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Wealth, Poverty & Human Destiny
 edited by Doug Bandow and David Schindler

For religious believers, the complicated issue of reconciling the free market with traditional morality is one of increasing importance as the ideology of capitalism gains unprecedented public support and globalization becomes unavoidable. The prospect of material triumph appears omnipresent, and the justifications for advancing the cause of wealth unmoored from traditional notions of the common good are finding allies in unlikely places. In this collection of essays, editors Doug Bandow and David Schindler bring together an eclectic mix of thinkers to discuss the morality of free-market systems. While the essays are not deliberately set in conversation, they naturally form a flowing dialogue.

The poor will always be with us, teach the Gospels, and how governments make policies to minimize, rather than eliminate, the number of people suffering economic hardship is at the center of this debate. Peter Hill’s contribution raises important questions regarding the political inequality which arises from an increase in economic equality. It is only when coercive government policies, restricting the freedoms of its citizens, are put into effect that a forced distribution of income can occur. This requires a drastic reorganization of the social and political infrastructure, and would necessarily result in the concentration of political power. Thus, for Hill, economic leveling is accomplished at the expense of relinquishing political power to a few central planners with almost absolute control. When the rule of law and individual rights are protected, however, economic inequality is almost always the result. To force economic equality upon a culture is to force it to abandon its equality before the courts and its property rights. For Hill, the remedy for poverty does not lie with a radical redistribution of private assets, rather he suggests that the most effective remedy is overall economic growth. Encouraging the creation of new wealth, rather than redistributing what already exists, is the most effective way to battle poverty. However, the production of new wealth necessitates a strong respect for property rights and the rule of law. When legal protections are broken, and property rights are abandoned, the poorest members of society are vulnerable to immense exploitation, and the creation of new wealth is impeded by a lack of civil stability. For Hill, the “government ought not to be engaged in redistributing income.”

Adrian Walker’s essay, “The Poverty of Liberal Economics,” is an exposition detailing the shortcomings of a liberal economy in light of the teachings of the Second Vatican Council. Although economic activity possesses its own teleology, “what liberalism misses…is that the market’s legitimate authority, like that of everything else in creation, is itself constituted by relation to God, not in separation from him.” Walker argues that poverty is not the problem, but rather our true crisis is formed by the spiritual poverty which exists in our society to a high degree. We cannot begin to address economic concerns when our own spirits are separated from the reality of Christ. There is a certain freedom which exists in economic poverty, and a richness that occurs in having our souls properly ordered to God. Materialism in the form of liberal economics does not work, writes Walker, because it “is not formed in Christ’s poverty of spirit.”

Consciously written in the “spirit of John Paul II,” Michael Novak’s “Catholic Social Teaching, Markets, and the Poor,” is a skilled defense of free-market systems. When combined with democratic government, free-markets offer “a better hope to the poor of the world than do socialist or traditionalist systems.” While open markets and the growth of democratic regimes are not the highest aims of a Christian society, the Catholic Church looks favorably upon them, argues Novak, when they “conform to the rule of law and subject themselves to sound moral criteria.” Clearly rebuffing the term liberal in its revolutionary sense, Novak embraces a liberalism that is committed to limited government, religious liberty, human dignity, and an economy driven by enterprise and free cooperation. Novak details the Catholic position on materialism, and delves into the teachings of Rerum Novarum on solidarity—not a revolutionary socialist movement, but rather an understanding that human beings participate in one humanity, “living in communio with all other humans in God.”

The natural extension of Novak’s argument is globalization, which he embraces as the “natural ecology of the Catholic faith.” Having the poor of the world enter into cooperation with major economic systems coincides, he argues, with the Catholic idea of a universal brotherhood of man. He stresses the call of John Paul II for wealthy nations to welcome third-world countries into economic relationships. This not only would allow for cooperation in engendering the growth of new capital, but it further allows for local institutions to become less corrupt through the necessary transparency that follows from international cooperation. Solidarity is, then, at once a matter of individual moral responsibility placed in cooperation with a universal call to live in communion with all human beings in the light of God’s love. It is incumbent upon all human beings to respect the integrity of the each person, for as Novak writes, “without communio, there is no whole human subject.”

