Reflecting on the GOP presidential campaigns and the Iowa caucus, Joseph Knippenberg has voiced serious concern on the First Things blog regarding the compatibility of Ron Paul’s libertarianism with traditional Christian social and political thought. As this race continues, this may be a question of fundamental importance, and I expect to see more Christians engaging this issue in the days and months to come.
Indeed, as Journal of Markets & Morality (JMM) executive editor Jordan Ballor has noted in his editorial for the most recent issue (14.2), the importance of this question is also highlighted by “the recent denial of a proposal for a master’s program in Austrian economics at Loyola University New Orleans [that] was in part attributed to ‘specific conflicts … between Catholic social teaching and the Austrian view of government, unions, taxations, human life and the place of Christianity in the public sector.'” Clearly, Loyola University New Orleans has already answered the question of compatibility with a strong no.
In light of the pressing need for a thoughtful and educated engagement of this question, I am pleased to note that the upcoming issue of JMM also features a debate in our “Controversy” section between Daniel Finn, Anthony Santelli, and John Mueller over the question: “Does libertarianism tempt some Catholics to stray from Catholic social thought?” The contributors represent an interesting spectrum of viewpoints on the issue and argue their stances with candor and conviction.
If you or your school or institution is not currently subscribed to JMM, this timely controversy is yet another reason to do so. For more information on how to subscribe, visit our website here.
Acton’s director of research Samuel Gregg has provided his reasoned take on the new document from the Pontifical Council for Justice and Peace — it’s up at The Corner. While its diagnosis of the world economy is fairly accurate, the council’s treatment plan is lacking in prudential analysis. Gregg’s disappointment is expressed at the end: “For a church with a long tradition of thinking seriously about finance centuries before anyone had ever heard of John Maynard Keynes or Friedrich Hayek, we can surely do better.”
He’s got four main points (full text below): (1) the fiat money system that accelerated financial decline wouldn’t be reformed by a world bank; (2) neither would the proliferation of moral hazards, which might in fact be increased; (3) there is no mention in the document of public debt and deficits, which problems face most developed countries and can’t be ignored; (4) there is little reason to believe that a newly created world bank could avoid the mistakes made by the Federal Reserve and other sovereign banks in the lead-up to the 2008 crash.
Doctrinally speaking, there’s nothing new to be found in this text. As PCJP officials will themselves tell you, it’s not within this curial body’s competence to make doctrinal statements that bind Catholic consciences. Moreover, the notion that an increasingly integrated world economy requires some type of authority able to make decisions about what the Church calls “the universal common good” has long been a staple of Catholic social teaching. Such references to a global world authority have always been accompanied by an emphasis on the idea of subsidiarity, and the present document is no exception to that rule. This principle maintains that any higher level of government should assist lower forms of political authority and civil-society associations “only when” (as this PCJP text states) “individual, social or financial actors are intrinsically deficient in capacity, or cannot manage by themselves to do what is required of them.”
But putting aside doctrinal questions, this text also makes claims of a more strictly economic nature. Given that these generally fall squarely into the area of prudential judgment for Catholics, it’s quite legitimate for Catholics to discuss and debate some of this document’s claims. So here are just a few questions worth asking.
First, the text makes a legitimate point about the effects of a disjunction between the financial sector and the rest of the economy. It fails, however, to note that one major reason for this disjunction has been the dissolution of any tie between money and an external object of value that regulates the quantity of money and credit in circulation in the “real” economy.
Between the late 1870s and 1914, such a linkage existed in the form of the classic gold standard. This gave the world remarkable monetary stability and low inflation without any centralized authority. You needn’t be a Ron Paul disciple to recognize that fiat money’s rise is at least partly responsible for the monetary crises this document correctly laments.
Second, this document displays no recognition of the role played by moral hazard in generating the 2008 crisis or the need to prevent similar situations from arising in the future. Moral hazard describes those situations when people are effectively insulated from the possible negative consequences of their choices. This makes them more likely to take risks they wouldn’t otherwise take — especially with other people’s money. The higher the extent of the guarantee, the greater is the risk of moral hazard. It creates, as the financial journalist Martin Wolf writes, “an overwhelming incentive to privatize gains and socialize losses.”
