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My friend Fr. Robert Sirico of Acton Institute has produced a new book entitled Defending the Free Market: The Moral Case for a Free Economy.
Hardback HERE, Kindle HERE. (UK HERE). PS: I received a review copy, but I am going to put the Kindle version on my wishlist. And if you don’t have a Kindle yet, consider getting one. I love mine.
One of Fr. Sirico’s great strengths is his ability to write with clarity and concision which enables me, decidedly not an economist, to follow easily what he is talking about.
Weighing in at 187 pages of the main text (followed by acknowledgments, bibliography, index), there are nine major chapters after the Introduction.
- A Leftist Undone
- Why You Can’t Have Freedom without a Free Economy
- What to Help the Poor? Start a Business
- Why the “Creative Destruction” of Capitalism Is More Creative than Destructive
- Why Greed is Not Good – and Why You Can Get More of It with Socialism than with Capitalism
- The Idol of Equality
- What Smart Charity Works – and Welfare Doesn’t
- The Health of Nations: Why State-Sponsored Health Care Is Not Compassionate
- Caring for the Environment Doesn’t Have to Mean Big Government
- A Theology for Economic Man
He shares some interesting autobiography which helped shape his ideas, including his personal experiences which explain both how he wound up a seriously screwed up lefty when he was young (think Jane Fonda and protests) and then how he escaped that trap (hint: it involved thinking and reading the right things and growing up). His experience of escaping from liberal hell motivated his inclusion after each chapter of a short helpful reading list.
I look forward to digging into this book today. As a matter of fact I have to set aside a couple other things to do that. But my quick scanning of the book shows that the Sirico isn’t just talking about policies which could work better to tackle the contingent choices we are faced with. He suggests things which can work because they are also the right thing to do. He makes a moral case, as the title says. His arguments have a theological underpinning. In the last chapter, for example, when he is explicitly theological, he raises the question “What does theology have to do with economics?”
A: Economics at its most fundamental level is not about money; it is about human action. How we answer the big questions – Who am I? What am I here? Where did I come from? Where am I going? What is man? – has n enormous impact on every facet of our lives, including how we work and buy and sell, and how we believe such activities should be directed – on economics, in other words.
One is tempted to say that his economic starting points involve our answer to the first questions in the Baltimore Catechism:
1. Q. Who made the world?
2. Q. Who is God?
3. Q. What is man?
6. Q. Why did God make you?
9. Q. What must we do to save our souls?
How we answer these questions guides everything else we do. And we cannot not answer these questions.
What he is trying to do, I surmise from my first glances, is make an argument for a free market that is free in a truer sense of freedom, namely, a freedom which comes from doing what we ought to do rather than just doing what we want to do. There are obviously going to be theological anthropological underpinnings in such an argument. Moreover, we also have to ask, “What’s it all for?”. If we think the material world of the here and now is all there is, then our choices will follow accordingly. Thus, in the last chapter Sirico deals with “vocation”.
This is a timely book, given that we are in a crucially important election cycle in the USA. Profoundly different visions are on ballot in November. A major dimension of the different visions involves contingent choices concerning the economy, and therefore jobs, entitlements, etc. In the last chapter Sirico describes the fictive homo economicus, a cold and selfish caricature of someone advancing “free market” ideas. I couldn’t help but think of how Pres. Obama and his surrogates, especially in the liberal media, are trying to impose this cold and calculating caricature on Mitt Romney and his time with Bain Capital. They are doing everything in their power to paint him and others like him as only interested in costs and benefits, the bottom line, entirely disregarding other people’s lives. I don’t buy that about Romney, by the way.
Anyway, get the book and find out what Sirico means when he argues that
“Failing to understand that man is more than homo economicus will lead to major errors in addressing social problems. If we treat only the symptoms of social ills – slapping more meddlesome regulations, government spending, or targeted tax cuts onto the surface of a problem without nourishing the wellsprings of human happiness – our solutions will fail.”
For the book launch Fr. Sirico has a brief video blurb.
[wp_youtube]Lt5IHy_bVjY[/wp_youtube]
So, here are the links!
I am looking forward to your comments after you read the book.
Hardback HERE, Kindle HERE. (UK HERE).
UPDATE:
Speaking of the free market, refresh your coffee supply now with Mystic Monk Coffee!
It’s swell!
“But Father! But Father!”, some of you are probably about to say, “You are intimating that Fr. Sirico’s book is so boring that you have to drink coffee to stay awake!”
HA! You fell into my cunning trap.
Above, I linked to their decaf page.
HA!
From Stuart Varney’s show on FNC:
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I just bought this book this morning for kindle! So far, it reads easily and seems accessible. I hope the young adults in my house will want to read it as well.
I shall add it to my reading list. I hope Fr. Sirico makes the point that the Federal government has been meddling in the “free” market for well over 100 years. Were it not so sad, I would chuckle at the comments from politicians about the evils of the market they have long insisted on perverting.
These issues must be fully understood by the bishops, as well, so they can understand why government is manifestly NOT the answer to getting health care to people who cannot afford insurance. Government has been possibly the largest single malefactor in the increase of health costs in the last 50 years. And before any object, the lack of tort reform is on the FedGuv, as well. Lack of action is still an action.
I can certainly respect the point of view taken by Fr. Sirico and the Acton Institute, but I would have even more respect for the Institute if some of the folks there weren’t so intent on deliberately mischaracterizing Distributist ideas. Fortunately, the intelligent folks over at the Distributist Review do a good job of setting the record straight.
