There is No Freedom without Economic Freedom

Friederic Bastiat, in his magnificent little pamphlet The Law, warned well more than a century ago about the tendency of different factions of society to abuse the law in order to loot each other. This author is nothing less than a prophet.

It’s fashionable today to condemn corporatism, in which big business owners benefit from cozy relationships with politicians and the Defense Department. More than that, however, there is the looting that the poor does of the rich and the middle class by virtue of welfare and other such things. The rich steal through government fiat, the poor steal through government fiat, and the middle class gets stuck with the bill.

“Ah, but it’s our responsibility to take care of the poor,” you might say. Yes, it is–but not through government fiat. Here’s a slice of evidence to munch on: When Ronald Reagan reduced taxes in the early 1980’s, charitable giving went up.

Now many people who support the mutual looting of society through the abuse of law are good people, and they have good intentions. Many of them (we’re essentially talking about modern Liberals) are also utterly opposed to our tyrannical crusades abroad and even to police brutality at home. What many of them fail to realize is this: all government law is enforced, ultimately, at gunpoint. If you don’t pay your taxes, and you ignore the ensuing letters, etc., sooner or later, there will be a knock at your door. The IRS, in whose court the accused are guilty until proven innocent (I’m not making this up), will take your property, and even anyone else’s belongings that might be on your property. Resist, you say? The State will kill you. What is nearly as bad is that most of your peers will think that you deserved it.

This doesn’t sound like freedom to me. The government is taking your money and using it in ways that it decides is appropriate. This is Central Planning, pure and simple: the self-appointed super-minds think that they, from a distance, can tell better than you what the needs are in your own home or neighborhood.

So, to my Liberal friends, I’d like to say: You’re fantastic on civil liberties, but it is crucial that you recognize that economic freedom is an indispensable part of liberty. We must work on ways to help the poor without granting so much power–any power–to the State.

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10 Responses

  1. Michael,
    Congratulations on your new profane blog, which I found through NLM.

    Even if I were a slave I, as a Christian would find comfort knowing that there is no freedom without truth.

    Having trudged the long path of conservativism, including Austrian economics at my alma mater, Hillsdale College, I would only recently discovered that classical economics does not mesh very well with Catholic social teaching. Until then I didn’t think it was possible that there could be a conflict. Along those lines is an excellent book by John Medaille: The Vocation of Business: Social Justice in the Marketplace. He also appears on the following site:http://www.distributist.blogspot.com/2008/04/cult-of-entrepreneurship.html
    I can hardly begin to give the argument, but in brief outline, the economics of Aristotle were closer to those of St. Thomas than those of the classical nineteenth century school, which place economics in a non-existent sphere outside the reach of God.
    Here is an article more directly concerning von Mises from Peter Chojnowski.
    http://drchojnowski.blogspot.com/2004/12/corporation-christendom-true-school-of.html#112820320256917858

    I think there should at least be a conversation between traditionalists and champions of classical economics.

    My years at Hillsdale taught me to abhor modern ideology (with thanks to Gerhardt Niemeyer and Eric Voegelin). I never dreamed that the very conservatism I looked to for the truth is itself infused with modern ideology. Now I look to the Church’s teaching to find teaching oriented toward truth.

  2. Well, Michael B., what can I say?

    1. Frederic Bastiat, who was a free marketer and whom I cite at the very beginning of this post, was a Catholic.

    2. How does a powerful central government taking money and distributing it as it sees fit square with the principle of subsidiarity?

    3. Where does the Catholic Church teach that governments should take money from one person and give it to another by force of law?

    4. It has been shown over and over and over again that free markets create more wealth for more people and more opportunity for the poor. Collectivism, which makes people feel like they’re accomplishing something, actually makes people poorer. Wouldn’t the Catholic want to support the system which makes for plenty?

    Remember the story that Ronald Reagan used to tell:

    A Soviet commissar went to a farm to check on the harvest. He asked the farmer how it went, and the farmer said, “Oh Commissar, we have enough crops that if we piled them up, they would reach the foot of God.”

    “But comrade,” replied the commissar, “there is no God.”

    “That’s okay, there are no crops, either.”

    5. I do not accept the idea that we have embarked in unbridled capitalism (not that you said it; I’m just pre-empting a potential objection). This is one of the grossest distortions of history. We have perhaps overdone it on corporatism (business in bed with government–the traditional definition of monopoly), but not capitalism. Herbert Hoover did not make the depression worse, for instance, by being laissez-faire; he made it worse by being a do-gooder.

