I argued earlier that if the above report is true, this future encyclical may represent a departure from the last social encyclical of Pope John Paul II, which seemed to open the way to a reconciliation between a market economy and Catholicism, and that it may represent a return to traditional Catholic Social Doctrine with its reliance on socialist economics, philosophy and propaganda. In this last part 3 of this series, I will argue that there may be an affinity between Pope Benedict’s writings on Christianity as a philosophy of freedom and the tradition of Liberalism as expressed by certain variants of the Enlightenment, specifically a connection to Saint Thomas and the late scholastic Spanish Dominicans and Jesuits of the School of Salamanca (Soto, Mercado, Molina, Mariana, etc.).
Several economists have already pointed out the strong philosophical connection between the development of the economic theory of free markets and Catholicism. To my knowledge, this was first explicitly developed by Murray Rothbard in the 1950’s.
In a memo written in 1957 titled "Catholicism, Protestantism and Capitalism," http://www.mises.org/rothbard/RothbardOnKauder3.pdf Rothbard is recommending to a publisher the work of Emil Kauder and his research into the Aristotelian-Thomistic background of marginal utility and Austrian economic theory:
Kauder, in fact, turns the Weber thesis on its own followers by attacking Smith and Ricardo for being influenced by [Protestantism] to develop the “labor theory of value.” Schumpeter also leaned in this direction. The brunt of this important new thesis is this: rather than saying that Hume and Smith developed economic theory almost de novo, economics had actually been developed, slowly but surely, over the centuries by the Scholastics and by Italian and French Catholics influenced by the Scholastics; that their economics was generally individualist methodologically, and stressed utility theory, consumers’ sovereignty and market pricing, and that Smith really set back economic thought by injecting the purely British doctrine of the labor theory of value, thus throwing economics off the sound track for a hundred years. Here I might add that the labor theory of value has had many bad consequences. It, of course, paved the way, quite logically, for Marx. Secondly, its emphasis on “costs determining prices” has encouraged the view that businessmen push up prices or that unions push up prices, rather than governmental inflation of the money supply. Third, its emphasis on “objective, inherent value” in goods led to “scientistic” attempts to measure values, to stabilize them by government manipulation, etc. Now, Kauder’s interesting thesis is in two parts: one, that the above was the historical course of events in economic thought; and two, that the reason for this forgetting of utility theory and replacement by a labor-cost theory was influence by the Protestant, as opposed to the Catholic spirit...
...We may sum up the Case for Catholicism as follows: (1) Smith’s laissez-faire and natural law views descended from the late Scholastics, and from the Catholic Physiocrats; (2) the Catholics had developed marginal utility, subjective value economics, and the idea that the just price was the market price, while the British Protestants grafted on a dangerous and ultimately highly statist labor theory of value, influenced by Calvinism; (3) some of the most “dogmatic” laissez-faire theorists have been Catholics: from the Physiocrats to Bastiat; (4) capitalism began in the Catholic Italian cities of the 14th century; (5) Natural rights and other rationalist views descended from the Scholastics.
This line of thought was fully developed by Murray Rothbard in his “Economic Thought Before Adam Smith” Volume 1.
A similar approach was explored by F.A. Hayek in his "Law, Legislation and Liberty, Volume 2: The Mirage of Social Justice" University of Chicago Press 1978, note #15 to Chapter 9, p. 178-179. Here, Hayek states that the origin of capitalism is not to be found in Calvinism but in Jesuit Spanish scholastics and that these Jesuit scholars in the 16th century were the first to recognize that prices determined by just conduct of the parties in the market (no violence, fraud, etc.) is all that justice requires. Any particular application of "social justice" in the real world, including Catholic Social Doctrine, can only be accomplished via socialism.
Others who have explored the historical, philosophical and theological connection between Catholicism and Liberalism.
1) Bruno Leoni in ”Freedom and the Law”
2) Alejandro A. Chafuen in “Faith and Liberty, The Economic Thought of the Late Scholastics”
3) Jesús Huerta de Soto in “Juan de Mariana and the Spanish Scholastics” http://www.jesushuertadesoto.com/madre2.htm
4) Thomas E. Woods Jr. in “The Church and The Market”
All of these authors convincingly argue that the late scholastics had discovered and developed not only most of the basic tenets of the Liberal Anglo-Saxon movement, but also the principles of the free market economy, all from a Thomistic perspective.