Mr. Alan Phipps, O.P.
alanphipps: Will you also be commenting here on the book?
AS an economist, married to another economist I’m THRILLED by by the publication of this book. Its about time the defenders of the Free Market defend the morality of capitalism!!!!
I agree with Alan: I think the Distributist perspective is the most moral choice for Catholics. As Chesterton said “The problem with Capitalism is not that there are too many Capitalists, but too few.” An unregulated market would lead to oppression, as is inevitable in any lawless system. If I have time to read the good Reverend’s book between my two theses, I will comment extensively.
Fr. Z, if you would like a Distributist counter-part, try John Medaille’s “Toward a Truly Free Market.”
[Thanks for the suggestion. Hopefully it will be available on Kindle someday. Those who want it, can get it as a book HERE. Perhaps readers will take a moment to go there and click on the left on the link to indicate to the publisher to make a Kindle version available. I’ll bet we could have an impact.]
I look forward to getting a copy of his book. While I am neither in the Romney or Obama camps, I look forward to the necessity of our nation embracing free economics. My grandpa never made it past the third grade, he had a truck and, eventually this evolved into a truck line. Government was not necessary in creating a job for him, eventually, however, the government had a large role to play in making the business eventually unsustainable – more paperwork than work. It is a strange development, I work for a company that, once the first generation of owners passed away, went from being family oriented – the owners had a heartfelt and recognizable appreciation for the workers being crucial and important to their success, to being an “us” against “them” mentality. While not specifically expressed in words, it is intimately felt in changing action and policy. Vocation is imperatively important to both employer and employee, too often, however, the employee is seen not as a family member whose family needs them in time, but simply a financial actor whose employment is in all situations is to be directed towards company good – loss of a day off, increased overtime, etc. At the same time, I work with employees who regard their “job security” in terms of poor training of others in order to keep themselves relevant and necessary. Still others believe, that if they refuse to do their current assignment well, they should be given a preferred assignment in which they choose to do well always.
Aren’t you just a little bit worried about a priest working for a political institute, whatever views you may have about the substance of the book? I write from the point of view of an orthodox Catholic in the UK.
Without wanting to get into a drawn out discussion on Distributism, please permit me to respond to Mr. Phipps by saying that IF there are any characterizations of Distributist ideas coming from the Acton Institute 1) they certainly were not made by me; 2) they certainly were not intentional; and 3) I would be grateful to receive specific citations on this so that if this assertion is correct, we can set the record straight. I appreciate the tone of the comment, and am grateful for the notice of my new book.
amfortas:
As I understand it, Fr. Sirico’s book is a defense of the free market, not a general treatise on economics. If you find any discomfort in that, I would recommend reading Economics in One Lesson by Henry Hazlett and Basic Economics: A Citizen’s Guide to the Economy by Thomas Sowell. Both are as readily comprehensible as I understand Fr. Sirico’s book to be.
As someone who has an undergrad in business & an MBA as well as worked for the majority of my career in Fortune 500 companies, I can say that the best talk I ever heard on capitalism was from my philosophy professor. He went into the principle of act to define the purpose of work and how that steers us to one system versus another. He talked about different types of goods and showed why government needs to stay out of things. It was far better than anything I ever heard from any of my economics professors who defended capitalism. I really believe that someone schooled in logic and the philosophical sciences can make a far better defense of the free market.
Fr. Sirico,
Thank you for your response. I didn’t have you in mind, specifically, but rather some of the folks who write for the Acton Institute blog, where there has been considerable characterization of Distributism (some of it fair, some of it unfair, in my opinion). I’d be happy to contact you privately (email?) to show you some of the more egregious examples.
I apologize, I didn’t intend to start a war, but only to engender discussion given the general topic of economics in America that seemed to be suggested by this post.
alanphipps: seemed to be suggested
Heh heh…
Well… seemingly suggested or not, I hope the discussion here can be good and useful.
In the past these economic blog entries have been a spark for some pretty strong and for the most part civil discussion.
Appreciate hearing about the book. Perhaps he will present it one of these Thursday evenings with Raymond Arroyo.
I will look forward to reading more reviews of this book.
It seems to be released at an opportune time, and will be interesting to see if there is some synergy between this book and some of the ideas espoused by Ryan in the budget battles.
The Moral Case for a Free Economy by Fr. Robert Sirico
Except for the fact that the free market has been condemned by: Leo XIII, Pius XI, Pius XII, Paul VI, John Paul II. Hey, who cares about Papal encyclicals.
There is no “budget battle” when the debt ceiling is continually consented to and increased. There will be no “budget battle” until we have representatives willing to cap the debt ceiling.
“Is this the [free market] model which ought to be proposed to the countries of the Third World which are searching for the path to true economic and civil progress?
The answer is obviously complex. If by “capitalism” is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a “business economy”, “market economy” or simply “free economy”. Blessed John Paul II, Centesimus Annus, 34
Athanasius, the difficulty with other models (including, from what I understand, distributism) is that they are dependent on a controlling force other than simple market forces. Long before the phrase “slippery slope” came into popular usage, the Feds had demonstrated with the Interstate Commerce Act that politicians–or perhaps, governing bodies–can’t be trusted not to overreach.
For Athanasius:
Except that the free market has NOT been condemned by any pope and certainly not by the ones you list.
A completely unfettered, unbridled laissez-faire capitalism has been condemned by those popes, to be sure. To be specific they condemned any claim that the right to property has no limits and, positively, they insisted that all that we own is under some sort of obligation to the common good.
