WEBVTT NOTE The Trouble with Catholic Social Teaching 1 00:00:00.000 --> 00:00:04.000 Lew Church was the archetypal American entrepreneur. 2 00:00:04.000 --> 00:00:14.000 He prospered in the free enterprise system through hard work, risk taking, innovation, and making use of his talents for the benefit of others and himself. 3 00:00:14.000 --> 00:00:23.000 Mr. Church remained true to the values of freedom, a market economy, limited government, and the private property order. 4 00:00:23.000 --> 00:00:29.000 Through the Lew Church Educational Foundation, he hoped to preserve and perpetuate this system. 5 00:00:29.000 --> 00:00:36.000 in which those who followed after him would have the same opportunity to prosper and enjoy liberty that he had. 6 00:00:36.000 --> 00:00:42.000 We are very pleased to have Dr. Thomas Woods deliver this year's church memorial lecture. 7 00:00:42.000 --> 00:00:51.000 Dr. Woods holds his undergraduate degree in history from Harvard and his MA, MPhil and PhD from Columbia University. 8 00:00:51.000 --> 00:00:58.000 He is the author of The Church Confronts Modernity, Catholic Intellectuals in the Progressive Era, 9 00:00:58.000 --> 00:01:07.000 by Clara, forthcoming in May from Columbia University Press, and the editor of two volumes in Regnery's conservative leadership series. 10 00:01:07.000 --> 00:01:14.000 His manuscript on Catholic social teaching from an Austrian perspective is presently under review. 11 00:01:14.000 --> 00:01:23.000 Dr. Woods is also associate editor of Latin Mass Magazine and author of numerous articles appearing in Investor's Business Daily, 12 00:01:23.000 --> 00:01:31.000 The Christian Science Monitor, The New Oxford Review, and dozens of other scholarly and popular periodicals. 13 00:01:31.000 --> 00:01:39.000 Dr. Woods is currently Assistant Professor of History at Suffolk Community College of the State University of New York in Brentwood, New York. 14 00:01:39.000 --> 00:01:45.000 The topic of his lecture is The Trouble with Catholic Social Teaching. 15 00:01:45.000 --> 00:01:47.000 Dr. Woods. 16 00:01:52.000 --> 00:02:01.000 I'm going to try to put my watch here. I could just go by the expressions on Lew's face, you know, angrier and angrier after 9.15, but I think I'll use the watch. 17 00:02:04.000 --> 00:02:10.000 I'm very honored to have been invited to deliver the Lew Church Lecture, and in particular to be addressing such a distinguished group of scholars. 18 00:02:10.000 --> 00:02:16.000 I'm always happy to be at the Mises Institute in any event and I'm always made to feel very welcome. 19 00:02:16.000 --> 00:02:25.000 I do feel a little funny today being apparently the only person in the room who hasn't co-authored an article with Walter Block. 20 00:02:25.000 --> 00:02:37.000 But given his level of productivity, I'm hopeful we can bang something out this afternoon. 21 00:02:37.000 --> 00:02:48.000 Well, unfortunately, I don't have the luxury that Dr. Ebeling had yesterday since I have but 45 minutes, 22 00:02:48.000 --> 00:02:54.000 so we'll save my jokes for later. Since I learned them from David Gordon, we're probably just as well. 23 00:02:54.000 --> 00:03:08.000 I delivered a paper at the Austrian Scholars Conference two years ago called Catholic Social Teaching and Economic Law and Unresolved Tension. 24 00:03:08.000 --> 00:03:13.000 I was gratified by the amount of discussion it provoked at the time and in the months that followed. 25 00:03:13.000 --> 00:03:19.000 And in a paper delivered later that year at another conference, Professor Richard Doherty of the University of Dallas, 26 00:03:19.000 --> 00:03:27.000 The University of Dallas, who was not all together persuaded by what I had to say, nevertheless described my position very well, thus, Doherty. 27 00:03:27.000 --> 00:03:36.000 The approach found in many of the encyclicals has led the Church to attempt to impose on the economic order principles external to the science of economics. 28 00:03:36.000 --> 00:03:45.000 And thus, it promotes policies that are bound to fail and that will bring disrepute to the Church, leading people to reject its teachings as unserious. 29 00:03:45.000 --> 00:03:52.000 The principles of economic activity are orderly and unchanging and attempts to impose particular policies from outside of that system 30 00:03:52.000 --> 00:03:57.000 reflect a lack of comprehension or recognition of the reality of the economic order. 31 00:03:57.000 --> 00:04:02.000 Since that's better than I could have said it, I just reprinted Doherty's own comments. 32 00:04:02.000 --> 00:04:08.000 Shortly after delivering the paper, I began receiving correspondence urging me to expand the argument into a full-length book. 33 00:04:08.000 --> 00:04:15.000 I'm happy to report that project is now complete, as Jeff mentioned, and the manuscript is just now under review as I speak to you. 34 00:04:15.000 --> 00:04:22.000 The points I made in that paper have been a source of controversy in some Catholic circles, even as they were happily welcomed in others. 35 00:04:22.000 --> 00:04:29.000 I mean, no death threats or anything, but purgatory threats. I'll be paying this off for a while. 36 00:04:29.000 --> 00:04:59.000 So, in my remarks today, I would like to do three things. First, I shall briefly dispense with the implicit and in times not so implicit claim heard in certain quarters that someone who takes the economic views I've adopted involves himself in dissent from church teaching. As I show it at much greater length in my book, the nature of economics as a positive science possessing an internal coherence of its own renders this claim perfectly nonsensical. 37 00:04:59.000 --> 00:05:16.000 Second, I wish to speak at some length about a single example, that of labor and wage rates that demonstrates the importance of sound economic analysis to proper moral judgment and which provides a passing glimpse at some of the difficulties and frustrations with which the Catholic Austrian has at times had to reckon. 38 00:05:16.000 --> 00:05:22.000 Finally, I wish to say a few words about the philosophical attractiveness of Austrian economics from a Catholic point of view. 39 00:05:22.000 --> 00:05:29.000 My critics notwithstanding, the primary claim I'm making is not that there is no moral dimension to the economic order. 40 00:05:29.000 --> 00:05:37.000 Fraud, theft and malicious failure to meet contractual obligations are crimes that amply merit the condemnation of the moral theologian. 41 00:05:37.000 --> 00:05:44.000 Moreover, one can raise no objection when a churchman expresses his concern regarding the material well-being of families 42 00:05:44.000 --> 00:05:48.000 and suggests that morally illicit methods of improving it should be pursued. 43 00:05:48.000 --> 00:05:54.000 My point is simply this, as soon as he recommends the best or most effective way to carry out that intention, 44 00:05:54.000 --> 00:06:00.000 via minimum wages, various mandated benefits, heavy taxation on the wealthy or whatever, 45 00:06:00.000 --> 00:06:06.000 he is entering a field in which his conclusions must be evaluated not on the basis of his authority as a churchman, 46 00:06:06.000 --> 00:06:10.000 but instead on the rigor of the argument he makes on their behalf. 47 00:06:10.000 --> 00:06:16.000 If a churchman possesses some special insight into economics merely by virtue of his exalted authority, 48 00:06:16.000 --> 00:06:18.000 Why not into other disciplines as well? 49 00:06:18.000 --> 00:06:22.000 Why should this special insight not extend, say, to architecture? 50 00:06:22.000 --> 00:06:24.000 As soon as we thus extend it, however, 51 00:06:24.000 --> 00:06:29.000 we see the logical problem with applying moral analysis to a value-neutral scientific discipline. 52 00:06:29.000 --> 00:06:32.000 It is certainly quite acceptable to say, for example, 53 00:06:32.000 --> 00:06:38.000 that churches should be constructed in such a way as to give to God the proper honor that is due to Him. 54 00:06:38.000 --> 00:06:41.000 But it is quite another to employ a moralistic idiom 55 00:06:41.000 --> 00:06:45.000 to pronounce upon how many supporting columns are necessary to keep them standing 56 00:06:45.000 --> 00:06:50.000 or what kind of building materials are the most desirable from the point of view of structural soundness. 