all he had just to buy and hold it. The pearl, of course, represents salvation and the love of God — non-scarce goods, because there is enough for everyone who desires them.

We are in fact surrounded every day by non-scarce goods exactly like the loaves and fishes. All ideas are of this nature. I can come up with an idea and share it with you. You can possess it, but in so doing, you do not take that idea away from me. Instead, you hold a replica of it — just as real and intact as the original version. Words are this way: I do not need to parse them out in order to save some for myself. Tunes in music are this way, too. I can sing a tune to you, and you can repeat it, but this action does not remove the tune from me. A perfect copy is made, and can be made and made again unto infinity.

This is completely different from the way things work in the realm of scarce goods. Let’s say that you like my shoes and want them. If you take them from me, I do not have them anymore. If I want them again, I have to take them back from you. There is a zero-sum rivalry between the goods. That means there must be some kind of system for deciding who can own them. It means absolutely nothing to declare that there should be something called socialism for my shoes so that the whole of society can somehow own them. It is factually impossible for this to happen, because shoes are a scarce good. This is why socialism is sheer fantasy, a meaningless dreamland as regards scarce goods.

 

The difference between scarce and non-scarce goods has long been noted within the Christian milieu. St. Augustine was once challenged to explain how it is that Jesus can speak for the Father in heaven though the Father is separate. He responded that there is a special non-scarce nature associated with words so that the Son can speak the same words and possess the same thoughts of the Father.

This is true on earth, too, Augustine continued:

The words I am uttering penetrate your senses, so that every hearer holds them, yet withholds them from no other. . . . I have no worry that, by giving all to one, the others are deprived. I hope, instead, that everyone will consume everything; so that, denying no other ear or mind, you take all to yourselves, yet leave all to all others. But for individual failures of memory, everyone who came to hear what I say can take it all off, each on one’s separate way.

In saying these things, Augustine was both establishing and following up on a tradition that prohibited the buying and selling of non-scarce things. Jewish Halachic code prohibits a rabbi or teacher to profit from the dissemination of Torah knowledge. He can charge for time, the use of a building, the books, and so on, but not the knowledge itself. The Torah is supposed to be a “free good” and accessible to all. From this idea also comes the prohibition on simony within Christianity.

The moral norm is that non-scarce goods should be free. There is no physical limit on their distribution. There is no conflict over ownership. They would not be subject to rationing. This is not true with regard to material goods.

To further understand this, let’s try an alternative scenario in which a non-scarce good like salvation (non-scarce because it is infinitely replicable) is actually a scarce good that must be rationed. Let’s say that Jesus had not offered salvation to all but instead had restricted the number of units of salvation to exactly 1,000. He then put His apostles in charge of allocating them. (When I mentioned to this to a non-believing friend of mine, he said: “You mean like tickets to Paradise? I bought five of those in a Mosque in Istanbul!”)

The apostles would have immediately confronted a serious problem. Would they give them all out immediately or dispense them over the course of a year, or ten years? Perhaps they suspected that the world would last another 100 years; they might limit the distribution of salvations to only ten per year. Or perhaps they needed to reserve them to last 1,000 years. Regardless, there would have had to be rules and norms governing how they were distributed. Perhaps this would be based on personal displays of virtue, of monetary payment, of family lineage, and so on.

No matter what the results, the history of Christianity would have been very different if Jesus had not made salvation a non-scarce good, but instead had limited the supply and charged the Church with allocation. There would have been no liberality in spreading the gospel. Forget the whole business of going to the ends of the earth or becoming fishers of men. Under a limited supply, the salvation could not be replicated. If, for example, the apostles had chosen a 1,001th person to be saved, eternal life would have been taken away from the first person to receive it.

 

This might sound preposterous and even frightening, but this is precisely the situation that persists with all materials goods in the real world. All scarce things are fixed, and all things must be allocated. Even under conditions of high economic growth and rapid technological progress, all goods in existence at any one time are finite and cannot be distributed without norms or property rights, lest there be a war of all against all. Another factor of production that is scarce is time, and this too must be allocated by some means.

As it happens, salvation is indeed a non-scarce good available to all who seek it. So are the intercessions of saints. No one fails to ask for the intercession of a saint, but one knows for a fact whether someone else is employing that saint at the moment. No, we rightly assume that saints have no limits on their time for prayer. Indeed, the limitlessness of salvation is the prototype for all forms of non-scarce goods like music, texts, images, and teachings.

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.

 

Image: © Dick Osseman

Jeffrey Tucker

By

Jeffrey Tucker is managing editor of Sacred Music and publications editor of the Church Music Association of America. He writes a bi-weekly column on sacred music and liturgy for Crisis Magazine and also runs the Chant Cafe Blog. Jeffrey@chantcafe.com

  • Brennan

    People reading this article might also be interested in this book (I’ve started reading it, and it’s quite good so far):

    Toward a Truly Free Market

    A Distributist Perspective on the Role of Government, Taxes, Health Care, Deficits, and More

    By John C. M

  • jefffrey tucker

    Maybe there is something to this book but if so, it will be the first with the word distributist in the title that makes a coherent economic argument.

  • Daniel Molinaro II

    Maybe there is something to this book but if so, it will be the first with the word distributist in the title that makes a coherent economic argument.

    Mr. Tucker, it’s not that distributists do not make coherent economic arguments. They do in fact understand economics. Your disagreement, if I remember correctly from past articles, is that they do not place the same emphasis on growth that you do. If I remember correctly, you think that growth, because it eventually results in getting spread around, is always good, whereas the distributist does not think that growth is a good to be sought for itself.

  • Jeffrey

    Umm, Daniel, that is not correct. If people don’t want growth, fine. Growth should not be forced. The IMF and World Bank make growth a priority. Market advocates make ownership and freedom the priority. The problem with distributism is that it imagines an ideal distribution of property and attempts to achieve it…through what means is unclear but it has to be through some use of force and central planning. But what happens on day two when trading begins anew and the division of labor takes over and distributions fall outside what the idealists want? We have to start over again. Keep this up and you end up with a strange sort of central planning. As always, the real choice over the use and allocation of scarce goods is: market exchange or government management. There is no third way.

  • Matthew Wade

    Mr. Tucker let slip his aversion to Distributism, a most unfortunate circumstance. Now it seems that these comments will go back and forth arguing about “Distributism vs. Libertarianism”, “Medieval Economic Thinking vs. The-Glorious-15th-and-16th-Century Spanish Catholic ‘Economists'”, and “You vs. Us”.

    First of all, this whole idea of scarcity as the foundation of economic “science” (I put it in quotes to distinguish the Catholic understanding of a “science” from that of the mainstream university view of economics with “physics envy”) is a bit of a strawman. Sure, hypothetically there is scarcity. Just like Ricardo’s idea of mutually beneficial free-trade works in theory. The problem is that so many non-economic, but still moral influences (yes, like all of the popes I think that economics falls within the realm of human action, morality, and therefore Church influence) come into play that someone like David Ricardo couldn’t possibly comprehend in his works when all he wanted to do was write about a circumscribed view of “Political Economy”. “Scarcity” is to modern economic “science” what gravity, electromagnetism, and strong and weak nuclear forces are to physics, some sort of foundation on which to build complex formulas that look great and require a degree to interpret. In economics this gives rise to the fabled “Supply and Demand Curves”, marginal theory, and “free market forces”. This has always, in my opinion, flown in the face of what Catholic Social Teaching has taught, in that some goods are completely outside of this analysis (Centesimus Annus #34). Perhaps we could develop some new term like “perceived scarcity” or “luxurious scarcity” because I’m not of the opinion that there is truly not enough wheat, corn, and milk around to feed the whole world, not enough cotton and wool around to clothe the whole world, and not enough shelter to protect the world. It may just be that those whose profits are derived from this theory of scarcity can’t stomach the sacrifice necessary to alleviate such problems. As Catholics, we don’t have that choice.

    I hope that my comment may make some kind of edifying contribution.

    Sincerely,

    Matthew Wade
    +JMJ+

  • Jeffrey

    “Sure, hypothetically there is scarcity”

    No, it’s more than hypothetical. There is not enough stuff. That’s why we need private property and prices. It’s why we need investment, trade, and production. If there were enough stuff for everyone, there would be no economic problem to solve at all. That is the point of my article. This is very serious: there are nearly seven billion mouths to feed in this world. Reverting standards of living to some previous century, because you think there is no economic problem at all, and in the name of some far-flung moral principle, will certainly result in mass death.

  • Nick Palmer

    Jeffrey, great article, and timely, too. As you point out, economics deals behaviorally with the temporal, as opposed to the Eternal. The moral issues also bear on the individual (with free will) versus the polity.

    Matthew shows his hand when he differentiates between some other stuff and “wheat, corn, and milk…cotton and wool…shelter.” Who determines what’s essential? He’s laid out a vegetarian-ish list. Why is that right? Hayek had much to say about this decision process, and where it leads one. The power to decide on the “right” list of “essentials to life” is an extraordinary power. We slide toward rule by the technocratic elite. Does corn provide nutrition more “efficiently” than soybeans? Than fish? Ask the corn farmer, he’ll tell you. Or, the fisherman. Or… Lobbyists, arise! Now, in Matthew’s world another scarce resource becomes “the power to decide.” How is it “priced”? Do these “deciders” sit in Needham, MA where I live? In Boston? In DC? In Brussels? How are they held accountable?

    There have been remarkable successes in Sub-Saharan Africa through giving property rights to local animals to those living in the areas as an alternative policing poaching of “public goods” game animals. Once those people see value in the “scarce resource” they become “good shepherds,” very quickly.

    At the climax of the article is the issue of production — unless someone produces something, it doesn’t exist to be consumed. Rev. James Schall has an excellent discourse on this topic in “Another Sort of Learning.” We live in the City of Man, aspiring for the City of God. We should not compromise Eternity, but while in this shady little valley here, we need to deal with reality. People produce based on incentives to produce. This does not mean that all incentives are monetary or power based. Some people produce solely out of love for God and fellow man. Yet, relying on all to behave in (what someone defines as) a benevolent fashion is simply utopian fantasy. There’s that immanentized eschaton for you.

    My one bone to pick with you, Jeffrey, concerns ownership of intellectual property beyond The Good News. I’m not well versed on copyright law, but assuming, per Tolkien, the difficulty of the “sub-creative” act of writing a book or a song or the like, we run into some thorny questions of fairness. Any thoughts on that topic?

    BTW, I love good analogies, and your “1,000 places in heaven” is a masterstroke. Like Bastiat’s “broken-window fallacy, it beautifully crystalizes the issue.

  • Matthew Wade

    …show thy hand to your audience. Or something like that was said by Our Lord. (Forgive me if the parody is too offensive.) Your comment, Mr. Palmer, about me showing my hand is telling. It is also perhaps a better segue to my response than I could myself have hoped for.

    My “list”, my “essentials to life”, the very distinction that I propose concerns that beautiful twenty-fifth chapter of St. Matthew’s Gospel. Please forgive me for not citing my sources, and for having lapsed in my recollection of Hayek’s principles. How could I have forgotten his discourse in my hasty concern for beatitude? Your apparent synthesis between a Platonic concern over a necessary “technocratic elite” and the new “scarcity” of “the power to decide” has taken us into the clouds of idealism. Only if we accept some sort of Machiavellian view of politics does your conclusion follow from my comments. Thankfully our Church provides us with the framework of thinking to avoid such single-mindedness. If you’ve ever met a hungry person you’ll realize that whether their bread is made from corn or wheat or potatoes doesn’t matter: the bread itself does. As to its production, and the incentive to those who produce it, I can’t rely on Christian Charity to motivate every man any more than you can rely on the free-market to allocate such goods to every man. However, my contention is that your propensity to put a price on everything is only evidence of the shallowness of the school of thought that can’t conceive of some material goods as “non-scarce”, and therefore not subject to such “scientific” consideration.

    As for your example of sub-Saharan Africa, I solute it. You’ll never find any reference in my post to some sort of generalized disdain for private property. In fact, by siding with the Popes I have to (willingly, mind you) accept the goodness (not absolute) of private property. One can (thankfully) cite dozens of other examples of private property providing a strong basis for climbing out of poverty. Thank goodness that our Church supports such an institution! As an aside, I would have to recommend Laborem Exercens over Another Sort of Learning if one were quickly searching for a proper orientation of thought towards work and production, employment and ownership.

    Lastly, I should love to have a beer or three with you to discuss this further because the irony and light-hearted nature that should animate such lively discussion can’t really be had over the internet. I hope mine hasn’t escaped my fellow readers.