If Kauder, Rothbard, and Hayek are correct, then Catholic economists, theologians and philosophers need to go back to the Catholic roots of Liberalism and extricate both Liberalism and Catholic Social Doctrine of the errors of Protestantism, Rationalism and the Enlightenment. And while Kauder, Rothbard, Hayek, Leoni, Chafuen and de Soto explore the historic and the philosophical connections between the two, to my knowledge, few have explored the deep theological connections between Catholicism and Liberalism. It is precisely here where Benedict XVI comes in, not only because he explicitly states, as I argue below, that this is needed, but because his own emphasis on the theology of freedom, he provides a possible bridge between a Catholic theology of freedom and free market economics.
1) My first area of exploration for possible affinities between Pope Benedict’s theology and Liberalism, is derived from a reading of his first encyclical “God is Love” http://www.vatican.va/holy_father/benedict_xvi/encyclicals/documents/hf_ben-xvi_enc_20051225_deus-caritas-est_en.html
b) Love—caritas—will always prove necessary, even in the most just society. There is no ordering of the State so just that it can eliminate the need for a
service of love. Whoever wants to eliminate love is preparing to eliminate man
as such. There will always be suffering which cries out for consolation and help. There will always be loneliness. There will always be situations of material need where help in the form of concrete love of neighbor is indispensable. The State which would provide everything, absorbing everything into itself, would ultimately become a mere bureaucracy incapable of guaranteeing the very thing which the suffering person—every person—needs: namely, loving personal concern. We do not need a State which regulates and controls everything, but a State which, in accordance with the principle of subsidiarity, generously acknowledges and supports initiatives arising from the different social forces and combines spontaneity with closeness to those in need....In the end, the claim that just social
structures would make works of charity superfluous masks a materialist
conception of man...
This passage, at least implicitly, recognizes that it is precisely in a system of Liberalism which does not purport to have the state solve everyone’s problems. Liberalism leaves space open for voluntary associations as one of the mechanisms complementing the free market through which
Christians can actively participate and institutionalize love for one’s neighbors.
2) My second area of exploration comes from my reading of “Introduction to Christianity,” where Pope Benedict XVI, then Cardinal Ratzinger, fully develops the connection between creation and freedom. He starts by asserting that the Christian belief in God is not identical with either the materialistic conception of being (that everything we encounter is matter) nor with the idealistic conception of being (that what we encounter is ultimately the product of thought, where mind is the original reality) p. 156-157, 1990 edition, Ignatius Press:
Christian belief in God means that things are the being-thought of a creative consciousness, of a creative freedom, and that the creative consciousness that bears up all things has release what has been thought into the freedom of its own, independent existence.
This goes beyond idealism. For the idealist, everything that “is” is explained as being-thought by single consciousness. For the Christian, everything that is being-thought is sustained by a creative freedom that imbues what is with the freedom of its own being. (P.157). Therefore, creation itself must be understood as creative freedom.
The idea of freedom is the characteristic mark of the Christian believe in God as opposed to any kind of monism. At the beginning of all being it puts not just some kind of consciousness but a creative freedom that creates further freedoms…Christianity is a philosophy of freedom. For Christianity, the explanation of reality as a whole is not an all-embracing consciousness or a single materiality; on the contrary, at the summit stands a freedom that thinks and, but thinking, creates freedoms, thus making freedom the structural form of all being. (P. 157-158)
Pope Benedict then, after identifying the very structure of the world with freedom, goes on to state that Christians believe in the personal nature of the freedom that thinks. God is not an anonymous neutral consciousness but rather a person, therefore, (p. 158).
The highest is not the most universal but, precisely, the particular, and the Christian faith is thus above all also the option for man as the irreducible, infinity-oriented being. (p.158)
Pope Benedict further argues from this that a person is not just an individual, a reproduction of the world of ideas into matter, a secondary reality, like the Greeks thought, but, precisely, a person: a unique, irreproducible, particular, free created being who has supremacy over the universal. (P. 160).
The moral logic behind the right to private property, including ownership of our own bodies, arises from Christian tradition’s concept of the dignity of every single human being. Theologically, the concept of the dignity of the human being is partially derived from God’s creation, in which we are called to be inalienably responsible to God for our own use of liberty, but it is derived and confirmed in its entirety by the mystery of the Incarnation. God gives us the right to private property simply by restoring the fullness of the dignity we received when God created us. When God becomes man and gives himself back to the Father in an act of pure love, God redeems creation by giving us the opportunity to use our liberty to give ourselves to others.
The Pope traces the birth of freedom in his "Theology and the Church’s Political Stance" to Jesus Christ himself: “to Caesar what is Caesar’s and to God what is God’s”.
