6.30.2008

Cavanaugh and the free market

William Cavanaugh is a professor of theology at St. Thomas. Apparently his writing on political and economic issues has made him popular in "radical" Catholic circles. Considering myself something of a radical, and also learning that Prof. Cavanaugh is rather well respected, I thought I should become acquainted with his thought. I have heard a good introduction is his book, Being Consumed: Economics and Christian Desire.

Perhaps contrary to your intuition is the idea that the study of God could have anything to say about the study of economy. And in some important way, you'd be right. In the first place, theology does not say anything about human economy; theology studies God. But in the Christian tradition, the revelation of God to Man was also the revelation of Man to Man. This is because Christians believe Jesus was both fully Man and fully God. As such, the study of God is also the study of man. And so in learning the truth about man, we learn things that we necessarily need to incorporate into our economic thinking. That is, if our economics is going to have any basis in reality, any basis in the nature of man.

Theology can teach us about anthropology, and anthropology is, or ought be, the basis of economics. And so Cavanaugh's book teaches us about human anthropology. His first major argument is that democratic capitalism explicitly condemns the notion of a public telos, a public purpose, and that this is a bad thing:
All of this indicates that there are true desires and false desires, and we need a telos to tell the difference between them. The second corollary of free-market economics is that freedom is maximized in the absence of a common telos. A market is free if individuals are free to choose their own ends based on nothing more than their own wants. (pp.10)
I am following along with the professor until he states his "second corollary" of free-market economics, which seems to me to be largely of his own convenient invention. He says that free-market economists believe 'freedom is maximized' in the absence of a common telos. Is that quite right? Yes, but it's not the whole story, or the most important part of the story. If he is going to criticize the free-market economists, he ought to fairly represent their argument. They do not love freedom qua freedom. They value freedom because they believe that freedom is the key to the maximization of prosperity. They also believe that the free market best respects the the nature of man. So the point of the free economy is not just that people are free; it is that this freedom is most conducive to human flourishing and creating wealth - i.e., moving people out of poverty. So I think Prof. Cavanaugh, at least in these first few chapters, is misreading the free-market economists and making a straw-man argument. He is correct about the necessity of a telos - nothing can or ought to happen in a moral or spiritual vacuum, economic choices included. (Whether it ought or can be common to all members of a society is another question.) But he is not fairly representing their whole argument, he is reducing it to love of freedom for freedom's sake.

6 comments:

Ol' Blue said...

Oh! this is getting to the heart of the matter. I personally like both of Prof. Cavanaugh's corollaries. I have had this "freedom qua freedom" discussion with some of the free-market economists in my libertarian circle down here, and there appears to be a split. Many do value economic freedom because it is most conducive to the maximization of prosperity, or at least that is the particular value of freedom they emphasize. To me, this seems like a base and materialistic reduction of freedom. Freedom is greater than that! Like P.J. O'Rourke says in his column that Dave posted on, economics is but a branch of moral philosophy. I know a number of free-market economists at George Mason University, a hub of Austrian Economics (i.e. the law and economics types, or economics as a branch of moral philosophy types) who are also freedom qua freedom supporters. I'm not familiar with the book, but I believe that the free-market because of prosperity is the straw-man, aka weaker, argument.
Even in the free-market, we don't choose to maximize prosperity, if we mean prosperity in material terms. At some point we all draw the line and stop working, and read a book or go to the beach instead. Think of Jefferson's first inaugural: "a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities." That last phrase is a real kicker for me.

Zachary said...

Hmm - great comment . You've forced me to amend my remarks a bit...

I agree with you - it's wrong to look only at the consequences of an economic system.

You also must look about what it says about the nature of man - whether it is in accord with nature.

So perhaps free-market economists do not love freedom simply because they value the autonomy of the will in itself, but because respecting man's free will is more in accord with nature, with reality.

And therefore there is no contradiction between those two groups of people.

You can support the free market because it produces the best consequences, the most prosperity, and also because it best respects nature. And it's seems reasonable to think the latter is a result of the former.

Zachary said...

Does that make any sense?

Darwin said...

The question I found myself asking reading your quote from Cavanaugh about free market economics and telos is that he seems to be conflating the acknowledgement that there is telos with a necessity of enforcing that telos.

Now obviously, not being a total libertarian, I think that there is need for enforcement of a certain degree of natural moral law. So while, within certain limits, I approve of free markets -- I don't approve of a legal free market for prostitution or for hard drugs. So I do think that our knowledge of the telos of human life and civil life should result in _some_ lack of "freedom".

However, it seems to me that what Cavanaugh may be missing is that often allowing for freedom does not represent a valuing of freedom simply for its own sake, but rather an acknowledgement that any regulating authority might well not have as clear an understanding of what is right in every given situation as the people actually involved.

I seem to recal that Hayak had an essay where he argued that free markets were important essentially because freedom was the best way of allowing the maximum number of people with the maximum knowledge of the details of each given situation make the relevant decisions.

So for instance, on the point that humans are not simply profit maximizers in the monetary sense -- we know that we need to stop at a certain point an pursue recreational or intellectual activities rather than simply making money all the time -- there are those who advocate having mandated maximum work hours, and others who advocate leaving this as a "free market" area. However, that doesn't necessarily mean that those against regulation think that everyone should always work more -- merely that the individual people involved in any given situation are the best ones to decide how long to work.

Zachary said...

Darwin thanks for the great comment

"The question I found myself asking reading your quote from Cavanaugh about free market economics and telos is that he seems to be conflating the acknowledgement that there is telos with a necessity of enforcing that telos."

Excellent insight...A further question I have along these lines is how he suggests filling the 'empty space' left by the absence of a public telos - in other words, is he going to argue that we should be enforcing Christian theology and morality as national purpose and public policy?

I'd bet that's where he throws out the idea of the nation state... I'll try to dig up a better quote later on in the book that provides a greater picture of his overall argument.

Ol' Blue said...

Right on Darwin. I think Hayek's essay you referred to is called "The Use of Knowledge in Society." It's a great one.