If PCJP were cognizant of this fact, it might have hesitated before recommending we consider “forms of recapitalization of banks with public funds, making the support conditional on ‘virtuous’ behaviours aimed at developing the ‘real economy.’” Such a recapitalization would simply reinforce the message that Wall Street can always turn to taxpayers to bail them out when their latest impossible-to-understand financial scheme goes south. In terms of orthodox Catholic theology, it’s worth reminding ourselves that the one who creates an occasion of sin bears some indirect responsibility for the choices of the person tempted by this situation to do something very imprudent or simply wrong.
Third, given this text’s subject matter, it reflects one very strange omission. Nowhere does it contain a detailed discussion of the high levels of public debt and deficits in many developed economies, the clear-and-present danger they represent to the global financial system, and their negative impact upon the prospects for economic growth (i.e., what gets people out of poverty).
Given these facts, how could governments provide the aforementioned public funds when they are already so heavily in debt and already tottering under the weight of existing fiscal obligations? By raising taxes? Even Bill Clinton thinks that’s not a great idea in an economic slowdown. Indeed, the basic demands of commutative justice indicate that governments need to meet their current obligations to existing creditors before they can even consider contributing to further bailouts.
Fourth, the document calls for the creation of some type of world central bank. Yet its authors seem unaware that much of the blame for our present economic mess is squarely attributable to central banks. Here one need only note that the Federal Reserve’s easy-money policies from 2000 onwards played an indispensible role in creating America’s housing-market bubble, the development of questionable securities products, and the subsequent 2008 meltdown.
Calls for a global central bank aren’t new. Keynes argued for such an organization 75 years ago. But why, given national central banks’ evident failures, should anyone suppose that a global central bank wouldn’t fall prey to the same errors? The folly of a centralized supranational body like the European Central Bank setting a one-size-fits-all interest-rate for economies as different as Greece and Germany should now be evident to everyone who doesn’t live in the fantasy world inhabited by EU bureaucrats. Indeed, it is simply impossible for any one individual or organization to know what is the optimal interest-rate for every country in the EU, let alone the world.
Plenty of other critiques could — and no doubt will — be made of some of the economic claims advanced in this PCJP document. As if in anticipation of this criticism, the document states, “We should not be afraid to propose new ideas.” That is most certainly true. Unfortunately, many of its authors’ ideas reflect an uncritical assimilation of the views of many of the very same individuals and institutions that helped generate the world’s most serious economic crisis since the Great Depression. For a church with a long tradition of thinking seriously about finance centuries before anyone had ever heard of John Maynard Keynes or Friedrich Hayek, we can surely do better.
In a talk titled, “From Divine Right to Human Rights: The Foundations of Rights in the Modern World,” I attempted to trace the development of the concept of “rights” in the West historically, from the ancient world to modern times. A corollary purpose was to show the students that liberty and religion are not inimical or diametrically opposed.
Shawn Ritenour, a faculty presenter at last month’s Acton University, pursues a similar purpose in a recent post at his blog, Foundations of Economics (after his book of the same name. Timothy Terrell reviews Ritenour’s book in issue 13.2 of the Journal of Markets & Morality). Ritenour writes, “While it is true that many non-believers embrace and promote the free society and many libertarians despise Christ[, i]t does not follow, however, that Christianity and liberty have nothing to do with one another.” He goes on to provide some more resources for this point, particularly arguing that “a close study of God’s Word reveals that social institutions that promote liberty are positively mandated.”
Human rights are one of these social institutions that promote liberty and are positively mandated by the Bible. In my presentation at the Northwood seminar, I drew on some resources from the Acton film, The Birth of Freedom. In particular, I shared this video featuring John Witte Jr. that addresses the question, “How Has Judaism Contributed to Human Rights?”
As Lord Acton puts it, in ancient Israel “the throne was erected on a compact; and the king was deprived of the right of legislation among a people that recognised no lawgiver but God, whose highest aim in politics was to restore the original purity of the constitution, and to make its government conform to the ideal type that was hallowed by the sanctions of heaven.”
Much of the conversation focuses on the role of government (or lack thereof), from a biblical perspective (or lack thereof), specifically with regard to foreign policy. As Bahnsen puts it, “As I got older and wiser, I began to realize that the heir of Friedrich Hayek was Milton Friedman, not Murray Rothbard, and that this ‘Austrian economics movement’ was a front for an extremist form of anti-war zealotry. Every single conference break was filled with the most radical of conspiracy theorists you have ever heard, and the political intentions of the major brains behind their operation were not hidden: Utter anarchy.”