57 00:06:50.000 --> 00:06:55.000 These questions are obviously well outside the legitimate province of the moral theologian. 58 00:06:55.000 --> 00:07:00.000 Issues surrounding the well-being of the working man can help illustrate the point. 59 00:07:00.000 --> 00:07:07.000 By the way, I'm the product of false consciousness since my father was a forklift operator in a food warehouse for 15 years, 60 00:07:07.000 --> 00:07:10.000 so I'm not supposed to be holding any of these views according to Marx. 61 00:07:10.000 --> 00:07:13.000 I'm deceived, of course. 62 00:07:13.000 --> 00:07:43.000 Although in his encyclical Longinqua Oceani in 1895, Pope Leo XIII appeared to endorse only voluntary unionism, rather than the coercive variety with which Western nations are intimately familiar, individual bishops, theologians and lay defenders of the Church's social teaching often fail to make such a distinction, taking it for granted that a Catholic support for the interests of labor includes endorsing the various special privileges that labor unions presently enjoy under the law. In short, hardly anyone who claims to speak for the Church 63 00:07:43.000 --> 00:07:48.040 Church on Economic Matters calls for a completely free labor market today. 64 00:07:48.040 --> 00:07:52.320 But if I can show that coercive labor unionism must have the overall effect of impoverishing 65 00:07:52.320 --> 00:07:58.120 society more than in proportion to any so-called gains won by unionized labor, and that unionized 66 00:07:58.120 --> 00:08:02.800 labor itself would be better off in a society with a free labor market, I cannot be obliged 67 00:08:02.800 --> 00:08:06.740 in conscience to believe coercive labor unionism to be a good thing from the point of view 68 00:08:06.740 --> 00:08:09.080 of workers' economic well-being. 69 00:08:09.080 --> 00:08:13.120 We are dealing here with a matter of simple disagreement on a debatable point of fact, 70 00:08:13.120 --> 00:08:17.320 qualitatively different from the denial of the virgin birth, the immaculate conception, 71 00:08:17.320 --> 00:08:20.000 or the equality of the three persons of the Holy Trinity. 72 00:08:20.000 --> 00:08:25.680 However, there are plenty of commentators who cannot or will not make this kind of distinction. 73 00:08:25.680 --> 00:08:29.600 For example, Todd Whitmore, an associate professor of theology at the University of Notre Dame, 74 00:08:29.600 --> 00:08:36.360 you can already see, this is bad news, has raised the question of whether the free market 75 00:08:36.360 --> 00:08:41.560 positions adopted by author Michael Novak constitute formal dissent on Novak's part. 76 00:08:41.560 --> 00:08:46.240 Quote, I believe that they do, Whitmore concludes. 77 00:08:46.240 --> 00:08:49.880 What neither Whitmore nor any other commentator has taken the trouble to answer is how it 78 00:08:49.880 --> 00:08:55.480 makes sense to speak of dissent from teaching one believes to be based on factual error 79 00:08:55.480 --> 00:08:58.240 on a matter on which the church has been promised no divine protection. 80 00:08:58.240 --> 00:09:03.260 Paul's someone a sender who argued that in fact they made four, particularly since mathematics 81 00:09:03.260 --> 00:09:07.020 Economics is not a discipline into which the popes have been granted any special insight. 82 00:09:07.020 --> 00:09:10.740 The very notion of dissent is obviously inapplicable in such a case. 83 00:09:10.740 --> 00:09:15.220 And if economics is just as legitimate and internally coherent a discipline as mathematics 84 00:09:15.220 --> 00:09:20.520 or any other field of study, the same boundary should apply in this case as in those. 85 00:09:20.520 --> 00:09:24.300 This is precisely the nature of the critique offered by Novak and even more so by my own 86 00:09:24.300 --> 00:09:25.300 work. 87 00:09:25.300 --> 00:09:28.260 If anything, the problem with Novak's position is not that he's too pro-market but that he's 88 00:09:28.260 --> 00:09:31.340 too timid in his endorsement of the market. 89 00:09:31.340 --> 00:09:35.300 We're not dealing here with the pertinacious denial of a solemn dogma believed by the Church 90 00:09:35.300 --> 00:09:40.300 for 2,000 years that the conscience is absolutely bound to accept, but rather with a good faith 91 00:09:40.300 --> 00:09:45.420 effort on the part of loyal Catholics to amend certain economic positions which, though advanced 92 00:09:45.420 --> 00:09:50.140 in the name of helping the poor or rectifying alleged injustice, have had and indeed must 93 00:09:50.140 --> 00:09:52.660 have the opposite effect. 94 00:09:52.660 --> 00:09:56.500 Still there are those who would stifle healthy and vigorous discussion of economic issues 95 00:09:56.500 --> 00:09:58.260 in the name of authority. 96 00:09:58.260 --> 00:10:02.700 We need a mandatum, say Mark and Louise Zwick of the politically leftist Houston Catholic 97 00:10:02.700 --> 00:10:07.260 worker, to ensure that the economics taught in Catholic universities will reflect the 98 00:10:07.260 --> 00:10:12.760 social teaching of the church. Such a demand is both an embarrassment to the church and 99 00:10:12.760 --> 00:10:18.220 an outrageous offense against a legitimate sphere of academic freedom within the university. 100 00:10:18.220 --> 00:10:22.420 It also reveals a profound confusion regarding the very nature of economics and of the church's 101 00:10:22.420 --> 00:10:27.640 magisterium itself. As I've indicated, it can be shown on the basis of theoretical argument 102 00:10:27.640 --> 00:10:32.640 and of empirical evidence that coercive labor unionism makes some workers worse off. 103 00:10:32.640 --> 00:10:39.640 Richard Vetter and Lowell Galloway of Ohio University have also shown that labor taken collectively is much worse off than it would have been 104 00:10:39.640 --> 00:10:42.640 had a free labor market prevailed over the past half century. 105 00:10:42.640 --> 00:10:47.640 To be sure, that conclusion appears to contradict the implied conclusion of Catholic social teaching 106 00:10:47.640 --> 00:10:53.640 that labor unionism is a legitimate means for workers to advance their interests and one that Catholics should favor. 107 00:10:53.640 --> 00:11:00.640 What exactly would the Catholic University endorsed by the zwicks do with such information as professors Vedder and Galloway provide? 108 00:11:00.640 --> 00:11:04.640 Ignore it? Assume a priori that it must be false? 109 00:11:04.640 --> 00:11:08.640 Would I be fired for communicating such subversive information to my students? 110 00:11:08.640 --> 00:11:15.640 If so, would the zwicks, before firing me, at least do me the courtesy of explaining where my logic was mistaken? 111 00:11:15.640 --> 00:11:19.640 Or am I simply to assume that logic is not welcome in their so-called Catholic University 112 00:11:19.640 --> 00:11:25.240 University, since its conclusions are disappointing from the point of view of the social teaching. 113 00:11:25.240 --> 00:11:28.920 Those of us who belong to the Church and are persuaded by the claims of Austrian economics 114 00:11:28.920 --> 00:11:33.160 insist upon the legitimate liberty of opinion that is supposed to be permitted in matters 115 00:11:33.160 --> 00:11:38.080 that do not touch upon Catholic dogma and on which men of goodwill may disagree. 116 00:11:38.080 --> 00:11:44.040 St. Augustine is famously said to have remarked, in fide unitas, in dubiis libertas, in omnibus 117 00:11:44.040 --> 00:11:49.560 caritas, in faith unity, in doubtful matters liberty, in all things charity. 118 00:11:49.560 --> 00:11:54.220 Such liberty of opinion on economic matters is generally recognized in practice. 