Economics and Morality Revisited

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In my podcast with Lew yesterday about The Church and the Market, Lew reminded me of my architecture analogy: while papal authority might extend to general principles, such as the need to build structures that call to mind the transcendent, that will remain standing for a long time, etc., it does not extend to the practical implementation of those principles — how to build a roof, what materials to use, how many supporting columns are necessary. That requires a knowledge of the requisite science.

Likewise for economics. It’s one thing to say you want the family to prosper. It’s another thing to say that living-wage legislation is just the thing to do it. Now I suppose you could say, “Living-wage legislation will indeed lead to the unemployment of some people, but justice demands that we implement it anyway.” That would be one thing. But that’s not what we get. We get the implicit assumption that wise legislation is the only thing standing between an undesirable situation and a desirable one. No trade-off is acknowledged, because in the faulty theory that informs these policy recommendations, none exists.

I received the reply I sometimes get to this argument: economics is a “moral science,” while architecture isn’t. Is nuclear physics a “moral science,” too, given that it involves the power to kill people? My point is that the cause-and-effect relationships that govern nuclear physics — in other words, the science itself — can be separated analytically from related moral questions.

Plus, that’s not even really my point. What I am criticizing becomes easier to see in the context of nuclear physics. Suppose I say, “The devastation of a nuclear conflict would be physically overwhelming and morally catastrophic. Therefore, for the sake of the common good, civil government should ensure that uncontrolled nuclear chain reactions not produce a release of energy.” The moral statement in sentence one is (thankfully) separable from the scientific implications of sentence two.

The analogy isn’t perfect, since forcing wage rates up by law will lead to higher wages for certain individuals, while a nuclear chain reaction cannot be lectured to at all. But if the claim is that all workers can be made better off by forcible increases in wage rates — which is the clear contention of the living-wage argument we see in episcopal statements — then it is no more sensible than lecturing to atoms.

One reply I received said that my roof and architecture analogy wasn’t a good one. Building a roof has no moral dimension, but “economic policy” is replete with moral concerns. Fair enough. But that’s not my argument. Economic policy does indeed have a moral dimension, as my critic points out. But economic theory does not. (If it does, then give me a specific example.) The policy regarding whether to use a nuclear weapon has a moral dimension. Nuclear physics per se does not. It is at the level of theory that I am speaking, since the policy recommendations in the encyclicals and in the statements of bishops’ conferences make implicit assumptions about economic theory. But since economic theory — which, I repeat, has no moral dimension — is not the legitimate province of Church authority, then the conclusions that follow from a churchman’s view of economic theory are only as strong as the strength of the theory.

Now if your policy recommendations are based in faulty theory, they will not have the desired consequences. There shouldn’t be any real controversy over this commonsensical conclusion. In fact, Gerard Casey, an orthodox Catholic who heads the philosophy department at University College, Dublin, says I don’t go far enough!

10:28 am on August 20, 2008