    Sincerely,

    Matthew Wade

  • Dee

    No, it’s more than hypothetical. There is not enough stuff. That’s why we need private property and prices. It’s why we need investment, trade, and production. If there were enough stuff for everyone, there would be no economic problem to solve at all. That is the point of my article. This is very serious: there are nearly seven billion mouths to feed in this world. Reverting standards of living to some previous century, because you think there is no economic problem at all, and in the name of some far-flung moral principle, will certainly result in mass death.

    I am wondering if we take the scarcity issue too far. There are finite goods that are scarce, because we know for certain that there are not many of them in this world. But how do we know that some of our goods are only scarce because of the way they are used/misused? For example, water could be considered a finite good, and we are already seeing problems with water in parts of the world. A different attitude towards water might have changed the way we treat that which affects it and then there would be plenty of clean water to go around for everyone on the planet. Is this naive, or really the way things work and we have thwarted it?

    If we begin with a scarcity mindset, that’s what we get. If we see that that there is an abundance of what we need, because that is what the earth provides if we take care of it, we do not treat all goods as equal and we are more cognizant of the difference between need and want.

  • Nick Palmer

    Matthew, a a recovering alcoholic, but a lover of a good-natured go-round, could we make it coffee? I’ll buy if you’re ever in the Boston area.

    First, I’m not sure you’ve addressed my point at all. At a personal level, if I see a starving man I can figure out how best to help him given the circumstances. The bread or corn or t-bone would come from the supermarket, and the money from me. But, how does one untether some goods from the broader economic context? Does someone dictate that items A, B, C, and D are no longer subject to pricing — we’ll just allocate them based on need? Who chooses the list? Again, the program you propose would by necessity be large and political. I, an individual, can make a choice to show charity to another individual or even a group. Your postulated world still faces the problem of production: in the absence of prices and remuneration, who will produce the A, B, C, and D? Will we subsidize them? How much $$? Who decides?

    Once you’ve disconnected a few production-based goods (i.e. those requiring someone to invest time and resources to produce), the system gets very wobbly.

    One key aspect of Hayek is the understanding that truly good, moral people have no desire to wield control over others’ lives. When one constructs a system devoid of a market mechanism for allocating goods, someone must make decisions about production priorities. As the moral don’t wish to, the worst elements rise to power.

    I don’t rely on the free market to allocate “goods to every man.” If only it were possible. I do, however, believe that the free market will provide more goods, of better quality, and lower total production cost to more people than any centrally planned system. We live in the City of Man, smack dab in the middle of a fallen world. Capitalism (not the corporatism so prevalent in the US and Europe) has done more good for more people than any alternative. Period.

  • Jeffrey

    Dee, if only the issue of scarcity could be solved by our attitudes alone. Let’s consider something simple like a car. You have one and I do not. How can I get one like yours? I can take yours (or you can give it to me) but then you won’t have it. Or I can hope to live an economic environment that enables the production and distribution of cars so that I can buy one. Those are the only two options I can think of it. No amount of attitude adjustment is going to perform the miracle of the loaves and fishes on your car.

  • Matthew Wade

    Mr. Palmer, my apologies and heartfelt congratulations. With fall and winter (supposedly) quickly approaching, my next trip to Boston may necessitate more coffee and hot chocolate than beer anyway! Only time will tell…

    To get back on topic, I think I see a common fallacy known that I call the “micro-/macroeconomic split”. There is a microeconomy that consists of yours, my, and thousands of others “individual” (I prefer “personal”) choices, but then there is this other thing called a macroeconomy where big players and theoretical forces play. The leap from one is truly theoretical in the current context. To be brief, I see no reason why my proposal necessitates a “large and political” animal. I reference Catholic Relief Services, Cross International Catholic Outreach, and more locally your Women’s Pregnancy Centers and YMCAs (sorry, the Y). I think its a non sequitor that such actions can move from yours and my personal decisions to more broad (large)scale operations only in a “political” context. (I think that you and I would share a discomfort with the IMF and the World Bank.)

    To touch on a more subtle point, there is such a thing as a “living wage” that would certainly be the overarching determination of price in my “ideal” world. I am unsatisfied with the argument that since we may have to spend significant energy figuring out what a “living wage” is both qualitatively and quantitatively, that we can conclude one doesn’t exist or is unattainable. But, are we really so attached to our economic theories that to consider the existence and essence of such a thing as a “living wage” is so painful we rather sacrifice our search to this idol “scarcity”? I won’t say that the “living wage” walks in the world of Forms with “justice” and “peace”, but I cling to the hope that it is more than some ethereal idea. To be wary about trying to take this “living wage” into the field of economics and pricing sells short our beautiful Tradition and heritage.

    I think Dee’s point is beautifully and simply made. It’s a Psalm 8 and Psalm 104 view contra a Malthusian/Sanger view. (That’s a bit of hyperbole, mind you.)

  • Victress Jenkins

    When I studied Macro Economics, this idea was “melded” into my brain. Public Education, for instance, is free for the students but not for the taxpayers.
    Micro Economics
    Years ago, there was a book published titled, “If I had Four Apples”. People learned to make do with what they had for the size of family they had. {One makes apple sauce.] A friend’s mother learned how to reinvent dishes using ground beef. Some of the younger folk reading this probably never were in a family that had to use ration stamps during the depression and WWII. Every empty toothpaste tube had to be refilled at the drug store. In order to get new tires, the family had to turn in the old ones.[WWII] Maybe people need to cultivate the idea of using “leftovers” creatively! [i.e. Use leftover meatloaf in making a batch of spaghetti & meat sauce or sliced thin for everyone’s sandwiches.]

  • Mike Minnis

    Can you help me with “living wage”? I have never quite understood this concept which appears in several encyclicals. How can employer pay an employee a “living wage” if the employer cannot afford to pay it? If an employer pays an employee more than the market rate, the employer will have difficulty competing with other employers providing the same good or service. Thus, an employer could be faced with choosing to employ a person for less than the “living wage” or not employ the person at all.

  • L M Adler

    The socialists, marxists, distributivists, egotists etc. all seem to think they can change the human nature of others and thus adjust the free markets to there goals. I say others because that seems what humans want to do …. change others. Free markets have always been shown to work when allowed to provides rewards commensurate to the risks. It is the rules to protect the haves or the rules to try to require the haves provide for the have nots that gums up the works.

  • Rich Browner

    I like the tone and substance of this article.

    I will admit that I do like the ideas behind a free and virtuous society, one in which all manner of tranactions between people are always for the good, and serve the common good. Distributism has an attraction. I do not reject it, but it has yet to be tried. And, because all men are not virtuous, I dont think it ever really will be.

    I like Mr. Tucker’s take. There are cold facts that we must face and Mr. Tucker has a good grasp on something that some people seem to want to avoid seeing.

    It really is that basic; almost primal. There is only so much that can go around, and there will have to be a way in which we rationally decide to share/ration/buy and sell it.

    Thanks for sharing!

  • Nick Palmer

    Matthew (and please use “Nick”), I’m still not convinced. Again, Jeffrey’s and my points do NOT require all things be driven by desire for filthy lucre. My objective function could contain a healthy dose of “utiles” for doing unto others (and it “should”). In the end God will judge me and you, not “society” or some other abstract polity. CRS and many others run on the utiles that you and I assign to charity, not on mandate nor on circumvention of the market. And, there’s some real upside. A number of years ago, I donated an old car to charity. Now, this charity had no need of a decrepit old Chevy, but through an active spare parts money, they made plenty off of it.

    All of the places you cite arose and thrive in a capitalist setting. In fact, there’s very good evidence that such charities are far, far more effective in helping those in need than the good ol’ US Gubmint. Here’s a few questions for all the Government-as-do-gooder liberals:

    1) Do you give to charity? Yes? Good, then
    2) Do you deliberately overpay your taxes? No? Then
    3) Why not?

    You see the bind. If gubmint is so very good and efficient at helping those in need, it makes no sense to give to other charities. Why not just consolidate all goodness and benevolence in one central place?

    Now, the liberal will object that HE already gives to charity, it’s only those other people, especially the much-despised “rich” who don’t. So, you see, gubmint must step in to make them bad uns pony up their fair share. Right?

    If you steal from me, and give the money (or food or iPhone) to a starving child, you haven’t made me virtuous, and you are a crook (legally & morally). The child lives, or downloads some neat apps, but neither you nor I are paving the way to St. Peter’s gate.

    As to the so-called living wage, a few reflections. First, what is “living”? The average family living below the US poverty level has something like two TVs, an air conditioner, and at least one car. Their principal challenge for their children is obesity. Who gets to define that level? If I’m a TV vendor, I’d say, “Let them eat TVs!” And, I’d spend a lot of lucre paying lobbyists to push TVs onto the “must have” list. If I, for example, owned an automotive company… Hmmmm, let’s see, who do we know that owns an automotive company? Ah, yes, the US Gubmint! Then, by all means, cars are a necessity!

    Second, pity the poor businesswoman. My wife owns a small retail store. If someone mandates that a living wage is $20/hour, she’s gotta pay it. In fact, what she would do in that case is to close the store, and instead of getting more TVs into the hands of a few of her employees, everyone would be out of work. No TVs, no Chevys.

    The problem only gets worse when dealing with a capital-intensive and growing business. If you raise the price of one factor (e.g. labor), I will substitute another, like capital. Thus, job creation falls.

    The data are incontrovertible. Minimum wage laws reduce employment, especially for those most in need of work. Period.

    I strongly recommend Bastiat’s “The Law.” At under 75 pages it lays these points out far more lucidly than can I, and with far fewer lame jokes. In addition, anything at all by Thomas Sowell is worthy of reading.

    Matthew, here’s where I come down. I’m no saint, and while I’m not satisfied with the person I am, I am striving to improve. The first problem with all these concepts is they place feelings (e.g. they need a “living wage”) over reality. Look at the USSR, Greece, and many other examples of free-lunch hunts. None of those who first advanced these ideas was out to wreak havoc. But, they did.

    The second problem, that you still have failed to address, are the “How?” questions. How do you ensure production of the “necessary” goods? How do you distribute them, what is your “fairness” formula? The fallen world is beset with tradeoffs, that’s just the way it is. And, how do you “encourage” someone unwilling to “contribute” his “fair share” into the communal pot? In the end, the answer becomes, force, “at the point of a gun.” Who wields that power? How is he, or how are they chosen? How do you ensure they have the appropriate moral virtues? Oh, and whose virtues, anyway? What about sharia law? Should we stone the adulterers and press the homosexuals to death?

    In short, the realities of life trump good intentions. Any distribution-based scheme must confront non-contributors. That implies either coercion or a system breakdown.

  • Wolfgang G.

    Mr. Tucker,
    My compliments on a well written article. Your plea for non-scarce goods is impressive. You are more generous to the sceptics regarding free markets than are most libertarians. The problem appears to be that the borderline between scarce and non-scarce goods is not as clear-cut and objective as it seems. In the classical (and neo-classical) view, goods are relatively scarce, i.e. with respect to wants and needs of consumers. What if somebody just doesn’t like a good and has a willingness to pay of zero dollars, and consequently does not desire more of it? Does this make it then a “free good” so that it escapes the domain of economic study? Now we know that goods that were scarce yesterday no longer are today, for example online editions of newspapers that are now available to readers for free. For other goods, rivalry in consumption has increased over time, and with it relative scarcity. The borders of scarcity are not fixed. Does this shift the borders of the applicability of economic reasoning? Mises would not have liked this conclusion. In any case, by declaring goods such as grace or salvation non-scarce, you have already questioned (and rightly so!) much of what passes today as the economics of religion.

  • TeaPot562

    How to define the “Living Wage”? Is this a wage paid to a father of a family of four, whose wife stays home to care for their children? Is it the wage paid to a person just out of high school who has no dependents? Many small businesses have choices as to whether they hire an employee or not. When the US Congress (or the California legislature) passes a law increasing the minimum wage, the owner of a small store thinks “Do I need an employee to sweep and tidy up at the end of the day, and to help replace goods on my shelves? Or do I stay an extra hour or two and do the job – far more efficiently – myself?”
    There is a reason why, cetera paribus, an increase in the minimum wage in a legal jurisdiction is usually followed by an increase in unemployment among unskilled workers.
    The financial downturn of 2007 – 2010 and continuing was preceded by a major push from the US Congress and others to qualify EVERYONE – not just those with substantial assets for down payments and significant earned income – to own their own homes. Sure, greed on the part of various bankers and others played a part in it; but the push by legislators to encourage quasigovernment agencies such as Fannie Mae and Freddie Mac to buy substandard mortgages from the originating banks, and adoption of rules limiting bank expansions and mergers UNLESS the banks could show that they were serving the poor and downtrodden – by granting mortgage loans and other things – played a major and almost unrecognized role. The adoption by lawmakers of policies based on the government forcing someone’s idea of social justice has been a disaster.
    TeaPot562

  • William

    For an excellent little book with a well-reasoned Catholic perspective on economics, read “Religion, Wealth and Poverty” by Fr. James V. Schall, S.J.