119 00:11:54.220 --> 00:11:58.860 No one is suggesting that the 16th century Spanish scholastics, who held a number of 120 00:11:58.860 --> 00:12:03.500 Proto-Austrian economic ideas, be declared heretics for that reason, though they certainly 121 00:12:03.500 --> 00:12:08.180 would be considered heretical had they denied an actual Catholic dogma, had they denied, 122 00:12:08.180 --> 00:12:12.460 for example, the Incarnation, the Trinity, the Two Natures and Christ, and so on. 123 00:12:12.460 --> 00:12:16.080 The Spanish scholastics remain profoundly admired by Catholics as the great intellects 124 00:12:16.080 --> 00:12:31.080 When in the early 20th century when senior John Ryan put forth his moral arguments for a family wage for a head of household, he was criticized by some in Catholic scholarly circles. 125 00:12:31.080 --> 00:12:44.080 The Catholic University Bulletin published a lengthy critique of Ryan in 1907, and as anyone familiar with that publication knows very well, its editors would never have published anything they believed to be in conflict with the tenets of the Catholic faith. 126 00:12:44.080 --> 00:13:04.080 That they nevertheless published critiques of Ryan reveals that they were able to make the elementary distinction between matters of Catholic dogma and matters which, by virtue of their reliance upon analysis borrowed from a secular discipline, are necessarily excluded from the infallibility that the Church claims in matters strictly pertaining to faith and morals. 127 00:13:04.080 --> 00:13:10.080 Pope Pius XI made a significant concession in his 1931 encyclical Quadragesimo Anno, 128 00:13:10.080 --> 00:13:16.080 which marked the 40th anniversary of the issuance of Pope Leo XIII's seminal document, Rerum Novarum. 129 00:13:16.080 --> 00:13:23.080 He acknowledged that limits must exist to what the moral theologian may legitimately say within the economic sphere, 130 00:13:23.080 --> 00:13:31.080 since, in the words of Pius XI, economics and moral science employs each its own principles in its own sphere. 131 00:13:31.080 --> 00:13:42.080 To be sure, the Pope then went on to deny his words that the economic and moral orders are so distinct from and alien to each other that the former depends in no way on the latter. 132 00:13:42.080 --> 00:13:57.080 But once it has been conceded that economics is a bona fide science possessing an internal coherence of its own, problems immediately arise for those who would claim that Catholic social teaching definitively settles all major economic matters in an absolute and binding way. 133 00:13:57.080 --> 00:14:14.080 As A.M.C. Waterman points out, this concession by Pius XI throws doubt on the authoritative character of that very substantial part of Catholic, or at least Papal, social teaching, which consists not of theological and ethical pronouncements, but of empirical judgments about the economy. 134 00:14:14.080 --> 00:14:21.080 This is the fundamental issue as yet unresolved in Catholic social teaching from the perspective of the supporter of the market. 135 00:14:21.080 --> 00:14:28.080 The moral argument advanced in favor of such teachings as the living wage is inextricably bound to certain economic preconceptions. 136 00:14:28.080 --> 00:14:35.080 But if those economic preconceptions are incorrect, what happens to the moral analysis whose conclusions are based on them? 137 00:14:35.080 --> 00:14:43.080 For instance, churchmen have wanted to increase the material well-being of workers, and some have not ruled out the imposition of a government-mandated living wage in order to do so. 138 00:14:43.080 --> 00:14:50.080 But what if such legislation increases unemployment? Should this not be a factor in our moral evaluation of living wage legislation? 139 00:14:50.080 --> 00:15:06.080 Furthermore, what if we can show that real wages are reliably increased across the board, not by intrusive legislation, but by an economic order that leaves capital accumulation unhampered, thereby increasing the productivity of labor? Facts like these must inform our judgments on such matters. 140 00:15:06.080 --> 00:15:15.080 This is the primary difficulty with some of what goes by the name of Catholic social teaching, and it is this, rather than any lack of loyalty to the teaching office of the Church, 141 00:15:15.080 --> 00:15:30.080 William Lucky, Chairman of the Department of Political Science and Economics at Christendom College, shares this concern and he writes, 142 00:15:30.080 --> 00:15:35.080 The fact that Catholic economic teaching put forth as unchanging and required of belief 143 00:15:35.080 --> 00:15:39.080 did not square with what Austrian economists know to be true 144 00:15:39.080 --> 00:15:44.080 has created an agonizing crisis of conscience for such economists. 145 00:15:44.080 --> 00:15:49.080 All these economists have tried to say is that if churchmen wish to weigh in on important economic questions, 146 00:15:49.080 --> 00:15:52.080 they cannot do so in a way that legitimately binds the conscience 147 00:15:52.080 --> 00:15:58.080 unless they pay very serious attention to what the secular discipline of economics has to say. 148 00:15:58.080 --> 00:16:07.080 In Rerum Navarum, 1891, Pope Leo XIII insisted that there was no inherent antagonism of interest between labor and capital. 149 00:16:07.080 --> 00:16:17.080 This point strikes at the heart of Marxism, of course, since that ideology posited a war of class against class as the normal and unavoidable condition of the market economy. 150 00:16:17.080 --> 00:16:21.080 The Pope may not have realized the full import of the point he was making, 151 00:16:21.080 --> 00:16:28.080 But the analysis that follows here may, I hope, vindicate his claim more decisively than he may have thought possible. 152 00:16:28.080 --> 00:16:36.080 What I want to show here in brief is that, in fact, the normal operation of the market tends toward an increase in the laborer's standard of living. 153 00:16:36.080 --> 00:16:41.080 So benevolent an institution is the market that no one's gain has to come at the expense of anyone else. 154 00:16:41.080 --> 00:16:43.080 Everyone can gain simultaneously. 155 00:16:43.080 --> 00:16:48.080 That being the case, it is this approach that Catholics should take when seeking to increase people's standard of living, 156 00:16:48.080 --> 00:16:51.520 of Living, not only because it is the only way that can improve everyone's 157 00:16:51.520 --> 00:16:55.840 economic well-being at once, but also because it does so in a way that sets up 158 00:16:55.840 --> 00:17:01.400 no artificial antagonism between labor and capital, as does all proposed 159 00:17:01.400 --> 00:17:05.060 legislation that would have increases in the workers well-being come at his 160 00:17:05.060 --> 00:17:11.120 employers coerced expense. In my opinion, one of the most important contributions 161 00:17:11.120 --> 00:17:16.040 of George Reisman's book Capitalism from 1996 is the author's Productivity 162 00:17:16.040 --> 00:17:25.040 The Theory of Wages, given my limited time this morning, I can only sketch Riesman's argument, though I do have considerably more justice in my forthcoming book. 163 00:17:25.040 --> 00:17:33.040 First, a proviso. In an economy with an expanding money supply, it is conceivable for everyone to earn more money at the same time, 164 00:17:33.040 --> 00:17:37.040 and for the prices of all goods to rise on a steady and regular basis. 165 00:17:37.040 --> 00:17:41.040 This, of course, is a description of the American economy for most of the 20th century. 166 00:17:41.040 --> 00:17:47.040 But these features of our inflationary economy obscure the actual process by which our living standards are increased, 167 00:17:47.040 --> 00:17:55.040 because they mislead us into thinking that the source of our increased prosperity is the greater quantity of dollars we tend to receive over time for our services. 168 00:17:55.040 --> 00:18:01.040 For the sake of conceptual clarity, therefore, we imagine in what follows an economy with an unchanging quantity of money. 169 00:18:01.040 --> 00:18:06.040 The key to the process whereby the unhampered market increases the average standard of living 170 00:18:06.040 --> 00:18:10.320 involves business investment in capital goods that increase the productivity of labor, 171 00:18:10.320 --> 00:18:13.960 that is the amount of output that each worker is capable of producing. 