Market Morals

Defending the Free Market:
The Moral Case for a Free Economy
by Robert A. Sirico
Regnery, 256 pages, $27.95

The Catholic Church, at its best, has preserved a rare freedom from political fashion. It has allied itself now with the left, now with the right, as its own doctrine and interests have dictated. In its social teaching, it has steered an original path between state socialism and free-market capitalism. This independence, the fruit of an ancient and rigorous intellectual tradition, is a precious asset. One reason John Paul II’s denunciation of communism carried such weight is that he was equally hard on the injustices of capitalism.

Political independence is a quality unfortunately absent from Defending the Free Market. Robert Sirico is a Catholic priest and cofounder of the Acton Institute, yet in this book his guiding lights are Ludwig von Mises and Friedrich Hayek, not Augustine or Aquinas. Vague references to a “Judeo-Christian worldview” did not assuage my feeling that what I was reading was more a one-sided political argument than a balanced theological assessment of the merits of free-market capitalism.

Sirico’s defense of the free market is premised on the claim that “private property confers on individuals and families an area of autonomy that is necessary for human freedom and civil liberties.” This at least is properly Christian and Catholic and, most important, true. Wherever property has been nationalized, a “levelling down of all to a like condition of misery and degradation” (to quote Rerum Novarum , the great encyclical of 1891) has been the consequence. Private property is the indispensable foundation of personal and family life and the best safeguard of a vigorous national culture.

Sirico’s error lies in his next step, which is to elide the right to property with the right to trade. “Freedom to trade is a necessary adjunct to private property rights. A secure right to property means little if people are not permitted to exchange their property for other property that they desire more.”

This is a non sequitur. Private property has existed since time immemorial; the free market is a modern innovation. Medieval nobles were not free to sell their estates. Nor, for that matter, are most modern British aristocrats. The chief value of property to its owner lies in his power not to sell but to use it, for sustenance or for enjoyment. Only the compulsive accumulator sees every possession as a stepping stone to further possessions.

Not only are private property and the free market not natural bedfellows; they are in a sense opposed. In order for private property to fulfill its function of providing individuals and families with “an area of autonomy,” it must be broadly distributed, yet the inherent tendency of free-market capitalism is toward a concentration of wealth.

This tendency can be offset in various ways, from antitrust laws to steeply redistributive taxation to grassroots ownership movements. But in the absence of such measures, it inexorably asserts itself. Over the past forty years, Britain and the United States have reverted to a condition like that described in Rerum Novarum : “A small number of very rich men have been able to lay upon the teeming masses of the laboring poor a yoke little better than that of slavery itself.”

Sirico’s error has been to run together two very different ways of thinking about property. In the Catholic tradition, property is an ethical and political institution, a safeguard of personal liberty. From this perspective, it matters very much who owns what, for it is this that determines the distribution of power in a society.

But in the standard economic analysis, property is simply part of the legal infrastructure of capitalism. From this standpoint, all that matters is that property rights are clearly defined and enforced; where the property ends up is a matter of indifference. Sirico slips quietly from one perspective to the other, casting a glow of Christian idealism over what is in essence a purely utilitarian doctrine.

Sirico next tries to acquit capitalism of the common charge of exciting greed. The greedy will always be with us, he retorts; capitalism’s trick has been to provide them with “a socially beneficent alternative to exploitation.” Communism, by contrast, has nothing to offer the greedy but robbery and graft.

The idea that markets flawlessly convert base instincts to socially beneficent ends has a long and venerable history. The early eighteenth-century Anglo-Dutch scribbler Bernard Mandeville spoke of commerce transmuting “private vices” into “public benefits.” Adam Smith famously pictured the selfish rich being led “by an invisible hand” to make “nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society.”

Smith’s doctrine has, in a sense, been vindicated. By releasing the acquisitive instinct from all ethical and legal restraints, modern societies have launched themselves down a path of seemingly endless enrichment.

But the moral cost has been great. Greed and envy are not, as Sirico imagines, fixed quantities varying only in their expression. They are more like muscles that expand when exercised and waste away when idle. Our society is more accepting of covetousness than any other in human history, so it is hardly surprising that covetousness flourishes here as nowhere before.

It is often argued, along lines similar to these, that we should defuse lust by giving it free rein rather than forcing it down the murky backways of prostitution and pornography. Sirico, I suspect, would reject this argument. He would reply that lust is bad in and of itself, irrespective of its consequences. Yet he accepts the analogous argument about greed. It is odd that Christian advocates of the free market are so accepting of consequentialist reasoning in one sphere yet so hostile to it in another.

The weakest part of the book is devoted to dethroning “the idol of equality.” Economic inequality does not matter morally, argues Sirico, so long as everyone has enough for “the basic necessities of life.” Indeed, inequality is a good thing insofar as it is a necessary part of an economic system that benefits everyone, including the poorest.

But might there be a moral issue here? Many on the right are prone to dismiss any concern with relative income as an expression of envy or class hatred. But we are not pigs who care only about our bellies; we are spirited beings moved by questions of status and honor. To dismiss such concerns as “envy” betrays a blinkered view of human motivation, and one that may find more agreement with socialism (in its reduction of all human interests to material interests) than with the Church.

It is typical of Sirico’s style of argument that he takes as his target “absolute equality.” Apart from a few old Trotskyites, no one wants absolute equality; the sensible demand is for greater relative equality. By leveling his attack against this straw man, Sirico deflects attention from the real scandal of the last four decades: the growth of inequality to levels not seen since the Great Depression.

The last chapter, “A Theology for Economic Man,” sees Sirico return to firmer ground. He writes eloquently in defense of his faith and against the twin errors of utopianism and relativism. But he errs in thinking that capitalism “emerged from an exalted vision of man and his inherent and transcendent destiny.”

Capitalism”the exploitation of man’s greed for the improvement of his estate”is a fruit of the secular Enlightenment. Across the world, it has proved a powerful solvent of older ethical, cultural, and religious traditions, Christianity among them. It has corrupted virtues into values, convictions into preferences, and wants into needs.

Marx, for once, was spot on in his insight into capitalism’s relativizing power: “All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned.”

Defending the Free Market is, if I may be permitted to speak as a European, a very American book. Only in America has Christianity reached so complete an accord with market imperatives. “The free economy is a dream worthy of our spiritual imaginations,” writes Sirico in his introduction. Perhaps, but it was not the dream of St. Benedict or St. Francis, nor even of Luther and Calvin.

Edward Skidelsky is a lecturer in philosophy at Exeter University. He is coauthor, with his father Robert Skidelsky, of How Much Is Enough? Money and the Good Life.