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CHAPTER 12: Christian Social Thought and the Origination of the Economic Order * - Paul Heyne, “Are Economists Basically Immoral?” and Other Essays on Economics, Ethics, and Religion 
“Are Economists Basically Immoral?” and Other Essays on Economics, Ethics, and Religion, edited and with an Introduction by Geoffrey Brennan and A.M.C. Waterman (Indianapolis: Liberty Fund, 2008).
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Christian Social Thought and the Origination of the Economic Order*
Perspective is important to have, but difficult to acquire. A history of Christian thought regarding the economic order may be able to provide us with valuable perspective as we try to come to terms with that order in our own time. But it’s hard to gain perspective on such a long and complex history. I began the preparation of this paper far more certain than I am now of what I wanted to say. The investigations undertaken to support my various theses repeatedly revealed how much I had forgotten to consider, how little I really knew about the general topic, and how much of what has been confidently asserted in this area has subsequently proved to be naive and hopelessly uninformed. What started out to be a definitive statement has turned into a mere series of suggestions.
“It has been said,” Franklin Gamwell tells us at the beginning of his keynote address,
that the economic order is a distinctively modern moral and political problem. Only with the modern age have economic activities become sufficiently differentiated from kinship associations, on the one hand, and from specifically political associations, on the other, that the economy as such might become a subject of moral deliberation, debate and decision.1
That’s a puzzling claim, at least upon first consideration. The production of wealth has been a cooperative social task in every society of which we have any knowledge. It would seem to follow, then, that an economic order must have existed in every known society. And if something so important existed, how could it have escaped recognition?
Karl Polanyi has given the clearest answer to that question. Until roughly the end of the eighteenth century, he contended, the economy was thoroughly “embedded” in society.
Accordingly, before modern times the forms of man’s livelihood attracted much less of his conscious attention than did most other parts of his organized existence. In contrast to kinship, magic or etiquette with their powerful keywords, the economy as such remained nameless. There existed, as a rule, no term to designate the concept of economy. Accordingly, as far as one can judge, this concept was absent.2
If Polanyi and Gamwell are correct—and I believe they are—my task of providing a historical overview of the ways in which Christian thinkers have understood the relationship between Christianity and the economic order is greatly simplified. Prior to 1800, Christians did not discern an economic order that “might become a subject of moral deliberation, debate and decision.”
Was the concept of an economic order discovered or invented? Polanyi wanted to claim that it was largely invented, and to lament the invention.
The concept of the economic order was invented, according to Polanyi, as a way of making room for the machine.
In order to allow scope to the use of elaborate, powerful machinery, we transformed human economy into a self-adjusting system of markets, and cast our thoughts and values in the mold of this unique innovation.3
We transformed Aristotle’s zoon politikon into Homo economicus, a creature motivated by the fear of hunger and the desire for personal gain. Then we made the rest of society fundamentally dependent upon the exchange-directed system of production and distribution that Homo economicus generated and so we surrendered to the determinism of the market.
Polanyi’s hostility toward the “market mentality” may have misled him, however.4 The market system is not as artificial or unnatural as he wanted to make it. The eighteenth-century founders of economic science were describing something that was actually at work; they were discovering the economic order, not inventing it.
There is too much design in the account that Polanyi gives us. There were no “we” who decided that the advantages of machinery could not be obtained without a self-adjusting system of markets, and who consequently cast “our” thoughts and values in the appropriate mold.
The discovery of a distinct economic order is closely bound up, as we might expect, with the development of a separate science to explain its working. That science, known as political economy through most of the nineteenth century and as economics since then, had no name at all before 1800. Like the order it would explain, it was in the process of being discovered.
In the eighteenth century the term “political economy” still had the meaning suggested by its etymology. Economy was the art of managing a household, and political economy was the analogous art of providing for all the wants of a state. The “principles” of political economy were the principles that ought to guide a statesman or legislator. Thus the subtitle of Sir James Steuart’s 1767 Inquiry into the Principles of Political Economy is “An Essay on the Science of Domestic Policy in Free Nations.”5 Similarly, Jean-Jacques Rousseau, in the article on political economy which he wrote for the Encyclopédie, defined his subject as the wise and legitimate government of that larger family, the state.6 Steuart and Rousseau simply take for granted that, as an oikonomia must have an oikonomos, so must a political economy have a statesman to set it in order. And the principles of political economy are the maxims to be observed by sensible rulers who want “to secure a certain fund of subsistence for all the inhabitants, to obviate every circumstance which may render it precarious.”7
Adam Smith understood the term political economy in much the same way, as management of the society.8 He dissented forcefully, however, on how much management was required. The first four books of The Wealth of Nations attempt to show how wealth is produced without the guidance of an oikonomos, and why it is likely to increase more rapidly the less control the statesman tries to exert. At the end of Book IV, before discussing the proper tasks of government, Smith sums up his central thesis:
All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men. The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society.9
If Smith deserves to be called the founder of economic science, it is because he provided the first comprehensive explanation of the order that establishes itself in wealth-producing activities in the absence of any “visible hand.” Others, of course, had made important contributions before him. Richard Cantillon’s Essay on the Nature of Trade in General, written around 1730 but not published until 1755, and A. J. R. Turgot’s Reflections on the Formation and Distribution of Riches, composed in 1766 and published three years later, were exceptionally lucid expositions of the economic order. Both these works present a sort of natural history of national wealth, in which events develop by a logic of their own rather than as a consequence of anyone’s design.10
Cantillon, Turgot, and Smith certainly described what we would today call an economic order. But was it sufficiently differentiated, in their treatments, from kinship and political associations to become “a subject of moral deliberation, debate and decision”? That is less certain. None of these writers seems to have thought of economic activity as something distinct from other purposive human action.