172 00:18:13.960 --> 00:18:18.200 A forklift, from my own experience, makes it possible 173 00:18:18.200 --> 00:18:21.880 for a worker to move and stack far more pallets than before 174 00:18:21.880 --> 00:18:25.280 and to reach heights that would have been impossible with his bare hands. 175 00:18:25.280 --> 00:18:29.840 Other kinds of machinery can multiply the efficiency of a single worker many times over, 176 00:18:29.840 --> 00:18:32.400 sometimes even by orders of magnitude. 177 00:18:32.400 --> 00:18:35.400 The amount of goods the economy is capable of producing thus rises, 178 00:18:35.400 --> 00:18:40.000 at times even explodes. This is how wealth is created. As a result of such 179 00:18:40.000 --> 00:18:43.560 capital investment firms can now produce many many times more goods than before 180 00:18:43.560 --> 00:18:47.900 very often and at considerably lower cost. Thanks to the pressures of market 181 00:18:47.900 --> 00:18:52.180 competition firms pass on these cost cuts to consumers in the form of lower 182 00:18:52.180 --> 00:18:56.840 prices, better quality merchandise or a combination of both. The ordinary person's 183 00:18:56.840 --> 00:19:00.060 standard of living increases therefore not because government takes from the 184 00:19:00.060 --> 00:19:04.520 rich to give to him, that kind of simple theft would only undermine this process, 185 00:19:04.520 --> 00:19:29.520 His standard of living increases because on the unhampered market, business firms are in a position to invest in machinery that makes it possible for more and more goods to be produced with fewer and fewer hands, thereby increasing the overall amount of material goods available and rendering them less and less expensive. 186 00:19:29.520 --> 00:19:38.520 As Riesman explains, it is the productivity of labor that determines the supply of consumers' goods relative to the supply of labor and thus the prices of consumers' goods relative to wage rates. 187 00:19:38.520 --> 00:19:47.520 Incidentally, the fact that this process tends to increase all real incomes and not just wages, in no way minimizes the fact that it does contribute to an increase in real wages. 188 00:19:47.520 --> 00:19:51.520 It should be unnecessary to point out that this does not mean we will run out of jobs. 189 00:19:51.520 --> 00:19:56.520 As long as human wants remain even partially unfulfilled, there will never be a shortage of jobs. 190 00:19:56.520 --> 00:20:07.520 In some fields, such as agriculture, the increase in output made possible by productivity gains will not be met by a proportionate increase in consumption, and will therefore result in fewer workers employed. 191 00:20:07.520 --> 00:20:15.520 But this released labor is now available to produce other goods that we could not have had before, since it had been tied up in agriculture. Again, the result is greater wealth. 192 00:20:15.520 --> 00:20:25.520 In other fields, such as automobile manufacturing, productivity increases will make possible a mass market in a product that had once been a mere luxury, and will therefore attract more employment. 193 00:20:25.520 --> 00:20:29.520 In both cases, the great mass of consumers are enormously benefited. 194 00:20:29.520 --> 00:20:35.520 To say the least, this is not the description of events that we find either in the typical history text 195 00:20:35.520 --> 00:20:38.520 or unfortunately in the statements of bishops' conferences. 196 00:20:38.520 --> 00:20:43.520 Instead, we hear that massive redistribution of wealth from rich to poor was and is morally necessary 197 00:20:43.520 --> 00:20:47.520 and economically indispensable in order to improve the lot of the least wealthy. 198 00:20:47.520 --> 00:20:52.520 But that kind of policy would have done absolutely nothing to improve the standard of living of workers 199 00:20:52.520 --> 00:20:56.320 of Living of workers who lived, for example, during the early industrial revolution. 200 00:20:56.320 --> 00:20:59.320 And I have to say, I like this line from Reisman. 201 00:20:59.320 --> 00:21:03.960 If one person in a thousand, say, is a wealthy capitalist and eats twice as much and has 202 00:21:03.960 --> 00:21:08.800 twenty times the clothing and furniture as an average person, hardly any noticeable improvement 203 00:21:08.800 --> 00:21:13.220 for the average person could come from dividing the capitalist's greater than average consumption 204 00:21:13.220 --> 00:21:16.760 by 999 and redistributing it. 205 00:21:16.760 --> 00:21:21.760 At best, therefore, such wealth redistribution, back to me, would have been useless in eradicating 206 00:21:21.760 --> 00:21:47.760 The Salutary Process by which the free market leads to an ever higher standard of living occurs without having to threaten violence against anyone or to confiscate anyone's wealth by force. 207 00:21:47.760 --> 00:21:53.440 It certainly occurs very much in spite of destructive and ill-considered campaigns for a living wage 208 00:21:53.440 --> 00:21:56.720 carried out all too often in the name of Catholic social teaching, 209 00:21:56.720 --> 00:21:59.440 which utterly fail to understand how this process occurs 210 00:21:59.440 --> 00:22:03.280 and which only make it more expensive to hire people in the first place. 211 00:22:03.280 --> 00:22:08.480 Pope Leo XIII's point that there is no necessary antagonism between labor and capital 212 00:22:08.480 --> 00:22:13.920 could enjoy no greater and happier vindication than this wonderful mutually beneficial process. 213 00:22:13.920 --> 00:22:16.720 Labor and capital alike should want the same thing. 214 00:22:16.720 --> 00:22:20.720 an economic environment with as little taxation as possible, even none at all, 215 00:22:20.720 --> 00:22:24.720 and an environment in which business investment and expansion are unhampered. 216 00:22:24.720 --> 00:22:29.720 How could this conclusion not be central to sound and sensible moral reasoning? 217 00:22:29.720 --> 00:22:34.720 This kind of analysis dramatically simplifies the process of making moral and economic sense 218 00:22:34.720 --> 00:22:38.720 of such subsidiary issues as working hours and working conditions. 219 00:22:38.720 --> 00:22:42.720 Didn't workers in the past have to work very long hours? Certainly. 220 00:22:42.720 --> 00:22:47.720 There's no doubt that by today's standards, people in the 19th century did indeed work an exhausting schedule. 221 00:22:47.720 --> 00:22:57.720 But again, when output per worker is miserably low, then a supply of consumer goods that most people consider adequate requires people to work correspondingly long hours to produce them all. 222 00:22:57.720 --> 00:23:03.720 If everybody worked 40-hour weeks and you had no machines, this would condemn them to starvation. 223 00:23:03.720 --> 00:23:14.720 That and not the wickedness of big business, as the typical textbook relates the matter with dreary predictability, accounts for the low standard of living and long hours of work that existed in the past. 224 00:23:14.720 --> 00:23:23.720 As the productivity of labor increases and with it the level of real wages, people can begin to opt for additional leisure. 225 00:23:23.720 --> 00:23:29.720 I'm thinking of myself. I would always opt for additional labor, as my wife could tell you. 226 00:23:29.720 --> 00:23:44.720 Rather than continue to work the long hours of the past, without the need for any legislation, whatever, a situation will eventually arise in which employers find offering correspondingly fewer hours to be in their own economic interest and will offer them without the need for government coercion. 227 00:23:44.720 --> 00:23:58.720 If someone who once worked 80 hours per week now wishes to work only 60 and is willing to accept a wage less than three-fourths that of his previous wage as a premium on the leisure he will now enjoy, it makes perfect sense for his employer to offer these terms. 228 00:23:58.720 --> 00:24:03.520 To the extent that maximum hours legislation corresponded with people's desire to work fewer hours, 229 00:24:03.520 --> 00:24:08.720 it was superfluous since such an outcome would have come about by means of the process just described. 