Saturday, December 13, 2014

The Church and the Market: A Value-Free Economics?

This is the 6th and the last section of chapter 1. It's about Economics: A Value-Free Science?

Chapter 1 deals with three types of objections:

Objection # 1 - The emphasis of Austrian School on efficiency is morally questionable. We answer this objection here.

Objection # 2 - The Austrian concept of economic law is incompatible with Catholicism. The response to this objection is found in this article

Objection # 3 - The autonomous nature of economics is contrary to Catholicism. This is the focus of the present article.

The third objection is about the relationship of economics to religion, Christianity, theology, and ethics. At the outset, we can see that the center of contention is between the autonomy of economics as a science and its subordination to religion. 

For Woods, the third objection is an outcome of a misconception about the nature of economics as a science. And so he responds to the objection by explaining first the nature of economics. 

Scarcity and the satisfaction of an end are two basic facts in economics. Its task is to describe these facts not to "prescribe" what our ends should be. However, by saying this, it doesn't mean that ethics is not important. Economics is simply describing the boundary of its subject matter and uses "reason to discover how man's ends can be reached" (ibid.). It accepts its limitation by acknowledging that the determination of end is not part of its task, but the territory of theology and moral philosophy. 

At this point, I notice that Woods is cautious about the danger of "intelletual imperialism" (p. 31) coming from both natural science and theology. He issues a warning:

"Every academic discipline, while making its own contribution to knowledge, is necessarily limited in the amount of truth with which it can enlighten us" (ibid.). 

That is why Woods likes Rothbard's idea that the recognition of this limitation is actually "good for our souls" (ibid.). 

Furthermore, by asserting the autonomy of economics, Woods also acknowledges the fact that economists as humans "should take moral positions" (ibid.) and these positions affect their attitude towards their subject. 

Closely related criticism to economics' autonomy includes the charge of "compartmentalization," which is a common mistake in modernity. Woods denies this charge. Since the task of economics is purely descriptive, he does not see the need for an ethical connection. And then he provides examples of such desciptive technical analyses: "analysis of supply and demand curves," analysis "of the complementarity of capital structure," and "analysis of the economic effects of inflation." 

For Woods, relying on Shawn Ritenour, the axiom of human action, which is the scope of economics does not belong to moral philosophy; it is simply a statement of the fact of human nature. As such the analysis of human action can rightly be perceived as "either correct or incorrect," but not necessarily "moral or immoral" (p. 32).

And so for Woods, there is nothing wrong to keep the autonomy of economics. He agrees with Benjamin Rogge that the Bible, the Papal encyclicals, Christian doctrine, and Christianity have nothing to do whatsoever with pure science like economics. Woods affirms Rogge's conclusion: "There can no more be a Christian science of economics than there can be a Christian science of mathematics" (p. 33). 

We notice here that Woods is emphatic about the disconnection of economics from ethics. However, he is cautious to repeat that this disconnection only concerns economic analysis and not about the use of economic resources. 

To strengthen his case, Woods brought us to the Medieval Period. During that time, the distinction between natural philosophy and theology was maintained. None would dare to import theology into natural philosophy for these two academic disciplines were accepted as separate. The issue of "compartmentalization" was not raised. Again, Woods finds justification for this position in Thomas Aquinas. He concludes that the same principle must be maintained to keep the autonomy of economics from theology. And finally, Woods relates his conclusion to Aquinas' three types of knowledge:

"St. Thomas made a famous distinction between knowledge attainable by reason alone, konwledge attainable by reason and also known by faith, and knowledge attainable only through faith. . . . Economics and its laws belong to the category of knowledge that is attainable by reason alone" (p. 34). 

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In summarizing the last section of chapter 1, I want to raise few points concerning Woods' position on the autonomous character of economics. I acknowledge that since the book is a Catholic defense of the free market, I think Woods' position is consistent as far as the Catholic presupposition is concerned particularly as found in the writings of Thomas Aquinas. 