    6. Tom Woods deals with this subject in excellent fashion. Pay particular attention to his comments about the nature of economics. http://mises.org/multimedia/mp3/ASC2004/Woods.mp3

  3. Michael,
    If I may respond; arguments for an interpretation of economics based on the virtues of the Enlightenment have made me increasingly queasy over the years. Mr. Woods’ is a case in point:
    “The primary difficulty with much of what has fallen under the heading of Catholic social teaching since Pope Leo XIII’s Rerum Novarum (1891) is that it assumes without argument that the force of human will suffices to resolve economic questions, and that reason and the conclusions of economic law can be safely neglected, even scorned.” (http://www.lewrockwell.com/woods/woods8.html)

    When Catholics start making arguments that God has little to do with the “laws of nature” other than setting up an impressive system, Deist style, it’s time to take a closer look at just what is being proposed to us. I suggested John Medaille because he makes a coherent critique of the science of econmics, as proposed by the Austrians others of the modern science of economics. This isn’t a matter of individualism vs collectivism, or liberalism vs conservatism, nor of reason vs the wishful thinking of religious dreamers, but of modernism vs tradition. Shall the world be ordered as if there were no oughts, or ought we to order ourselves to truth? Freedom untied from truth isn’t worth much, and truth is more than a set of principles which explain human behavior in a quasi-mechanistic manner.

    I have noticed since the fall of the Evil Empire (Reagan’s apt coinage) that conservatives have continued to fight as if it were still 1967 and the collectivist revolution is going to come, when the clear and present danger now is an out of control individualism. What I am suggesting is that a return to an examination of the current crisis of our civilization along the battle lines drawn by the Reformation and the Enlightenment against the Catholic culture they supplanted would be a more fruitful path for all conservatives, but especially Catholic conservatives.

  4. Who has decided that it is government which should enforce the “oughts”? And again I ask: What obligates me to support anything other than a free market when it is the free market that works best?

    And I cannot possibly agree that individualism is on the rise. Greed may be, but not individualism. The difference? Contemporary greed has people wanting the government to loot other people so that they can get what they want without having to earn it. How is this just?

    On the other hand, individualism promotes individual responsibility. Friederich Hayek pointed out that more intrusive governments have less virtuous societies. Is there any fact that may suggest this is true? How about the fact that the American Church, for all its problems, is the envy of Europe.

    And what do you mean by “tradition”?

  5. There is a certain type of Catholic who, when he hears about the merits of a free market, starts talking about the evils of the Enlightenment and begins citing papal encyclicals about the need for social justice. The problem with these critics is that they are not intellectually zeroed in on the critical choice: market or state. To the extent you are willing to curb the market, you are to the same extent empowering the state. There is no third way <— read that sentence 5,000 times until you get it right.The state means coercion and central planning and, in our epoch, playing the role of God — which one might think a Catholic would worry about just a bit. So you can see that all the talk about the Enlightenment or the Protestant ethic and etc. is nothing more than a distraction from the central point that the choice we face now and always is between liberty and statism, and statism always means making society a more violent place.

  6. Gentlemen,
    1. Tradition. We are stepping back from civics 101 for a moment, to philosophy 101. The ought refers to classical (and Thomistic) philosophy, which recognizes that God is the true measure for judging man and his works and man is not. The modern philosophical position is that the world is what it is, nothing higher. God, or Plato’s The Good cannot be scientifically established, this “ought”, the good that man should measure himself against (including religion) is for private life, not public. This becomes the basis for modern government.

    2. Austrian ideology posits a “free market”, but the market will always exist within a social context which will influence the market, with or without the coercive power of the state (most likely with). What will never exist on earth is a market free of these influences. The American economy is exhibit #1 in this case. An analysis of the market that includes the reality of these influences will be closer to the truth than the myth of the utterly free market. So, check out John Medaille.

    3. The state, of necessity, always means coercion, the necessity being the fallen nature of man and his need for authority to help reign in the excesses of sin. The state will never whither away in a libertarian utopia. In fact, the state comes to us from God in His mercy. Even the authority of a flawed state deserves respect in the matter of things that belong to Caesar. The flawed state, however, is subject to the spiritual authority of the Church, whether the state recognizes that fact, or not.