230 00:24:08.720 --> 00:24:15.920 But to the extent that such legislation was economically premature, forcing fewer hours on workers who needed the wages of their longer hours 231 00:24:15.920 --> 00:24:18.920 in order to maintain what they considered an adequate standard of living, 232 00:24:18.920 --> 00:24:21.720 it harmed the very people who was allegedly intended to help. 233 00:24:21.720 --> 00:24:27.320 By the way, I think I win the prize and I think I'm the one millionth person to say in libertarian circles 234 00:24:27.320 --> 00:24:44.320 The same can be said for legislation to improve working conditions, which was praised by Pius XI and Quadrigesimo. 235 00:24:44.320 --> 00:24:49.320 Improvements in working conditions that pay for themselves in terms of less workplace damage and disruption 236 00:24:49.320 --> 00:24:52.320 will of course be readily adopted by any profit-seeking enterprise. 237 00:24:52.320 --> 00:25:04.320 But even improvements that do not pay for themselves will still be adopted in cases in which the wage premium that would have to be offered to attract workers in the absence of the improvement would be higher than the cost of simply introducing the improvement. 238 00:25:04.320 --> 00:25:20.320 The only non-arbitrary way of introducing an improvement like climate controlled facilities, therefore, and the only way of doing so that does not price workers out of jobs entirely or impoverish society out of proportion to the satisfaction derived by workers now enjoying climate control is by paying attention to the market. 239 00:25:20.320 --> 00:25:33.320 to the Market. Everyone knows that certain lines of work, because of their difficulty, or because of undesirable or unpleasant aspects of the labor involved, carry a wage premium to attract sufficient workers by compensating them for these negative factors. 240 00:25:33.320 --> 00:25:48.320 As time goes on and more and more places become climate controlled, the wage premium for non-climate controlled workplaces will rise. The wage differential that the non-climate controlled workplace must pay in order to attract workers away from employers with climate controlled facilities 241 00:25:48.320 --> 00:25:57.320 may eventually reach a level at which it would be less expensive for the firm simply to install climate control rather than to go on paying higher wages than their competitors who provide climate control. 242 00:25:57.320 --> 00:26:07.320 The market thus allows for rational allocation of resources and helps to ensure that improvements in workplace conditions do not come at the expense of other goods that workers and consumers value more. 243 00:26:07.320 --> 00:26:11.320 And, of course, there's no logical limit to the improvements in working conditions that we might want. 244 00:26:11.320 --> 00:26:17.320 Who would not want five-hour lunch breaks, an office with a view of Niagara Falls and the services of a masseuse? 245 00:26:17.320 --> 00:26:28.320 There is no such thing as a free lunch, and any improvement in working conditions must come at the expense of something else that must now be foregone. 246 00:26:28.320 --> 00:26:35.320 There is no way in isolation from market exchange that improvements in working conditions can be rationally compared with these foregone opportunities. 247 00:26:35.320 --> 00:26:41.320 Most people, including recent popes, take for granted that the government must enact legislation governing working conditions. 248 00:26:41.320 --> 00:26:48.320 Now, certainly the popes would oppose state mandated safety requirements so stringent as to cause serious disruption in employment. 249 00:26:48.320 --> 00:27:01.320 As free market economists have suggested, however, there is only one non-arbitrary way of ensuring that increases in working conditions do not come about at the expense of other goods that society at large as well as workers themselves value more highly. 250 00:27:01.320 --> 00:27:07.320 That way involves market exchange. For that reason, therefore, there is nothing subversive or objectionable taking place. 251 00:27:07.320 --> 00:27:17.320 When a Catholic recommends the market as the best way of implementing the Pope's concern for working conditions, even if this particular solution may not have occurred to them, as indeed it does not occur to most people. 252 00:27:17.320 --> 00:27:23.320 A similar analysis can also shed light on the problem of child labor, the source of a great deal of uninformed moralizing. 253 00:27:23.320 --> 00:27:28.320 Far from a product of the Industrial Revolution, child labor has existed since the beginning of time. 254 00:27:28.320 --> 00:27:36.320 When the productivity of labor is hopelessly low, parents naturally think of children as economic actors who can contribute to the well-being of their families. 255 00:27:36.320 --> 00:27:41.320 Without their children's participation in the family's work, the entire household could suffer terrible privation. 256 00:27:41.320 --> 00:27:48.320 This is a fact of life in poor, low productivity societies that no so-called progressive legislation can wish away. 257 00:27:48.320 --> 00:27:55.320 As Anna Kruger writes, the issue of child labor is vexing. There are legitimate issues of intolerable working conditions, 258 00:27:55.320 --> 00:27:59.320 but employment of children may provide food that prevents a family from starving. 259 00:27:59.320 --> 00:28:04.320 In some instances also, it may provide girls with an alternative to forced early marriages. 260 00:28:04.320 --> 00:28:09.320 Even the International Labour Organization conceded in a 1997 report. 261 00:28:09.320 --> 00:28:14.320 Poverty, however, emerges as the most compelling reason why children work. 262 00:28:14.320 --> 00:28:20.320 Poor households need the money and children commonly contribute around 20 to 25 percent of family income. 263 00:28:20.320 --> 00:28:24.320 Since, by definition, poor households spend the bulk of their income on food, 264 00:28:24.320 --> 00:28:29.320 it is clear that the income provided by working children is critical to their survival. 265 00:28:29.320 --> 00:28:37.320 So to say that legislation can bring about an end to child labor is like saying that someone's fever can be cured by dousing his thermometer in ice. 266 00:28:37.320 --> 00:28:42.320 The only way child labor can come to a genuine end is when the need for it has dwindled or disappeared. 267 00:28:42.320 --> 00:28:46.320 In societies where the productivity of labor has risen sufficiently, 268 00:28:46.320 --> 00:28:53.320 in other words, when the labor of fewer people is now necessary to perform the same amount of work as before, 269 00:28:53.320 --> 00:28:57.320 the contribution of children to the productive process no longer carries the same urgency. 270 00:28:57.320 --> 00:29:09.320 In wealthy societies like these, parents have the luxury of keeping their children at home, and in our own case, even providing them with over 12 years of what we laughingly call formal education by age 18. 271 00:29:09.320 --> 00:29:16.320 But again, this outcome could not have been wished into existence. It had to be brought about through a dramatic increase in the productivity of labor. 272 00:29:16.320 --> 00:29:20.320 In other words, by the capital investment that occurs on the unhampered market. 273 00:29:20.320 --> 00:29:25.720 Those who, out of a combination of legitimate humanitarian concern and unfortunate economic 274 00:29:25.720 --> 00:29:30.080 ignorance, attempt to accelerate this process by means of legislation prohibiting child 275 00:29:30.080 --> 00:29:34.040 labor, only add to the very misery they claim to be alleviating. 276 00:29:34.040 --> 00:29:38.960 It is only because such humanitarians have spent their lives in the fantastically wealthy 277 00:29:38.960 --> 00:29:43.720 capitalist societies of the West that they could have failed to realize that dire poverty, 278 00:29:43.720 --> 00:29:47.840 which makes child labor inevitable, has been the lot of the entire human race for the great 279 00:29:47.840 --> 00:29:49.560 majority of its history. 