But on that point Adam Smith and the American Founders would agree with your listed popes.
We have not had an unfettered, unbridled laissez-faire free market in the United States for at least 100 years. What we had before that, how laissez-faire it was and so forth can be debated.
We could have a good discussion IF we stopped with the distorting absolutizing claims and got down to the nitty gritty of just how we are going to go about defining how the common good obligations that all of us have, whether fabulously wealthy “capitalists” or small-time Distributists, are going to be exercised.
Could we, as Catholics, at least agree that our fellow Catholics care about the common good? That the Acton Institute cares about the common good? That we all agree that the common good has to set limits on private property?
Then we could discuss what those limits ought to be. The popes you list didn’t go into those details.
Bishops teach principles: 1. the common good sets limits to free markets; 2. the right to private property, subject to common good, is a God-given right needed for human dignity (Centesimus Annus. They don’t decide the details about applying those principles to given economic situations. The rest of us, non-bishops (maybe even a priest here or there is allowed to have opinions on some details. Like, say, Fr. Sirico? Fr. Z?) get to have the fun of deciding how to apply the principles.
But the principle you put into the mouths of these popes is not one of the principles they taught. So the first step is to get the principles right.
No. 2 is a free market system. Not only did your named popes not condemn it, they said it is needed for human dignity, as long as it recognizes the mortgage laid on the free market and private property by the common good.
One common-good-respecting free market system is to place the onus for honoring one’s common-good obligation freely on the shoulders of property owners, big and small. That is fully compatible with the popes’ principles: private property is a God-given requirement for human dignity, but private property is not absolute but subject to the common good.
Okay, we could say, hey, we’ll respect human dignity precisely by laying the moral onus on owners of property, big and small, to be generous in philanthropy, big and small.
Others, also faithful Catholics, respond, “in a fallen world we can’t respect human dignity THAT much–wealthy people will become greedy, not respect the common good sufficiently. So, we will respect common-good obligations best if GOVERNMENT (no greediness there, no sirreee Bob) bureaucrats are given near total responsibility for confiscating wealth via taxes and distributing it for the common good. Then all will be fair and good and beautiful. Can’t trust owners of property to exercise their human dignity and freely contribute to the common good. Instead, we respect the Dignity of Great Government as the most moral and honorable and common-good-concerned entity of all. Never, ever would a politician use tax-confiscated resources to line his own pockets or those of his cronies. Never gonna happen. Gubmint’s the answer.
In between these caricatures lies the answer. But where and exactly what is it? I bet Fr. Sirico’s book has some really, really good ideas about that. Why don’t we all read it?
I appeal again to my recent rant about poorly defined terms. To many people, Capitalism means basically anything that respects private property; this is the nose of the came. To others, it is “completely unfettered, unbridled laissez-faire capitalism” — this is the rest of the camel that tries to sneak in. There is a slippery slope to the right as well as to the left, wmeyer, and having one’s life ruined by a company president atop a nameless bureaucracy is no better than having one’s life ruined by a national president atop a nameless bureaucracy.
The key things to keep in mind are that sometimes the system needs to be tweaked by increasing regulations*, sometimes by decreasing them, depending on will do the most for the common good. There is not a one-size-fits-all answer that will always work, but a dogmatic commitment to either always increasing regulations or always decreasing regulations is guaranteed to be a very bad answer. That comes from what a friend calls “thinking in crayon”.
We have a mixed government and a mixed economy. We should not aspire to either total state control or unbridled capitalism, just as we should not go to either a dictatorship (though that looks more likely) or a direct democracy. In both cases, though, we need to remember that the test of a government is how well it serves the common good, and the test of an economic model is how well it serves the common good.
*Seriously, is there anyone who really wants to get rid of the FDA and go to completely unregulated drugs, or get rid of the Department of Agriculture and have food products of unknown quality and content? Surely companies motivated only by the desire to make more money can be trusted not to lie to us, right?
Contramundum, no, I would not get rid of the FDA, but I would remove their powers which were increased post-Thalidomide. They would review and advise, but not have the power to prevent a drug being used. Such decisions are best left to the patient and his physician. The difficulty with these bureaus is that they are given the power to extend their own powers by way of regulations, altogether free of legislative oversight. How, exactly, is that different than an unregulated CEO ruin your life?
If we are to have personal freedom, then we must assume personal responsibility. We must read warning labels, and discuss risks with providers, whether about health, or other aspects of life.
Much (most?) of our current laws and regulations which were intended to protect us do a far better job of ensuring profitable employment to attorneys than they do of keeping us unharmed. And direct and indirect costs are always increased by legislation, as well as by regulation.
Lack of tort reform leaves lawyers unfettered in a very unsatisfactory way. Actually, it’s essentially the same problem as if the drug companies were entirely unregulated: a bunch of “professionals” saying trust me. And I should trust a lawyer more than a CEO or a physician???
Athanasius – I would love to see your reference on any of those popes, especially John Paul II, where you claim they are against capitalism. I get the feeling that you are using some half-quote in the same way people say a high ranking official is against the death penalty or for homosexual marriage. Again, please provide a reference, I would love to see it.
ContraMundum – I am happy that someone actually wants to get to a definition of “capitalism” before dissecting it. The problem is that capitalism can be used for good uses to increase productivity but at the same time can be used to decrease productivity as well. The over regulating by the FDA that Wmeyer referred to is just one example. But many times it can be done by corporations that are blocking others from entering the market which can have negative ramifications. So there are 2 sides to capitalism and one must figure out which is good and which is bad.