Even Polanyi, who criticizes Smith in The Great Transformation, conceded, in notes distributed to his students in economic history courses at Columbia University, that Smith still belongs with the “societal” writers. He considered economic life to be only an aspect of national life, bound to reflect the health or ill health of national life. All through his writings, Polanyi concludes, Smith’s approach is “institutional, historical, and societal.”11
Bernard Mandeville was a key figure in the development of eighteenth-century thought on the workings of society.12 His Fable of the Bees, first published in 1705 as a poem of 400 lines, and subsequently much enlarged, elaborated, and defended in 1714 and 1729 reprintings, was widely read and discussed. Mandeville’s scandalous thesis was that private vices led to public benefits. His significance for economics and social science lay in the success with which he expounded the notion that social order can and will emerge without the benefit of any advance design, that economy in the larger society does not require an oikonomos to direct it. But he also claimed that it was vice, or selfish and anti-social motives, which supplied the principle of coordination. Despite Adam Smith’s careful refutation of Mandeville on this score, the belief that the economic order is held together by the operation of essentially immoral motives survived to shape nineteenth-century conceptions of that order and eventually the reactions of Christian thinkers trying to come to terms with it.
Smith himself never claimed that the economic order was maintained through the operation of selfish interests. He speaks of self-love, of one’s own advantage, security, gain, and interest; and of the “uniform, constant, and uninterrupted effort of every man to better his condition.”13 None of this can be equated with selfishness, however. Smith’s attack on Mandeville in The Theory of Moral Sentiments clarifies his own position.
After reviewing Mandeville’s “wholly pernicious” argument, to the effect that all actions, including those that seem most generous and self-sacrificing, stem in reality from selfishness and mean motives, Smith writes:
Whether the most generous and public-spirited actions may not, in some sense, be regarded as proceeding from self-love, I shall not at present examine. The decision of this question is not, I apprehend, of any importance toward establishing the reality of virtue, since self-love may frequently be a virtuous motive of action.14
The desire to better our condition, which Smith believes is the dominant motive in social interaction among all classes of people, prompts most of them to pursue “an augmentation of fortune,” because this is “the means most vulgar and the most obvious” toward bettering one’s condition. This desire leads people to work and to save, which in turn fuels the process of economic growth.15
And what are people ultimately after? “[W]hat are the advantages which we propose by that great purpose of human life which we call bettering our condition?” Smith answers: “To be observed, to be attended to, to be taken notice of with sympathy, complacency, and approbation, are all the advantages which we can propose to derive from it.”16
This often culminates in sheer vanity, which is the desire to be praised for what one knows is not genuinely praiseworthy. But it need not produce that result. The crucial point Smith makes against Mandeville is that the desire for approval can take the form of the love of virtue or the love of true glory, as well as mere vanity. The love of virtue is “the desire of doing what is honorable and noble, of rendering ourselves the proper objects of esteem and approbation.” The love of true glory is “the love of well-grounded fame and reputation, the desire of acquiring esteem by what is really estimable.”17 Thus the Homo economicus in Adam Smith’s system of moral philosophy, while he adapts means to ends, does not necessarily pursue base or ignoble ends. The desire to better one’s condition is common to the virtuous and the vain.
The notion that Adam Smith glorified the pursuit of gain could never be maintained by anyone who had read the companion volume to The Wealth of Nations.18
The publication in 1798 of Malthus’ Essay on Population was a crucial event, both for the subsequent development of economics and for Christians who would later reflect on the economic order.
In his book on the “Clapham Sect,” Saints in Politics, Ernest Marshall Howse writes:
Adam Smith, Ricardo, and Malthus had combined to teach that poverty was inevitable; that the increase of population outstripping the means of subsistence, left an inevitable fringe of society on the borderland of starvation; that there was an iron law of wages, allotting with scientific finality the total sum that could be left for labor; and that all interference with those scientific laws was unwise, and ultimately futile.19
But this is not what Smith taught; it is the Malthusian vision of the human situation. Ricardo employed Malthus’ population theory, along with the law of diminishing returns in agriculture, to construct his model of the economic system. But even Ricardo did not maintain that poverty was inevitable. In his influential essay On the Principles of Population and Taxation (1817), Ricardo expresses the hope that the laboring classes will acquire a taste for luxuries and so will limit the size of their families.20
How did Malthus’ gloomy view of the human situation come to be so widely accepted as the central teaching of classical political economy? The undiluted doctrine of the first edition of Malthus’ essay did not, in fact, command general acceptance among political economists in Malthus’ time, not even in England.21 It does seem to have convinced Malthus’ theological colleagues, however. As Anthony Waterman has shown in a recent article on “The Ideological Alliance of Political Economy and Christian Theology, 1798-1833,” a number of Anglican theologian-economists subscribed to Malthus’ basic doctrine and turned it into a grim theodicy. Poverty and inequality were God’s way of propelling mankind, “despite its brutish inertia, toward the higher possibilities of earthly existence.”22
Here is the surprising solution to the puzzle of how Christian thinkers in England were able to accept so easily the teachings of the dismal science: they were its principal teachers. The doctrines of the Reverend T. R. Malthus conformed more readily to their natural theology than did the teachings of that optimistic deist, Adam Smith.23
Christian social thought at the end of the eighteenth century was profoundly conservative. Order was of God, almost without regard to the nature of the order. Inequalities were not inequities, but rather divinely ordained differences that enabled the social organism to function. The church’s traditional hostility toward the desire for gain, we must remember, was part of a static conception of the social order, in which people were expected to be content with the lot assigned to them in this life and to avoid envy or covetousness. Respect for property was part and parcel of respect for government, ecclesiastical authority, and Providence itself. And in the last decade of the eighteenth century, there were the chilling lessons of the French Revolution for anyone inclined to doubt that respect for established institutions was the foundation of social order.24
Some would have argued in the early nineteenth century that the social theology of Malthus and the clerical political economists was more “natural” than Christian. No such charge would have been made, however, against William Wilberforce, Henry Thornton, and the other members of what subsequently came to be known as the Clapham Sect. This small group of wealthy and powerful individuals were committed Evangelicals and active social reformers. How did they approach the problems of the economic order?25
The Clapham “Saints,” to use the derisive label applied to them in their time, were certainly less tolerant of whatever social wrongs they saw and much more willing to make personal sacrifices to remedy them. Their long struggle to secure abolition of the slave trade provides ample evidence of their Evangelical piety, their conviction that true religion entailed concern for the problems of this world, and their refusal to substitute pious words for personally costly actions. There is no evidence, however, that they saw the economic order in any way fundamentally different from the way in which it was perceived by Malthus or Thomas Chalmers.