  • Jeffrey Tucker

    I want to say a special thank you to Prof. Grassl for commenting here and giving me some more issues to think about.

  • Christopher Ferrara

    What exactly has Tucker said? Apparently this: Catholics do not understand “economics” because they think scarce goods, such as a bag of potato chips or a lawn mower, are like non-scarce goods, such as air and salvation. The production and allocation of scarce goods, he writes, are governed by economic laws.

    What laws? And what is it about these “laws” that Catholics do not understand? Have the Popes failed to understand these “laws” in their constant teaching on the abuses of both capitalism and socialism and the requirements of natural justice in the market, which is entirely subject to the Ten Commandments and the moral supervision of the Church, as Pope Benedict reminds us in Caritas in veritate?

    “All things finite are subject to economic laws.” Really? And what is the authority for that proposition?

    Catholics will understand “economics” just fine—economics in the Catholic sense—if they follow Catholic social teaching. For economics, as the Popes insist, is a branch of ethics within the purview of the Magisterium. No “law of economics” can change that ethical reality. The Greek knew this, and so does the Catholic Magisterium.

  • Ski

    It was a pleasure to read this, thanks a lot. I

  • Joseph Magiri

    Tucker: We rightly assume that saints have no limits on their time for prayer.

    Me: Time is a measure of change. Since there is no change in heaven, neither saints nor God is bound by time

  • Mike

    Jeffrey stated:

    “No amount of attitude adjustment is going to perform the miracle of the loaves and fishes on your car.”

    Obviously. It is incredible to me that so many people fail to understand this.

  • Jeffersonianideal

    Religion and economics are a dangerous mix in the same way religion and government are. If believers subscribe to the notion that institutional religion is not in itself a business entity or if one clings to the convenient myth that biblical scripture somehow promotes and encourages the free enterprise system or that Jesus was some sort of celestial representative of capitalism, they are as delusional about economics as they are about faith.

  • David Castlen

    I can not believe with all the data avaibable all the history clarified and the love of freedom and Man’ rights that one can not come to terms with the fact that a free system has (and does) provide an abundance of goods and services far above and beyond any socialist system like the distributist.

  • Matthew Wade

    It is an overly daunting task for me to try to respond to the plethora of replies to my posts. I have read them all, and couldn’t disagree more with some of the comments, but as I’m not a professional writer I just can’t take the time to formulate the deserving response(s). I want to make a couple of final points, and then I will bow out of this conversation – admitting that I perhaps bit off more than I could chew:

    – in all of the discussion it has been assumed that the non-“free-market” solution (which some will call “Capitalism” and some will call “Libertarian” and some will call “anti-socialist”) leads to a government-imposed solution. This is a fallacy of epic proportions, and I urge all of you (as I will do) to prayerfully consider your (my) motivations for thinking in that way. The current political climate strongly influences all of our views of these issues, but if, as one writer put it, “religion and economics are a dangerous mix” then we as Catholics have no business discussing such things on this website. If I am wrong about this then so is the Church. PLEASE read, from front to back, the Compendium of Catholic Social Teaching, coupled with Caritas in Veritate, which isn’t covered in the former publication;

    – not positing the “how”, which I certainly admit I haven’t laid out, yet, doesn’t refute the “what” (the “quid”) no matter how much one may declare a need for “practicality”;

    I still firmly and absolutely disagree with Mr. Tucker’s brief, non-elaborate discussion of what he posits as the distinguishing characteristic between those who “understand economics” and those of us who don’t, “scarcity”, which was the genesis of the current back-and-forth that I predicted would degenerate into a discussion of “us vs. them”.

    Maybe I could write my own article, if I ever get my own blog. 😛

  • Mike

    David wrote:

    “I can not believe with all the data available all the history clarified and the love of freedom and Man’ rights that one can not come to terms with the fact that a free system has (and does) provide an abundance of goods and services far above and beyond any socialist system like the distributist.”

    Agreed. In fact, I find it utterly mind-boggling. The facts are quite clear and completely obvious. Frankly, a person would have to be incredibly thick at this point to believe otherwise.

    The free market is the best socio-economic system in history and has been repeatedly proven as such. It’s sad many would simply rather stay blind.

  • Anders

    Kudo’s to Jeff Tucker’s article.

    It is unfortunate that many people don’t understand his definition of scarcity. They see limitless possibilities for material and spiritual wealth and that the basic of needs of many can be cared for. In this sense there is no scarcity. However there is at any moment time more desired goods than available goods. Therefore we need some way of allocating goods that have multiple potential uses and users.

    It also seems as if some people think the Catholic Church’s moral teaching have some say on reality therefore it can contradict reality. The second does not follow the first. The Church can have much to say on the operation of a gun – for instance it can tell us not to shoot it at people. However saying we can shoot it at someone because it won’t harm them physically is so much nonsense. Similarly it can not prescribe the operation of a gun from an engineering perspective contrary to the results of engineering or the laws of physic and chemistry.

  • Keith Hamburger

    Most economic fallacies derive from a focus on what “should be” rather than what “is”. As the cliche referenced in the title implies, what “should be”, what anyone wishes for, is absolutely irrelevant to the issues at hand. What is relevant is the realities of the world. While as another has pointed out, when referring to non-physical objects (such as IP), or materials that require no actual production (air, in most cases, water in some cases) may present a fuzzy line to scarcity, any physical object that must be produced by someone is inherently a scarce good. This must be a fact due to, if nothing else, the limited time we each have on this earth. One must make a decision as to what to do with that ultimate scarcity, our three score and ten.

    Without a market to determine allocation of such scarce goods one ends up with someone deciding what is to be allocated where by fiat. Even if I am deciding what to do with my own production and providing it as charity I am making the decisions as to what is to be provided to those in need based on my values, not their’s. Since there is no universal set of values there will be some sort of mismatch between what is being provided compared to what is desired or needed. As the scale increases beyond individual charity to an entire society and economy those mismatches will increase exponentially.

    No matter how much you “wish” things were different, the reality is what it is.

    And, Mr. Wade’s characterization of economics as generating equations and graphs and such is in direct opposition to how Mr. Tucker’s economics is presented (as evidenced by the websites he manages and writes for, http://www.lewrockwell.com and http://mises.org). Certainly classical, neo-classical, Keynesian, monetarist, Marxist and most other schools of economics try to create a pseudo-physical model of economics through mathematical equations. However, the Austrian school of economics rejects such as an inherent impossibility. As we learn more of the nature of recursive feedback systems through chaos/complexity theory and fractal geometry we learn more of the true nature of the universe and society that eliminates the ideas of a fundamental determinism in fields such as economics. All we can really hope to accomplish is a reasonable prediction based on an inherently incomplete view of the conditions at a given time. Larger scale and general qualitative predictions can be somewhat accurate but detailed quantitative predictions are impossible.

    Given all of that no one has ever proposed an alternative to the analog functioning of the marketplace to balance the values of all participants in society and the inherently limited supply of goods produced by that society. Until someone can produce a non-contradictory and universally applicable model that is different from absolute individual freedom, respect of others as equals in action and free markets no other system can make any other sense.

  • dennis

    I hope you or some similarly qualified person might read and review Chris Ferrara’s new book on the Church and libertarians. I know Tom Wood has had his fill of him, but I would sure like to see a critique from a libertarian Catholic.

  • Theorist

    Economics tells us how things are valued while the Church tells us what to value. As such the two systems are quite made for each other.

    Though distributism is just one of many responses to social teaching, this system, in as much as it is a value preference of a people, affects economics and causes the economic system to become more reflective of church teaching via consumer sovereignty.

    So for instance, in order for a living wage to exist, the employer has to value the money given even less so than the labor received, and the same goes for a just price. That is, the act of giving money by either party must be seen by both parties as having an intrinsic importance -the giving of money itself becomes a consumers good.

    The transition from the current economic setting to a distributist one, if freely chosen, can be accommodated without mass death in the same way that the Amish were able to create their system without violence. Now this in no way necessarily negates human nature, but it rather simply adds a new habit(paying higher) on to it.

  • Keith Hamburger

    Does the church teach you whether to value beef over chicken, pork over fish? Does the church teach you whether it is better to have a Ford or a Chevy or a Toyota?

    The church may teach you many different values but it doesn’t teach where to allocate all of your efforts and all values. Certainly it may teach that it is good to give of your life to those that are less fortunate but it is nonsensical, for example, to value another’s life over your’s such that you give your life and cannot be there to help others in the future. It may make sense to risk your life to save another such that there is a chance you both might survive but it rarely makes since to completely give up your life for another’s. The church doesn’t even teach, in such an instance, what is the reasonable risk you should make for mutual survival.

    All of these values are relative and subjective and decisions we might make every day. And they change for each and every one of us from moment to moment. One will value food very highly if they haven’t eaten in a couple of days but will value it much less following a satisfying meal.

    To say that one can trust the church to teach us all about values and, therefore, we can just make the decisions on what to do based on the church’s teachings and avoid markets is incredibly naive.

    And, again, it focuses on wishes rather than reality.

  • Jason Burke

    Blogs are a non-scarce good.
    https://www.blogger.com/start

  • Philip

    Although I am not an economist in any sense of the word (I’m only 1smilies/cool.gif I think past comments have emphasized the scarcity of goods to the point of falling into “slice of the pie” or semi-mercantilist economics, without properly acknowledging the creation of wealth. whereas certain goods, like land, are relatively inflexible, other resources can be increased or more properly utilized through innovation and technology, i.e. labor productivity. This is why I question socialist economic theory that advocates “distribution of wealth” without realizing the flexible scarcity of the “what.”

    Pure free market theory is NOT the best market possible, because as human nature dictates action from a short term perspective (by this I mean anywhere from months to possible lifetimes) free market economies do not in many ways account for the “externalities” of particular economic action. For example, in a pure free market system a company may decide it is more economically feasible to dump its waste in a watershed, as the seepage from said waste will not occur for many years, by which time the compan may have moved locations, or otherwise.
    I myself advocate a form of “enlightened capitalism,” which, cliche as it sounds, is mainly conventional in America as aproper balance between capitalist and socialist economies,that recognizes the weaknesses of “trickle down” strategies as well as acknowledging reasonable deficit constraints that are necessary to implement that we don’t follow Greece’s downgrading of credit.
    As I am not an economist, I apologize for any stupidities I may have uttered here, but I hope my comment may be recieved with charity.

  • John2

    Tom Woods (noted above) pretty much wiped out the very notion of distributism, repeatedly, in detail, at length. His work is widely ‘distributed’ (ha!) in print and in electronic form. The counterarguments are all there; they are dealt with in comprehensive style. I don’t want to summarize here; there are plenty of long posts in the thread already.

    Now some of us don’t believe a historian knows his economics, or maybe don’t want to believe it, or maybe think he has a hidden agenda — OK.

    JP II performed the same good service, in Centesimus Annus. In 1991. There is no viable ‘third way’ but the idea is resilient. I encourage you to work at making it viable.

  • Daniel Molinaro II

    There is no third way.

    JPII dissagrees in Centesimus Annus.

    And I did not mean growth. I should have said an over-emphasis on wealth creation.

  • Theorist

    So I was corrected on the distinction between value and goods and how flexible these things are. In the same light I think that free markets are objectively the most flexible system.

    For instance, if a factory dumped chemicals, the owners of the land (or whoever owns the water ways, etc.) could sue the factory. If there are no owners and the effects of spilled chemicals are bad enough, a market demand for owning the land or suing the factory would come into place. If even then no one would want to stop this pollution, then we can only conclude that there are more valuable ways people wish to spend their time and their concern for health is more on the lowish part of their priorities. Either way the expansion of the list of priorities is an integral part of creating a better society.

  • John M

    Where to begin?

    People extol the “free market” as successful, but there hasn’t been anything approximating a free market in at least 70 years, and maybe never, depending on your definition. But certainly we were closer 70 years, and there is a reason we abandoned the capitalist notion of the freedom of the market: it didn’t work. from 1853 to 1942, the economy was in recession or depression an astounding 40% of the time. Since then, it has been in recession 15% of the time. Those who want to go back ought to have a better understanding of the period. In truth, capitalism has never been able to balance itself without massive gov’t support. The cause of big government is big business; they feed on each other.