Mr. Novak stresses that human capital is the primary economic entity, and that, in the modern world, education is required if the markets are to flourish. “The chief cause of the wealth of nations is human wit—discovery, invention, the habit of enterprise, foresight, skill in organization,” he writes. Thus, man’s primary resource is himself, and if he is to participate in the global economy, he must have the skills to do so. Not only must this breed of economic man be skilled in scientific knowledge, he must be aware of the basic needs of his fellow man. The market is “a social instrument,” and this concept is at the center of Catholic economic thought. The markets are not closed systems, and every individual action has a reaction, which in turn, has an impact on the wider social organization.

In one of the most important contributions to this book, Samuel Gregg explores the moral dimensions of free choice. Positive laws, he argues, should facilitate the fulfillment of a moral good. The proposition of an unchanging good, as opposed to the moral philosophy of liberal theorists John Rawls and Ronald Dworkin, is necessary to defend against ridiculous assertions of individual prerogative and the arbitrary exercise of power. If every opinion warrants the distinction of possessing its own moral truth, then proponents of slavery are as entitled to exert their ignominious claims as its most outspoken adversaries. Apologists of slavery, under this system, possess as legitimate an argument to institute laws protecting this institution as its most outspoken opponents. As Gregg writes, “If all opinions are equal, then we must conclude that Edmund Burke’s views, for example, are only as valuable as those of Joseph Stalin.” This principle has far reaching consequences in terms of individual morality, the institution of positive laws, and in the formation of economic policy.

For Gregg, it is imperative to regard the market as an institution bound to the human aspects of civilization. The economic order is not a distinct, insular abstraction that is capable of being divorced from the greater reality of culture. While the markets are not a sufficient enough basis to establish the claims of truth, it is an entity capable of reflecting the moral dimensions of a culture. Gregg fully understands that being a Christian means sometimes rejecting the more advantageous economic choice in favor of the less attractive, but morally right, position on the side of eternal Truth. He does not shun the proposition of capitalism, for we are all capitalists, to some degree. He does, however, recognize its limits and stresses the importance for Christians to not isolate themselves from the realities of the material world. Christ’s sacrifice upon the Cross demonstrates God’s love for humanity, and the human person is more than the temporal embodiment of pure spirit.

Similarly to Gregg, Richard John Neuhaus, editor of First Things magazine, argues that claims of moral neutrality are logically impossible. Fr. Neuhaus profoundly rejects the notion of perfection in the city of man. The temporal order is incapable of reaching the utopian heights imagined by naive, dreamy aspirants. The coercive state is no exception to this, because it is only when humans act as free, moral agents, that they are able to realize their potential good. In a free society, the state is only an instrument, accompanied by a chorus of other players, in the cultivation of whole culture. The foundation of culture, however, is the dynamic character of individuals living in free cooperation with each other in the grace of God.

The editors of this volume respond to the arguments of the contributors. Beginning with Paul Johnson’s observation that the 20th century was “the age of politics,” Doug Bandow thrusts himself into a defense of the need for a market economy. If wealth is to be created the use of free markets must prevail. There are, however, limitations to the successes of global capitalism. Capitalism is not exempt from scrutiny, no matter how successful or beneficial it may be to the cultivation of a free society. Like any social institution, the free-market system has serious flaws, and there are always people willing to exploit it for personal gain. Furthermore, the vocabulary employed in the discussion over economics must be clarified, especially when it comes to poverty. In the modern, seemingly benign welfare-state, there is a strong undercurrent of class envy which is the necessary result of a culture focused on economic entitlements. Thus, the conversation about how to relieve poverty focuses upon the redistribution of wealth as opposed to finding ways of creating new wealth. Additionally, the idea of poverty is not a relative term. Middle class Americans are in dire economic straights if one is to compare their financial worth with that of Bill Gates. The middle-class person, driving a new domestic car, is not in a state of poverty because he doesn’t own a Jaguar. Poverty, for Bandow, is something beyond a term of comparative wealth. Real poverty exists when people are unable to eat, possess clothing, or maintain shelter.