Lack of tort reform leaves lawyers unfettered in a very unsatisfactory way.
Yes, a “free market” leaves all economic actors unfettered in a very unsatisfactory way.
You can’t have a free market where economic decisions are unregulated and simultaneously regulate the economic decisions of plaintiffs’ lawyers. Your protests are better directed at (1) your peers sitting in jury boxes and (2) lawyers’ ability to advertise and thereby gin up non-cases.
Tort reform is a great contradiction of supposedly “free market” types.
I am a “free marketeer” economist, shaped greatly by Friedman’s work where he tied free markets to basic ideas of the liberty of man. I look forward to Fr. Sirica’s Catholic approach to defending what I now call “economic liberty.” “Free markets” raise all these boogey-men to liberals who call them impersonal. But markets are made up of the people who participate in them. And underlying “free markets” is the idea of economic liberty and a man’s right to improve upon his situation and acquire property of his own, which the Church does not condemn. (In fact, I recall seeing a quote from an encyclical that the Church does indeed approve that right of man. I am no Catholic social teaching expert, however.)
Arthur Brooks of AEI was just on Arroyo’s show with a similarly themed new book he was promoting.
@wmeyer
So how about pornography? If you can sell literal poison, “let the buyer beware”, with maybe a warning sticker, maybe not, how about selling spiritual poison, maybe with a warning sticker? Does it make any difference how deep in the gutter the pornography plunges?
You seem to think that people can and should work things out for themselves. In principle that can work, but it is very inefficient, and it will lead directly to catastrophes. After all, in principle we could get rid of traffic lights and let motorists work things out for themselves. This is what happens in many places when the signals go out, after all, and you know exactly what happens: traffic backs up terribly because motorists have to take extra time for extra caution, or there will be an accident. That’s until some jerk gets frustrated and throws caution to the wind and actually causes an accident.
No, I am not a libertarian. I am not opposed to all government, only to stupid government, and even more to evil government. But then, I’m opposed to most things that are stupid or evil.
On the law: Notice, for example, Chapter 9 of Fr. Sirico’s book: “Caring for the Environment Doesn’t Have to Mean Big Government.” We have tons of federal and state environmental regulation in the United States, laws executed by federal and state agencies. I don’t know about Father’s book, but these arguments invariably hearken back to the days when lawsuits in tort, or under various property doctrines or public or private nuisance (not a tort), were the sole method for dealing with pollution and environmental issues. (And I’d generally agree with Father if that’s what he says–and, of course, Father, judging by the hedged chapter title, likely acknowledges that times are different than when the common law was in full swing, as writers like Hayek noted.)
So for the tort-reform minded, why not apply free market principles consistently and leave the common law alone and let the injured people have their recourse in the courts? It’s like St. Thomas More was made to say in a great play: don’t cut down the laws (tort laws) in an effort to get at the devil (lawsuit abuse); you might need them yourself one day, and you will be glad they’re there.
It is better to prevent the disaster beforehand than to allow lawsuits after the damage is done, especially when the “damage” means dead people.
Let’s see, Popes against the Free Market. These are just for starters:
Pius XI
Pius XII
John XXIII
Paul VI
JPII
One or several of the elements integral to free market capitalism are condemned in these lines, and even the Acton institute admits pre-conciliar teaching was anti-free market. (link later, my battery is dying). Capitalism is just enlightenment liberalism and the other side of the coin from socialism.
If we were still ANYWHERE near a common-law tort system, tort reform would not be necessary.
The greatest abuses of the law were nowhere to be found in the common-law system — they are mostly created by statute. Examples: class-action lawsuits, product liability laws, punitive and exemplary damages, attorney fees (especially contingency fees). That’s where the big bucks are for lawyers. You’ll find that many lawyers abandon the ordinary tort case in shooting for the big money in class actions and product cases, while ordinary tort cases are relegated to revolving-door jacklegs who sue and settle quickly for a pittance to gain their fee.
So tort reform involves undoing some of the more flagrant examples of what used to be called “the Lawyers’ and Accountants’ Relief Act”.
Nuisance actions, by the way, are a very effective method to get a handle on pollution, water runoff, etc. At least in Georgia they are.
I don’t think common law will allow you to sue someone who has not already harmed you. That’s like saying, “No, we won’t enforce a school zone around the school, but hey, if someone runs over your kid and kills her, you can always sue him in court!” Everyone — you, the driver, to say nothing of your daughter — is better off if a speed zone is established around the school.
I think what is being suggested is not suing before the fact, but prior restraint of trade.
As to my point about tort reform, I do not ever expect to see a free market in this country, short of a total collapse of government. And in the current system, omitting tort reform leaves the attorneys, as I said, unfettered, while their prey, on the other hand, are essentially hamstrung.
AnAmericanMother: One of our problems is that the web of laws and regulations is so complex that it affords nearly unlimited opportunities for lawyers to avoid unemployment. And society has become very nearly obsessed with the desire to control the other guy. Even at the level of HOA design standards. As a former board member, I have heard all manner of nonsense, such as the lawyer and board member who wanted to require all vehicles of homeowners to be inside garages. I pointed out to him that as he is a prosecutor, and the Sheriff has advised that one of the best deterrents to burglary is a car in the driveway, he might want to reconsider. He happens also to be the leader of the Neighborhood Watch. The point is, logic and reason go out the window when these people want to exert control.
I do not ever expect to see a free market in this country, …
I doubt what you would consider has ever existed in history, or ever will. It seems to be an imaginary ideal.