Twentieth-century critics have sometimes faulted the members of Wilberforce’s circle for attacking slavery abroad while ignoring “wage slavery” at home.26 Even Howse, in his sympathetic history of the Clapham Sect, and while defending them against unfair and often uninformed criticism in this area, speaks of their “heartlessness,” their indifference toward “civil injustice,” even their “cruelty” when it came to the legal rights of wage earners.27 But there is no heartlessness, cruelty, or injustice in accepting what one genuinely believes cannot be changed, or in opposing policies which have kind intentions but are thought to produce cruel consequences.
The Clapham Saints did not believe that the condition of the laborer could not be improved, though they certainly entertained expectations more modest in this respect than those that came to be held later in the century. They simply believed that combinations and strikes were far more likely to damage the working classes than to help them, especially in the long run. If they were wrong about this, it was not because they had averted their eyes from the conditions of the laboring classes or refused to consider reasoned arguments to the contrary. Their views in this area were generally consistent with the views of the leading political economists of their day and even of the next generation. (It may be noted in passing that Henry Thornton, in whose house in Clapham the Saints regularly met to map their strategies, was probably the most astute monetary economist of the nineteenth century.28 )
According to Polanyi, Malthus played a crucial role in the establishment of an institutionally separate economic sphere in society, by invoking Nature herself to secure “the autonomy of the economic sphere.”29 For those who followed Malthus, the laws of the market were not the mere will of particular social classes or arbitrary governments; they were the very decrees of Providence.
How was the economic order perceived in the first half of the nineteenth century by Christian social thinkers who accepted Smith but rejected Malthus? The United States provides an interesting case study.
Neither Malthus nor Ricardo ever acquired in the United States anything like the authority they commanded in Britain.30 The basic doctrine of Malthus (and the foundation of Ricardo’s distribution theory), that the pressure of population on limited agricultural land will keep wages at subsistence, had little to commend it in a country where land was abundant and labor was chronically scarce. The European textbook most widely used in the United States was J. B. Say’s Treatise on Political Economy.31 In this work, the topic of population isn’t even taken up until the end of the second (of three) books, and then no gloomy conclusions are drawn. Moreover, the editor of the American edition of Say’s Treatise, Clement C. Biddle, chastises the English translator in his introduction for inserting footnotes that defend Malthus and Ricardo against Say. Biddle informs the American reader that he has “entirely omitted” all notes by the translator that “are in opposition to the well-established elements of the science, and have no other support than the hypothesis of Mr. Ricardo and Mr. Malthus.”32
A statement by the Rev. John McVickar fairly summarizes the position of most American Christians who discussed the economic order in the first half of the nineteenth century:
That science and religion eventually teach the same lesson, is a necessary consequence of the unity of truth, but it is seldom that this union is so early and so satisfactorily displayed as in the researches of Political Economy.33
The Rev. Francis Wayland, whose Elements of Political Economy quickly became and long remained the most widely-used textbook in the United States after its publication in 1837, taught that God had established laws governing the accumulation of wealth. Chief among these was the truth that those who honestly strive to promote their own welfare promote thereby the welfare of the whole society. It is our task “so to construct the arrangements of society, as to give free scope to the laws of Divine Providence.” And that means allowing each person to keep all that he has justly acquired by his industry, while compelling the slothful to suffer the consequences of their idleness.34
Henry F. May uses the apt term “clerical laissez-faire” to characterize the most influential school of political economy in the United States at least up to the Civil War.35 Christian social thinkers who followed the optimistic Smithian line agreed at least in this respect with those who subscribed to the more dismal Malthus-Ricardo position: the laws of political economy were the laws of God, and they basically ordained non-interference, by government or charitably-inclined private parties, with the consequences that flow from the individual choices of the industrious or the indolent, the frugal or the improvident.
Why did so many Christian thinkers in the first half of the nineteenth century embrace the newly-discovered economic order with such unqualified enthusiasm? Why didn’t a social system so dependent for its functioning on the pursuit of gain pose a greater ethical problem of thinkers inheriting a long tradition of firm hostility to commerce and turpe lucrum? Part of the answer, I believe, is that they saw in the economic order described by the new science of political economy the possibility for a radical transformation of the human condition. The newly-discovered economic order offered an opportunity for people—everyone, in principle, and perhaps most people in practice—to better their condition in life.
Socialists, therefore, by endeavoring to transfer the possessions of individuals to the community at large, strike at the interests of every wage-earner, since they would deprive him of the liberty of disposing of his wages, and thereby of all hope and possibility of increasing his resources and of bettering his condition in life. . . .