The alleviation of poverty is an important task in the life of any Christian, but the extent to which state coercion participates in the realization of this goal is a matter of serious question. The assertion that every Christian need be a socialist, for Bandow, must be viewed against the idea that persons who depend on the government to forcibly remove property from their richer neighbors, purely for their own benefit, are just as enamored of the things of this world as the die-hard capitalist of the Marxian caricature. Bandow defends the free-market, not as the embodiment of Christian idealism, but with John Paul II, as a tolerable alternative to the enslaving ideologies of collectivism.

David Schindler, on the other hand, proposes an alternative view to the pro-market vision proposed by Bandow and Novak. While he does not embrace a state-run socialism, nor any of the coercive collectivism shunned by Bandow, he suggests that “wealth and poverty must be understood [finally] in terms of the destiny that defines the nature of man.” Schindler maintains that the vision of the economists in this volume differ in their vision of Christianity, and not in the more topical vision of economics. In other words, Schindler and his opponents differ in how they understand “communio,” and the implications of the Church’s vision of the person for economics. While Bandow favors a more market-based environment for the poor to attain a reasonable standard of living, Schindler attempts to understand the problem of poverty in broader terms—“the human person in his or her totality.” He rejects the idea that economics is a system to be viewed in its own terms and on its own grounds.

Mr. Schindler elegantly explains that the divisions in this book lay along the fault line of authors selected by Bandow (Peter Hill, Michael Novak, Samuel Gregg, Jennifer Roback Morse, Daniel Griswold, and Richard John Neuhaus) and himself (Adrian Walker, D. Stephen Long, William Cavanaugh, David Crawford, V. Bradley Lewis, and Arthur Davis). The essential break has to do with Bandow’s group believing that “Christianity has made its peace with liberalism on its best reading.” Schindler, on the other hand, maintains that liberalism is perhaps the greatest threat to Christianity in the contemporary world. He believes that liberalism has hijacked certain terms and cloaked them with benign connotations—“tolerance,” “compassion,” “freedom,” “rights.” The violence of liberalism, he contends, takes as its victims the most defenseless and unfortunate members of society—the unborn, the sick, and the elderly. The loss of community, of familial love, and of the meaning of what it is to be human is the result of liberalism’s seemingly harmless desire for freedom of choice and rights.

The collective synergy of the essays selected for this volume prevents the creation of an academic dogmatism to which an inquiry such as this can so easily degenerate. This type of dynamic at once ensures that the subject is given a thorough and fair treatment, and is a testament to the importance of this discussion as a central component of our cultural outlook. St. Augustine’s two cities, running parallel in history and touching at various points, come into direct contact with one another in this debate. The function of economics as a material science is inextricably linked to the larger moral structure that is attached to human affairs, and it is through the application of eternal principles to the temporal world by which we create a tolerable, balanced order. If we fail, as a social community, to achieve a fusion of our material circumstances and our eternal moral obligations, we fail to fulfill our natural teleology. The essayists in this group, though possessing different visions of how to accomplish a unity of high moral standards with the markets, are keenly aware of our responsibility to those things that lay beyond the domain of material quantification. Each of these contributors struggles to find a system that satisfies our moral obligations and views the material world, not with a Manichean vision, but rather, as an object of God’s creation that must be loved, but loved with limits.

The unique dynamic of Wealth, Poverty and Human Destiny is due to its varied cast of contributors, each bringing his or her own perspective to this important discussion. Bandow’s critical defense of the market-economy, and Schindler’s critique of liberalism combine to form a nuanced discussion of the role of free-market economics in the modern world. Intelligently organized and elegantly written, Wealth, Poverty and Human Destiny lays out the pros and cons of a market-based economy in clear, simple language that many similar books of its kind could never do.

