“Supporting markets as the economic arrangements most likely to help promote human flourishing doesn’t necessarily mean you accept libertarian philosophical premises” says Acton Institute Director of Research Samuel Gregg in an essay published today at Public Discourse. This comes in response to “Koch Brothers Latest Target: Pope Francis,” an Oct. 14 article written by John Gehring at the American Prospect that claims the Acton Institute is part of a larger network of organizations behind “a decidedly different message than Pope Francis does when it comes to the economy and climate change.” Gehring, Catholic program director at Faith in Public Life, labels various free-market organizations as “libertarian” and asserts that “libertarian thought … is the exact opposite of Catholic teaching.”
Gregg begins his response by noting some of the contributions that great libertarian thinkers such as Hayek and Mises have made to economics:
Libertarianism’s great strength lies in economics. Prominent twentieth-century libertarian economists, such as Ludwig von Mises and Friedrich von Hayek, made major contributions to the critique of socialist economics. While ridiculed by some at the time, their criticisms turned out to be spot-on.
In Socialism (1922), for example, Mises illustrated that socialist economies can’t replicate the market price system’s ability to signal the supply and demand status for countless goods and services to consumers and producers at any one point in time. However intelligent and statistically equipped the top-down planners might be (whether they take the form of a Communist politburo, a Fascist dictator, or a 1970s British government), they simply cannot know the optimal price for any good or service at any point in time. Any attempt to dictate prices from the top-down will lead, paradoxically, to economic disorder and dysfunction.