Neither must it be supposed that the solicitude of the Church is so preoccupied with the spiritual concerns of her children as to neglect their temporal and earthly interests. Her desire is that the poor [literally, the proletarians], for example, should rise above poverty and wretchedness, and better their condition in life; and for this she makes a strong endeavor. By the very fact that she calls men to virtue and forms them to its practice she promotes this in no slight degree. Christian morality, when adequately and completely practiced, leads of itself to temporal prosperity. . . .
. . . [A]ll may justly strive to better their condition.
The three quotations above are from Rerum Novarum, Pope Leo XIII’s 1891 encyclical on the condition of the working classes.36 They don’t prove the thesis; indeed, they are hardly even evidence for it, coming as they do almost a century after the discovery of the economic order. Nonetheless, they do suggest how powerfully the ideal of bettering one’s condition may have influenced social theology in the nineteenth century. The encyclical does not argue the point; it takes for granted that wage-earners are eager to improve their condition and that this desire is not only compatible with Christian virtue but almost a sign of its presence. We are a long way from the medieval world in which the desire to better one’s condition is cupiditas.
How shall we account for the growing dissatisfaction with the workings of the economic order that Christian spokesmen begin to express after the middle of the nineteenth century? E. R. Norman has become somewhat notorious for claiming that churchmen’s pronouncements on social issues do little more than express the shifting opinions of the intellectual classes to which they belong (or aspire). Norman’s summary of this thesis, in the Introduction to his Church and Society in England 1770-1970, is worth extended quotation:
It is also clear that the leadership of the Church has been internally divided on a number of issues in each successive generation. Some, often a majority, have readily adopted the progressive idealism common to liberal opinion within the intelligentsia, of which they were a part. The parochial clergy and the laity have often been less open to shifts of intellectual attitude—they were less immediately related to the sources of ideas in the Universities and in public life. They have been more reflective of conservative values, slower to adapt to the fashions of thought which take hold at the top of the Church. Divisions of opinion within the intelligentsia have always been faithfully reproduced within the Church’s leading thinkers. This points to another general conclusion of the present study: that the social attitudes of the Church have derived from the surrounding intellectual and political culture and not, as churchmen themselves always seem to assume, from theological learning. The theologians have always managed to reinterpret their sources in ways which have somehow made their version of Christianity correspond almost exactly to the values of their class and generation. Thus theological scholarship justified the structural social obligations of the eighteenth-century world; then it provided a Christian basis for Political Economy; later collectivist principles were hailed as the most perfect embodiment of the compassion prescribed in the New Testament; and even the contemporary doctrines of “liberation” and “secularization” have been given powerful theological support. Theologians, after all, are intellectuals, and they have a natural interest in representing social changes in terms of ideas. It is not surprising that they should believe that their own social preferences are derived from straight intellectual calculation, rather than, as is the case, from the complicated and mixed world of ideas and moral postures characteristic of the intelligentsia as a whole. This is, no doubt, the way of all truth; it takes on the form and the idealism of the intellectual preoccupations of each generation.37
If Norman is correct, an explanation of changing Christian views on the economic order over the past two centuries would have to provide an explanation of the changing intellectual and political culture of the Western world. That task would carry me far beyond my assignment or competence and your patience. But is Norman’s thesis correct? I am convinced it is. His detailed account of changing Anglican views on society between 1770 and 1970 offers overwhelming evidence to support his thesis with respect to England. As one who has read extensively in the American literature, I am prepared to defend the thesis with respect to mainline Christianity in this country.38
I can understand why the Norman thesis would offend many churchmen. But could matters possibly be other than as Norman describes under what Franklin Gamwell has called the conditions of “modernity”?39 If “appropriate standards of belief and action are those which the reasoning human individual sets for himself or herself” (Gamwell), how could we expect Christian thinking about the economic order to reflect anything except “the surrounding intellectual and political culture” (Norman)?
Gamwell thinks that two recent discussions of Christian ethics and the economic order disagree with his claim “that religious ethics is not credible in the modern world unless its judgments and proposals are defended by humanistic appeal.” Philip Wogaman and Robert Benne, as Gamwell reads them, “finally justify their normative judgments by exclusive and, therefore, heteronomous appeal to characteristic convictions of the Christian faith.”40 I think he misreads them. Wogaman, who claims that ideological thinking is unavoidable in this area, also says:
But it still makes all the difference whether our ideologies really do conform, on the one hand, to all we consider good and humane and true and, on the other hand, to the facts of the real world.41
Benne is even more explicit. He appeals to the general evidence of the social sciences for his factual claims and to the political philosophies of Reinhold Niebuhr and John Rawls for “criteria of judgment.”42
One does not, of course, make a “heteronomous appeal to characteristic convictions of the Christian faith” by citing Reinhold Niebuhr in support of an argument, especially since Niebuhr himself often wondered whether there was anything uniquely “Christian” about his social analysis.43 One can also quote the Bible to support an argument without implying anything more thereby than that the text quoted makes a valid point.
To summarize then: Christian thinkers began to offer theological criticisms of the economic order in the second half of the nineteenth century because that order was coming under attack “from the surrounding intellectual and political culture.” The process gathers momentum in England around the middle of the century. In the United States it is delayed for about a generation, partly because the slavery issue had to be resolved first, partly because the problems that the economic order generated were less obvious and probably less severe in this country. I know far less about what was happening in other countries. The 1878 encyclical of Leo XIII attacking socialism, Quod Apostolici Muneris, and the highly conservative Rerum Novarum of 1891 certainly suggest that the Roman Catholic Church was not in the vanguard of those offering criticisms of the economic order in the last part of the nineteenth century.