Books mentioned in this essay may be found in The Imaginative Conservative Bookstore.

Glen Austin Sproviero was a Richard M. Weaver Fellow doing graduate studies at St. Andrews University in Scotland when this essay originally appeared in Volume 44, Number 2 (Winter 2006) of the University Bookman. It is published here by permission.

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10 replies to this post
  1. Schumpeter, a great advocate of capitalism and perhaps its greatest historian before Braudel, memorably described the working of the free market as "creative destruction." What is conservative about free markets, exactly?

    I also wonder what the contributors to this book would say to one of the basic findings of economic history: that markets are constructed by the state, always, and without exception. In other words, there is no such thing as the "free market" in history. It is always structured in such a way as to reward some activities more than others. Saying that "redistribution" is "invasive," then, is intellectually dishonest. The question is, in what way and at what juncture of economic activity should political decisions be made about how to encourage the building and sharing of wealth? Because the decision always has to be made, by someone. Shouldn't it be made democratically?

    Finally, the authors seem to ignore one of the most basic findings of economic science in the last thirty years, as well. That is, wealth does not "trickle down." The "conservative" ruminations on the market presented in this volume serve primarily as an ideological justification for the massive concentration of wealth in the hands of a few, with the power and legal authority to remake society according to their whim. That is not conservatism.

    Thanks; hope this meets the threshold of civility.

  2. (I should add that I couldn't agree more that "St. Augustine’s two cities, running parallel in history and touching at various points, come into direct contact with one another in this debate. The function of economics as a material science is inextricably linked to the larger moral structure.")

  3. Eric, first of all, your comment is indeed quite civil, and very pertinent. To tackle it backwards, wealth ONLY trickles down. Would you argue that it trickles up? Second, the decisions you wish to be made "democratically" are never made democratically. You reference history, which shows that democracy always fails as soon as the poor find out that they can steal money from the rich. Third, you are absolutely right that there has never been any such thing as a free market, and, that states determine what is "free." But students of history should also learn that the best cannot be the enemy of the good. In other words, the more decentralized and "freer" an economy can be, the more likelihood that wealth, always created by the few, will trickle down to the rest of us. The more collective the economic decisions, the less prosperity. Give an historical example where this is not true. Having said all this, as you put it, the "juncture" of politics and economy, both of which are just subsets of morality and neither one "sciences", must come from a healthy cult, which cannot exist without the guidance of the City of God.

  4. One problem John is 'vulgar libertarianism', or claiming the successes of actually existing state capitalism as the successes of the free market by its ideologues. Actually existing capitalism has never been anything like a 'free market', which itself is a terribly vague term. Anything like pure 'Free markets' have little to do with all the proliferation of GDP, electromagnetic gadgets and consumer goods we see around us in the West.

    Anyway, what does decentralised mean in this regard? Do you mean the Friedmanite or Austrian fantasies that they pretend have anything to do with actually existing capitalism when they think no one is looking?

    Wouldn't real economic decentralism mean something closer to Catholic Social teaching, Chesterbelloc, Roepke and Schumacher?

  5. John,

    I notice you avoid the question whether capitalism is ever conservative. Understandable.

    I'd rather not say which way wealth trickles, because I think the metaphor is misleading. But, it’s worth pointing out that everyone who's ever thought about 'value' has reached the same conclusion: it's created by labor. That goes not only for Marx, but for Smith as well. Quite a spread on the political spectrum! Schumpeter, mentioned before, helped clarify the role of entrepreneurship—another way of saying intellectual labor. But mostly economists ceased to talk about value in the mid-nineteenth century, because they were trying to make a science separate from political and ethical problems, and found that the creation of value by adding labor to nature is awfully hard to quantify.

    I think most people would agree that intellectual labor creates a lot of value. I assume this is what you mean by “wealth, always created by the few.” But what does any of this have to do with private property or free markets? So far, nothing. It has to do with work and creativity.

