Tuesday, April 29, 2008

"Economics As Science: A Catholic Defense of the Free Market"

Thomas E. Woods, Jr., senior fellow at the Ludwig von Mises Institute and author of the book The Church and the Market: A Catholic Defense of the Free Economy, has an interesting article on economics and Catholic social teaching at InsideCatholic.

Here's an excerpt:
... The point is that the cause-and-effect relationships that constitute the theoretical edifice of economics are not a matter of faith and morals. They do not fall within the range of subjects on which a Catholic prelate is endowed with special insight or authority. Catholic laity cannot head up petition drives against them. They are simply facts of life. Facts cannot be protested, defied, or lectured to; they can only be learned and acted upon. There is no use in shaking our fists at the fact that price controls lead to shortages. All we can do is understand the phenomenon, and be sure to bear it and other economic truths in mind if we want to make statements about the economy that are rational and useful.

... Suppose an ecclesiastical document should recommend a particular economic policy as being morally necessary, because its drafters believe it will make the poor better off. Suppose further that they consider it so obvious that this policy will improve the lot of the poor that they do not consider the possibility that it could have any other effect, that there could be any good economic reason for opposing it, or even simply that a trade-off exists between the good outcome they hope for by the policy and unfortunate, unintended side effects of that policy. And now suppose that the policy will in fact not only not improve the position of the poor, but may also make it even worse. What are economically astute members of the faithful to do? Are they forbidden to observe that no one can make reality otherwise than it is, or make A cause B if in the nature of things A inhibits B?

Vainly barking commands at the economy cannot make reality otherwise than it is. We may as well harangue the law of gravity for dashing our hopes of soaring through the air. All people of good will would be delighted if suddenly, for the first time in world history, everyone earned a wage we considered comfortable. But if the human will alone could make everyone prosperous, then what Bangladesh lacks is not capital and secure property rights but enough protests and vigils. In what other field do Catholics feel justified in making solemn pronouncements without knowing the first thing about the subject at hand?

[Read the whole thing]

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At 4/29/2008 4:41 PM, Blogger Jeff Miller said...

Of all the ignorances in American and probably world political life certainly economics must be number one.

People should break down in laughter at what most polilticians say on economics. We should fall down in shock if one says they are going to reduce gas prices when their plan is not removing gas taxes the only element they control.

Oh well.


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