    Markets are social creations; they depend on rules. For example, when Jay Gould wanted to establish a monopoly in building supplies in New York, he used his personal control of the railroads to forbid them to carry any competing products. This worked until Congress imposed the common carrier rule on the railroads. So where did the freedom of the market lie? With Gould treating it as a private property to create another monopoly, or with the imposition of the common carrier rule?

    Productive property is indeed the key. If an unlimited right, then Gould was right to use it as a personal possession. But does this lead to freedom or slavery? Property exists in many forms and under many sanctions. If it is gathered into the hands of the state, there is socialism and servility; if in the hands of a few, there is liberalism (commonly called “capitlism”) and servility; if widely dispersed throughout society, there is distributism and relative freedom.

    Economics certainly does involves scarcity, because we live in a finite world. But to call economics the science of scarcity is to mistake the part for the whole. For example, aerodynamics involves a knowledge of air pressure, but it is not the science of air pressure; it is the science of moving things through the air. Likewise, economics is about the material provisioning of society, and without this understanding, economics loses any possible purpose.

    Next combox

  • John M

    It is amusing to watch the Austrians try to appropriate the School of Salamanca, a school which taught that usury was a sin, utility pricing a violation of the 8th commandmant, believed in just prices and prices set by the state. Is there any tenet of Austrianism that the Spainiards did not disdain? I cannot think of any.

    The truth is, distributism works, in example after example, on large and small scales. Austrianism, on the other hand, has not one single working example. IN the Mondragon Cooperative Corporation of Spain, 100,000 worker owners do in excess of 25B/year. And they provide, from their own resources, social safety networks, school systems, language institutes, training schools, language schools, and a university, all without gov’t help. It is ironic that the only thing that comes close to the libertarian ideal is provided by the distributists. And this is just one of thousands of examples on any scale you like. The historical truth is that distributism goes from success to success, while Capitalism goes from bailout to bailout. It has always been that way.

    But the strangest thing is to see liberalism (the original term for capitalism) touted as Catholic, especially in it Neo-Austrian version. This school was founded by Ludwig von Mises, a radical atheist who proclaimed himself a descendant of the French Revolution and who had hatred of the Catholic and a special hatred of Christ. And those who think that his “axioms of action” can hold any water ought to consider Mises’s own conclusion about them. Namely, he stated (correctly) that if the axioms were correct, then God cannot exist.

    Mises is right; you have to choose between him and the Church; the two are incompatible, and as Mises said, one must destroy the other. It seems to me that the destruction is taking place from within.

  • Hearts

    Brennan, anyone using M

  • Mark May

    Thank you, Mr. Tucker. You are indeed gifted as a great communicator.

    Matthew Wade in one of the early posts writes, “I’m not of the opinion that there is truly not enough wheat, corn, and milk around to feed the whole world,…” In one sense and in the long run there truly is an unlimited supply of wheat, corn and milk. God creates these things and there is no limit to His creative ability. In the short run, however, there is a definite limit to our labor and capital resources, such as machinery, available for their production and distribution.

    Capital and labor are scarce. This cannot be denied.

  • Greg

    I enjoyed the material here, both article and exchanges.

    I have a couple of thoughts, one a question, one a comment:

    1) We know from the tradition that God has an economy, yet he is dealing (principally) with non-scarce items. Would it then be helpful to reconfigure our thoughts about economy along the lines of economic activity involving decisions each of which provide the greatest benefit in the greatest number of ways? This would bridge the scarce/non-scarce divide, as well as the self-interest/charity divide.

    2) With others, I noticed that some items on the non-scarce list don’t (always) fit well there. This calls attention to Man’s unique position as rational animal/spiritual-corporeal hybrid/temporal-eternal being. This suggests some merit to my point 1).

    God bless you,
    Greg

  • Richard Aleman

    As it appears both Mr. Ferrara’s and Mr. M

  • Richard Aleman

    Dear Mr. Tucker,

    As mentioned a couple of years ago on The Distributist Review, a public debate is still on the table should Mr. Woods or you wish to discuss the issues in front of our Catholic peers. I’m positive both followers of the Mises Institute and our publication will more than welcome such a public challenge.

    In fact, perhaps Inside Catholic might like to cover this kind of event.

    I trust you know where to reach me.

  • John2

    Dear Administrators,

    This little contretemps has erupted, in other fora, into quite the melee. And so Mr. Richard Aleman gets around the admin’s efforts to block this or that poster, and so forth and so on.

    You can quickly determine who Mr. Aleman is and …. It is old, gentlemen. Very old.

  • Edgar A Suter MD

    The Ordinary Magisterium on Usury:
    Should the commandments of God be voided by the innovations of men?

    In his recent paper Catholic Social Teaching and the Market Economy Revisited in The Catholic Social Science Review 14 (2009): 107-124 , Mr. Thomas Woods of the Ludwig Von Mises Institute has once again claimed that Catholics may embrace without qualm the free market espoused by himself, F.A. Hayek, and the rest of the Austrian School of economics. An examination of the Ordinary Magisterium,

  • Edgar A Suter MD

    …Jesus, True God and True Man, Who can neither deceive nor be deceived, exhorts against the injustice of usury, extending the New Covenant

  • Bender

    Many Catholics do not understand economics because the Church teachings thereon are too often ambiguous. That is, the fundamental teaching is not ambiguous — love thy neighbor, do not steal — but attempts to apply the fundamentals to real life situations descends into ambiguity because there are so many different economic systems. Thus, statements that are intended or thought to apply to one situation and one economic system are interpreted to be applicable to an entirely different set of circumstances. Hence the confusion.

    Look — contemporary Catholic economic thought, i.e. social doctrine, was born in Europe. Not just any Europe, but post-feudal Europe, where a small handful of nobility owned all the land and all the gold, which they kept locked up in rooms. The feudal system was not a free market, it was not capitalism. The “life-blood” of the economy did not flow freely, but was instead kept in a small number of hands. Accordingly, there were large numbers of starving and homeless poor. Much of Catholic economic teachings are a reaction to that.

    Catholic teaching did not develop in the atmosphere of the American free market. And when one tries to apply those post-feudalistic ideas to the American system, it is a false comparison, like putting a square peg in a round hole.

    Catholics do not understand economics because too much of it is comparing apples to oranges.

  • Bender

    in a pure free market system a company may decide it is more economically feasible to dump its waste in a watershed

    That is a common understanding of a “free market,” but it is an erroneous understanding. A true free market is one that is, of course, “free.” And what is “freedom”?

    No need to change our Catholic understanding of the concept of freedom simply because “market” is attached to it.

    “Freedom,” as JP2 said, is not the right to do whatever you want to do (like dump toxic waste in the river), but is instead the ability to do what you ought to do, that is the ability to do the right thing, the moral thing.

    A true free market, then, is one that is necessarily always consistent with the moral good. If some actor in the market is not doing the good, then it is not a “free” market, it is an enslaved market. A market which ends up harming the actor as much as the rest of society. The toxic dumper does not prosper in the end. Moreover, the other aspect of doing right is setting things right, i.e. justice, and other actors in the market place, in order to restore the freedom of the market, will take action against the toxic dumper to his detriment.

  • Edgar A Suter MD

    There is nothing ambiguous about the clear statements of the Church that taking interest on a loan of money is gravely sinful. There are numerous instances in which men struggle to claim ambiguity to vindicate their sinful proclivities. Homosexuals struggle to convince themselves that the “sin of Sodom was inhospitality.” And analogously, libertarians struggle to claim “ambiguity” despite the Ordinary Magisterium that declaims the grave sinfulness of usury in inescapably plain language.

    The “Oral Torah” (namely the Talmud and Kabbalah) uses rabbinical pilpul to revoke the commandments of God, e.g., Rabbi Hillel contrived a loophole in God’s law against usury (he also enshrined a Talmudic loophole allowing incest with children less than 9 years of age, but that is another topic). The short version of his Talmudic loophole against usury: Usury against brothers and neighbors is forbidden and Gentiles are not the brothers or neighbors of Jews, so Jews are free to engage in rapacious business practices against us. Authentic Catholicism disallows such pilpul. The Ordinary Magisterium is dispositive, not ambiguous at all. The taking of interest on a loan of money is gravely sinful. Further, all mankind are neighbors and brothers and must be treated morally, charitably, even our enemies.

    Besides usury, here are the corollary matters of just prices and just wages!

    For practicing Catholics, God’s Law trumps the “science” of Hillel’s screw-him-because-he-is-not-your-brother “free market” economics.

  • Admin

    Dear Administrators,

    This little contretemps has erupted, in other fora, into quite the melee. And so Mr. Richard Aleman gets around the admin’s efforts to block this or that poster, and so forth and so on.

    You can quickly determine who Mr. Aleman is and …. It is old, gentlemen. Very old.

    Thank you, John. Chris Ferrara, John Medaille, and their tribe of trolls were blocked at the old IC, and I’ve extended that here. They can take their travelling roadshow somewhere else.

  • TeaPot562

    @ Dr. Suter:
    My dictionary, circa 1965, defines Usury as; 1. the act or practice of exacting a rate of interest beyond what is allowed by law; and, 2. Obs. the lending of money at interest.
    Also, How do you read Matthew 25: v. 14-30; especially verses 24-27, ending with v. 27: “All the more reason to deposit my money with the bankers, so that on my return I could have had it back with interest.”
    TeaPot562

  • Theorist

    I’m sure everyone knows this, but IMO it seems the church is okay with most forms of interest taking in general -as long as it is not too great.

    Likewise, (according to the RC encyclopedia) the theory of the just wage itself boils down to a matter of contract and negotiation. With a grounding in economics, I dare say that this suggests a purely free-market solution.

  • Joe H

    As one who is sympathetic to both, I have addressed some of these issue here.

    http://joeahargrave.wordpress….elm-ropke/

    The Distributist approach to economics as a science and discipline is embarrassing. I think much of it stems from an inability to distinguish between philosophical and methodological materialism.

    I highly recommend the work of Wilhelm Ropke as an example of a genuine economist who was also sympathetic with Distributism, and who attempted to integrate a Christian/humanist philosophy with economic science, WITHOUT degrading either.

    I mean really, we can be for free market capitalism and Distributism for the same reason we can be good Catholics and believe in evolution.

  • Tony Pivetta

    Property is a legitimate societal institution; it must be, otherwise the commandment “Thou Shalt Not Steal” makes no sense. Property rights necessarily include the right to exchange property: if you own it, you have a right to trade (or give) it away. If property and exchange are moral and good, taking property and getting in the way of exchange are immoral and bad. But that’s precisely what all corporatist, fascist, mercantilist, socialist and distributist apologists seek to do: get in the way of property and exchange to advance the public good (whatever that means and whoever defines it). It’s remarkable. Statists carve out an exception to a fundamental rule of morality–“Thou Shalt Not Steal”–to advance their vision of morality! They do evil in the hopes good can come of it. See St. Paul’s epistle to the Romans for more on this (Romans 3:smilies/cool.gif.

  • Blake Helgoth

    If I may, can I go back to the just wage discussion? The Church teaches that there is indeed a just wage and that one ought to pay it to a worker. A just wage is a wage that allows one to care for his family – based on a one income model. What the Church does not say is that government ought to make laws concerning just wages. The just wage is the obligation of the employer, not the right of the employee and has nothing to do with the government. Church teaching does leave room for differing wages according to differing circumstances (single workers, workers with other income, etc.), but She makes clear that what is at stake are people. The reason there is a just wage is that the one earning the wage is a person. All business transactions have to do with people. The reason that one has a duty to pay a just wage is that they are using the person’s time up so that they cannot do other things do provide for their family at the same time. Were we go astray is that every time the notion of just wage is brought up the assumption is that the government should regulate wages. This is not the business of government. I would agree that local law should not allow mistreatment of employees, in all regards. However, it is hard to imagine a law that would allow for the flexibility that is needed in wages to fit the circumstances. Now, what is also true here is that the production of some things may not be profitable if a just wage is paid. This does not remove the duty of the employer. Maybe, and this may be a crazy idea here, profit might not be the only reason to produce things (gasp!). Maybe monetary gain is not the only motivation for work. I do not think anyone here would argue that an employee does not have moral obligations towards his workers that go beyond paying a wage. Because we have thought of the just wage as a government decree it has been hard to see how this did not limit an employer

  • Brian Douglass

    “But what happens on day two when trading begins anew and the division of labor takes over and distributions fall outside what the idealists want? ” -JeffreyTucker

    That’s why Belloc is very clear in his Essay on the Restoration of Property that any distribution must grow from a seed planted in the breast. He realized that if you try what you stated (which isn’t really a straw man because I know a number of Distributists who have proposed similar things) would end up just the way you said.