    The difficulty comes in when work and creativity go from being an entrepreneurial activity, like Edison’s collection of scientists and tinkerers at Hyde Park, to a corporate producer of shareholder wealth, like Bell labs. If we look at Bell Labs by the end of the 80s, it was distributing enormous amounts of wealth to managers and shareholders, but very little to the scientists and engineers doing the intellectual labor that transformed the 20th century. A pittance by comparison. Yet I bet if you asked them, 9 of 10 people would agree the scientists and engineers created more value.

    Even more troubling, Bell was making a great deal of its money not by flooding the market with the new ideas of its creative employees’ minds, but by sitting on patents or buying them up before they could be got to market, thus keeping potential competitors out of the marketplace. Is quasi-monopolistic control of ideas to maximize profits really “creating value”? I don’t think so. But it did create wealth, for the owners.

    So we’re left with this. Physical and intellectual labor create value, but something else creates wealth for people who ‘own’ for a living. “It takes money to make money,” goes the saying. That something else, in other words, is capital. It doesn’t create; it controls. And it doesn’t care what it destroys, so long as it can create wealth. What does that have to do with conservatism? What does it have to do with value? What does it have to do with the City of God? Nothing.

    So, I guess it seems clear to me there’s a categorical difference between entrepreneurship and capital; between intellectual labor and ownership. And just as clearly, if value is ‘trickling’ anywhere, in this case and many others, it’s trickling up, from laborers to the owners. Politically, as a society, don’t we want to structure a market that encourages capital to foster creative invention and entrepreneurship, but refuses to allow capital to stifle the same for its own financial benefit? Is that any more redistributive than a state that uses taxpayer money and working class soldiers to go to war to secure the interests of a fabulously wealthy elite, which prospers more from slave-labor “jobs” created in China or Honduras than from middle- and working-class jobs created here, where education and health benefits and social security (of just the kind Adam Smith thought essential to any functioning republic) have to be factored in? What would a conservative like Burke say? I think he’d side with Marx, to tell the truth.

  6. One last thing. The idea that the poor will vote themselves money and ruin democracy is of course a rough paraphrase from Tocqueville. Tocqueville had many good things to say about America and democracy, but we mustn’t forget that he was an aristocrat and a statist, and that his later career in French public service showed that he favored the use of any means, however brutal, to keep the poor poor and the rich rich. Surely that’s not what we mean by successful democracy either, is it? Still, many fine things to say. But I wonder if he ever asked a poor person what they wanted from our representative government. Do you really think they’d have answered “I want free money”? They want a level playing field. They want schools that are equal in funding and in professionalism. They want a modicum of reliable public transportation so those without work can find it. They want policing that isn’t racistly indiscriminate. That’s been my experience, at any rate. Those things aren’t summed up in a nice excerpt of Hayek or Friedman, because Friedman couldn’t think about anything except the money supply and let’s face it, Hayek was pro-fascism. He loved what Pinochet was doing with Chile. So much growth! And if the poor didn’t benefit from all that glorious growth, it was probably because they were face down in a ditch, or in bags in the soccer stadium, and that was their fault. For not getting on board the ‘wealth through growth’ train.

    So, is decentralization good? Yes, unless it’s a question of basic rights. But we should be much more wary of giving the rich a free ride than we are of giving the laborers one. Smith, Marx and Schumpeter would all agree. So would Augustine, and Jesus.

  7. I don't mean any of the above. Friedman, Mises, etc. etc. were all ideologues, and as I have said probably 50,000 times in my life, the true opposite of conservative is ideology. There are many examples of relatively decentralized economies, which doesn't make them necessarily "free" in an abstract sense. Read a little about American small towns, right on up to the early 1950s, and you will see, again, relatively open markets, relatively little regulation, relatively creative atmospheres where good men and women could make a living. Much of pre-Caesar Rome and a good chunk of Hebrew history shows similar things. What they all had in common was a set of fairly clear moral boundaries for economic activity. Even the deist Ben Franklin understood that the myth of Opportunity depended on virtue. The Catholic principle of subsidiarity captures this quite well, but the other you name try too hard to make it into a system.