The modern idea of freedom is thus a legitimate product of the Christian environment; it could not have developed anywhere else. Indeed, one must add that it cannot be separated from this Christian environment and transplanted into any other system, as is shown very clearly today in the renaissance of Islam; the attempt to graft on to Islamic societies what are termed western standards cut loose from their Christian foundations misunderstands the internal logic of Islam as well as the historical logic to which these western standards belong, and hence this attempt was condemned to fail in this form. The construction of society in Islam is theocratic, and therefore monist and not dualist; dualism, which is the recondition for freedom, presupposes for its part the logic of the Christian thing. In practice this means that it is only where the duality of Church and state, of the sacral and the political authority, remains maintained in some form or another that the fundamental pre-condition exists for freedom. http://www.lewrockwell.com/orig6/ratzinger2.htmlSo the following logical steps from citations above can be used to secure the concept of freedom of Liberalism on more solid theological grounds.
a) Creation is the being-thought of a creative consciousness that is free
b) Creation is imbued by the freedom of its own being
c) Freedom is the structural form of all being
d) Christian God is personal
f) Human beings are not individuals but persons who are unique, irreproducible, particular, free, supreme over universals
g) Human dignity is partially derived from God’s creation, in which we are called to be inalienably responsible to God for our own use of liberty
h) Freedom in the West is a product of the dualism of State vs Church established by Christ's dictum "Give to Caesar what is Caesar’s, and to God what is God’s"
To my knowledge, however, Pope Benedict does not write anything related to what the above steps would mean for the world of politics and economics, the free market and freedom from state aggression and intervention. One can easily imbue these arguments with of Rothbard’s “Ethics of Liberty” http://www.mises.org/resources/b66a8bf2-9db3-428e-84d0-44ac1514873c to present a Catholic reading.
3) The third possible area of affinity between Pope Benedict XVI’s theology and Liberalism comes from his writings on the development of the concept of freedom since the Enlightenment.
In his essay “Truth-Tolerance-Freedom” he links the concept of freedom in the Enlightenment with Reason alone. He recognizes that this trend is varied and at times contradictory. He distinguishes two trends. One is the Anglo-Saxon trend which is based on natural law, rejects positive of man-made law, and recognizes that man has rights because he was created free. This approach is revolutionary because it stands against the absolutism of the state and because it is not merely a political claim but a metaphysical claim. “Inherent in being itself there is an ethical and legal claim.” (p. 238 of Truth and Tolerance, Ignatius Press, 2004). Being is not just material, it bears within it dignity and an ethical dimension that has a legal claim of nature against the existing institutions of government. These claims take the form of rights of individuals over and against the state and its institutions (p.239). And two is the more radical continental trends exemplified by Rousseau, the French Revolution, Marx and dictatorships they generated, which promised a freedom unregulated by anything. He concludes by stating that:
Since man is a being who exists in being-from, being-with and being-for, human freedom can only exist in an ordered coexistence of freedoms. Law is, therefore, not the opposite of freedom, but its necessary condition; it is indeed constitutive of freedom. (P.256)
Most modern Popes confused the Liberalism of the French Enlightenment (that was rationalistic, Cartesian, Rousseauian, Hegelian, Marxist, materialistic, contractual, utilitarian, anti-Semitic, atheistic, democratic and that led to the French Revolution, the Reign of Terror, democratic dictatorships of all sorts, communism, fascism, socialism and nazism) with the British tradition of common law (that was almost its exact opposite: anti-systematic, anti-utopian, empirical and Protestant).
To my knowledge, Pope Benedict is the first Pope to make this distinction between both movements explicit. Now, he does link through a cause and effect relationship both movements, with Anglo-Saxon Liberalism degenerating into French Liberalism, but the fact that he at least makes the distinction between them is critical, because from there, one can explore how Protestant philosophers who were well versed in the scholastics (Grotious and Pufendorf, for example) influenced the likes of Adam Smith. Unfortunately with the passage of time, the existence of this connection between Saint Thomas, the late Spanish scholastics and British common law was lost. This lost link contributed, I think, to the anti-liberal thinking of most modern Popes, who threw out the proverbial baby of Thomistic Liberalism with the bath water of Enlightenment Liberalism.
Both Enlightenment Liberalisms were dead ends that had and continue to have a very wide influence. The Liberalism articulated by Adam Smith, for example, gave us the mistaken labor theory of value that resulted in the development of the economics of Karl Marx, Keynes and Catholic Social Doctrine. As pointed out by Rothbard and Hayek, the late scholastics had discovered and developed not only most of the basic tenets of the Liberal Anglo-Saxon trends described by the Pope, but also the principles of the free market economy from a Thomistic perspective which can shield us from these mistakes. For example, they asserted that the value of a commodity is not based on its labor content, like Smith and Marx thought, but in the subjective valuations of buyers and sellers in a free market. Economists like Menger, Mises, Rothbard and Hayek took up these principles and fully developed into what is now called the Austrian School of Economics.