280 00:29:49.560 --> 00:29:54.000 The fact is, legislation or no legislation, a typical family in a very poor country still 281 00:29:54.000 --> 00:29:56.820 needs the income that child's work brings. 282 00:29:56.820 --> 00:30:00.360 If the law prevents their children from being employed legally, then, supposing they do 283 00:30:00.360 --> 00:30:04.380 not want to starve, they are likely to employ their children illegally, where conditions 284 00:30:04.380 --> 00:30:06.760 are almost certain to be far worse. 285 00:30:06.760 --> 00:30:10.920 In fact, in exceedingly poor societies, where liberal humanitarians have prohibited child 286 00:30:10.920 --> 00:30:15.260 labor, it is not uncommon to find that the children wind up in prostitution, hardly an 287 00:30:15.260 --> 00:30:18.340 improvement in their welfare, to say the least. 288 00:30:18.340 --> 00:30:23.220 In fact, Oxfam, the British charity, recently reported that when factory owners in Bangladesh 289 00:30:23.220 --> 00:30:30.100 gave in to pressure to fire child laborers, thousands starved or went into prostitution. 290 00:30:30.100 --> 00:30:33.500 In light of our discussion of wages and how they are increased, we are in a better position 291 00:30:33.500 --> 00:30:39.780 to evaluate Pius XI's statement in Quadragesi Moano that all men must be paid a wage sufficient 292 00:30:39.780 --> 00:30:43.900 to support their families in reasonable comfort, and that where this is not possible, and these 293 00:30:43.900 --> 00:30:55.900 These are the words of Pius. Social justice demands that changes be introduced as soon as possible, whereby such a wage will be assured to every adult working man. 294 00:30:55.900 --> 00:31:12.900 Well, according to our analysis of wages here, when Quadragesimo instructs us to introduce changes in order to make a living wage available to working men, we should comply by removing as many obstacles to investment as possible and eliminating taxes on capital, excess profits and the like. 295 00:31:12.900 --> 00:31:24.900 Unfortunately, these are the very sorts of things that certain ecclesiastical documents seem to call for in order to improve labor's material condition, the very things that we would propose repealing. 296 00:31:24.900 --> 00:31:31.900 Such ill-considered recommendations only underscore the importance of sound economic reasoning to sensible moral judgment. 297 00:31:31.900 --> 00:31:41.900 What was wrong with Catholic social thought in the 19th century, writes Father James Sadowski, was not so much its ethics as its lack of understanding of how the free market can work. 298 00:31:41.900 --> 00:31:49.900 The concern for the worker was entirely legitimate, but concern can accomplish little unless we know the causes and the cures for the disease. 299 00:31:49.900 --> 00:31:59.900 I had father over for dinner, actually not so long ago, and I asked him, over the course of your career as a Jesuit, a wonderful man retired at Fordham, 300 00:31:59.900 --> 00:32:07.900 I asked him, have you encountered any other priests whose economic views are entirely, consistently 100% Rothbardian? 301 00:32:07.900 --> 00:32:12.900 Rothbardian, and he said no, and then paused and said, don't expect to either. 302 00:32:12.900 --> 00:32:19.900 Well, who knows? Who knows what the future will hold? Nothing the Mises Institute can't do. 303 00:32:19.900 --> 00:32:25.900 Strangely, little or no acknowledgement is made in papal economic writings, since 1891, 304 00:32:25.900 --> 00:32:29.900 of the enormous increase in living standards that became evident among the great mass of the population 305 00:32:29.900 --> 00:32:35.900 from the Industrial Revolution to the present, or the substantial increase in the purchasing power of wages 306 00:32:35.900 --> 00:32:38.900 that occurred throughout the 19th century, the century of laissez-faire. 307 00:32:38.900 --> 00:32:43.900 This is certainly one of the most outstanding features of modern European economic history, 308 00:32:43.900 --> 00:32:47.900 yet for some reason it features not at all in the social encyclicals. 309 00:32:47.900 --> 00:32:54.900 To the contrary, those encyclicals routinely speak as if the worker's condition had actually stagnated or even deteriorated, 310 00:32:54.900 --> 00:32:57.900 as indeed popular opinion continues to believe. 311 00:32:57.900 --> 00:33:05.400 Professor Lucky writes that it is, these are his words, hard to excuse Leo XIII for his statements to this effect. 312 00:33:05.400 --> 00:33:10.400 Again, Lucky, using life expectancy figures which ought to have been available to Leo, 313 00:33:10.400 --> 00:33:15.900 it is clear that at the dawn of the 19th century life expectancy in England was about 37 years, 314 00:33:15.900 --> 00:33:23.400 but after 1871 to 5, about 20 years prior to Rear of Navarra, there is an acceleration in life expectancy with no setbacks, 315 00:33:23.400 --> 00:33:26.900 so that by 1900 English life expectancy is about 50. 316 00:33:26.900 --> 00:33:31.900 Real per capita income begins to soar immediately after 1800 in all of Europe. 317 00:33:31.900 --> 00:33:35.900 Let me offer one additional consideration before closing this section. 318 00:33:35.900 --> 00:33:42.900 When dealing with wage rates, a moral question that is hardly ever asked, but should be, by those who advocate living wage legislation, 319 00:33:42.900 --> 00:33:47.900 is why the obligation of charity should fall entirely upon the shoulders of the employer. 320 00:33:47.900 --> 00:33:51.900 Father Sadowski argues that the very fact that an employee has accepted employment 321 00:33:51.900 --> 00:33:55.900 is an indication that he expects to be made better off than he would have been 322 00:33:55.900 --> 00:33:58.700 and that he attempted to go into business for himself. 323 00:33:58.700 --> 00:34:01.100 Thus, in the case of a worker in dire need, 324 00:34:01.100 --> 00:34:02.700 while certainly from a Christian point of view, 325 00:34:02.700 --> 00:34:04.600 we ought to help him meet his needs, 326 00:34:04.600 --> 00:34:07.000 the question that ought to arise is this. 327 00:34:07.000 --> 00:34:09.800 Why, however, should it be precisely the employer 328 00:34:09.800 --> 00:34:11.700 on whom this obligation falls, 329 00:34:11.700 --> 00:34:13.900 if in fact the employer is not worsening 330 00:34:13.900 --> 00:34:17.200 but bettering the condition of his employee? 331 00:34:17.200 --> 00:34:20.300 Advocates of the minimum wage, living wage and family wage 332 00:34:20.300 --> 00:34:23.400 never even raised this fairly critical question. 333 00:34:23.400 --> 00:34:29.200 As Walter Block and a colleague wrote in a co-authored piece not long ago, 334 00:34:29.200 --> 00:34:35.600 if you want to give money to poor people, why not just go ahead and do it? 335 00:34:35.600 --> 00:34:39.400 Well, let me be clear. Those of us within the Church who advocate the Austrian approach to economics 336 00:34:39.400 --> 00:34:44.600 are not demanding that the popes preach Austrian economics from the chair of Peter. 337 00:34:44.600 --> 00:34:48.100 No one with any knowledge of the development of economic thought among churchmen over the centuries 338 00:34:48.100 --> 00:34:52.900 would dare to claim that a single view could constitute Catholic economics. 339 00:34:52.900 --> 00:34:56.940 Against those who suggest that a Catholic may look at economic matters in only one way, 340 00:34:56.940 --> 00:35:03.860 Professor Daniel Ville reminds us that Catholic theology does not exclude pluralism of opinions on profane matters. 341 00:35:03.860 --> 00:35:10.180 We do not claim that ours alone is Catholic economics, but merely that what we teach is not only not antagonistic to, 342 00:35:10.180 --> 00:35:14.380 but in fact is profoundly compatible with traditional Catholicism. 343 00:35:14.380 --> 00:35:22.340 A profound philosophical commonality exists between Catholicism and the brilliant edifice of truth to be found within the Austrian School of Economics. 344 00:35:22.340 --> 00:35:26.940 The Austrian method of praxeology, and I go into this much greater length in my book, 345 00:35:26.940 --> 00:35:29.340 should be especially attractive to the Catholic. 