    Any Distributist who is a fan of using the State really needs to read some Dorothy Day. “Holy Mother the State” is evil.

    pax et bonum!

  • Jeff Culbreath

    Thank you, John. Chris Ferrara, John Medaille, and their tribe of trolls were blocked at the old IC, and I’ve extended that here. They can take their travelling roadshow somewhere else.

    This is a joke, right? No discussion of the compatibility of Catholicism with Austrian economics allowed? Did Prof. Medaille violate Inside Catholic’s posting rules? I saw nothing remotely abusive or improper. Please explain before I delete this site from my daily reading.

  • Edgar A Suter MD

    @ Tea Pot

    Just profit is not prohibited to Catholics. Catholics, indeed all men, are prohibited from taking profit on a loan of money, just as they are prohibited from oppressing laborers, widows, and children. Matthew chapter 25 only underscores what we already know: Catholics are free to invest in business that reaps profit providing no injustice or immorality is involved. Matthew chapter 25 does not dispense us from God’s moral law. Usury and other immorality remains prohibited, hence, among many possible examples, a Catholic may not run a sweat shop, a whore house, or a business that takes interest on the loan of money.

    For a discussion of what is and what is not forbidden, including discussion of the natural law analogs of Catholic theology seen in ancient cultures, please see Prof. Brian McCall’s excellent article:
    Unprofitable Lending: Modern Credit Regulation and the Lost Theory of Usury
    Brian McCall
    University of Oklahoma College of Law
    Cardozo Law Review, Vol. 30, No. 2, 2008
    http://works.bepress.com/cgi/viewcontent.cgi?article=1005&context=brian_mccall

    I can also provide you (or anyone interested) with a pdf file of Fr. Lewis Watt SJ’s Usury in Catholic Theology (imprimatur 1945, out of print, in the public domain, and 37 MB).

  • Admin

    This is a joke, right? No discussion of the compatibility of Catholicism with Austrian economics allowed? Did Prof. Medaille violate Inside Catholic’s posting rules? I saw nothing remotely abusive or improper. Please explain before I delete this site from my daily reading.

    As I said, their ban goes back to the old site. There’s a history there.

    If you want to discuss these issues in a productive manner, feel free. Others are doing so.

  • Matthew Wade

    Thank you, John. Chris Ferrara, John Medaille, and their tribe of trolls were blocked at the old IC, and I’ve extended that here. They can take their travelling roadshow somewhere else.

    This is a joke, right? No discussion of the compatibility of Catholicism with Austrian economics allowed? Did Prof. Medaille violate Inside Catholic’s posting rules? I saw nothing remotely abusive or improper. Please explain before I delete this site from my daily reading.

    I’m sorry to all who hoped that I would leave this discussion but I am equally distressed at such a flippant comment. Perhaps there is some underlying history here that I am not privy to know – and I will assume that until further evidence proves otherwise – but if not then this is a monumentally disturbing twist of my view of InsideCatholic.com and its policies regarding different opinions. I’ll continue to monitor for a response. I am less than satisfied with any of the supposedly enlightened responses from the author of this article or those who defend him – especially considering their not overly Catholic form or substance; but a couple of formal challenges to him and his school of thought and you get blocked? Let me be blocked next! I was under the impression that if I wanted a one-sidedly Misesian view of economics and Catholicism I could stroll over to mises.org.

    Please feel free to e-mail me at thisismattwade at gmail dot com.

  • Athanasius

    What is shocking is not Mr. Tucker’s hit-piece essay, but the lack of courage to even defend it against the people it attacks. They’re just banned. They make certain points, then they get banned. For what? Because Austrian economics could not stand to the light of day and Inside Catholic has decided to shut the light out. Score another for the new world order which bankrolls it.

  • Edgar A Suter MD

    In his otherwise excellent post on just wages, Blake Helgoth said this: “What the Church does not say is that government ought to make laws concerning just wages.”

    I draw your attention to sections V and VI of Pope Pius IX’s Syllabus of Errors:
    http://www.papalencyclicals.net/Pius09/p9syll.htm

    Separation of Church and State is not a Catholic doctrine, but a tool of the enemies of Jesus Christ.

    @ Admin
    I have strong disagreements with Chris Ferrara and his editor, but I do think a sincerely practicing Catholic would reflect on the “tribe of trolls” insult and issue a brief but humble retraction and apology.

  • Robert L.

    I’m surprised that Mr. Tucker did not, in the comments or the article, raise the Calculation Problem in defense of his position.
    http://en.wikipedia.org/wiki/Calculation_problem
    The essential heresy underlying all planned economics is that God assigned or assigns all value to material goods and human labor, making such values objective and fixed. He didn’t, or Free Will would not exist at all. The fact is that the assignment of value to goods and labor is left to Adam, and work and thought are required to determine values consistent with individual, morally chosen, desired ends. Furthermore, value, being subject to Free Will, is both subjective and context dependent. This is why all attempts to define “essential goods,” according to some objective standard are doomed to failure. There is no way to compare one human soul’s relative valuation of one good to another, or to compare one human soul’s valuation of one good to another human soul’s valuation of the same good, until and unless a trade or trade-off, based in the Free Will of each party, occurs. Each of us assigns value to nature through the process of making economic tradeoffs. Scarce goods must be produced before they can be distributed or consumed. In order for production to have a rational basis and be consistent with the valuations of the individual consumers who will use the products, the factors of production must be evaluated and choices made among all of the various alternatives possible. The only way for the factors of production to be rationally evaluated is for them to have their relative aggregated values be revealed through free trade. Without free trade, production must be accomplished based upon the arbitrary whims of some setter(s) of arbitrary value. Appointing such arbitrary setters of fiat value is the very invitation to the libido dominandi.

    “Economy… the art of making the most of life; the love of economy is the root of all virtue.”
    — George Bernard Shaw

  • Matthew Wade

    Robert, forgive me if the following comment seems crass or argumentative. I mean it in the most fraternally-corrective way. That being said, your thinking is the most recent evidence in this thread that those who study and apologize for economics (and some certain aspect of economics such as the “free market”) must realign their thought processes. If you wish to apologize for Christ and His Church, Her teaching and tradition, and Her care for all men and women, then you must reassess the philosophical foundations of your school of thought.

    The essential heresy underlying all planned economics is that God assigned or assigns all value to material goods and human labor, making such values objective and fixed.”

    Despite the ambiguity of such a comment, I’m going to assume that you’re talking about socialism. In that case, amen brother! You’re right on.

    The fact is that the assignment of value to goods and labor is left to Adam, and work and thought are required to determine values consistent with individual, morally chosen, desired ends.

    Here is where philosophy – that beautiful handmaid of theology, not economics, of whom she is the mother – must impose itself. From the Compendium of the Social Doctrine of the Church (#277):

    277. The Church’s social doctrine has not failed to insist on the relationship between labour and capital, placing in evidence both the priority of the first over the second as well as their complementarities.

    Labour has an intrinsic priority over capital.

  • Jeff Culbreath

    If you want to discuss these issues in a productive manner, feel free. Others are doing so.

    I don’t have the time (or the ability, quite frankly) to enter this discussion profitably (forgive the pun).

    I would, however, like to see the arguments of Medaille, Ferrara and their “tribe of trolls” addressed rather than dismissed. We’re not all economists here, but we’re all Catholics: the burden of proof is on the Austrians to show that their policy proscriptions can be reconciled with Catholic social doctrine.

  • Blake Helgoth

    Thank you for your comments. I looked at Pius IX’s Syllabus of Errors and did not find what you were referencing. Could you be more specific? I would very much like to read it. Also, I whole heartily agree that the separation of Church and State is contrary to the teaching of Christ. All I was saying is that the Church has not commanded the promulgation of laws concerning a just wage.

  • G.Booker

    Mr. Tucker,

    Thank you for something to chew on. Sometimes we burden ourselves with worries that are out of our controls. Everyday I try to let God take more control of my life. I believe people are either givers or takers. I strive to always be a giver and stay clear of the takers but, many times I personally fail. I believe in simplicity as well. Life is a gift from God. If one sustains life, do they not understand basic principles of economics? Does a practicing Catholic that strives for holiness not understand the economics of salvation?

    Presently in my diocese and in my opinion, I am seeing the Church squander resources. Multi-million dollar buildings are being raised with ever increasing diocesan employees added to the payroll while small, self-sustaining parishes are being closed and auctioned off (it’s that shortage of priests thing). I see the diocese for the bureaucracy that it has become. For now, the diocese is sustaining its livelihood. The diocese understands economics but are they being a giver or a taker?

    Peace, G

  • Matthew Wade

    Dear Tony, at first glance I missed your post about property. Upon further reading, though, I think that you’re confused about some of the principles of some of the economic schools you claim to refute by your quotation of the seventh commandment. No Distributist whom I have met has ever advocated against private property. I think that you’ve been given this notion by those who claim to refute the Distributists, those like Mr. Tucker and Mr. Woods. However, the problem for you (and them) is that the Catholic Church has never agreed with some sort of “absolute right” to private property. In fact, in paragraphs 171 to 184 of the Compendium of the Social Doctrine of the Church the principle of the Universal Destination of Goods is laid out quite clearly. This principle is included in that same chapter as that which talks about “Solidarity” and “Subsidiarity”, among others.

    And I am saddened by your comment: “the public good (whatever that means and whoever defines it)”. The Catechism of the Catholic Church defines such a thing (under the term “the Common Good”, mind you) in paragraphs 1905 – 1912. I recommend that you read these paragraphs before you make such a flippant comment. I won’t quote them on here, to save space; but they’re far more spiritually (and, ironically, corporally) edifying than whatever is current at mises.org or lewrockwell.com

    I commit this comment to you in Christ,

    Matthew Wade

  • John T. Boyle

    I hear a lot about distribution and nothing of production. We must produce before we can distribute anything. Unlike Jesus, we can not chage five loaves and two fish into food for thousands so readily. God knows this but His message was that the spiritual is more important than the physical but even He responded to our physical needs when the time came. I can’t say whether this confirms the hypothesis or not. How we handle economics has to be different than how Jesus responded because we are not God. Again, God knows this but he also knows what’s in our hearts and forgives both the liberal who fails to produce but wants to distribute the property of others, the conservative who cannot be separated from surplus production, and the ignorant society that fails to understand the way nature is, blinded by the way they think it ought to be. God made this world so let’s work within it understanding that capitalism is natural and has been with us since the beginning even in those societies controled by central authoritative powers i.e. USSR, China, Cuba, etc. The Bible is replete with stories about markets. What God has said is that it is neither good nor bad but that some within the markets do bad whether cheat another or dishonoring God by putting the marketplace above God, Himself.

  • Sarah L

    Admin: Thank you, John. Chris Ferrara, John Medaille, and their tribe of trolls were blocked at the old IC, and I’ve extended that here. They can take their travelling roadshow somewhere else.

    Jeff Culbreath: This is a joke, right? No discussion of the compatibility of Catholicism with Austrian economics allowed? Did Prof. Medaille violate Inside Catholic’s posting rules? I saw nothing remotely abusive or improper. Please explain before I delete this site from my daily reading.

    Thanks to Jeff and Matthew for their sane responses to this. I saw nothing trollish in the responses of John Medaille to this article. The word troll seems to fit more easily the derisive tone of Mr. Tucker, et al regarding distributism and distributists. I would argue that those who don’t know the Catholic Church’s teaching on economics (which involves people as well as money and therefore can’t be amoral) are those for whom economics is beyond their intellectual field of vision. It comes down to ignorance of the foundational thinking that every Catholic should adopt out of obedience, even if their understanding of the applications thereof is clouded during this life.

    And, no, sorry, but Dr. Woods has not debunked distributism, though he has tried. He’s very popular among other Catholic Austro-libs, but so far his biggest gun is declaring Church teaching on the subject to be inapplicable based on the supposed amorality of economics. So, if the Church isn’t qualified to teach on the subject, what are we left with? Like it or not, economics touches on the morality of the people involved. It doesn’t operate in a vacuum with people on the outside of it. Leave the Church out, you leave God out, and you get chaos. No, thanks.

    If saying so makes me a troll, then go ahead and block me, too – though it is depressing to see this kind of behavior from a Catholic website I’ve read and enjoyed for so long. I’ve yet to read anything by Prof. Medaille or Christopher Ferrarra that was trollish. They disagree with you, obviously, on a very touchy subject. And they’re much better at explaining economics, Church teaching, and distributism than I am, so they’re more dangerous.