    4.The state, if it is ordered so that proper function of the most local parts of it are not usurped by the larger, less local part of it, does not necessarily lead to central planning. In fact, it will be dependent on independent associations to work. This is already the case in capitalism, the scale is wrong: large corporations and wealthy people enlist the aid of the central government for their ends, the government works more efficiently through these “private” channels, This association needs to be reversed, it should be as local and small as possible.

    I don’t think our liberal friends who scream “social justice” when they mean “sociailist state” even know what the Enlightenment was. I’m sure you are aware of the critiques of Catholics like John Medaille. If not, I recommend him to you so you can at least understand what a traditional objection to classical economics is. He can make the argument much clearer than I can.

  7. Michael B.,

    “The Good cannot be scientifically established.”

    Correct. That’s why State coercion is bad. The free market is based not on planning but on contingency, which allows people more freely to meet their needs as they arise.

    Yes, there is always a social context to the free market, but this does not need to be enshrined in the law. Moreover, in those areas in which order needs to be preserved, it can be done without a State. This does not presuppose a “libertarian utopia” but rather makes room for more local associations which are not organized on the governmental/police state model.

    Finally, I would like to note that nothing you have said proves in the slightest that free markets are somehow contrary to Catholicism, so can we just agree to disagree? Frankly this whole hand-wringing over whether or not Pope Leo XIII would agree with me gets boring after awhile.

  8. Jeffrey,

    Great point about the State becoming a false god. This is the part people miss. Thomas Day tells the story about the time someone said to him, “Oh you’re Catholic? Well, that’s okay. Just remember: you’re an American first!”

  9. Michael,
    Thanks for letting me stir up the pot a bit.

    Although I tried to carry on a bit of discussion, I don’t remember any hand wringing. Be that as it may, what I did suggest is that there is a coherent traditional Catholic critique to the free market ideology we conservatives give allegiance too, and that it is worth investigating. I say this as someone who read The Law on my own at home as a high schooler before I read it in economics class at Hillsdale. And you’re right, there is nothing more boring than talking past each other.

    I would hope that a little back and forth in a comment box would not substitute for a fully argued line of reasoning, which is why I recommended Medaille’s book in the first place.
    Thanks again,
    Best wishes,
    Michael B.

  10. You are quite right that any material freedom requires economic freedom. As St. Thomas points out, the practice of virtue depends on a certain material sufficiency. The Liberals, whether paleo- or neo-, claim to be devoted to this freedom. However, it turns out that their definition of freedom is purely formal, a mere indeterminacy in the will. But this is not Christian freedom, which is not merely formal, but material (as any proper definition is). Christian freedom is the liberty to explore the truth in goodness and beauty. Hence, anything that departs from the truth departs from liberty and leads to slavery.

    For example, the decision to take your cocaine in powdered or crystal form is a free choice. But it is not a choice of freedom, since either choice leads to slavery. With an inadequate understanding of freedom, there will be an inadequate understanding of free markets. Markets, no less than morals, are made by rules, rules made by the community, in one way or another. Now, while one may–and ought to–reject the totalizing nation-state as the maker of the rules, it would be a mistake to therefore reject any rule-making authority for the community, and reduce everything to individual choice alone. Such a reductionism is, in fact, the essence of liberalism.

    And that explains what has happened to American “Conservatism.” It ends as liberalism because it begins as liberalism. Reagan expresses his admiration for Roosevelt (not without reason) and Hayek writes “Why I am not a Conservative.” Many people express their suprise at the fate of conservatism, but there should be no surprise. Things usually end where they begin, and a conservatism that seeks only to “conserve” Enlightenment rationalism will come to the same end as that rationalism. Why should anybody be surprised?

    Both Hayek and Marx promised a “withering away of the state.” Both ideologies have been thoroughly tested, and both ended up with gargantuan states. The defenders of both offer the same defense: “Reagan (or Lenin) and Bush (or Stalin) didn’t do it right!” Maybe. Or maybe they did it as rightly as these ideologies can be done. But in any case, they lead to the same place.

    Belloc predicted this a long time ago in The Servile State. He predicted that the growing power of the corporations would lead to growing power of the state, a state increasingly beholding to the corporations, with a resulting servility for the mass of men. Each and every day, Belloc appears more and more to be the true prophet.

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