346 00:35:29.340 --> 00:35:34.540 Carl Menger, but above all, Mises and his followers sought to ground economic principles on the basis of absolute truth, 347 00:35:34.540 --> 00:35:37.240 apprehensible by means of reflection on the nature of reality. 348 00:35:37.240 --> 00:35:45.040 Of course, I'm prescinding from the epistemological debates about the status of the action axiom and Aristotle and all that, and Kant. 349 00:35:45.040 --> 00:35:49.940 But what in the social sciences could be more congenial to the Catholic mind than this? 350 00:35:49.940 --> 00:35:55.940 Likewise, Austrian economics reveals to us a universe of order, whose structure we can apprehend through our reason. 351 00:35:55.940 --> 00:35:59.940 As Professor Jeff Herbiner, this guy right here, explains, 352 00:35:59.940 --> 00:36:06.940 a causal realistic approach to economics arose in Christendom because only there did scholars conceive of nature as an interconnected order, 353 00:36:06.940 --> 00:36:14.940 created in the flux of time by God out of nothing and governed by God-ordained natural laws that human intellect could discover and use to comprehend nature 354 00:36:14.940 --> 00:36:18.940 with the goal of ruling over it for God's glory. 355 00:36:18.940 --> 00:36:26.940 The alternative is the world of John Stuart Mill, who posited that it was entirely possible that we might find some place in the universe where two and two do not make four. 356 00:36:26.940 --> 00:36:32.940 A view which, in Herbiner's words, is grounded in the metaphysical position that the universe is not an orderly creation. 357 00:36:32.940 --> 00:36:37.940 Which one is more compatible with Catholicism should not be difficult to discern. 358 00:36:37.940 --> 00:36:43.940 The Church has always maintained that faith and reason are not in conflict, but rather constitute two harmonious paths to truth. 359 00:36:43.940 --> 00:36:50.940 That is the approach toward the secular world that makes the most sense for a Catholic and for which there exists considerable precedent throughout history. 360 00:36:50.940 --> 00:36:56.940 In the second century, St. Justin Martyrs spoke of the seeds of the word to be found in the ancient Greeks, 361 00:36:56.940 --> 00:37:02.940 and Clement of Alexandria insisted that the great works of the Greeks be studied at his renowned catechetical school. 362 00:37:02.940 --> 00:37:06.940 St. John of Damascus, John Damascene, adopted the same attitude. 363 00:37:06.940 --> 00:37:09.940 He favored the study and use of what was good in Greek philosophy, 364 00:37:09.940 --> 00:37:21.940 because in his words, whatever there is of good has been given to men from above by God since every best gift and every perfect gift is from above coming down from the father of lights. 365 00:37:21.940 --> 00:37:30.940 In my own book on Catholic intellectual life during the Progressive Era, I show that the same type of interaction with secular knowledge was at work in the early 20th century as well. 366 00:37:30.940 --> 00:37:36.940 It is simply not possible to question the doctrinal orthodoxy of the men I profiled in that book. 367 00:37:36.940 --> 00:37:41.940 At the same time, they were not afraid to engage in selective appropriation of the best of secular thought, 368 00:37:41.940 --> 00:37:44.940 wherever it contained an insight that might be of benefit to the Church, 369 00:37:44.940 --> 00:37:48.940 all the while keeping the faith itself free from any kind of profanation. 370 00:37:48.940 --> 00:37:53.940 Yet while the Church has not hesitated in the past to make use of whatever secular knowledge has to teach, 371 00:37:53.940 --> 00:37:58.940 what is especially interesting about the present case is that the secular truths that economic theory has to teach 372 00:37:58.940 --> 00:38:03.940 were in some cases anticipated or even discovered by some of the Church's own theologians. 373 00:38:03.940 --> 00:38:12.940 The Austrian School carries forward, as many of you know, a great many of the economic insights of the late scholastic theologians, a source of pride, not shame, for modern-day Catholics. 374 00:38:12.940 --> 00:38:25.940 The scholastics perceived clear relationships of cause and effect at work in the economy, particularly after observing the considerable price inflation that occurred in 16th century Spain as a result of the influx of precious metals from the New World. 375 00:38:25.940 --> 00:38:30.940 From the observation that the greater supply of species had led to a decline in the purchasing power of money, 376 00:38:30.940 --> 00:38:38.940 They came to the more general conclusion, and economic law as it were, that an increase in the supply of any good will tend to bring about a decrease in its price. 377 00:38:44.940 --> 00:38:49.940 The Austrian School also shows what reason properly exercised can accomplish. 378 00:38:49.940 --> 00:38:54.940 And surely this is something that Catholics who have always granted reason its rightful due ought to appreciate. 379 00:38:54.940 --> 00:39:06.940 Great economic treatises of Mises and Rothbard begin with the axiom that human beings act, proceed to the elaboration of an entire economic system from this irrefutable premise and a few subsidiary postulates. 380 00:39:06.940 --> 00:39:15.940 Austrians likewise reject the mathematization of the discipline that other paradigms have encouraged and dismiss artificial models that reduce man to a mere atom. 381 00:39:15.940 --> 00:39:28.940 They are methodological dualists who insist that the study of man, who unlike animals and inanimate things, is endowed with reason and free will, is something unique, and that the study of man is conceptually distinct from the study of the physical universe, 382 00:39:28.940 --> 00:39:33.940 and they criticize the attempt to fashion economics along the model of physics and the hard sciences. 383 00:39:33.940 --> 00:39:37.940 This clearly is a system that is eminently congenial to the Catholic mind. 384 00:39:37.940 --> 00:39:41.940 Economics does not contain all the answers of life, nor does it claim to. 385 00:39:41.940 --> 00:39:52.940 It does, however, show how the morally acceptable desire for profit leads to spontaneous social cooperation that obviates the need for a bloated state apparatus to direct production. 386 00:39:52.940 --> 00:40:00.940 It shows us the fascinating mechanisms by which peaceful social cooperation without the initiation of physical force leads to overall prosperity. 387 00:40:00.940 --> 00:40:08.940 This means less disease, more leisure time to spend with our families and greater opportunities to enjoy the good things of civilization. 388 00:40:08.940 --> 00:40:14.940 In his book, A Humane Economy, Wilhelm Röpke wrote, 389 00:40:14.940 --> 00:40:19.940 What overweening arrogance there is in the disparagement of things economic. 390 00:40:19.940 --> 00:40:32.940 What ignorant neglect of the sum of work, sacrifice, devotion, pioneering spirit, common decency and conscientiousness, upon which depends the bare life of the world's enormous and ever-growing population. 391 00:40:32.940 --> 00:40:40.940 The sum of all these humble things supports the whole edifice of our civilization, and without them there could be neither freedom nor justice. 392 00:40:40.940 --> 00:40:46.940 The masses would not have a life fit for human beings, and no helping hand would be extended to anyone. 393 00:40:46.940 --> 00:40:53.940 Romanticizing and moralistic contempt for the economy, including contempt of the impulses which move the market economy, 394 00:40:53.940 --> 00:41:01.940 and the institutions that support it, must be as far from our minds as economism, materialism and utilitarianism. 395 00:41:01.940 --> 00:41:04.940 That is sound advice from a wise man. 396 00:41:04.940 --> 00:41:10.940 It also happens to be the very message that Catholics working within the Austrian tradition have themselves been trying to convey. 397 00:41:12.940 --> 00:41:40.940 This is going to be, this is a sensitive thing that I'm not going to put well, but I can't help but think of a colleague, former colleague of mine, Steve Paevich, who said, 398 00:41:40.940 --> 00:41:57.940 Senator Ted Kennedy needs poor people, and you can see where I'm going here, where the parallel between the church and the state, I can't simply stop with the explanation of intellectual error. 