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Fabric Merchants and Fairness

March 1, 2017 | (1,803 words)

At this late date no reasonable person disputes the broad outline of the positive effects of free enterprise, expressed by Arthur Brooks in his essay “Confessions of a Catholic Convert to Capitalism,” found in the February 20, 2017 edition of America magazine. As we all know, things started to improve for the down-trodden masses when the fabric merchants of Florence, Italy, invented double-entry bookkeeping in the 14th Century. After surviving an awkward few hundred years of mercantilism, during which European monarchs sought their own aggrandizement, Scotland’s Adam Smith kicked off the era of free trade with his 1776 masterwork, The Wealth of Nations.

Since the historical record is beyond dispute, one wonders why conservative-libertarian think tank scribes such as Mr. Brooks, esteemed President of The American Enterprise institute, continue to trumpet it as if it were breaking news. No one questions the material improvements free trade and free market capitalism has wrought. So the only thing worth discussing is the excess and abuse that has been allowed to flourish alongside the many-splendored benefits we are routinely reminded of. The excess and abuse has been with us since the very beginning, in 14th Century Florence.

It is interesting to note the way in which Mr. Brooks pits his collegiate and post-graduate education in Enlightenment-libertarian economic theories of the Austrian and Chicago schools against his youthful “moderately hostile disposition” towards capitalism, and the “common objection” to capitalism expressed by his Catholic friends. The point being that at no time has Mr. Brooks apparently seen fit to avail himself of the doctrinal wealth that is Catholic social teaching as it pertains specifically to economics. Not exactly what one would describe as a fair fight, now is it?

Like many academics, Arthur Brooks is enamored of data regarding household consumption, and offers it as a positive indicator of human flourishing. Since even poor people now have an air conditioner and a color television, all is right in the heartland, the economists confidently assert. But to his credit, unlike many in the academy, Brooks does acknowledge that such strictly materialistic measurements do not tell the whole story. He bravely brings G.K. Chesterton into the discussion, and cites Chesterton’s famous quote from Three Foes of the Family: “It cannot be too often repeated that what has destroyed the family in the modern world was Capitalism.” But in the final analysis Mr. Brooks opts to disagree with Chesterton, on the grounds that “systems are fundamentally amoral. The forces that make up the free enterprise system are fundamentally content-neutral… At root, then, what matters is the morality of those who participate in the system.”

On this point we wholeheartedly agree with Mr. Brooks. It is indeed the morality of those who participate in the system that makes all the difference. But we should draw attention to how his premise is at odds with conventional wisdom. Well-known conservative-libertarian think tank spokespeople, such as the recently departed Michael Novak, and the still-alive-and-kicking Father Robert Sirico, are of the opinion the free market is, in fact, inherently moral.

Our objection to Arthur Brooks’ compelling essay centers around two wide-ranging ideas that he expounds upon at length. He credits free enterprise for eliminating starvation-level poverty for billions of people, highlighting the dramatic strides made by the poorest of the poor around the globe. He informs us the percentage of the world’s population that survives on one dollar or less per day shrunk by 80 percent since 1970. Impressive statistics, to be sure, but aren’t these what might be accurately described as first-stage developmental gains?

In other words, the question that deserves further scrutiny is how well and how easily such peoples are able to continue their upward ascent, into a state of living any of us would describe as remotely acceptable. Not just materially speaking, but culturally and socially, as well. No matter how much window dressing one is inclined to apply to the historical record, from the 14th century onward the secular implementation of “content-neutral” capitalism has required a disenfranchised population that can be readily manipulated, for the direct financial benefit of those who own or manage the means of production. This fact hasn’t changed. As time passes, we just go further afield to find a group we can take advantage of. That each destitute assemblage in turn accrues some meager benefit that lifts them off the floor of human existence hardly qualifies as a ringing endorsement of the present system as it is allowed to operate.

The second wide-ranging idea to which one might reasonably object in Mr. Brooks’ detailed presentation is the familiar straw man argument he feels compelled to make, namely that socialism is an unacceptable alternative to what we have now. Yes, he admits, capitalism and free enterprise as they are currently practiced may be flawed, but socialism is deplorable. Would that conservative-libertarian Catholics stop wasting their valuable time entertaining such an empty justification of the economic status quo. We all know from Pius XI and his encyclical Quadrissimo Anno (1931), that “No one can be at the same time a sincere Catholic and a true socialist.” So please, enough already. No serious Catholic is arguing in favor of socialism. Not even Pope Francis. The choice is not between “market forces” and “more state control,” as Brooks and many others would have us believe. The choice is between our present “content-neutral” economic free-for-all, and a system that incorporates Christian principles that were set aside long ago. Here in the U.S., the Christian principles that should animate our economic behavior have been completely banished from the marketplace, through the separation of church and state that even docile Catholics accept as inviolable.