Although the economic order was discovered in the eighteenth century and clearly recognized at the beginning of the nineteenth century, it did not immediately “become a subject of moral deliberation, debate and decision.” We do not engage in moral discussion of forces that we consider inexorable; and inexorableness was, I think, a dominant perceived characteristic of the economic order in the early nineteenth century. This claim must be distinguished from the quite different and erroneous notion that laissez-faire reigned unchallenged in the first half of the nineteenth century.
It is easy to exaggerate the extent to which laissez-faire thinking on the part of Christians derived from the laissez-faire teachings of nineteenth-century political economy. When churchmen later in the century wanted to proclaim a new departure in Christian social thought, they found it convenient to blame the dogmas of the economists for earlier positions they were now repudiating. “We were misled” is an acceptable excuse. Moreover, it removes the necessity of explaining why the pronouncements of Christian social theorists should be correct now when they were wrong earlier. The flaw in this excuse is that secular political economists in the nineteenth century were generally not advocates of laissez-faire.44
In any event, laissez-faire is a policy, and as such it can be “a subject of moral deliberation, debate and decision.” The sense of inexorableness to which I am referring was something else, and was expressed in a variety of ways. I shall illustrate from the writings of Smith, Malthus, and Marx.
Adam Smith expresses it in a passage that is actually critical of the excessive claims made by François Quesnay and the Physiocrats on behalf of laissez-faire policy:
Some speculative physicians seem to have imagined that the health of the human body could be preserved only by a certain precise regimen of diet and exercise, of which every, the smallest, violation necessarily occasioned some degree of disease or disorder proportioned to the degree of the violation. Experience, however, would seem to show, that the human body frequently preserves, to all appearance at least, the most perfect state of health under a vast variety of different regimens; even under some which are generally believed to be very far from being perfectly wholesome. But the healthful state of the human body, it would seem, contains in itself some unknown principle of preservation, capable either of preventing or of correcting, in many respects, the bad effects even of a very faulty regimen. Mr. Quesnai, who was himself a physician, and a very speculative physician, seems to have entertained a notion of the same kind concerning the political body, and to have imagined that it would thrive and prosper only under a certain precise regimen, the exact regimen of perfect liberty and perfect justice. He seems not to have considered that in the political body, the natural effort which every man is continually making to better his own condition, is a principle of preservation capable of preventing and correcting, in many respects, the bad effects of a political economy, in some degree both partial and oppressive. Such a political economy, though it no doubt retards more or less, is not always capable of stopping altogether the natural progress of a nation towards wealth and prosperity, and still less of making it go backwards. If a nation could not prosper without the enjoyment of perfect liberty and perfect justice, there is not in the world a nation which could ever have prospered. In the political body, however, the wisdom of nature has fortunately made ample provision for remedying many of the bad effects of the folly and injustice of man; in the same manner as it has done in the natural body, for remedying those of his sloth and intemperance.45
Malthus, who wasn’t even an advocate of free trade in grain, much less of laissez-faire, expresses what I am calling inexorableness in the first chapter of his Essay on Population:
In entering upon the argument I must premise that I put out of the question, at present, all mere conjectures, that is, all suppositions, the probable realization of which cannot be inferred upon any just philosophical grounds. A writer may tell me that he thinks man will ultimately become an ostrich, I cannot properly contradict him. But before he can expect to bring any reasonable person over to his opinion, he ought to shew that the necks of mankind have been gradually elongating, that the lips have grown harder and more prominent, that the legs and feet are daily altering their shape, and that the hair is beginning to change into stubs of feathers. And till the probability of so wonderful a conversion can be shewn, it is surely lost time and lost eloquence to expatiate on the happiness of man in such a state; to describe his powers, both of running and flying, to paint him in a condition where all narrow luxuries would be contemned, where he would be employed only in collecting the necessaries of life, and where, consequently, each man’s share of labour would be light, and his portion of leisure ample.
I think I may fairly make two postulata.
First, That food is necessary to the existence of man.
Secondly, That the passion between the sexes is necessary and will remain nearly in its present state.
These two laws, ever since we have had any knowledge of mankind, appear to have been fixed laws of our nature, and, as we have not hitherto seen any alteration in them, we have no right to conclude that they will ever cease to be what they now are, without an immediate act of power in that Being who first arranged the system of the universe, and for the advantage of his creatures, still executes, according to fixed laws, all its various operations.46
The strongest expressions of the inexorableness of the economic order are found in the writings of Marx, whom no one ever accused of partiality toward laissez-faire (or Malthus!). Here is what he wrote in the Preface to A Contribution to the Critique of Political Economy:
In the social production of their life, men enter into definite relations that are indispensable and independent of their will, relations of production which correspond to a definite stage of development of their material productive forces. The sum total of these relations of production constitutes the economic structure of society, the real foundation, on which rises a legal and political superstructure and to which correspond definite forms of social consciousness. The mode of production of material life conditions the social, political and intellectual life process in general. It is not the consciousness of men that determines their being, but, on the contrary, their social being that determines their consciousness. At a certain stage of their development, the material productive forces of society come in conflict with the existing relations of production, or—what is but a legal expression for the same thing—with the property relations within which they have been at work hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an epoch of social revolution. With the change of the economic foundation the entire immense superstructure is more or less rapidly transformed. In considering such transformations a distinction should always be made between the material transformation of the economic conditions of production, which can be determined with the precision of natural science, and the legal, political, religious, aesthetic or philosophic—in short, ideological forms in which men become conscious of this conflict and fight it out.47
The same idea is forcefully presented in part I of The German Ideology, the long essay that Marx and Engels wrote together in 1845-46 in an effort to clarify to themselves their position over against Hegelian philosophy.48 An even clearer and certainly more concise statement is in a letter written by Marx at the end of 1846 to P. V. Annenkov, who had asked his opinion of Proudhon’s new book The Philosophy of Poverty:
What is society, whatever its form may be? The product of men’s reciprocal action. Are men free to choose this or that form of society? By no means. Assume a particular state of development in the productive faculties of man and you will get a particular form of commerce and consumption. Assume particular stages of development in production, commerce and consumption and you will have a corresponding social constitution, a corresponding organisation of the family, of orders or of classes, in a word, a corresponding civil society. Assume a particular civil society and you will get particular political conditions which are only the official expression of civil society. . . .
