Our friends over at AEI have a wonderful website—Values & Capitalism—devoted to many of the same topics we cover here at Acton: faith, economics, poverty, the environment, society. Values & Capitalism, which is capably managed and curated by my buddy Eric Teetsel, is an excellent resource that I recommend to all liberty-loving, virtue promoting Christians (i.e., all good Acton PowerBlog readers).
Yesterday I argued that since bias is inherent in institutions and neutrality between individual and social spheres is illusory we should harness and direct the bias of institutions towards a free and virtuous society characterized by individual liberty and sustained by religious principles.
One of the ways we can do that in the economic realm, I believe, is to encourage a bias toward entrepreneurship and away from corporatism. As Derek Thompson, a senior editor at The Atlantic, says, “It would be naive to think we can cleanse the law of all biases. But what if the law were biased, not toward the oil and gas industry or the cotton farmers, but toward the creative, the self-employed, and the entrepreneurs?”
Thompson proposes a new framework for competitiveness:
When it comes to our view of individual liberty, one of the most unexplored areas of distinction between libertarians and religious conservatives* is how we view neutrality and bias. Because the differences are uncharted, I have no way of describing the variance without resorting to a grossly simplistic caricature—so with a grossly simplistic caricature we shall proceed:
Yesterday AEI hosted a lively discussion between Jonah Goldberg and Matt Welch on the question, “Are Libertarians Part of the Conservative Movement?” I’ve got a piece appearing tomorrow at Comment that will discuss the “fusionist” project and the relationship between so-called economic or “market” conservatives and social or “communitarian” conservatives.
At this point, though, I’ll simply point out a distinction I’ve made in the past between libertarianism as a political philosophy and libertarianism as a world-and-life view. The former, I think, is largely compatible with and an important part of the broader conservative political movement. The latter, however, is much more problematic. Libertarianism as a political philosophy emphasizes the proper role and functions of a limited government, and asks critically of each policy, as Goldberg notes, “Should government really be doing this?” This question is one that is, in my view, an absolutely indispensable and welcome component of the conservative movement.
Libertarianism as a world-and-life view, however, understands personal choice as the highest good and interprets everything else in light of that single guiding principle. These kinds of libertarians do not hold to a view of the world in which choice must be directed to any objective good or correspond to the moral order. No, rather, choice itself is opposed to any form of constraint, moral or otherwise. The exercise of the will is itself the supreme act of human freedom. (These, I think, are Kirk’s “chirping sectaries.”) This kind of libertarianism is much less compatible with a conservative vision of the good society, although there are probably still cases in which such libertarians and conservatives can be effective co-belligerents. I would add that this kind of libertarianism is much less compatible with the Christian faith, and in many cases much more likely to be substituted for or conflated with Christianity. Libertarianism as a world-and-life view is an ideological competitor to the Christian faith.
Respective definitions of liberty are absolutely essential to distinguishing various strands of libertarianism. Are we simply free to choose, or free to choose the good? How is the good defined, and in relation to what (the moral order?) or who (myself? God?) is it defined? Here I’ll submit Lord Acton’s definition as representative of a good answer, from the kind of classical liberal who oriented freedom to the good: “Liberty is not the ability to do what you want, but the right to do what you ought.”
When we are asking the kinds of questions raised by last night’s AEI discussion, it’s important to define our terms and clarify precisely who and what we are discussing. Libertarianism is an inherently diverse phenomenon, with a rather dizzying spectrum of perspectives unified around some core commitments. But precisely how these core commitments animate and are placed in relationship to the broader vision of the common good (if there even is such a vision) is widely divergent. A presentation by Nigel Ashford at an IHS event once outlined at least 5 basic types (with attendant subgroupings) on a continuum, you might say, of libertarianism. (It so happens, usually, that whoever is to the left of you on the spectrum is cast as a “socialist” of some form or another.)
I’ll have some more to say related to my piece tomorrow at Comment, but here I’ll just note that my conclusions about the prospects for fusionism (social and economic conservatives need each other now perhaps more than ever) are largely shared with those in Hunter Baker’s essay, “Can Libertarians and Social Conservatives Find Common Ground?” and commend Baker’s article to your attention.
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.
Despite the Catholic Left’s excited hyperventilating that the document released today by the Pontifical Council for Justice and Peace (PCJP) would put the Church “to the left of Nancy Pelosi” on economic issues, more careful reading of “Towards Reforming the International Financial and Monetary Systems in the Context of Global Public Authority” soon indicates that it reflects rather conventional contemporary economic thinking. Unfortunately, given the uselessness of much present-day economics, that’s not likely to make it especially helpful in thinking through some of our present financial challenges.
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.
Earlier this year I was invited to participate in a seminar sponsored by the Institute for Humane Studies and Students for a Free Economy at Northwood University. In the course of the weekend I was able to establish that while I wasn’t the first theologian to present at an IHS event, I may well have been the first Protestant theologian.
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.”
David Bahnsen and Douglas Wilson have engaged in a fascinating conversation about Ron Paul. To follow the threads of critique and concern on either side, first read Bahnsen’s “The Undiscerning and Dangerous Appreciation of Ron Paul.” Then read Wilson’s “Bright Lights and Big Bugs.”
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.
One of the few scholarly treatments of the engagement between Christian Reconstruction and libertarian political and economic thought appears in the Journal of Markets & Morality. Read “One Protestant Tradition’s Interface with Austrian Economics: Christian Reconstruction as Critic and Ally,” by Glenn Moots and Timothy Terrell for some worthwhile background to the conversation between Bahnsen and Wilson on Ron Paul.
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.
Among his many salient points against libertarianism enumerated in the essay, “Libertarians: the Chirping Sectaries,” Kirk said:
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.