A critical component of Bahnsen’s argument is the connection he draws between Ron Paul and Lew Rockwell: “Ron Paul and Lew Rockwell are joined at the hip.” Read the whole thing to see the implications that Bahnsen draws.
Wilson’s response is worth looking at closely as well. In discussing the implications of a “guilt by association” approach, Wilson writes, that “all these concerns come to a practical head when you think about the reconstructionist movement.”
Thus, concludes Wilson,
a lot of the associational difficulties that attend Ron Paul’s crowd are exactly the same as those which attended the recons. We are talking in many cases about the very same people. I believe that if we were to cross check the subscription lists for the various newsletters concerned, the results would be informative and edifying. Gary North writes for Lew Rockwell, and Gary North also worked with Jim Jordan, who has worked with Gary Demar, who worked with Peter Leithart, who works alongside me, who is friends with David Bahnsen, who works with Andrew Sandlin, who was a successor to Rushdoony, who was North’s father-in-law, who worked on Ron Paul’s staff, and on it goes.
As Moots and Terrell write, “Christian Reconstruction is in no small sense the gateway for libertarianism and Austrian economics to make its way into the thinking of the religious right. While there are clearly points of disagreement, libertarianism’s link to Christian Reconstruction is much stronger than its link to other groups within the religious right.”
According to the National Bureau of Economic Research, the Great Recession ended almost two years ago, in the summer of 2009. But we’re all uneasy. Job growth has been disappointing. The recovery seems fragile. Where should we head from here? Is that question even meaningful? Can the government steer the economy or have past attempts helped create the mess we’re still in.
John Maynard Keynes and F. A. Hayek never agreed on the answers to these questions and they still don’t. Let’s listen to the greats. See Keynes and Hayek throwing down in “Fight of the Century”.
Is it conceivable to endorse the cinematic adaptation of Ayn Rand’s libertarian manifesto Atlas Shrugged – as I do – while rejecting the flawed ideology which inspired it?
I would argue, yes. On the one hand, I place the Beatles at the pinnacle of 1960s pop music while concluding that their song “Mr. Moonlight” is wince-inducing to the point of being unlistenable. Likewise, I admire 99.9 percent of G.K. Chesterton’s body of work yet disagree with him on his assertion only men should vote. On the other hand, I disagree for the most part with Camille Paglia’s worldview yet admire her writing style and intellectual honesty.
So it goes with Ayn Rand. Her free-market views were a welcome antidote to New Deal policies and the malignant growth of government programs and crony capitalism. And for the same reasons I warmly welcome the first installment of the planned cinematic trilogy of Rand’s Atlas Shrugged – timed to coincide with the traditional Tax Day this coming Friday – which renders her themes in such a fashion they appear ripped from the headlines of today’s Wall Street Journal.
Atlas Shrugged-Part I captures the malaise of our times in its depiction of a United States of the near future when businessmen look to government to throttle competition by any means necessary (e.g. legislation and regulation) rather than innovating and investing to succeed. Part I ignores Rand’s anti-collectivism, rampant individualism, atheism and, for the most part, libertarian libertinism, to focus on her depictions of government looters and corporate rent seekers.
All this recommends the movie to lovers of liberty properly understood, to borrow a phrase from Russell Kirk. In fact, I’ll go so far as to encourage readers to see the film and skip the book.
My problems with Rand and Objectivism, the ideology of “enlightened self-interest” she founded, go beyond the oft-quoted admonition of Whittaker Chambers in which he expressed her autocratic intransigence led him to read Rand’s command to all detractors real and perceived “to the gas chambers go!” on every page. There is some truth to Chamber’s critique, to be sure, in that any worldview that rejects faith and community eventually succumbs to obduracy leading to what Russell Kirk labeled the “chirping sect” of libertarianism (a phrase he borrowed from T.S. Eliot).
By chirping sect, Kirk intentionally references Edmund Burke’s “insects of the hour” — those libertarians who splinter into ever smaller groups and thereby sacrifice both the personal and common good on the altar of their own narcissism masked as “individualism.” One need only read about the internecine strife within the Objectivist’s ivory tower to note the wisdom of Burke and Kirk. The CliffsNotes version: Arguing with Rand meant immediate exile to intellectual Siberia.