When discussing economics, I prefer practical suggestions aimed at making the situation better, rather than ideological suggestions aimed at an unattainable ideal.
Is every drug approved by the FDA safe? I dunno, seems a lot of advertising on the television deals with one of two subjects, ask your doctor to proscribe drug and contact this number if you or a loved one has suffered such and such side affects of said drug. Yeah, I get the feeling that the FDA has made us little more than guinea pigs with recourse to lawyers, but, I highly doubt the FDA is subject to lawsuits when someone dies and the pharmaceutical companies can’t raise the prices of everything else to cover settlements.
Atahanasius, everyone of those comments support Capitalism and free markets. They speak to the injustice of Governments showing preference to certain entities and restricting the flow of labour or capital. Capitalism is not the accumulation of wealth, but the use of it. Its primace is that an effective and efficient use will attract more capital for the same or similar use. The people who the Popes were discussing were not capitalists, but remnants of the authoritarian states, imperialists, and simple thieves of Europe and the countries they had come to control. Capitalism is not an end state with an accumulation of wealth, but the effective use of it, which breeds and creates more wealth for all.
Actually, no. Capitalism is not “the effective use of [wealth], which breeds and creates more wealth for all.” Capitalism is an economic system built not on private property or a free market only, but notably also only the loaning of money at interest. I’ve heard some people claim that the condemnations from Scripture and from Magisterium of usury pertain only to outrageous interest rates, like those on credit cards, and others say that it pertains to a loan at interest for any purpose that has no chance of returning a profit (as buying better equipment for a mine or farm might). No matter how you slice it, though, usury is a part of our current form of Capitalism, and there is nothing in an ideologically pure laissez-faire free market that would prevent it.
Ugh. “notably also on”, not “notably also only”.
@ ContraMundum
Two points:
1) Libertarians aren’t anarchists, and when we talk about limited government, we also mean properly-checked government. When most people think of checks and balances, they think horizontally, e.g. executive, legislative and judicial, but neglect to think of vertical checks and balances, which have been eroding for the last 100 years. Yes, pornography is bad, but that doesn’t mean it should be Federally regulated–that’s what the 10th ammendment is for.
2) I’m not a lawyer or a anywhere a legal scholar, but as I understand it courts of LAW deal with monetary damages, but courts of EQUITY deal with compelling an action or issuing an injunction. In most states, and in Federal courts, courts of Equity and Law are combined, but the principles that govern each are still distinct.
@Dave
(1) There are all kinds of libertarians. Some do tend towards anarchy. I’ll accept that you do not.
Regardless, my point was that a mixed economy combining market forces and government regulations is better than either extreme — only market forces or only government regulations. The optimal balance is a function of many variables (including the country’s history and culture, the intellectual and moral quality of its leadership, whether feast or famine currently prevails, whether the economy is primarily agricultural, industrial, or whatever, etc.) and cannot be found easily or without controversy.
(2) The courts have a role to play, of course, but legislation and regulation have roles to play, too. As an example, it is more efficient to create speed zones through legislation or executive regulation than to try to get an injunction on each driver through the courts; in general, it is more efficient to agree that there are certain rules which everyone must follow rather than try every possible action by every possible actor in the courts.
Secondly, regulations requiring inspections, regular reports, permits, etc. — precisely the sort of things I suspect get most under the skin of libertarian capitalists — are the public’s best, and in most cases only, source of information about the risks posed by nearby activities.
Can all this get out of hand? You bet it can! Has it done so in the past? Indisputably.
Finally, I would expect libertarians not to delight in a judicial takeover of the legislative and executive spheres, as has been in place for decades to oversee school desegregation.
@ ContraMundum
I agree wholeheartedly that a society’s history and culture are integral to the political and economic philosophy that it adheres to, which is why totalitarian governments either try to stamp out religion or infiltrate it. A society without virtue, and that fails to recognize absolute truth, will do a poor job of adopting classical liberalism in any form. And I’m not suggesting that the judicial branch is best suited to defining traffic safety. My point was only that 1) Equity and law are distinct but equally important, and 2) in the past, both in the United States and in the UK, a lot of disputes could be efficiently and fairly solved through LOCAL courts.
Lastly, I don’t accept the premise that the regulations you point out ARE the best solution. Why do you make the assumption that they are?
ContraMundum, regulations, as we are seeing them now, are a terrible solution, as they are created by non-elected officials, and leave us no recourse.
A general problem with legislation has been (with rare exceptions, such as Prohibition) that there is no looking back. When a law is enacted, it is rarely reconsidered, in the context of actual vs. expected results, and even more rarely repealed. This is just nonsense, as everyone makes mistakes, and this is especially likely when the issue is the control of human affairs.
Contra, interest is the strike price of effective and efficient use of the money loaned. It is a way to value the alternative use of that money for the person who holds it and the person who needs it. It is the same question of any cost: it is worth what you are willing to pay for it. We are really talking about regulating human avarice. Easy debt, along with artificially lower interest rates, has facilitated this. These sorts of pressures are not free market, but the result of bad Government policy (interference).
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Please be more specific. Which regulations, and the best solution to what?
Maybe you meant inspections and reports? OK, a fairly concrete example: let’s look at mine safety. The owners and operators of mines don’t want the work slowed down or stopped due to safety concerns. That cuts into their bottom line. Often, the miners themselves do not want to report problems, either, because even though their lives are the ones at risk, they fear reprisals and loss of work. The mandatory reports and inspections help keep them honest, help being the active word. They also lay the groundwork for determining the events leading up to accidents. Even with such regulations, important safety protocols have been ignored and reports have been falsified. If you think that a judicial solution alone would improve mine safety, you need to justify that.
