What You Didn’t Learn about Economics in Catholic School

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  • 09/21/2022

Catholic loyalty to the Democratic Party is frustrating to Republican strategists, and to many Catholic conservatives. Conservatives complain that the United States Conference of Catholic Bishops has strange priorities: putting minimum wage increases on a level with outlawing abortion suggests a certain moral tone deafness. But the American bishops didn't invent "the social teaching of the Church." Popes since 1890 have taught that employers must sometimes pay workers more than they can command on the open market, and urged governments to intervene in the economy to help the poor.

A new book by Thomas Woods strikes at the ties that bind Catholics to interventionist economics. The Church and the Market: A Catholic Defense of the Free Economy is a full-throttle defense of the right of sincere Catholics to be adherents of a truly free market. If Woods is right, Catholics can forget any nagging guilt that they ought to take "living wage" legislation seriously, abandon their traditional support of labor unions, and vote Republican with a clear conscience.

Woods marshals impressive evidence that the policy recommendations of modern popes are at odds with their stated goals. The minimum wage actually creates unemployment. The foreign aid that Paul VI taught was a duty of wealthy nations has corrupted governments, stifled economies, and left the people in the poorest countries worse off. Welfare programs undermine the family and ultimately make people poorer.

To expand on a hypothetical Woods proposes, good Catholic citizens trying to apply the social teaching of the Church seem to be in the position that good Catholic architects would be in if the pope taught: Build cathedrals of durable materials; be sure to use cardboard. Woods thinks Catholics are as free to ignore the popes' opinions on economic policy as on the relative merits of building materials.

The weakest link in his argument is the premise that economics is a science pretty much like physics-within the scope of reason alone, outside the ambit of faith and morals. His belief that the Church will have to do a better job of understanding economics "[i]f the Church is to be taken seriously in these matters" sounds dangerously like the arguments of liberal Protestants, ever anxious to update the Bible according to contemporary thinking, rarely asking whether modern thought needs to be corrected by the Bible.

Here's an example where Woods seems to reserve wholly to economic science what ought to belong (partly) to moral analysis. He punches some large holes in Hilaire Belloc's analysis of an "unproductive" loan, in which a man borrows six loaves of bread to sustain his family over the next few days, agreeing to pay back seven (including interest). But Wood's analysis seems problematic, too:

    . . . Belloc falls victim to the ancient fallacy of attempting to evaluate from the point of view of a third party the satisfaction derived from a market exchange. If a borrower determines that six loaves of bread today are worth more to him than seven loaves two weeks from now, who would be so foolish as to tell him he is "wrong"?

Wouldn't the same reasoning apply in the case of a father of five who cashes his paycheck in a casino, and then goes on to mortgage his house there later the same night?

Woods hasn't-yet-shown that he can do with economic science what St. Thomas Aquinas did with Aristotle's philosophy. But he's made a powerful case that baptizing modern economics is an urgent project, and he's made a valuable start.

Woods is a font of information about every corner of the intellectual landscape in which Catholic doctrine meets economics. He knows about it all-from the Salamanca-school Thomists, who are Adam Smith's precursors, to the differences between Austrian and Chicago-school economists. Woods shows how Belloc's "distributist" economics-admired by many conservatives today-couldn't be implemented without what Belloc calls the "servile state." His defense of private banking suddenly made clear to me why the Federal Reserve causes inflation. The Church and the Market emphatically succeeds in its stated goals, to "build a stronger case for the market, clarify common misunderstandings, and ultimately to push laymen and clergy alike to become more informed on economic matters."


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