Contrary to Rand’s individualism, the United States since its beginning has congregated in townships and parishes where true democracy flourishes under the express influence of religious faith. Nineteenth-century writers Alexis de Tocqueville and Orestes Brownson both noted these communal incubators and conservators of liberty – small collectives that reflect their respective faiths to advocate for the good of all within their sphere.
As Tocqueville wrote in his seminal Democracy in America:
In the United States the influence of religion is not confined to the manners, but it extends to the intelligence of the people. Amongst the Anglo-Americans, there are some who profess the doctrines of Christianity from a sincere belief in them, and others who do the same because they are afraid to be suspected of unbelief. Christianity, therefore, reigns without any obstacle, by universal consent; the consequence is, as I have before observed, that every principle of the moral world is fixed and determinate, although the political world is abandoned to the debates and the experiments of men. Thus the human mind is never left to wander across a boundless field; and, whatever may be its pretensions, it is checked from time to time by barriers which it cannot surmount. Before it can perpetrate innovation, certain primal and immutable principles are laid down, and the boldest conceptions of human device are subjected to certain forms which retard and stop their completion.
What binds society together? The libertarians reply that the cement of society (so far as they will endure any binding at all) is self-interest, closely joined to the nexus of cash payment. But the conservatives declare that society is a community of souls, joining the dead, the living, and those yet unborn; and that it coheres through what Aristotle called friendship and Christians call love of neighbor.
Elsewhere in his essay, Kirk delineates the differences between individualism as expressed by Rand and her like and the community spirit so intrinsic to our national character by invoking Eric Voegelin, whom, Kirk states:
[R]eminds us – is not between totalitarians on the one hand and liberals (or libertarians) on the other; rather, it lies between all those who believe in some sort of transcendent moral order, on one side, and on the other side all those who take this ephemeral existence of ours for the be-all and end-all-to be devoted chiefly to producing and consuming. In this discrimination between the sheep and the goats, the libertarians must be classified with the goats – that is, as utilitarians admitting no transcendent sanctions for conduct. In effect, they are converts to Marx’s dialectical materialism; so conservatives draw back from them on the first principle of all.
In short, capitalism and the toxic individualism of Rand and others for the instantaneous benefits supposedly granted leads to liberty misunderstood in the forms of materialism and licentious behavior – both antithetical to liberty properly understood as the fully realized temporal life in community and faith.
So I’m thankful Atlas Shrugged-Part I avoids the toxic elements of Rand’s so-called “philosophy” and am hopeful the subsequent installments of the film trilogy steer clear of the same pitfalls. By all means, see the film and avoid the book.
If you’ve been following the news recently, no doubt you’re aware of the controversy in Wisconsin surrounding Governor Scott Walker’s budget proposals – which include curtailing collective bargaining for state employees – which have led to massive union protests in Madison and the state Senate Democrats fleeing to Illinois to try to delay the vote and force changes in the bill.
Last week, a couple of radio shows turned to Acton for insight on the Wisconsin situation. On Monday, Rev. Robert A. Sirico joined guest host Sheila Liaugminas on The Drew Mariani Show on Relevant Radio to discuss how to properly value the work of public employees, Catholic teaching on unions, and some of the problems posed by public sector unions:
On Tuesday, Acton’s Director of Research, Dr. Samuel Gregg, joined host Al Kresta on Kresta in the Afternoon on Ave Maria Radio to discuss both the Catholic Church’s historic teaching on unions and its response to the present situation:
A new article from Acton Research Director Samuel Gregg published today in Acton News & Commentary. Sign up for the free, weekly email newsletter here.
A Tale of Two Europes
By Samuel Gregg
The word “crisis” is usually employed to indicate that a person or even an entire culture has reached a turning-point which demands decisions: choices that either propel those in crisis towards renewed growth or condemn them to remorseless decline.
These dynamics of crisis are especially pertinent for much of contemporary Europe. The continent’s well-documented economic problems are now forcing governments to decide between confronting deep-seated problems in their economic culture, or propping up the entitlement economies that have become unaffordable (and morally-questionable) relics in today’s global economy.
While some European governments have begun implementing long-overdue changes in the form of austerity-measures, welfare-reforms, and labor-market liberalization, the resistance is loud and fierce, as anyone who has visited France lately will attest.
No-one should be surprised by this. Such reforms clash directly with widespread expectations about employment, welfare, and the state’s economic role that have become profoundly imbedded in many European societies over the past 100 years. Yet it’s also arguable this is simply the latest bout of an on-going clash of economic ideas which goes back much further in European history than most people realize.
