“Supporting markets as the economic arrangements most likely to help promote human flourishing doesn’t necessarily mean you accept libertarian philosophical premises” says Acton Institute Director of Research Samuel Gregg in an essay published today at Public Discourse. This comes in response to “Koch Brothers Latest Target: Pope Francis,” an Oct. 14 article written by John Gehring at the American Prospect that claims the Acton Institute is part of a larger network of organizations behind “a decidedly different message than Pope Francis does when it comes to the economy and climate change.” Gehring, Catholic program director at Faith in Public Life, labels various free-market organizations as “libertarian” and asserts that “libertarian thought … is the exact opposite of Catholic teaching.”
Gregg begins his response by noting some of the contributions that great libertarian thinkers such as Hayek and Mises have made to economics:
Libertarianism’s great strength lies in economics. Prominent twentieth-century libertarian economists, such as Ludwig von Mises and Friedrich von Hayek, made major contributions to the critique of socialist economics. While ridiculed by some at the time, their criticisms turned out to be spot-on.
In Socialism (1922), for example, Mises illustrated that socialist economies can’t replicate the market price system’s ability to signal the supply and demand status for countless goods and services to consumers and producers at any one point in time. However intelligent and statistically equipped the top-down planners might be (whether they take the form of a Communist politburo, a Fascist dictator, or a 1970s British government), they simply cannot know the optimal price for any good or service at any point in time. Any attempt to dictate prices from the top-down will lead, paradoxically, to economic disorder and dysfunction.
Gregg goes on to show how the philosophical views of Hayek and Mises are “characteristic of many self-described libertarians” and that “they are also difficult to reconcile with Catholic or natural law accounts of man and human flourishing.” (“Catholicism and natural law theory reject, for example, the Epicurean notion that happiness consists in pleasure,” Gregg adds.) He even uses the example of Adam Smith saying that “tensions in Smith’s ethical theory” which he draws out in his book Theory of Moral Sentiments, “don’t invalidate the key economic insights expressed in his Wealth of Nations.” Gregg makes his point clear: you don’t have to accept someone’s philosophical view in order to agree with their economic views.
Gregg makes this connection to Pope Francis:
If the foregoing analysis is accurate, it suggests that criticizing aspects of Pope Francis’s statements about economic questions doesn’t necessarily mean that you’re trying to promote libertarianism. Certainly, Catholics should be respectful of any pope’s observations about political and economic subjects. But they’re not required to remain silent when a pope (or any Catholic bishop) makes statements about the economy reasonably judged to be prudential or empirical claims and thus potentially disputable on grounds of logic or fact.
Take, for instance, the Pope’s statement in Evangelli Gaudium (2013) that “Inequality is the root of social ills.” We will leave aside the Catholic teaching that original sin and people’s free choices to sin are at the root of all ills, social or otherwise. Instead, let’s consider that not all forms of inequality—including economic inequality—are necessarily unjust.
Toward the end of his article, Gregg clears up one more problem in the “phony war” between Catholicism and libertarianism. “How can ‘the economic technique’ be integrated into more robust accounts of human flourishing than those offered by libertarianism?” Gregg answers this way:
Here, I’d argue, new natural law theory has much promise. Germain Grisez’s 1978 article “Against Consequentialism,” for example, discusses the economic method’s benefits and limits in detail. He illustrates how cost-benefit analysis is a valid way of determining how to make practical non-moral judgments. Economics, John Finnis states, “constantly reminds us that to spend on one thing is to use up what might have been spent (time and labor, money, other resources) on other purposes.”
New natural law’s advantage is its particular attention to the difference between (1) ends that are intended and freely chosen, and (2) the side-effects (what might be called “the invisible hand” writ large) of those very same choices. The economist’s emphasis upon unintended consequences relies implicitly upon this distinction. As Finnis observes in his Aquinas (1998), “Modern economics gets going with Adam Smith’s proposal that it be undertaken as a science of side-effects.” That, he writes elsewhere, is “its true utility as a help-mate for ethics and political theory and thus for jurisprudence.” Economic analysis, Finnis continues in another place, “brings to light the complexity of the impact which one’s choices have, beyond their purpose or intention.”
You can read the entire article “Markets, Catholicism and Libertarianism” by Samuel Gregg at Public Discourse here.