It is superfluous to add that men are not free to choose their productive forces—which are the basis of all their history—for every productive force is an acquired force, the product of former activity. The productive forces are therefore the result of practical human energy; but this energy is itself conditioned by the circumstances in which men find themselves, by the productive forces already acquired, by the social form which exists before they do, which they do not create, which is the product of the preceding generation. . . . [T]he social history of men is never anything but the history of their individual development, whether they are conscious of it or not. Their material relations are the basis of all their relations. These material relations are only the necessary forms in which their material and individual activity is realised.49
Marx and Engels were notoriously contemptuous of those who wanted to make the economic order the “subject of moral deliberation, debate and decision.” In The Communist Manifesto they summarize their attitude toward such utopian socialists:
Historical action is to yield to their personal inventive action, historically created conditions of emancipation to fantastic ones, and the gradual, spontaneous class-organisation of the proletariat to the organisation of society specially contrived by these inventors. Future history resolves itself, in their eyes, into the propaganda and the practical carrying out of their social plans.50
In the end, however, the economic order must be recognized as an invention, an imposition on our way of conceiving the social world. It wasn’t a mere fabrication. Something was discovered. But the nineteenth century misunderstood it, and Christian social thought has suffered greatly from that misconception.
There is finally no economic order that can be distinguished from other forms or orders of social interaction. There are no economic goals, economic motives, or economic institutions. Economic action is simply purposive action, action that tries to use means to achieve ends.51
Activity aimed at securing food, clothing and lodging was once the basic, essential, and therefore in a sense controlling activity in every human society.52 Exactly when that ceased to be true in Western industrialized societies, or when it became more false than true, can be debated. But it certainly happened a long time ago in the United States. When Americans “make a living” today, they are not aiming to produce the material conditions of their existence. The materialist interpretation of history once functioned as a powerful critique of wishful thinking disguised as social philosophy. Today it is largely irrelevant. The new social needs which have been created in the course of history, through the operation of the powerful social forces that Marx and Engels emphasized, have removed us so far from anything that might be defensibly designated “material” that the materialist interpretation of history is today an obstacle to realistic social analysis. To identify “economic” with “material” only compounds confusion.
Since economic action is purposive action, it is necessarily “individualistic”; only individuals can have action-directing purposes. Economic action necessarily aims at “gain”; that’s an essential part of the meaning of purposive. So economic action aims at individual gain. But this only explicates the meaning of purposive action. It says nothing about what counts as gain for any particular individual. Fellowship, conviviality, discussion, group process—all these could be the gain at which particular purposive actions might be aiming. Who of us knows exactly what we’re aiming at, or what our ultimate goals might be? Ends become means to further ends in the process of living, and the process itself is an important “end,” even when we aren’t explicitly conscious of that fact. We want to win; but we also want a good game.53
Is money perhaps the thread which we’re seeking? Does money have some essential link to the economic order that might enable us to differentiate that order, or to separate economic actions from non-economic actions? Money is a medium of exchange. It is a means to more effective social exchange. It facilitates cooperation. Through the use of money, we can more effectively use the resources under our control to secure from others the cooperation that we need to achieve our purposes. The social institution of money encourages “rationality,” the ends-means approach to life, by facilitating the accomplishment of purposes. It extends the planning horizon, by establishing more predictable connections between immediate actions and distant goals. The increasing monetization of social interactions—“everything has a price”—extends the realm of social, as distinct from merely physical or biological, order.54
We have been learning, since the eighteenth century, that order will emerge from the interplay of human purposes without the existence of any overarching design. We have been slowly discovering the precise conditions which make such orders more or less satisfactory.55 We have begun to realize that the vantage points from which we once thought we could control the chaos or cruelty of “unplanned” social orders are themselves subject to the control of social orders that no one controls.56 Politics has no veto over economics, and economics does not control politics; people simply interact, on the basis of the costs and benefits that they anticipate.
This was first discovered in a sphere where it was most readily apparent: the social production of food, clothing, and lodging. It was most apparent there because this was, by necessity, the sphere of the most consistently “rational” action. Through this accident, the social production and distribution of the basic necessities of life came to be thought of as “the economic order”; the regularities or “laws” governing the production and distribution of these necessities were called “the laws of economics”; and the failings, moral or material, of such unplanned social orders were attributed exclusively to the misconceived economic order.57 It was supposed that there were other forms of rational, purposive association that could correct the errors and fill up the deficiencies of the “competitive,” “individualistic,” “selfish,” “materialistic,” “amoral” (if not “immoral”) economic order.
When Christian social theorists became disillusioned with the idea that the “laws of economics” were the decrees of Providence, they began to substitute the belief that the economic order was perfectly malleable. This is an attractive belief. I do not think, however, that there is anything peculiarly Christian or even religious about it. It isn’t even true. It does nonetheless seem to possess an enormous power to stir the soul of intellectuals and to stoke the fires of moral indignation.58 That is probably enough to guarantee it many more years of vigorous life.