So this third area of affinity between Pope Benedict XVI’s theology and Liberalism is based on his explicit acknowledgement of a dichotomy between Natural Law Liberalism as expressed in the Anglo-Saxon tradition of Common Law and the French Enlightenment Liberalism. What is lacking in his perspective is a more elaborate connection to Saint Thomas and the Liberal Spanish Dominicans and Jesuits of the School of Salamanca. While one can take a leap and make the connection without, I believe, any major theological or philosophical problems, I am not sure if Benedict himself took that step.
4) A fourth area of affinity, however, is derived from his call to re-attach to the Enlightenment its Christian roots. By making this call, he does come close to making the connection between Liberalism and Saint Thomas. In "Christianity and the Crisis of Cultures" Ignatius Press 2006, he criticizes the banishment of Christianity from the European Constitution resulting from a “laicist Enlightenment” philosophy cut from its Christian roots.
…Enlightenment culture is substantially defined by the rights to liberty. Its starting point is that liberty is a fundamental value and the criterion of everything else…At the same time, it is equally obvious that the concept of liberty on which this culture is based inevitably leads to contradictions since it is either badly defined or not defined at all… p. 34-35-36
Above all, however, we must affirm that this Enlightenment philosophy, with its related culture, is incomplete. It consciously cuts off its own historical roots, depriving itself of the powerful sources from which it sprang. It detaches itself from what we might call the basic memory of mankind, without which reason loses its orientation… p 41
A tree without roots dries up…In affirming this, we are not denying all the positive and important contributions of this philosophy. Rather, we are stating that it needs to be completed, since it is profoundly incomplete…p. 43
Rothbard presents us with a very similar argument when he labors to find a philosophical and ethical foundation for the Austrian School of Economics on the Spanish Scholastics, Saint Thomas and Aristotle, in stark distinction to Mises utilitarian and value free approach. Here is Rothbard:
Pope Benedict’s argues that since the Enlightenment is Christian in origin, and that since it was only born in places where Christianity had taken hold (p.48), even if we cannot find the path of accepting the existence of God, we should at a minimum heed to Pascal’s advice and direct our lives as if God existed.
Thus, while praxeological economic theory is extremely useful for providing data
and knowledge for framing economic policy, it cannot be sufficient by itself to enable the economist to make any value pronouncements or to advocate any
public policy whatsoever. More specifically, Ludwig von Mises to the contrary notwithstanding, neither praxeological economics nor Mises’s utilitarian liberalism is sufficient to make the case for laissez faire and the free-market economy. To make such a case, one must go beyond economics and utilitarianism to establish an objective ethics which affirms the overriding value of liberty, and morally condemns all forms of statism... http://www.mises.org/resources/765d4a0d-02c8-4098-9862-823b7021d3b1
Even the one who does not succeed in finding the path to accepting the existence of God ought nevertheless to try to live and to direct his live as if God did indeed exist…This does not impose limitations on anyone’s freedom; it gives support to all our human affairs and supplies a criterion of which human life stands sorely in need. p. 51
In that fashion, one can reconnect the Enlightenment to its lost Christian roots, rebuilding and reinforcing the framework within which Western civilization developed.
Let me conclude by stating that Catholic economists and theologians must build a stronger connection between Catholicism and Capitalism, a connection that will prove more fruitful than the one between Protestantism and Capitalism that has given us, particularly through its Calvinist streak the type of socialism exemplified by the current US welfare state. F.A. Hayek, it is reported, influenced the development of John Paul II’s views of capitalism in Centesimus Annus.
11."During the last months of his life, Hayek had the opportunity for a long conversation with Pope John Paul II. There are signs of Hayek’s influence in certain portions of the pope’s encyclical Centesimus Annus. In paragraphs 31 and
32, in particular, Centesimus Annus employs unmistakably Hayekian insights."
Michael Novak, "Two Moral Ideas for Business," Economic Affairs
(September-October 1993): 7. (See Jesús Huerta de Soto, “The Ethics of
Capitalism” http://www.acton.org/publicat/m_and_m/1999_fall/desoto.html).
So perhaps the same dialogue will eventually take place between Pope Benedict and a Catholic economist or philosopher knowledgeable of both the Pope’s writings and the Thomistic roots of the Liberalism and make that final connection explicit.
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