Another example would be the mandatory chemical safety training required by law for employees working in chemical labs. Universities often have utterly dismal safety precautions when left to their own devices, as anyone who has worked on the science and engineering side of campus knows. At least the federal regulations raise the bar a little.
To give you one example from my own experience with lousy university safety, just before I got my Ph.D. from Florida State an arsonist set fire to a waste paper basket in the men’s room on the 5th floor of the physics building. I found out about this about 2 hours later when an email memo was sent around. There had been no fire alarm. When I looked into it, I found out that because the machine shop in the basement had accidentally triggered the alarm in the past, all the smoke alarms in the building had been shut off. There were heat sensors in the ceilings, I was told, but since they did not catch the fire in the men’s room, they presumably would only have sounded a warning when the fire was already out of control and the people in the upper stories were already trapped.
reg,
What is usury? Do you agree with the Church that usury is wrong, or does that not fit on your cafeteria plate?
@wmeyer,
See my response to dave821319.
I am not willing to sacrifice lives for your ideological purity. Some regulations are necessary.
Oh, and I notice you did not respond to my questions about whether pornography should be in any way limited or restricted.
Contra, you are assuming facts not in evidence. Though I prefer market-based solutions, I recognize the need for some regulations and laws. What I do not support is the wholesale violation of Constitutional limits in which our Fed legislators have indulged since passing the Interstate Commerce Act.
As to pornography, first there is the problem of a legal definition. Then there is the reality that was demonstrated by Prohibition. There is a percentage of the population which will indulge their perverse desires, regardless of laws or regulations. And in the Internet age, unless we propose that the Feds filter the Internet–which I will never support–then there is little you can do.
@wmeyer
You had not responded to any of several direct questions with anything but criticism for regulations and laws. If you acknowledge that some of them are necessary, that’s all I’m asking. Determining which are acceptable and which are not is a different and difficult issue.
I’m glad to see that you do not object in principle to restricting pornography, only you are aware of serious practical difficulties, which I also acknowledge.
Contra, One issue is that you quickly leaped to wrong assumptions about me. Another is that I pop in when I am able, but I have work to do, and as a software developer, I know that multi-tasking is far more effective for computers than for humans–my work requires focus. With that said, I now end my lunch break, and return to my work.
Contra, usury definitions all rely on the concept of ‘reasonable’. That infers some subjectivity by the parties involved. This can be resolved by agreeing on the alternative cost of the use of those funds by the person who holds them. The original objections to demanding interest were centered on cultural understandings of capital that were not complete. For example, if someone loans money with no interest, then needs it to deal with a calamity, like a flood, then the borrower can be considered to have harmed the lender unless he returns it to the lender pronto. If the lender demands the immediate return of the money to repair his flood damage, then the borrower may need to liquidate possessions until he can make the payment. Even if he does pay in full he will have to consider that he did not make as much as he expected. This is his interest. In modern times the interest rate is struck when the loan is made. In old days that may not have been the case, so the borrower would have been subject to usury during re-payment. If the interest rates are known in advance, and the borrower is free to not take the loan, then paying high interest is no different than any other over payment.
RCG,
Either you don’t understand the Papal encyclicals I’ve quoted or you don’t understand Capitalism, I’m not sure which. Let’s look at some of those.
JPII: “Here we find a new limit on the market: there are collective and qualitative needs which cannot be satisfied by market mechanisms.” (CA 40)
This is anathema to all free-market theory. Free market theory, whether Libertarian or Conservative, holds that the market self corrects and government interference in the market is counter-productive at best. Again with Pius XI:
“Every effort, therefore, must be made that at least in future only a fair share of the fruits of production be permitted to accumulate in the hands of the wealthy, and that an ample sufficiency be supplied to the workingmen (QA, no. 61).”
Again, this means government action in the economy, anathema to free market theory. Why? It is not because the disproportionate power that wealth brings requires government mechanisms to check its use, and structure the economy so that wealth is infused in the community not sucked out by vulture capital, from crooks like Mitt Romney and Goldman and Sachs. The defense of Romney and Bain capital is spot on: It is not their job to create jobs, just make money.” That is true, and it is the problem with capitalism. What happens when wealth concentrates in the 1%? They hold a disproportionate amount of power that is unchecked by political mechanisms. Why is it that the biotech and pharmeceutical industries de facto own the FDA? Because they have the money to offer to political officials in exchange for their members running the FDA. This is why harmful drugs get put on the market and biotech is allowed to conduct its own studies while Amish producing raw milk get SWAT teamed and shut down. Capitalism kills. Why is there abortion? Because powerful capitalist interests want it. Entrepreneurs have pioneered big business in stem cells and even food (pepsi using lines coming from embryonic cells to produce flavoring). No one with lots of money save by true Catholic conviction do not want abortion to end. Consider this from Chesterton:
That should be “it is the” not it is not the”
So mine workers don’t want to report safety issues, which we’re assuming violate Federal mine regulations, because they want to remain employed. In other words, those mine workers make a choice to accept a certain level of risk for a certain amount of compensation; and other people choose not to, and go work somewhere else. That’s market equilibrium–market equilibrium with a whole lot of money taken out of the economy to create and enforce regulations that neither labor nor firms want.
And again, there is a big difference between Federal laws/regulations, and state and local laws/regulations. The 10th ammendment was written to explicitly grant states all powers not explicitly enumerated in the constitution as belonging to the Federal government.