  • Christopher

    This is an important topic and I am glad to see Catholics addressing it in a serious fashion. I am particularly impressed with Matthew’s knowledge of the Compendium and his well-reasoned arguments.

    I am distressed at Inside Catholic’s decision to ban John Medaille’s comments, which were substantive and showed no ill-will other than the legitimate desire to articulate his disagreements. If anybody should be banned it is the administrator’s flippant and insulting dismissal. I can certainly believe there is a history there, but if they are currently playing by the rules then there is not reason to ban them again. An explanation is in order.

    I would encourage everyone to check out Albino Barrera’s work at Providence College. He is both a theologian and an economist. He brings some real refinement and insight into some of these important arguments.

    I appreciate the argument as a desire to get at the truth, but I think those who argue against the Church’s Social Teaching tradition need to realize that that is a very poor place to stand. Wrestle with it, absolutely-but it is a highly problematic conclusion to claim that the Pope’s just don’t understand. I found that to be the response to J.P. II’s Veritatis Splendorby the very people he was finding fault with. It is just too easy to dismiss the Church’s teaching by saying: “They just don’t understand.” They may well understand only too well….

    I have enjoyed reading the conversation. If anything the properly ordered piety and well reasoned argument of Matthew Wade (and a few others) reinforces my thinking that he is the one arguing in the best direction.

  • Admin

    Thanks to Jeff and Matthew for their sane responses to this. I saw nothing trollish in the responses of John Medaille to this article. The word troll seems to fit more easily the derisive tone of Mr. Tucker, et al regarding distributism and distributists. I would argue that those who don’t know the Catholic Church’s teaching on economics (which involves people as well as money and therefore can’t be amoral) are those for whom economics is beyond their intellectual field of vision. It comes down to ignorance of the foundational thinking that every Catholic should adopt out of obedience, even if their understanding of the applications thereof is clouded during this life.

    Sarah,

    Once again, our history with Ferrara and Medaille goes back to the old site — with Ferrara, back to the old Crisis magazine, almost 10 years ago. They were not blocked for what they just wrote, but for other, older matters. They had long been banned, but when we launched the new site, the banned IPs weren’t yet transferred over. That’s why those comments slipped through and gave this the appearance of being something new. We left up a few of them, because they’d already had other responses.

    This site is like our living room, and we have the right to make up the rules to provide a (comparatively) calm environment for debate. We think we generally succeed, but that means some people are not able to participate. That doesn’t seem unreasonable or unfair.

    I hope that helps clarify things.

    To all: This thread has gotten completely off the subject of the article. Let’s please return to that.

    Thanks,

    The Management

  • Admin

    I have strong disagreements with Chris Ferrara and his editor, but I do think a sincerely practicing Catholic would reflect on the “tribe of trolls” insult and issue a brief but humble retraction and apology.

    Dr Suter,

    I didn’t see this. By the phrase “Tribe of Trolls,” I’m referring to the online term “combox troll,” that is, someone who drops in and leaves angry, aggressive or provocative comments. I was not calling them monsters, which would have been insulting. It’s a different use of the word.

    However, I should have written a tone neutral comment there. I apologize to all if I inadvertently brought down the quality of the discussion.

    Alright, that’s the last we’ll be saying about it. Back to the article…

  • Phillip Osborn

    I have read several comments here condemning “usury” without a clear definition of said term from scripture.
    If you look at the Mosaic references, they all have to do with loans to “your poor brother.” There is no reference to usury as an “exorbitant” rate of interest, nor to business loans. It has to do with charity, which God commanded be extended to those in need.
    Note also there is no penalty prescribed for failure to do so, implying that God himself, not the earthly government, either civil or ecclesiastical, would be the judge.

  • J.P. Zmirak

    Excellent analysis, Jeff. Too many Catholics refuse to understand economics because they have been taught to disdain the virtue of Prudence. Modern liberalism, cross-breeding like a retro-virus with ascetic and otherworldly strains within the Catholic tradition, has produced among many a childish, peevish impatience with the heavy lifting entailed in actually accomplishing tangible goals in a fallen world. When presented with real limits to their aspirations–limits on the number of immigrants our country can accept, on the tax rates that can be assessed to fund social programs, on the “rights” that can be extended to people in the absence of responsibilities–they react by abusing the messenger. Every time I present such limits to this type of Catholic, they react as if they were an 8-year-old child who just watched me stab Santa Claus.

    It also doesn’t help that clergymen spend their formative and subsequent years completely insulated from the world of work and wages….

  • Eric Pavlat

    Mr. Zmirak,

    I’ve found that insults don’t constitute an effective way to win over your opponents’ hearts and minds. You write that they consciously “refuse to understand.” They “disdain the virtue of prudence.” They have “a childish, peevish impatience with … heavy lifting.” They react like “an 8-year-old child.” Why, I haven’t seen so many ad hominems since … well, two or three weeks ago, yes, but it’s still not good. Or convincing.

    There are two main problems with the Austrian/libertarian economic school:

    1) It conflicts with Church teaching so obviously that the only defense I’ve seen offered is for apologists to say, “Well, the Church’s authority doesn’t apply to economics” (when repeated popes have insisted that it does). Saying, “Yes, I disagree with the Church, but it’s okay” doesn’t fly very well with me.

    2) It claims to be a science. The test of a science is whether or not it can be used to successfully make predictions. Here’s the challenge: (a) Show me the Austrian adherents who successfully predicted the current economic crisis, and (b) show me where the Austrian adherents think we’ll be in two years or so, and let’s compare. If it can’t do that, it isn’t a science.

  • TeaPot562

    As an individual, and as part of a family, I consider myself bound by the teachings in Matthew 25, v. 31-46. My wife & I try to live prudently and not waste food or other material goods. Our car is a ’98 Ford Taurus. Having been blessed by the Lord with children, grandchildren and material goods, we find that we are able to contribute more than the biblical tenth of our income to charities. Since some unemployment has afflicted children and/or inlaws in recent years, we “help out” the families of our relatives.
    We are responding to needs AS INDIVIDUALS. For some reason, we are irritated by politicians who claim “Social Justice” in enacting laws by which our national congress and/or state legislatures decide what larger part of our income they want to allocate to others, and btw, pay exorbitant wages and pension benefits to the federal and state employees who will be administering their concept of social justice.
    To the extent that elected and appointed government representatives push the adoption of programs which will lead to the expansion of government (and their own power and income), I am very sceptical of their understanding of social justice. Did Leo XIII in 1891 really want the governments all over the world taking over (or regulating) the production and distribution of all goods produced? Or was he appealing to individual consciences? Certainly he wanted employers to give consideration to the rights and needs of those who worked for the employers. But I suspect that he would have been horrified by the application in Soviet Russia of the theories of Marx and Engels, and the millions of deaths that resulted.
    Attempts by large governmental bodies to redress economic problems seem to cause problems of their own, frequently unforeseen. Social Justice does not seem to be a concept that the government can enforce in a way that can be seen as “Just”. The results of Original Sin are as present in the lives of our government officials as in the lives of capitalists and employers in the marketplace. A human being does not suddenly become virtuous because s/he works for the government.
    Capitalists with consciences are preferable in my mind to government bureaucrats with fixed rules.
    TeaPot562

  • Joe H

    Eric,

    I think you ought to give Hayek’s lecture on economic science a read:

    http://nobelprize.org/nobel_prizes/economics/laureates/1974/hayek-lecture.html

    I think your criteria for science is far too narrow. Science isn’t defined by its utility or what it can do for us; it a systematic, objective study of phenomena. Different sciences will naturally have different standards; physics involves fewer variables than a human economy, which is why the former can be precise in its predictions while the latter can hardly make predictions at all. This is Hayek’s point, which he actually uses to caution AGAINST “scientistic” models.

    Nor is it extremely obvious where Austrian economics – as opposed to some of the subjective opinions of some of its prominent figures – are explicitly opposed to Catholic teaching in any essential way. The key is to be able to understand the difference between statements in the social teaching that are clearly related to methods which are clearly negotiable, and moral ends which are clearly not.

    Austrian economics is not incompatible with Church teaching or with Distributism for that matter. It may throw into question some of the specific policy recommendations of past popes, but anyone who confuses those with dogmatic decrees is engaging in a serious error, I think.

    It may be worth noting that John Medaille relies on left-anarchist theorists such as Kevin Carson, who displays a red-and-black flag on his blog, for some of his theories. That’s the sort of anarchism that persecuted the Church during the Spanish Civil War, hardly compatible with Catholic social teaching in itself. But Medaille has managed to combine in a way he and others see fitting the theories of this anti-clerical revolutionary with Distributism. If he can do that, I don’t see why Thomas Woods and Jeffery Tucker can’t look to Mises, or why we can’t look to Hayek or Ropke.

  • Robert L.

    Matthew,

    Allow me to clear up the ambiguity in the line of reasoning. Genesis tells us that Adam is condemned to earn his living by the sweat of his brow. In other words, he must discover the intrinsic properties inherent in elements of Creation and devise a set of valuation criteria which allow those elements to be employed in moral human action. The physical nature and properties are intrinsic, the value of any particular action or thing employed as means to some end is not intrinsic and not set objectively by God, but must be chosen by Adam. Those choices are subject to moral evaluation according to criteria which encompass both actor and context. Hence, the value of a particular means is subjective and context dependent, not intrinsic and objective.

    The problem with discussing “labor” in relation to capital and Church social teaching is that the word “labor” applies to two different things. “Labor” can refer to human action: digging a hole is a kind of labor, or it can be used as a collective noun indicating a classification of human beings according to the criterion that they exchange some service (“labor”) for a contractually defined wage. The problem with this ambiguity arises whenever people conflate “labor” with “human being.” Human beings are ends in themselves, not involuntary means to the ends of others. It is immoral in almost any imaginable context, to “value” a piece of capital, e.g. a dump truck, over a human being, which, in effect, presumes in the first place, that the human being is something to be evaluated as disposable means. Nevertheless, it is not immoral to compare the relative values of various forms of labor when the term “labor” refers not to human beings themselves, but to human actions. When transporting large quantities of dirt over significant distances, for example, the “labor” of a man driving a dump truck is of obviously more value than the “labor” of a man hauling sacks full of dirt on his back. This is an evaluation of the action, not the actors. The distinction is crucial.

    But to say that it is our individual prerogative to assess the value of bread relative to a second (luxury) car is to assume that everyone affected by our economic decisions is in the same position of luxury.

    I beg to differ. It is not to assume that everyone affected by our economic decisions is in the same position of luxury. I am saying that every human being acts in setting the value of the car relative to the bread in the process of making trades with other human beings for these and other items in the marketplace. The root of the error people make is in presuming that the relative values of the factors of production are set from the top down, by “the capitalists” and that this consequentially sets the value of all final consumption goods and services. This is not the case. The relative values of the arrangements and composition of the factors of production are imputed to the factors of production by consumers, from the bottom up, when they make trades for things in the market place. The owners of capital and labor may value their own items and services, but it is ultimately the consumer who validates the value choices of the producers in agreeing to purchase or not purchase. The capitalist merely has the ability to arrange the factors of production or trade them according to values calculated to return a profit in the exchange of goods and services. If the capitalist has calculated correctly, his arrangement of the factors of production under his control has economically produced consumption output in concordance with the relative valuations determined by consumers. In that case, where he has calculated correctly, he profits; if not, he suffers loss.

  • J.P. Zmirak

    Eric, you seem not to understand what “ad hominem” means. It’s an attack on the character of a particular person when that character is irrelevant to the issue at hand. I was instead attacking the rhetoric employed by unnamed people when discussing precisely the topic at hand. To say that someone’s argument is “childish” may or may not be incorrect, but it’s not an ad hominem. Nor is it an ad hominem to say that people neglect the virtue of prudence in their considerations of economics. Indeed, since I was speaking generally, there was no “hominid” to ad-tack.

    Let’s grant that the encyclicals quoted by anti-market Catholics were indeed critical of capitalism itself, not abuses thereof. As Mr. Ferrara gleefully points out wherever he gets the chance, most of the same encyclicals denounced religious liberty and the freedom of the press (indeed, the “Liberalism” condemned by Traditionalists is really libertarianism, and amounts to a strong support for religious, intellectual, and economic freedom).