Again, our position would appear to broadly align with that of Arthur Brooks on this score. We don’t need an entirely new system of economic exchange. We just need to demonstrate a measure of moral restraint, based on the recognition of an objective moral order, while participating in the economic system we already have.

When all is said and done, Mr. Brooks is defending a theoretical construct that no amount of physical evidence to the contrary can make a dent in. He tells us: “The problem is not money; it is attachment to money. Why else would God himself enter the world in poverty? More precisely for the topic at hand, the big problem is not free enterprise per se. It is the choice by many men and women to prioritize the struggle for riches ahead of higher goods such as faith, family, and friendships.”

“Still,” Brooks continues, “doesn’t the free enterprise system’s relentless efficiency at creating wealth make it a special offender at incentivizing selfishness and avarice? Even if humans tend naturally toward greed until we are corrected, doesn’t capitalism just slam our feet down on the accelerator? In a word, no… Greed was a deadly sin long before the invention of capitalism. Free enterprise – which has brought so much good to so many – is not the culprit.”

My goodness, is this really the most persuasive argument Arthur Brooks can muster? All would certainly agree with his well-worn refrain: the deadly sin of greed has been with us since the beginning. Fallen humans have utilized whatever system of exchange they have historically found at their disposal to improve their own circumstances, without regard for the well-being of others. This innate tendency to prioritize riches ahead of higher goods such as faith, family, and friendship is bred into our fallen nature, and is obviously very much alive and well in our own time. For Mr. Brooks to defend the present-day delivery system of selfishness and avarice and claim it deserves no blame rings a bit hollow, to say the least. He does, after all, lead a research foundation blessed with lavish financial resources, supplied by wealthy private donors, whose sole purpose is to advocate on behalf of the existing economic status quo. Given his professional affiliation, Brooks hardly qualifies as a dispassionate, objective observer.

This correspondent would also beg to differ with Mr. Brooks over whether our present version of capitalism is inclined to “slam our feet down on the accelerator” toward a propensity for greed. He says “no.” Based on our own forty years of experiencing economics at street level, we would have to emphatically disagree with Arthur Brooks, the French horn player-turned-statistician, and answer that question in the affirmative.

In shifting between domestic and international concerns, Mr. Brooks champions “five interrelated forces” that are reshaping the worldwide economy for the better: globalization, free trade, property rights, the rule of law, and the culture of entrepreneurship. And what about here at home? Brooks sounds eminently reasonable and even-handed when he states: “We must conduct an honest accounting of market failures, to be sure – but we should rely whenever possible on market concepts of competition and choice…”

Such familiar bromides about competition and entrepreneurship completely ignore the radical change in economic theory, and the dramatic rollback of anti-trust legislation, both of which were implemented in the 1980s. These changes in business school curriculum and federal policy ushered in a new wave of mergers and acquisitions that seek to eliminate competition and stifle entrepreneurship at every turn. Yet certain research foundations go about the business of promoting these favored concepts as if nothing has changed in the slightest. The eloquent subterfuge makes their esteemed spokespeople little more than really well-dressed carnival barkers at this point.

And let’s not forget the “consumer choice” rationale. The official justification for the rapacious behavior unleased in the 1980s is that prices to consumers will be lowered, thereby expanding choice. But now, some thirty-odd years down the road, we see the excess profits enjoyed by the owner-investor class have come, as they always do, in direct proportion to the lowered/stagnating wages earned by the workers who provide the service or make the product.

If our ultimate objective is the Catholic ideal of a just society based on equitable distribution, it should be painfully obvious by now that “expanding consumer choice” is not a reliable guideline for economic policy. And in the interest of clarity, let’s note how conservative-libertarian criticism of the general public’s concern over “inequality” is really nothing more than a diversionary tactic. Being more precise with our language would help clear things up, allowing us to dispense with distraction, and focus on what is really wrong. Equitable distribution – not equality – is all that human dignity and justice demand. No sincere Catholic is worrying about or arguing for “equal outcomes” in the economic realm. One hopes The American Enterprise Institute, of which Arthur Brooks is the distinguished President, will one day choose to view the economic question through a Catholic lens, when it finally gets around to rendering its “honest accounting of market failures.”

Robert J. Cavanaugh, Jr.
March 1, 2017

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