Blog author: kschmiesing
Thursday, November 11, 2010
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An exciting new book for anyone interested in the intersection of morality/theology and economics is John Mueller’s Redeeming Economics. I haven’t yet seen the book myself, but Acton Senior Fellow Jennifer Morse reviews it here. Drawing on Aristotle, Augustine, and Aquinas, Mueller argues for recovering a fourth element of economics (besides consumption, production, and exchange): gift. He calls his approach neo-scholastic economics.

Here’s Morse:

The enemies of the state who ought to resist state encroachment of the family’s domain have been reduced to treating the family as a special case of the market. This rhetorical strategy has made it difficult to do justice to the deep human need for personal connections, a need that cannot be satisfied by commercial relationships. At the same time, the enemies of the market who ought to defend the family against commercialization have typically offered the government as the only alternative. These critics have been blind to the state’s encroachment on the proper domain of the family and the accompanying replacement of family bonds with impersonal government transfers and bureaucratic control. Mueller’s synthesis allows us to see the genuinely social arena of human life, where people are more than autonomous individuals, and where actions nevertheless remain none of the government’s business.


  • Roger McKinney

    The book sounds interesting, especially the important emphasis on the late scholastics, but not something I want to buy. I’ll wait for the library to pick it up.

    “Smith dropped consumption and distribution, leaving only production and exchange as the proper domain of economics.”

    Not really. The purpose of production is consumption and you can’t have consumption without production. The two meet in exchange. Distribution should not be part of economics because that is the church’s domain. Economics is about the marketplace, not the family or charity or theology.

    “Smith’s famous declaration about the butcher and the baker acting solely out of self-interest eliminates Augustine’s theory of distribution.”

    No it doesn’t. The context of Smith’s argument is whether it is better to have the state regulate the market or let free people regulate it by choice. Charity played no part in the context. But charity is not excluded from personal interest. Every economist since Smith has recognized charity as a legitimate aspect of self-interest.

    “Mueller claims that Augustine’s theory of distribution could have shown why the butcher and the baker give their wares to their own children, and sell them to everyone else.”

    For Smith, taking care of family was part of the definition of self-interest. Children are part of “self.”

    “Neoclassical analysis often begins with Robinson Crusoe, alone on his island, allocating scarce resources with no companions or relationships. By contrast, Wicksteed invites us to consider the problem of a mother…”

    The Crusoe story is necessary to isolate certain basic principles of economics. It’s just a didactic technique. You can’t understand the story of the mother until you understand the Crusoe story.

    “Neoclassical economics does not provide a coherent, empirically verifiable description of how people actually choose-rightly or wrongly—to distribute the use of their resources, whether as individual persons, as members of a family household, or as a society under the same government.”

    And it shouldn’t. That is the domain of ethics and the theology, not economics. As Mises often pointed out, the role of economics is to sort out the means to achieve particular ends. Dragging economics into the debate on morality will cause nothing but mass confusion. In fact, the utility theory has tried something similar to moral theory and it has been disastrous.

    “This dichotomy has made it difficult to resist the lure of the state takeover of the wide scope of human activity that can be plausibly argued as affecting other people.”

    That’s a strange explanation of the rise of socialism. Hayek’s “The Counter-Revolution in Science” is the best I have seen. The dichotomy of private and public sectors arose with the popularity of socialism and the denial of the right to property, the moral foundation of markets.

    “The enemies of the state who ought to resist state encroachment of the family’s domain have been reduced to treating the family as a special case of the market.”

    No they haven’t. It’s not part of the market at all.

    “This rhetorical strategy has made it difficult to do justice to the deep human need for personal connections, a need that cannot be satisfied by commercial relationships.”

    Exactly! The author seems to have fallen victim to the fad to explain everything with economics. That’s just a fad and will go away. Economics cannot explain everything. It can’t explain the movements of the planets around the sun, the origin of love or morality, or many other things in life and it shouldn’t try. The proper subject of economics is the market, which doesn’t include the family or the church, except in the respect that free markets make life easier for both by making both richer materially.

    “But scarce goods cannot be shared with everyone, simply due to the fact of scarcity.”

    Ah but socialists deny that scarcity exists. Jim Wallace begs people to abandon the “gospel of scarcity” (economics) and embrace the “gospel of abundance” (socialism).

    A neo-scholastic school of economics already exists; it is the Austrian school.

  • Michael S. W.

    Roger: I read Mueller’s book and wrote a review of it in my economics class. I came to the exact same conclusion as you: that his neo-scholastic economics already exits in the Austrian school–it’s a pity he doesn’t understand the Austrians.