    If we accept Vatican II, the Church has abandoned those positions, which tells me that the level of authority at which those pronouncements was made was NOT definitive, certainly not infallible. A subsequent document, Popolorum Progressio, which did NOT attack the other two freedoms, supported massive forced redistribution of wealth and massively counterproductive foreign aid. It was not tinged by authoritarianism but by welfare state socialism. Centisimus Annus was far more sensible and realistic, in my opinion. The papacy is not an oracle. Sometimes popes enunciate solemn moral principles, then do a poor job of explaining how to implement them (see Gregory XVI on fighting indifferentism… through religious intolerance). That’s okay. We don’t expect technical expertise of pastors.

    The problem with distributists is that they’re willing to use force to impose a vision of the good at the expense of individual rights, on issues where there is no violation of natural law (and hence, where the state has no business interfering). Yes, it’s good for society to have small businessmen and small farmers. Let’s by all means try to patronize them. When we start mobilizing to force others to patronize them, or prevent the formation of larger companies, we are impinging unjustly on people’s rights to freely dispose of their property and their labor. It’s a sin. Likewise, it’s a sin when big business uses big government to line its own pockets, or big labor uses the state to close out competition in the workplace.

    If the Church can reverse her stand on something as close to her heart as religious liberty, I have ZERO confidence in the permanence or doctrinal value of technical economic prescriptions by popes. That doesn’t undermine my faith in the papacy; it simply restricts it to its proper sphere.

    Now if popes wish to teach us that we as Catholics may not hire people for less than a living wage, imposing it on us as a precept of our faith for us to keep on pain of sin… that’s entirely within their pastoral purview. To tell us as citizens that we should force this view on others goes too far.

  • Theorist

    Just to be fair, only some distributists actually want to use the power of the state to force their system on people.

    Contra the distributists, economics is in my opinion a half-speculative/half-practical science since the purpose of learning economics is practical but the only way to reach this end, is through abstract reflection on human action; not moment to moment judgment calls. In this sense I suppose it can be likened to a builder who reflects on the process of building a house without planning to actually build the house.

    Also, wage determination on the market is just an instance of the general law of marginality which is in substance simply choice and action. It is not essentially based on negotiating power.

    What Woods and others seem to mean by saying the Church has no authority in economics, is simply to say that it has no authority in knowing the implications of human action per se, and the flow of goods as seen under that aspect.

  • Thomas Sundaram

    As far as the comments on this thread went before the conversation was interrupted by the editor, there was no call to refer to the Distributist fellows as a “tribe of trolls” or a “travelling roadshow”, and the editors should be ashamed of themselves for their clumsy management of the situation (and I will confess that I do not think a situation that occurred some time ago, and on another publication which only happened to be connected to InsideCatholic, should have effects reaching to something as unrelated as a polite discussion of economics!)

    I am not some sort of follower of either Dr. Medaille or Chris Ferrara (although I am keenly interested in at least hearing what they have to say, an interest that has been thwarted, now) but they have not done anything on this thread to elicit the scurrilous comments made against them. Indeed, I have often heard that the definition of a troll is one who uses aggressive tactics to advance a viewpoint by non-rational means, and stifling one’s opposition through administrative powers is definitely in conformance with this. So unless the editors themselves would like it understood, from their own actions, that InsideCatholic is a stationary racket run by a fiefdom of unjust trolls, at the very least, an apology is in order with regard to the mismoderation of this discussion. The action taken by the editors is at least imprudent and at most unmerited, even based on an impartial examination.

  • John2

    Dear Mr. Thomas Sundaram,
    The admins say there is a history behind their actions. You admit you do not know the history, then you claim the admins have no call to act as they did. We need not further discuss the merits of this position.

    To cut to the chase, you can learn distributism by standard methods of online research. They actively promote their ideas, in public; you can find them.

    Happy reading!

  • Eric Pavlat

    I’m totally not an expert in Distributism; I’m an interested question-asker. I’m not on Medaille’s side, but I’m attempting to be on the Church’s side, and I find the ground kind of squishy, so forgive me if I reach out for a hand to steady me from time to time.

    The problem with distributists is that they’re willing to use force to impose a vision of the good at the expense of individual rights, on issues where there is no violation of natural law (and hence, where the state has no business interfering)….

    Indeed; I just had a blog post a few weeks ago about the problem of how to craft a distributist policies without force. I admit that one of the problems with Distributism is that there’s no crystal-clear plan, much less one that follows the requirements of subsidiarity. I hope that problem gets solved.

    If the Church can reverse her stand on something as close to her heart as religious liberty, I have ZERO confidence in the permanence or doctrinal value of technical economic prescriptions by popes. That doesn’t undermine my faith in the papacy; it simply restricts it to its proper sphere.

    There’s a real difference between the authority of something mentioned in one encyclical and something repeated by pope after pope over the course of more than a century. No, it doesn’t rise to the level of Dogma, but the stuff that gets into the Catechism and the Compendium of Social Doctrine, I take extremely seriously.

    You said, “I have ZERO confidence in the permanence or doctrinal value of technical economic prescriptions by popes.” Is there anything else parallel? Any other repeated teaching of the Church that one can freely ignore, because it falls out of the Church’s area of authority, despite her own claims to the contrary?

  • Thomas Sundaram

    I see that my previous comment has been deleted. Lovely.

    I am frankly a bit annoyed by the blas

  • Don L

    I have a tendency to refer to economics as the ecology of finance. It is living things interacting in their environment. And so is it with those who exchange money for goods. Consider millions of wolves chasing the last rabbit on earth -a rare supply situation with a massive demand. The value of the rabbit suddenly becomes worth many times more.
    When a popular chef, some years back, created blackened redfish he turned the entire redfish population on it’s head -causing this once nearly inedible fish, to become almost extinct. No one had ever before examined their up and down cycles because they never had reason to -there were always redfish around.

    And so it is with money in the market place – it is the best determinant of the actual value of something because it relies upon market forces (nature)and not government interference (supposedly)
    However, this doesn’t explain whether one should or should not purchase certain items and the morality of materialism driving those markets. It merely points out that the economy is not a zero sum game. Just as more trees can be planted, fish can be farmed, more children will not result in the destuction of the planet’s resources, but rely upon new methods of producing food, energy etc.

  • Wessexman

    Firstly Joe H, Kevin Carson is an individualist anarchist and not like the Spanish anarchist. Secondly as far as I can see John Medaille only uses Kevin Carson’s work for historical insights on the nature of capitalism as a statist entreprise and for some practical examples of decentralised industries as far as I can see. I think in fact he doesn’t make enough use of the former threads in Carson’s work if anything, they are excellent fodder for distributism because they show just how much corporate-capitalism and capitalism are and never have been free market. I have yet to see any evidence of him taking on the more philosophical and moral positions of Carson like Jeffrey Tucker and Thomas Woods take on those of the Austrians and liberalism in general.

  • Marthe L

    First, I have to say that I am a Catholic but I do possess a certain knowledge of economics… Back in the late 50’s and early 60’s when I went to the University of Montreal, the University did not make a point of being Catholic, it was just a normal thing for many in the faculty to BE Catholic. Therefore, as part of the Bachelor in Commerce curriculum, there was an introduction to the Catholic Church teaching on Social Justice (e.g. to Leo XIII’s teaching and the later Quadragesimo Anno). Then I took several post-graduate credits in Economics.
    Some things puzzle me about the posts about this article:
    1. There sems to be a quasi-religious belief in “the market”, as if it was the perfect ruler of economic activity… A few weeks ago I attended a workshop held by a Canadian Jesuit called Bill Ryan, who happens to have a PhD in Economics from Harvard. I happened to ask him what he thought of the “market” and his reply was something like “an excuse for not taking responsibility for one’s actions”! As for me, the market theory appears to be just an early economic model to try to make sense, through simplification, of complex economic relationships. It is not a dogma…
    2. It is all well and fine to say that caring for the poor should not be handled by the government, but should be a matter of personal charity. This worries me, since I hav been reading a lot of comments about news items on a few news Web sites (my favourite is cbc.ca) and there appears to be a lot of prejudice against the poor, particularly people who remain unemployed for a long time, who are often being accused of just being lazy, of having been used to live from government handouts without really be willing to work (e.g. “blaming the victim” in its more blatant expression). Therefore,I am afraid that “personal charity” would be associated with a destructively judgemental attitude that would keep many individuals in extreme poverty because they may not meet the expectations of the “givers”. In turn, the children of such poor people would not get any chance to get out of their poverty because judgemental attitudes towards their parents would keep them in a position of not being able to get the education or skills training they would need to make their way in the world of work. And, since I am a Canadian, I cannot avoid looking towards our neighbours to the South and the remmants of negative attitudes towards African-Americans: would poor African-Americans really get their fair share of personal charities? The way I see things from a completely different “cultural” point of view from people from the US, I definitely would see a role for the government, just to “even the playing field” for everybody…
    These are just a few preliminary thoughts… I do not have time right now to do a lot of research, but I might come back to this subject some time in the future…

  • nohype

    Excellent article with a plausible hypothesis. Some of the comments illustrate the assertion that most of what is written in Catholic circles about economics is painful to read.

    In addition to the avoidance of scarcity, I wonder if emphasis on intentions may also be a factor in explaining why Catholics so often write stupidly about economics. In judging whether an action is sinful or not, intention matters and results do not. If I act to cause someone harm and my actions inadvertently result in helping him, it is not the results that matter morally but what I intended. In contrast, in economics results matter, not intentions. For economists, if the results are bad, it is not the fault of bad intentions but of bad incentives, and the way to correct the situation is change incentives. That seems to strike people who are focused on morality as a perverse way of looking at the world. However, those regimes that have tried to “correct” intentions have been disasters for freedom and human rights, not to mention prosperity. (It is worth noting that morally we focus on specific and concrete individual actions while economists focus on aggregated results with abstract individual action. Economists are not interested in individuals as individuals–they are interested in the group outcomes that result from many individual choices.)

  • William Meyer

    The range of arguments in the comments already posted proves Mr. Tucker’s thesis.

    In general, I find that few people, Catholic or not, have studied economics to any useful degree. This seems particularly true of those fond of Distributism. I would suggest reading Henry Hazlett, Milton and Rose Friedman, and Thomas Sowell, all of whom present economics in a manner understandable by non-economosts.

  • Marthe L

    I hve read Milton Friedman and concluded that he is considered a good economist simply because he says exactly what people to the right want to hear. And most of it is contrary to the social teaching of the Catholic Church. One example: Corporations have no other social duty than to make money for their shareholders. The Pope said that labour should not be considered as less important than capital, but as MORE important. Economics teach that there are 3 factors of production: raw materials, labour and capital. Giving precedence to capital to the detriment of the two others creates a serious imbalance and is mostly responsible for the widening gap between rich and poor. Ignoring this imbalance will eventually lead to serious social unrest, and, yes, the masses of impoverished workers may just be ready to accept a system that promises them “heaven on earth”…

  • Matthew Wade

    In addition to the avoidance of scarcity, I wonder if emphasis on intentions may also be a factor in explaining why Catholics so often write stupidly about economics. In judging whether an action is sinful or not, intention matters and results do not.

    I take issue with your claim at the beginning of your post. As I am under the impression that such a claim is the basis for your thoughts in the following sentences, I’ll only focus on the beginning in this brief response.

    “The Apostles decisively rejected any separation between the commitment of the heart and the actions which express or prove it (cf. 1 Jn 2:3-6).” (Veritatis Splendor #26) What the late Pope John Paul II refers to as “actions” are referred to as “objects” in the Catechism. More to the point, and forgive me if you aren’t a Catholic because that would presumably absolve you of an otherwise grievous and, bluntly, scandalous claim, please see paragraphs 1749 – 1761 of the Catechism for a refutation of your claim. I’ll only quote #1755:

    A morally good act requires the goodness of the object, of the end, and of the circumstances together. An evil end corrupts the action, even if the object is good in itself (such as praying and fasting “in order to be seen by men”).

    The object of the choice can by itself vitiate an act in its entirety. There are some concrete acts

  • Tim H

    Maybe Mr. Tucker is right that we Catholics don’t understand economics, but as a proponent of free markets, he also has a duty to explain what happens over time when free markets lead to large scale winners who can buy political favors to force the market their way.

    What happens then?

    It simply won’t due to say something like “that’s not my province”. If you suggest a course of action (free markets), you are morally bound to deal with the consequences. And this is something I never see the Austrians or the Libertarians address.

    So tell me how we keep the large scale winners from buying the rule making process?

  • nohype

    In response to Matthew Wade:

    You might look at the previous section, 1754: “The circumstances, including the consequences, are secondary elements of a moral act. … Circumstances of themselves cannot change the moral quality of acts themselves; they can make neither good nor right an action that is in itself evil.”