On the contrary, it is the policies of the Federal Reserve Bank, a private bank that is totally unregulated, yet by the Federal Reserve Act of 1913 functions as our central bank and determines, at the behest of the Federal Reserve Board (all private investors in the federal reserve bank) what our policies will be. Our government serves the private investors, not the other way around. Though the FED banking mafia is not free market, it is not government either.
Nonsense. That’s external force to produce a contract. Not that every regulation is the most perfect thing, but if someone accepts a contract by an external force, i.e. will lose job or the alternative is starvation, it is not a free contract. Leo XIII teaches:
“Let the working man and the employer make free agreements, and in particular let them agree freely as to the wages; nevertheless, there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well-behaved wage-earner. If through necessity or fear of a worse evil the workman accept harder conditions because an employer or contractor will afford him no better, he is made the victim of force and injustice.” (Rerum Novarum, no. 45) Market equilibrium = slavery. There are no such thing as market forces, it is as mythological as Midas or Osiris. There are people who manipulate the market to produce an effect. People work in the market, not anomalous “market forces”.
Sed Contra. Medieval definitions and understandings of Usury were well thought out, exact, and clearly understood, whereas today few understand them except the bankers at the top. Even the politicians do not understand them.
The Church for example made distinctions between interest on loans which were productive in nature vs. Usury, charging money for the use of money. Without actual production, you’re asking for money that you are not entitled to because in the middle ages, money was understood correctly as a value relative to wealth that can be acquired, that is a symbol of wealth, something far less understood today. In the former case an investor in a workshop, a mine, or some other productive venture, was not considered usurious because he provided capital (the money) without which materials for the venture could not be acquired, and the labor, without which the money is worthless, produce a productive venture, and thus the lender is more a partner and entitled to his share of the profits. By contrast loaning money to someone and charging a fee for the use of the money was held as usurious, and current Church teaching, unchanged though neglected, in Dum vix pervenit of Benedict XIV, holds the same. Some scholastics said that a fee of 1% could be charged for the service, but any more was theft (Foscarini, Salamancans, etc.) The reasons should be clear, if a fixed currency, like gold or silver, were loaned out at interest, eventually the lender possesses all the wealth of the community. Usury is a sin because it is theft, it sucks all capital out of a community, rather than infusing it as in the productive example.
Today, however, we have a problem worse than usury, which is that banks loan money they don’t have. This is accomplished by Fractional Reserve Banking, which allows banks to lend out money that doesn’t exist and offer bank credit. This amount of non-money they loan is based on their deposit at the central bank (in America the FED). You go for a loan, and the bank, based on the reserve ratio, puts a figure on a computer that says “x” amount in dollars. This money doesn’t exist. They hope to cover their depositors with the interest payments they receive for the money they don’t have. That is fraud, plain and simple. It creates currency bubbles and inflates everyone’s currency. This is why you have housing bubbles and why they effect the whole economy. This is why mortgage news and rates top the economic use, because the majority of money in circulation was created out of a banker’s magic hat via a bank loan. The borrower pledges the house as collateral if the bank will give him credit. Since we’re trained from birth to think bank credit is money, we think we got money, when in reality the bank is underwriting us. The borrower has no concept of what is going on. When the borrower defaults, that money that didn’t exist vanishes, then the bank must seize the asset and sell it, the amount lost from the original “loan” shows up as a loss on their books, and the FED must then print paper to make up for the loss in the bubble.
That’s huge. That mean most of our money is created not by the mint but by debt, and… the majority of our economic activity is fraudulent. In 2008 that came home to roost, and the Zuckerburg fraud, where the facebook insiders just fleeced the investors, will bring the economy down further, since losses are systemic. That is a result of the free market.
Wow, thank you for those references Athanasius. When I said I was afraid you might be using some half-quotes, I was afraid you were going to take some very vague statements that can be twisted around to mean whatever you wanted them to mean. I’m glad you didn’t do that.*
*denotes sarcasm
I added a video to the top entry.
re: Sancta Maria Victoriae
Can you demonstrate how I did that? Or are you content to make drive by comments without demonstration? [Hmmm…] The Church’s perennial teaching is so clear that even Acton admits Rerum Novarum and Quadragesimo Anno are hostile to the free market: http://distributistreview.com/mag/2011/07/is-the-acton-institute-a-genuine-expression-of-catholic-social-thought/
Can you demonstrate how I did that? -Athanasius
You are referring to my claim that you just used a quote that is vague and can be interpreted any way one wants to. Let’s look at your vague quote by Paul VI –
“Increased ‘possession is not the ultimate goal of nations nor of individuals. All growth is ambivalent. It is essential if man is to develop as a man, but in a way it imprisons man if he considers it the supreme good, and it restricts his vision (Populorum Progressio, no. 19).”
Can’t that vague quote by used to argue against distributism which you seem to be pushing? After all, if we should be against a system that is for “increased possesion”, then why push a system that aims to have the most possesion by the most people (i.e. distributism)?
Sola Scriptura anyone?
Regarding “market equilibrium”, that’s a fancy term for “compromise” or, more precisely, “what I was willing to trade met up nicely with what you were willing to trade.” It has nothing to do with what and whether we should want to trade.
Most of modern economics is like that: perfectly valid but entirely amoral observations of how human behaviors surrounding the exchange of goods affect… other human behaviors around the exchange of goods! Heck, it’s not only amoral, it’s also production-agnostic — it’s only about the exchanging, not the making except inasmuch as it plays into the exchanging and some of the exchanging is put back toward the making (and this relation is a remarkably small subset of economics as I understand it).