399 00:41:57.940 --> 00:42:04.940 Do you really believe that the Catholic hierarchy over these many decades and centuries 400 00:42:04.940 --> 00:42:11.940 believes in the material improvement of the flock? Or is there something more at work here? 401 00:42:13.940 --> 00:42:16.940 Well, that is a difficult and delicate question. 402 00:42:16.940 --> 00:42:42.940 I mean, you know, offhand, I'm not sure how I would formulate an answer to that question because I'd have to think about a serious rather than a silly off-the-cuff reply to that question, so maybe I can, I'm sorry, I hope that doesn't seem like a cop-out, but I would really have to roll that around in my head for a little while. 403 00:42:42.940 --> 00:43:11.940 Not being an economist, it would seem the whole problem with economics is that wealth for people increased over time, life expectancy increased over about 60 years, but we don't live that long, the people didn't live that long, so it's sort of like the circumstances are bad, they're getting better, but people want it now. 404 00:43:11.940 --> 00:43:26.940 now, and therefore the idea of labor unions getting it now, living with now, because I won't be alive in 60 years. What do you do with that and promoting free market economy? 405 00:43:26.940 --> 00:43:38.940 Yeah, well, I mean, I guess sort of the answer is that, well, the question, oh, sorry, the question seems to be that it's true that over time the market economy leads to, you know, 406 00:43:38.940 --> 00:43:47.940 We get greater life expectancy, greater prosperity, but there's a certain impatience on the part of some sectors of the economy, particularly labor, for example. 407 00:43:47.940 --> 00:43:56.940 They want improvements in their material condition to come immediately and as fast as they're seeing them for other people, and how do we answer that? 408 00:43:56.940 --> 00:44:02.940 Well, part of the answer is that the mechanism that is accelerating this increase in material well-being, 409 00:44:02.940 --> 00:44:09.940 which is, you know, an increase that, as we all know, means that everybody's living at a standard of living higher than the greatest kings lived in. 410 00:44:09.940 --> 00:44:13.940 I mean, if you have a flush toilet, then you're living better than a king in the 18th century. 411 00:44:13.940 --> 00:44:17.940 But the sort of the answer that I would say is that you're going to... 412 00:44:17.940 --> 00:44:25.940 it's not helpful to interfere with the mechanism that is making possible the very thought that your condition is improvable. 413 00:44:25.940 --> 00:44:38.940 I mean, Hayek made this argument, this great book on, edited volume on capitalism and the historians, that when poverty is just a fact of life and it's just grinding poverty goes on for centuries, no one questions it. 414 00:44:38.940 --> 00:44:46.940 I mean, you don't hear protests about it in the 11th century. I mean, what's the point of protesting? It'd be like protesting a blue sky. There's no point in it. 415 00:44:46.940 --> 00:44:52.940 But it's only when you see that great wealth is possible that suddenly you become, you suddenly notice that poverty is something intolerable. 416 00:44:52.940 --> 00:45:14.940 I would say to such people, you'd better be very careful about interfering with the very system that is making possible the progress that you see, that is already made possible on thought of progress in your own life, promises to make possible great progress in the future, as long as you don't grind it to a halt through misguided intervention. That would be my best off-the-cuff answer. 417 00:45:14.940 --> 00:45:27.120 Maybe you can help me understand why it is that the Catholic morality, 418 00:45:27.120 --> 00:45:31.740 Christian morality, generally applies to the ends but not the means. In other words, 419 00:45:31.740 --> 00:45:41.420 you know, the goal is the improvement of wealth in the masses or living conditions in the masses. 420 00:45:41.420 --> 00:46:10.420 Well, thank you ma'am, it says that shall not steal. Certainly the Gospels refer, very often refer to tax collectors as sinners, all over the place, Matthew. So, how is it that the Catholic social teaching sees that the ends justify, the moral ends justify the sinful means, i.e. stealing? 421 00:46:10.420 --> 00:46:15.420 Right. Well, I mean, I couldn't agree with you more. I think the answer, though, is that they don't view it that way. 422 00:46:15.420 --> 00:46:22.420 Since they have, so many of them, such a faulty understanding of the wage relation that some of them think that... 423 00:46:22.420 --> 00:46:27.420 I mean, some of the more extreme ones would say that since the employer has in effect all... 424 00:46:27.420 --> 00:46:34.420 And secondly, what I have found consistently is that they really, a lot of people who formulate these doctrines, 425 00:46:34.420 --> 00:46:39.420 they think that economics really is... some of them think it's just a sham science. 426 00:46:39.420 --> 00:46:42.920 It's a science that was developed to rationalize human greed. 427 00:46:42.920 --> 00:46:51.420 You can have all the economic arguments you want, but that's what it was. 428 00:46:51.420 --> 00:46:59.420 So that therefore if you say, well, there's a certain structure to the economic order, 429 00:46:59.420 --> 00:47:03.420 they would in effect tend to take, I don't want to say a Marxist view that, 430 00:47:03.420 --> 00:47:06.920 well, that's just a bourgeois way of thinking that's meant to oppress the masses, 431 00:47:06.920 --> 00:47:36.920 But they don't buy it. They don't buy it. They would say that that's just like deism in religion, that there's a being and that somehow everything works out according to natural laws and that you're just applying deism to economics and the world doesn't work that way and so I think it's partly because they won't give economics its due and the thing is that part of my answer to Professor Reynolds' question now would be that since I know so many people outside of the church, I mean, for instance, 432 00:47:36.920 --> 00:47:48.920 The German Historical School, for example, wouldn't really recognize the points that Mises was trying to make about economic laws that are independent of time and place and that are just there and you can't wish them away. 433 00:47:48.920 --> 00:48:00.920 People in the German Historical School took the position that a lot of Catholic social thinkers take, which is that there really isn't anything that our human will can't overcome. 434 00:48:00.920 --> 00:48:06.560 So, I'd like to say that this is a question of intellectual error, but that goes so against 435 00:48:06.560 --> 00:48:13.880 my grain, because I want to say it's evil and wickedness, but I think that on the part 436 00:48:13.880 --> 00:48:14.880 of most... 437 00:48:14.880 --> 00:48:19.800 I mean, look, most bishops today in the US, in my opinion, are barely clinging to the 438 00:48:19.800 --> 00:48:21.880 faith in any regard. 439 00:48:21.880 --> 00:48:23.560 I mean, I don't see... 440 00:48:23.560 --> 00:48:28.000 It's embarrassing what they allow to go on in their diocese, so, I mean, it's not that 441 00:48:28.000 --> 00:48:29.480 I'm trying to defend these people. 442 00:48:29.480 --> 00:48:36.480 I think almost every one of them is an absolute disgrace and an outrage, but I think that most of them just don't spend that much time thinking about these issues, 443 00:48:36.480 --> 00:48:44.480 and I think most people that we all know tend to take the position that without labor unions, everybody would be working in mines 80 hours a day. 444 00:48:44.480 --> 00:48:50.480 You know, I mean, I think most people just instinctively take this position, and we don't have to impute bad motives to them. 445 00:48:50.480 --> 00:48:58.480 But we do have to impute, I think, some kind of culpable ignorance. I mean, there is plenty of information around you if you just look at it. 446 00:48:58.480 --> 00:49:00.480 Okay, thank you.