    A bit earlier in section 1752, “intention is an element essential to the moral evaluation of an action.”

    In other words, for judging whether my actions are sinful or not, my intentions are essential but the results or consequences of my actions are not.

  • Matthew Wade

    My friend, I’m utterly astounded that you’ve tried to argue the point. After re-reading my post I can see some other places where one may have picked a bone, and had a good fight. Your choice of casuistry (in the modern, negative sense of the word) is sad, at best. It’s like saying, “A soul is an essential part of a human person, therefore a body is not.” For clarity, paragraph #1753:

    A good intention…does not make behavior that is intrinsically disordered…good or just. (N.B.: This directly addresses your example in your post.)

    That presupposes that there are “intrinsically disordered acts. (I’ll let you find the definition of them in the Catechism. I don’t think you doubt their existence.) I want to go farther with this, as I had hoped that in good faith you would reference completely the sources I quoted. (Admin, please forgive me for going somewhat off topic but this must be settled, if only for the audience and not nohype him-/herself.) Paragraph #1756:

    It is therefore an error to judge the morality of human acts by considering only the intention that inspires them or the circumstances (environment, social pressure, duress or emergency, etc.) which supply their context.

    Yes, there is one hidden preposition in my argument: evil acts are sinful acts. I won’t absolutize such a preposition (and irreverently judge you), but if you’re comfortable justifying objectively evil acts with some sort of subjective ignorance then I’ll ask you to also reference Article 6 of the same Chapter of the same Section of the same Part of the same Catechism.

    I hope you’ll find my comment edifying.

  • Fins

    I

  • Chris Campbell

    “Jeffrey, great article, and timely, too. As you point out, economics deals behaviorally with the temporal, as opposed to the Eternal. The moral issues also bear on the individual (with free will) versus the polity.”

    actual, as economics does bear on man and man’s soul, how society relates with one another, etc-then it is under the realm of morals. Sadly, no “austro-libertarians” are gutsy enough to debate Distributists….no real way to defend a anti-Catholic system. We have thrown down the gauntlet here and esp, on FB, sadly, none dare come forward, esp not Tucker and Woods…2 peas in an unCatholic system of idols…

  • Chris Campbell

    “The problem with distributists is that they’re willing to use force to impose a vision of the good at the expense of individual rights,”

    actually, capitalism is force and so, too, socialism, oftne working on concert…for who runs the Govt, but capitalists…Atlee in Britain brought National healthcare full throttle and he was wealthy….Most commies in USSR were well off, as was Rockafellar, Morgan,etc in USA…

    As distributism is largely rebuked or unknown, how then can we use force? Also, your last statement, is the individual more powerful then the common good and community? Might want to read up a bit mroe on that, answer, it is not-individualism is a protestant concept, that led to each beleiver reading and interpresting the bible for themselves and a dog-eat-dog economics of Puritans,et al..hardly Catholic, sort like Tucker and Woods….

  • Theorist

    This is something that should be remembered in this discussion in exactly the same manner which Fins stated. Indeed I would add that among austrians there is a difference between Austrian Economics and Libertarian ethical theory, between understanding economics and favoring a totally free society. And even though I think Economics is actually a branch of ethics, this must be distinguished from AE which, although it uses the word “Economics” is really an analysis of all the actions of which a man is capable -not those ethical actions that separate us from animals.

    As for some posts which discuss the differences between AE and the economics that is normally taught, one must know that Mises Institute AE hasn’t been taught in universities for nearly 120 years -it was only the rise of the internet that resurrected it. As such, AE is different from neoclassicalism in method, conclusions, and (IF one wants to mix in the normative) policy proposals.

    For the record austrian economists only like capital over labor, because capital augments the effectiveness of labor. To the contrary because markets are always TENDING towards equilibrium, profits tend to fall with prices thereby increasing the share of output accruing to labor.

  • Carl

    2269 The fifth commandment forbids doing anything with the intention of indirectly bringing about a person’s death. The moral law prohibits exposing someone to mortal danger without grave reason, as well as refusing assistance to a person in danger.
    The acceptance by human society of murderous famines, without efforts to remedy them, is a scandalous injustice and a grave offense. Those whose usurious and avaricious dealings lead to the hunger and death of their brethren in the human family indirectly commit homicide, which is imputable to them.
    Unintentional killing is not morally imputable. But one is not exonerated from grave offense if, without proportionate reasons, he has acted in a way that brings about someone’s death, even without the intention to do so.

    2438 Various causes of a religious, political, economic, and financial nature today give “the social question a worldwide dimension.

  • Marthe L

    I for one do not find very convincing the argument that “living wages”, or even a minimum wage as we have in Canada, results in unemployment. Some employers’ organization said the same thing here a few weeks ago: without a minimum wage, employers would be able to hire people who otherwise would remain unemployed because they have a lower level of skills. However, what good is it to work full time and not earn enough to support oneself, with or without one’s family? How else are they supposed to earn the extra cash they need? Sure, people would be employed, but they also need to have a roof over their heads and food on the table, and even money to pay for transportation to get to work, even if it is by public transportation. Also, I am certainly not convinced that employers able to hire at lower wages than provided by a rule on minimum wages would really employ more people: they most probably leave the under-skilled workers aside as they have always done and pay less to the ones they would have hired anyway, thus increasing their own profits. By the way, does anyone remember Jesus’ parable on the workers hired at different times of the day to go and work in someone’s fields? At the end of the day, the employer chose to pay to the last ones hired the same wages as had been accepted by the ones who started to work early in the morning. I think that this would be a good example to follow nowadays is it was not generally accepted that the only social responsibility of a corporation is to make money for its shareholders…

  • moreorless

    Marthe, it is fair to argue that, as a Catholic entrepreneur, I have the obligation to provide my employees a living wage. But, my obligations to my family, force me to balance the needs of my employees with those of my own. If I pay my employees a wage that is substantially above the market, in the long run (depending on my cash reserves this may be a very short long run) my business will fail, and both my employees and my family will suffer.

    Setting a minimum wage, that is the same for everyone, creates a further economic/moral complications (that the parable you cite highlights very clearly): how do I, as an entrepreneur, account for the differences in productivity, attitude, loyalty and all those desirable traits among my employees? Most of the people who have spent any time going to college, learning new skills or bettering themselves have done so to try get to a higher rate of pay. Any system where rewards are not tied to performance/results; and where everyone is compensated according to some other formula creates an incentive to reduce individual output. If I know that I’m going to get that rate, regardless of whether I show up on time or not, I have no incentive to be on time.
    When the government sets the price for a good, that is above the market price (this is called called a price floor) it creates a surplus (supply outpaces demand). Minimum wage is the price floor for labor (one cannot pay a wage that is lower than the floor) and it creates a surplus of labor. The real tragedy is that the good intentions of legislators in providing a living wage by imposing a price floor (minimum wage) results in some people being laid-off and some people not being hired. For the ones looking for work the choice is not between a low “un-livable” wage and a higher “livable” wage. The brutality of the result is no job. The freedom to accept a lower paying job, instead of having no job, is what the politician took away from me.
    My Catholic obligations as an individual are very difficult to translate into social obligations imposed by force by the state. When that imposition happens we Catholics soon find our private worship gets more and more limited.
    Prof. Tucker, the enjoyment of reading your article and all the “heated rhetoric” that followed is without a doubt a good example of non-scarce good.

  • Marthe L

    I have been thinking about your post for a while, and I would like to point out a few more things.
    Starting at the end, about your “freedom” to accept a lower wage. I can reply with an example: When I began to do free-lance translation, most of my work came from the Federal government (Canadian). The way things were done then by the Translation Bureau was to phone three translators to obtain a quote every time there was work to give out, and the person asking for the lower price won the contract. Sounds reasonable? Yes, but I soon discovered that there were some translators who deliberately undercut everybody else and thus obtained a larger part of the work available. Of course, they were “free” to do it… But in reality, they showed little respect for their colleagues who might have needed to make a living. As well, they were doing damage to the entire profession by maintaining the prices lower than would have been normal (or lower than market,if you like). Was that just? Earlier today I read in another article on Inside Catholic that: “True freedom is not to be confused with freedom from responsibility, but implies a responsibility to our fellow man.” Could it also mean a responsibility to our fellow colleagues? Another quote from the same article: “As Pope John Paul II said, during his visit to the United States in 1995: “Every generation of Americans needs to know that freedom consists not in doing what we like, but in having the right to do what we ought.”
    You say that as an entrepreneur you have responsibilities to your family that would force you to balance the needs of your employees with your own. Yes, of course, but your argument seems to refer to a very small business, where conditions are different. And in my case, as a self-employed worker, whenever I have hired someone to help me (not as permanent employee, though, but more as casual help whenever I needed and/or could afford it) I have always considered it against my principles to pay less than $15(CAN) an hour, although the minimum wage at the time in Ontario was just under $10, and I rarely suffered because of it. As a Catholic and a Christian, I have also learned to trust in the Providence of the Lord, and that if I tried to do the right thing, He would support me – and He did!
    However, if we consider larger corporations, this is different. There has to be a way to provide a balance between the larger power of the employer, and the individual and very much lower power of the individual worker who needs to earn a living. If there is no union to provide a combination of all or most of the power of individual, there has to be some sort of regulation. Otherwise we could still see abuses of the sort that took place during the Industrial Revolution in England, when employers were only too happy to take advantage of a “loophole” in the market system. While in theory the supply of labour should have decreased if wages became too low, the contrary occurred: the lower the wages, the higher the supply, to the point that 6 year olds were sent to work in the mines… Of course, there was no “surplus” of labour, but would it not have been better and more just to send the kids to school? These were probably some of the preoccupations that led LeoXIII to publish an encyclical letter on the rights of workers…
    In my opinion, to dispense with a minimum wage would in fact be subsidizing corporations and allow some of them to pay their CEO a few millions of dollars more a year… Do you really think that it is reasonable to expect that personal charity would be enough to allow the lowest paid workers to support themselves and their families?

  • Brian McCall

    An element missing from the discussion of Scarce goods is that they are not only distributed by the means of “economic laws” which operate outside of the realm of human moral action. People have the ability to affect, and in fact do, the relative scarcity of goods. Anti-competitive behavior affects the scarcity and hence price of scarce goods but this is not the result of some abstract unavoidable “law;” it is the effect of human choice. Adapting St. Thomas’ example a bit, we can use the example of a theatrical performance. Tickets to the event are scarce. Yet, it is unjust for someone to show up at the ticket office and buy all the tickets early and then sell them for an inflated price because they are now more scarce, a scarcity of his own making. Economic activity is not the product of pure disembodied laws but of free human actions and all chosen human actions have moral implications.

  • Mena

    Two questions:

    (1) Are there any good Catholic Business Schools out there?

    (2) Are there any good Catholic economic theorists who embrace a pro-business, pro-free-market agenda?

    If you know of any, please list them and offer a sentence on their contributions.

    Thanks in advance for your responses!

  • Fr. Larry Gearhart

    Economics is not a zero-sum game. Neither is salvation. Progressives and Calvinists assume otherwise. This is their fundamental error.

  • Faciamus

    In your condemnation of usury, I hope you yourself have never taken out a mortgage, bought a car on credit, accumulated student loans, use a credit card, or own stock. If you have, and what you are describing is actually usury, then you are causing those who deal in these financial instruments to sin mortally, according to your definition.

    Usury is not the forbiddance to collect interest on a loan, but the practice of lending money at an unreasonably high rate of interest. Your definition of all commercial lending as usury is fundamentally wrong.

    Of course it can be argued that many financial institutions are guilty of usury (credit cards would seem to fit this definition), but to say that any collection of interest on a loan is usurious is illogical.

  • Lee

    I couldn’t read all the comments so I may be repeating. At any rate, while I believe there is such a science of economics, it was highjacked a long time ago by the owners of the British central bank and has been a “science” entirely hostage to the Federal Reserve, the private bank which controls our money supply, and, also, coincidenatlly, employs directly or indirectly the incomes of most US economists who aren’t about to bite the hand that feeds them. The primary reason Catholics and any else with common sense do not understand economics is because the modern version is entirely irrational — there is almost nothing there to understand– scarcity or no notwithstanding.

  • Marie

    The Sunday homily Oct 17th Father gave an example of two children who wanted the same candy bar. That is not fair if one gets the bar and the other does without. So any parent knows about distribution. You equally cut it in half. I smiled at the flaw in thinking. As a parent who watches sugar intake for ones children, we know one child can tolerant more sugar than the other. It is a much more complex issue than just simple slogans.

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