(Believe it or not, all that stuff with credit instead of money has actual measurements and math involved to try to smooth out the fluctuations in market value of the currency itself; I don’t know if they work in practice, and I certainly doubt that the danger of runaway inflation is taken seriously by the market wizards who attempt to control bubbley effects to smooth out peaks and valleys in the market, but I do know that the critique is valid that these focus on smooth exchange rather than actual goods produced or better yet the production thereof.)
The Church, on the other hand, has all sorts of moral principles to sort out in the matter, has to remember the making in itself as well as the exchanging, and so on and so forth. That’s why we wind up with the Distributists (who’re at least trying to take some cues from the Church there, setting aside what we may think of their attempt) going on about the difference between loans that produce things and loans that don’t, the means of production rather than just the goods that’ve been produced*, and of course the inherent basic family unit of society (rather than a nearly amoral autonomous individual with solely contractual obligations or an entirely structural collective in which there is no such thing as personal sin or personal virtue or heroism; neither of these involves morality as the Church teaches of).
*For anyone who doesn’t know the difference between Distributism and Socialism: the redistribution evisioned by Distributists is typically — not necessarily always or solely, but typically — of the means of production rather than the goods produced… although Distributists aren’t usually too fond of the notion that only those who bother to work should ever benefit from it, whether the objection’s mercy for those who have neglected to contribute to production or fairness to those who try their best but aren’t capable of much, it’s the ability to produce rather than the goods produced that they generally want every family to possess even if by redistribution if necessary.
At least as I understand it from having read several of these combox arguments in the past.
Fr. Z, if you add Medaille’s book to your Amazon wish list, I will be able to get it for you in the next few weeks. Just sayin’… [Thanks! At the moment, however, I am just receiving Kindle books.]
Only if you haven’t the faintest idea what Capitalism, or Distributism is all about. Let’s proceed at an elementary level. The quote again:
It is even simpler than that. First, re-distribution is another word for expropriation. Absent Arthur Penty, I can’t think of a single Distributist who supports expropriation of wealth. Distributism comes from Aristotle’s teaching of “Distributive Justice”, which is that the foundational point of society is justice. So essentially Distributism favors policies at the responsible level of government that favor small businesses and foster a wider ownership of capital and penalizes a larger and concentrated ownership of capital. Hence Belloc says in his Essay on the Restoration of Property (which I believe is on Kindle so it can be added to Fr. Zs reading list) that if people do not want well divided property Distributism can’t be accomplished, because expropriating wealth and giving it to others is antithetical to Distributist justice. A good example of how a Distributive economy could come about is Taiwan, which rather than taking the land from the feudal land owners in the 1950s, brokered a purchase of land by the peasants from the landowners with payments, and at the same time brought in industrial engineers from Japan and the US to set up industries for the former landowners to invest in, co-owned with new workers, financed by government fiat currency which was extinguished through taxes to stave off inflation. The end result is where Capitalist nations have 20-30% unemployment (including the US once you count the statistics correctly and stop fudging the numbers to keep it below 10%) Taiwan today has but 5.2% unemployment.
Done reading; ready for discussion.
For anyone who doesn’t know the difference between Distributism and Socialism: the redistribution evisioned by Distributists is typically — not necessarily always or solely, but typically — of the means of production rather than the goods produced
So essentially Distributism favors policies at the responsible level of government that favor small businesses and foster a wider ownership of capital and penalizes a larger and concentrated ownership of capital.
Hey fellas, you do realize that when one has more “means of production”, “owns more businesses” or “owns more capital” then they in effect have more possessions? At this point you are just arguing semantics which is a waste of time.
Only if you haven’t the faintest idea what Capitalism, or Distributism is all about.
I see how it works now, either we must agree with you or be accused of not being as intelligent as you. Buh-bye.
SMV: You demonstrate with everything you say you haven’t a clue about economic terms. Economics, no matter what the position of the economist (austrian, kensyian, liberal, distributist) holds there are distinctions in possessions. Capital is a product that must be turned into wealth. Possessions in themsleves are irrelevant to the issue. The issue is what kind of possessions. The ownership of productive property is an entirely different thing both in kind and value from non-productive property. yet they are both possessions. This is not semantics, you don’t know what basic terms are, hence I am more than justified in positing you know nothing of capitalism which you want to defend, or distributism which you want to attack.
You demonstrate with everything you say you haven’t a clue about economic terms.
…you don’t know what basic terms are, hence I am more than justified in positing you know nothing of capitalism which you want to defend, or distributism which you want to attack.
Hahaha, AGREE WITH ME OR I’LL CALL YOU STUPID!!!!
No, make reasonable economic arguments with logical conclusions or bow out as not knowing enough to make a reasonable argument. If someone is making arguments for example on stocks, I’m going to defer to one of my colleagues more versed in it because I just don’t know enough about it. That’s all I’m asking for. You haven’t been able to refute a thing I said, and have reverted to dumb liberal tricks to shift the burden of proof because you just don’t like it. I could just as easily say you are saying “agree with me or you are stupid” since whenever I make a point that you can’t refute, you throw everything off track. I think this is too based on the appetites for you.
Moreover, it doesn’t follow that I think you are stupid because you don’t make economic points correctly. Just that you are wrong, unless you can show me otherwise, which has been yet to happen in these comments, perhaps because this posting has become too old, but we’ll see. [No, I don’t think so. After this, I think it is time to shut this down.]
I don’t like the tone of this.
It’s time to call it a day.