[* ] Unpublished typescript of a paper presented to a conference titled “Christianity and the Economic Order,” at the Divinity School of the University of Chicago, 9-11 April 1984. Reprinted by permission of Mrs. Juliana Heyne.
[1. ] Franklin I. Gamwell, “Freedom and the Economic Order: A Foreword to Religious Evaluation,” p. 1.
[2. ] Polanyi discusses this issue at length in The Great Transformation: The Political and Economic Origins of Our Time (c. 1944) and in several of the essays in Primitive, Archaic and Modern Economies: Essays of Karl Polanyi (c. 1968), edited by George Dalton. The quotation is from “Aristotle Discovers the Economy,” reprinted in Primitive, Archaic and Modern Economies (Doubleday Anchor), p. 85.
[3. ] Polanyi, “Our Obsolete Market Mentality,” Primitive, Archaic and Modern Economies, p. 59. See also The Great Transformation (Beacon Paperback, 1957), pp. 57, 68-76.
[4. ] “Only since the market was permitted to grind the human fabric into the featureless uniformity of selenic erosion has man’s institutional creativeness been in abeyance.” “[L]aissez-faire philosophy, with its corollary of a marketing society, . . . is responsible for the splitting up of man’s vital unity.” “[I]n a truly democratic society, the problem of industry would resolve itself through the planned intervention of the producers and consumers themselves. Such conscious and responsible action is, indeed, one of the embodiments of freedom in a complex society.” The quotations are from “Our Obsolete Market Mentality,” pp. 71, 73, and 76-77 respectively.
[5. ] Sir James Steuart, An Inquiry into the Principles of Political Oeconomy, edited and with an introduction by Andrew S. Skinner (1966), p. 2.
[6. ] The Encyclopédie article was translated and printed with The Social Contract and other essays by Rousseau in the Everyman’s Library series (1935). See p. 249.
[7. ] Steuart, op. cit., p. 17.
[8. ] Smith defined political economy as “a branch of the science of a statesman or legislator” in his introduction to book IV of The Wealth of Nations. All his other uses of the term are consistent with this definition. As Jacob Viner has remarked, given Smith’s “dim view of the benefits to be derived from national economic policy, political economy must for him have been nearly synonymous with ‘economic poison.’ ” From Viner’s article on Smith in The International Encyclopedia of the Social Sciences, (1968-79), vol. 14, p. 328.
[9. ] Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, book IV, chapter IX. The quotation is on p. 687 of the 1976 Glasgow edition, p. 651 of the 1937 Modern Library edition. The editions will henceforth be referred to as (GE) and (MLE).
[10. ] The detached, purely descriptive tone is particularly striking in Cantillon’s Essay.
[11. ]Primitive, Archaic and Modern Economies, pp. 127-29.
[12. ] F. A. Hayek, “Dr. Bernard Mandeville,” a lecture reprinted in New Studies in Philosophy, Politics, Economics and the History of Ideas (1978).
[13. ] Some key passages in The Wealth of Nations: book I, chapter II, pp. 26-27 (GE), p. 14 (MLE); book II, chapter III, pp. 341-49 (GE), pp. 324-32 (MLE); book IV, chapter II, pp. 454-56 (GE), pp. 421-23 (MLE).
[14. ] Adam Smith, The Theory of Moral Sentiments, part VII, section II, chapter IV, pp. 308-9 in the Glasgow edition (1976).
[15. ] This is the theme of book II, chapter III in The Wealth of Nations.
[16. ]The Theory of Moral Sentiments, part I, section III, chapter II, p. 50. For an elaboration of Smith’s thought on this issue, see all of chapter II and chapter III in section III of part I and also chapter I of part IV.
[17. ]Ibid., p. 309.
[18. ] It should not be maintained even by someone who has read only The Wealth of Nations. It is maintained, unfortunately, in Max Lerner’s introduction to the Modern Library edition.
[19. ] Ernest Marshall Howse, Saints in Politics (1952), p. 128.
[20. ]Op. cit., chapter V, p. 100 in the Sraffa edition. See also p. 96 and the quotation from Robert Torrens in the footnote.
[21. ] It was turned rather quickly into the innocuous proposition that population is limited by the supply of foodstuffs.
[22. ] A. M. C. Waterman, op. cit., Journal of Ecclesiastical History (April 1983), p. 238.
[23. ] In addition to the essay cited above, see Waterman, “Malthus as a Theologian: The First Essay and the Relation between Political Economy and Christian Theology,” in Malthus Past and Present (1983), and J. M. Pullen, “Malthus’ Theological Ideas and Their Influence on His Principle of Population,” History of Political Economy (Spring 1981), pp. 39-54.
[24. ] For the effects all this had in delaying the success of Wilberforce and his friends in securing abolition of the slave trade, see Howse, Saints in Politics, pp. 28-64, and especially pp. 42-45.
[25. ] My account depends heavily on Howse, op. cit., especially pp. 116-37.
[26. ] Charles E. Raven, in presenting the historical background to the Christian Socialist movement, writes as follows: “Very characteristic is their great hero William Wilberforce, whose private life was a shining example of consistent and earnest goodness, who had a real belief in freedom and spent years in the struggle for the abolition of slavery, and who never realised that, while he was bringing liberty to negroes in the plantations, the white slaves of industry in mine and factory were being made the victims of a tyranny a thousandfold more cruel.” Raven, Christian Socialism 1848-1854 (1920), p. 12.
[27. ] Howse, op. cit., pp. 117-18, 127-29.