  8. Eric, much to ponder here, although I think my last comment implicitly answers many of the things you bring up. I think you ascribe too much to Tocqueville's aristocratic background, Catholic tastes, and "statism." His insights into New England village life are much superior than those of any "democrat" of the era. Even Timothy Dwight, who rode all over New England and New York and was a native, did not do much better. One of the problems, I think, with your entire premise is that you, like Marx, think that there is such a thing as "capitalism." Like "isolationism," it's an invented term, a straw man if you will, that then allows silly people to make it into something approximating reality. I also find your assumptions about what the "poor" want to be questionable. Most people who talk about the "poor," I find, have never known any, and haven't the faintest idea what they "want." Russell Kirk knew the poor–he was one, much of his life, and lived in the midst of rural poverty such as is hard for most people to conceive. The same is true of my own life; for the first dozen or so years of our married life my wife and I lived well under any definition of "poverty level," and managed to be hard working and dignified and to raise three daughters quite well. We never, as far as I remember, had even a concept of a "level playing field," nor did we resent those who had more. Being "poor" is an overrated concept, invented, I suspect, by deracinated intellectuals, who also invented "capitalism." Now, as to whether what the neocons call "democratic capitalism," which none of them has practiced, can be conservative, the answer is easy–no. The true American revolution was Hamilton's, and he got it done while almost nobody around him knew what he was doing. But that also does not mean necessarily that a relatively progressive political economy cannot be reigned in by conserving principles.

  9. John,
    Appreciate your clarification. Indeed, thinking about small town market life and Hamilton gets us quite a ways down the path, together, and away from the efficient market ideologues. I do think there's a distinction to be made between quasi-natural market activity among people who know each other personally, and large-scale exchange among people who don't know each other and never have to have anything to do with each other again, thanks to the mediation of money and a powerful state. The two forms are indeed almost antithetical, if we think of them in terms of social relations. (Braudel, Christopher Agnew, and very recently David Graeber are very helpful in sketching–just sketching–the distinction.) Perhaps it would be better to find a different word for the latter than capitalism, which is admittedly awfully loaded. But sometimes one needs an invented word to describe things people didn't recognize or describe systematically at the time of their development.

    Your points on the poor and Tocqueville well taken. Complicated subjects indeed. Thanks for the exchange (and pardon the pun).

  10. John, I understand and largely agree with your point about the sometimes too rigid and systematic thinking of Chesterton or Schumacher or a Wendell Berry, though it is nowhere near the degree of a Friedman or Mises. I largely agree with you about the direction of decentralised economics we need to follow.

    The problem is we have to be on our guard for those who, under the cover of supposedly being 'conservative', would interpret decentralised and 'freer' economics just according to the mantras of a Hayek(Hayek, to be fair, is one of the few free market ideologues worth reading, as long as caution and context are remembered) or Rothbard. Indeed what often happens is that even many of the differences between actually existing, massively state driven capitalism and the fantasies of the free marketeers are forgotten. So MacDonalds and Apple, in some sort of perverse parody, are considered the mark of a decentralised and freer economy.

    You are certainly correct that the likes of Schumacher and Chesterton or Ruskin/Morris, to repeat myself, can become too rigid and ideological as well. But they bring up goods points. Freer markets and a lack of burdensome regulation is important, but we must also take the time to look at issues like property distribution( not in the liberal sense but in that of Chesterbelloc and referring mostly to real, productive property), the role of technology, localism and regionalism versus globalism, the rural-urban balance, the importance and place of good work, environmental matters and so forth. Those traditional economies you mentioned often thrived not just because of freer markets and lack of invasive regulation, but because they achieved something of a natural and humane balance in many of the areas just referred to. So while reiterating my agreement about being wary of all rigid and systematic approaches we must be careful not to make simply adherence to freer markets and less regulations the sole, or even the overwhelmingly central, plank of a more traditional approach to economics.

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