However, Catholicism does not have the monopoly of the intellectual defense of the free market. From the perspective of Classical Protestantism as seen in the writings of Herman Bavinck, Cornelius van Til, and Gary North, we can see this issue of economics' autonomy from a different point of view.

One particular concern is about the limitation of academic discipline. I encounter this idea of "intellectual imperialism" first in Herman Bavinck's book, The Philosophy of Revelation. The concern of Woods concerning the dominance of natural science was already raised by Bavinck in his Stone Lectures at Princeton Theological Seminary for the academic year of 1908 and 1909. In chapter 4, Revelation and Nature, he affirms that natural science is “perfectly free in its own sphere” (p. 86) and it has to acknowledge its limitations, a principle, which Woods observes has been neglected by natural science for so long (p. 31). 

On the other hand, contrary to the conclusion of Woods, natural science (and I think Bavinck woul also include other sciences including economics) cannot be completely disconnected from theology and ethics. Bavinck warns:

Natural science "shall not form a conception, out of the narrow sphere in which it works, in which no room is left for the soul and immortality, for intelligence and design in the world, for the existence and providence of God, for religion and Christianity” (p. 86). In fact, Bavinck even argues that natural science has been using terms and ideas borrowed from metaphysics "like ‘thing’ and ‘property,’ ‘matter’ and ‘force,’ ‘aether’ and ‘movement,’ ‘space’ and ‘time,’ ’cause’ and ‘design,’ . . . . ” (p. 88). 

Moreover, the science of nature has a duty to “maintain its ethical character, and shall not put itself at the service of the evil inclination of the human heart in its endeavor to explain the world without God and to erect itself into a self-supporting and self-sufficient divinity” (ibid.). 

I think similar principle can be applied to other sciences. Maintaining the ethical character of the sciences is not a violation of their autonomy or a replacement of intellectual imperialism of natural science with another kind, theological imperialism. This is unavoidable on two grounds:

First, the world is either supranatural in its origin or has come from an eternal matter of some kind. Second, if the former is true, the fact of revelation is also inescapable. Christian Theism teaches that both nature and the Bible are parts of divine revelation. The study of economics is part of nature. 

Another concern is related to the descriptive character of economic analysis. It is something that all human can share regardless of religious standing, Christians or not. If this is the meaning of "ethical disconnection," I think the classical Reformed theology will have no quarrel with it. Moreover, Cornelius van Til has a particular concept that I think helpful to this discussion. He distinguished the difference between proximate or immediate matters from ultimate matters. When it comes to proximate matters, these are things that all human share by virtue of common grace. Theological formulation is unavoidable even in these areas of human concern.

My third concern is about the negation of the existence of Christian science of economics. I am not sure if I accurately understood Woods in this regard. If the "Christian science of economics" is similar to "biblical or Christian economics," I am now thinking about the 39 years spent by Gary North in finishing his 31 volume economic commentary on the Bible, which primary thesis is to prove the relationship between the Bible and the free market. Of course, to disprove North, one has to exert a certain amount of time and energy studying his books. As for me, that is a task that is next to impossible for none in our generation would dare do it, not only because it is perceived as a waste of time, but also the fact that the intellectual consensus has decided that the case is already closed. 

My fourth and last concern is about the three types of knowledge. This issue is connected to the relationship between reason and faith. I want to repeat here a portion of my comment on the first article: 

". . . . the author assumes that reason is the same in all human. In this, he fails to take sin into account. Though he admits in the concluding section of the chapter that morality is inescapable due to the fact that economists are still human, but he implicitly denies the impact of sin on human reason. To this blogger, basing on Van Tilian assumptions, sin affects the entirety of man including his reason, and that would mean even his study of economics."

For an overview of the relationship between faith and reason:




Source: Woods, T. E. Jr. (2005). The Church and the Market: A Catholic Defense of the Free Economy. Lanham/Boulder/New York/Toronto/Oxford: Lexington Books.