[28. ] Henry Thornton, An Enquiry into the Nature and Effects of the Paper Credit of Great Britain (1802), reissued in 1939 under the editorship of F. A. Hayek with a long and scholarly introduction by the editor.
[29. ]Primitive, Archaic and Modern Economies, p. 131.
[30. ] George Johnson Cady, “The Early American Reaction to the Theory of Malthus,” Journal of Political Economy 39, no. 5 (October 1931): 601-32.
[31. ] Michael J. L. O’Connor, Origins of Academic Economics in America (1944), pp. 120-35.
[32. ] Jean-Baptiste Say, A Treatise on Political Economy, translated from the fourth edition of the French, by C. R. Prinsep; New American edition, containing a translation of the introduction, and additional notes, by Clement C. Biddle (1836). The advertisement by the American editor to the fifth edition contains Biddle’s complaint against Prinsep for yielding ground to Malthus and Ricardo, p. ix.
[33. ] The statement is in one of the many footnotes McVickar wrote for Outlines of Political Economy (1825), which is basically a reprinting with commentary of J. R. McCulloch’s essay on Political Economy in the Encyclopedia Britannica (1825), p. 69.
[34. ] Wayland’s theological economics are discussed at some length in a forthcoming article titled “Clerical Laissez-Faire,” which I originally wrote for a 1982 conference on religion and economics. The book containing the article is to be published by the Fraser Institute of Vancouver, British Columbia.
[35. ] Henry F. May, Protestant Churches and Industrial America (1949), p. 14.
[36. ] I have added the emphasis in quoting from The Church Speaks to the Modern World: The Social Teachings of Leo XIII, edited and with an introduction by Etienne Gilson (Doubleday Image Book, c. 1954), pp. 207, 220, 226.
[37. ] E. R. Norman, Church and Society in England 1770-1970: A Historical Study (1976), pp. 10-11.
[38. ] The mildly interested reader could examine James Dombrowski, The Early Days of Christian Socialism in America (1936); Charles Howard Hopkins, The Rise of the Social Gospel in American Protestantism, 1865-1915 (1940); and Henry F. May, Protestant Churches and Industrial America (1949). Anyone over thirty years of age can consult his memory.
[39. ] Gamwell, op. cit., pp. 1-3.
[40. ]Ibid., p. 2.
[41. ] J. Philip Wogaman, The Great Economic Debate: An Ethical Analysis (1977), p. 33.
[42. ] Robert Benne, The Ethic of Democratic Capitalism: A Moral Reassessment (1981), pp. viii-ix and the entire first chapter.
[43. ] Reinhold Niebuhr, Leaves from the Notebook of a Tamed Cynic, reissued with a foreword by Martin E. Marty (c. 1929, 1956, 1980). Pp. 166-67 and 196-97 offer some typically Niebuhrean comments on Niebuhr.
[44. ] Lionel Robbins, The Theory of Economic Policy in English Classical Political Economy (1952). Of course, if laissez-faire is redefined to cover any predisposition against adding to the agenda of government, then the classical economists were indeed defenders of laissez-faire.
[45. ] Smith, The Wealth of Nations, book IV, chapter IX, pp. 673-74 (GE), p. 638 (MLE).
[46. ] Thomas Robert Malthus, An Essay on the Principle of Population, Norton Critical Edition (1798, 1976), p. 19.
[47. ] I have quoted from The Marx-Engels Reader, Second Edition, edited by Robert C. Tucker (1978), pp. 4-5.
[48. ] It was not published until 1932.
[49. ]The Marx-Engels Reader, pp. 136-37.
[50. ]Ibid., pp. 497-98.
[51. ] The definitive discussion of these matters is still the series of articles that Frank Knight published in the 1920s in the Quarterly Journal of Economics, which were reprinted as the first three essays in Frank H. Knight, The Ethics of Competition and Other Essays (1936).
[52. ] This is what accounts for the early economists’ tendency to assign a superior productivity to agriculture. The Physiocrats made agriculture exclusively productive, and labelled manufacturing and trade “sterile.” In modern jargon, they were calling attention to the low marginal productivity of non-agricultural production. Cantillon’s Essay makes all this remarkably clear.
[53. ] A point regularly insisted upon by Knight.
[54. ] My attempt at description should not be understood as an unqualified endorsement.
[55. ] Clearly-defined rights (or powers) with few restrictions on the exchange of rights turn out to be significant conditions.
[56. ] Marx and Engels never explained how order would be achieved once “social control of the means of production” had been established. Engels occasionally raised the question—in the preface he wrote to The Poverty of Philosophy, for example, where he pithily demonstrates the unworkability of socialism as advocated by Rodbertus—but always walked away without actually answering.
[57. ] “Reflection will reveal,” according to Frank Knight, “that it is rather an accident that internal social conflicts take the economic form. This will be clear if one pictures the situation which would result if every adult were granted the power to work physical miracles, and could bring about any desired physical result simply by wishing, thus eliminating all problems of production and distribution. Problems of associative life would then arise only in the other two of the three main forms of interest and activity we have recognized, i.e., in play and culture. But without some revolutionary change in human nature, conflicts in these fields would be fully as acute as those to which economic interests give rise, and they would not be essentially different in form. It is probable that the necessity of economic activity and co-operation actually reduces social conflict on the whole. Man is by nature self-assertive and competitive, and is also disposed to gang up in conflicts and contests, whether or not any real advantage is at stake.” From Frank H. Knight and Thornton W. Merriam, The Economic Order and Religion (1945), p. 99.
[58. ] An excellent example is provided by Knight’s collaborator in The Economic Order and Religion, Thornton Merriam. See especially his chapter on “Economic Intentions of Christianity,” pp. 190-205.