Certainly the contemporary controversy partly concerns the government’s role during recessions. From this standpoint, Europe (and America) is rehashing the famous dispute between the economists Friedrich von Hayek and John Maynard Keynes in the 1930s about how to respond to the Great Depression. Should we, as Hayek maintained, react by giving markets the flexibility they need to self-correct? Or do we prime the pump à la Keynes? (more…)
The Tea Party Movement: How Does it Gel With Catholic Social Teaching?
Since their not-so-quiet arrival on the U.S. political scene, the tea party has garnered a great deal of attention and found growing support among disgruntled Americans, many of whom are Catholics. A study commissioned earlier this year by the National Review Institute found that 28 percent of tea party supporters identified themselves as Catholic. Yet while the movement may include aspects that are attractive to practicing Catholics, there are also serious questions about whether the at times radical views and controversial practices seen from tea party protesters fit with the teachings of the Church. Fr. Robert Sirico of the Acton Institute is here to look at the Tea Party and Catholic Social Teaching.
If the recent analysis by the New York Times on the success of the tea party movement is correct, the influence of this movement favoring limited government and low levels of taxation may have a decided impact in the upcoming elections, particularly in holding the Republican leadership’s feet to the fire on a variety of related issues.
The influence and more especially the authenticity of the tea party movement also is being debated in religious circles where some writers have expressed a skepticism as to how the evident religious sentiments expressed by many (but not all) tea party activists can be compatible with the undeniable Christian obligation to tend to the needs of “the least of these my brethren.”
Stephen Schneck, director of the Institute for Policy Research and Catholic Studies at The Catholic University of America, said in critique of the tea party approach, “Much as we might like otherwise, the Catholic argument is that government and citizen are equally expected to be our brother’s keeper.”
One of the leaders of the evangelical left, Jim Wallis, renders what I think is a wholly inaccurate image of tea party folks when he says, “When government regulation is the enemy, the market is set free to pursue its own self-interest without regard for public safety, the common good, and the protection of the environment — which Christians regard as God’s creation. Libertarians seem to believe in the myth of the sinless market and that the self-interest of business owners or corporations will serve the interests of society; and if they don’t, it’s not government’s role to correct it.”
From my conversations with numerous supporters of the tea party movement from around the country, these comments fail to grasp the essential point of what this movement is about, and why religious people are attracted to it.
I have no doubt there are people on the fringes of the tea party movement who hate government. Most of these, however, I would suggest hate government the way most of us “hate” the dentist — that is, we are not in favor of abolishing dentistry; we just want to make sure it hurts as little as possible and does not do permanent damage.
It is not that tea party folk believe in “the myth of the sinless market.”
It is that they, and most believers, indeed most Americans, believe that politicians and bureaucrats are not immaculately conceived and require limits to their interventions.
And so we come to what may be the real deficiency of this popular movement — it has yet to define a set of clear principles that permit it to consistently outline its view of society and the proper role of the state.
Such a set of principles exists within both the Roman Catholic and Reformed Protestant traditions and are known respectively as subsidiarity and sphere sovereignty. Each term in different yet complementary ways states that needs are best met at the most local level of their existence and that higher orders of social organization (that is, mediating institutions and the public sector) may only temporarily intervene into lower spheres of social organization in moments of great crisis. This intervention by higher authorities should happen to assist, not replace, local relationships.
In his monumental encyclical “The Hundredth Year” Pope John Paul II outlined the principle of subsidiarity and demonstrated an understanding of the reaction that can occur in the social sphere when the limits of the state are not clearly maintained. Although written almost a decade ago, his cautions and observations could have been penned today:
By intervening directly and depriving society of its responsibility, the Social Assistance State leads to a loss of human energies and an inordinate increase of public agencies, which are dominated more by bureaucratic ways of thinking than by concern for serving their clients, and which are accompanied by an enormous increase in spending. In fact, it would appear that needs are best understood and satisfied by people who are closest to them and who act as neighbors to those in need. It should be added that certain kinds of demands often call for a response which is not simply material but which is capable of perceiving the deeper human need. One thinks of the condition of refugees, immigrants, the elderly, the sick, and all those in circumstances which call for assistance, such as drug abusers: all these people can be helped effectively only by those who offer them genuine fraternal support, in addition to the necessary care.