Economic Freedom in the Light of Personal Freedom

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Free will is a personal human power, which provides the light of personal freedom necessary to evaluate economic freedom and a standard of living. The subject of economics concerns the social relationships that arise in a society in which there is a division of labor.  These relationships may be just or unjust. Our Lord tells us that, irrespective of societal relationships, personal freedom is inalienable.

And do not fear those who kill the body but cannot kill the soul; rather fear him who can destroy both soul and body in hell. (Matthew 10:28)

We ought not to fear what others can do to us, but what we can do to ourselves by our own choice to hate rather than to love. One saint who epitomizes the inalienable exercise of her free will to love, rather than to hate, while enduring extreme cruelty from others within an unjust economic system, is St. Josephine Bakhita.

While suffering extreme cruelty under economic slavery, St. Josephine reasoned that there must be a good source of the beauty of the stars, though she did not know that source. Later, under a kind master, she learned of Jesus crucified for her and of the Catholic Faith. She had the heroic virtue to be thankful both to her kidnappers who sold her into slavery and to her cruel slave masters because they mapped the journey which led her to the God of Love, who suffered for her.

I stand in awe of St. Josephine. I suspect I would succumb to bitterness and hatred, assuming that I could have survived her extreme suffering under economic servitude.

Economic Servitude/Freedom and the Catholic Faith

Although the Catholic Faith condemns economic servitude, it does not propose any system of economic freedom. Economics is a secular, not a theological topic. No economic system has a corner on moral rectitude. St. Paul does not propose an economic system alternative to that of Roman slavery. In his letter to Philemon, St. Paul urges him to act freely out of brotherly love, which is completely incompatible with economic servitude. It is brotherly love, not an economic system, which destroys slavery.

Is the Capitalism of Today a System of Economic Freedom?

In a discussion of capitalism and distributism, Jay Richards identifies capitalism as a system of economic freedom because it is based on free markets and free contracts. However, to apply the word free to a market-determined price is an analogy, because freedom is only applicable to a person. Only the person has free will. Imagine each shopper haggling with a grocer over the price of milk and each other commodity. Of course, no one today would want such economic freedom.

Similarly, “free contract” is a misnomer when applied to an individual’s being hired to work. A truly free contract can only be made by two equal individuals. The very terminology of capitalism’s  “free contracts” with persons hired indicates the inequality of the contractors and, thereby, the absence of true freedom of the individual hire. Consider the pairs owner/wage earner, employer/employee, and manager/human resource: Employee at least implies a person being used as a tool. Today’s term, human resource, reduces the person to an inert commodity.

What is the basis of inequality in the contract of hiring? The one contractor has control over the means of production, while the other, the hire, has no control over any means by which to make a living.

Is Distributism a Practical Alternative to Capitalism?

Distributism is the name used by Hilaire Belloc and others for an economic system in which the number of farmers and craftsman, individually owning the property (land, tools, buildings, etc.) by which they make their living, is such as to make their presence commonplace, thereby giving a tone of economic freedom to a society.

Jay Richards and others have emphatically said, “No”.

Scoffing, they claim that distributism would result in a stagnate society in which everyone was a farmer owning “three acres and a mule.” They argue that such a system of alleged economic freedom would condemn everyone to poverty. It would preclude the explosion of technology and its resultant dramatic increase in the standard of living that we have enjoyed under capitalism since the second half of the twentieth century.

In the 1930s, due to low wages, which suppressed purchasing power and thereby consumption, capitalism nearly came to a halt. Belloc addressed the situation in a series of newspaper columns in 1938, The Way Out, now in book format. A superficial reading would identify the value of distributism as the alleviation of material insufficiency and material insecurity, which were typical of wage earners at the time of his writing. Superficially, distributism appears to be simply a proposed way of raising the low standard of living of the 1930s. Yet, a tremendous increase in the standard of living was achieved by capitalism itself in the latter twentieth century. This was the very experience of my father, who worked in the first half of the twentieth century, and his offspring, who worked in the second half.

At that time the rule was: the lower the wages, the higher the profit per unit of product. However, it was later realized that the suppression of wages suppressed sales and thereby profit. In the second half of the century, capitalism apparently cured itself by increasing wages and thereby purchasing power and total profit. The result was a high standard of living for the general population of workers.

A Family Tale

In the first half of the twentieth century, my father worked at an insufficient wage in the insecurity of a switchman on the extra-board of a railroad. We had a payphone in our apartment so he could be summoned to work at an hourly wage if a regular employee couldn’t come to work on a particular day. In 1937, he died of cancer at the age of 48 in the railroad hospital. His underaged offspring, though malnourished, survived on welfare, until coming of age, when they were employed in the economic boom of the second half of the twentieth century. They enjoyed an incredibly high standard of living compared to their father. Capitalism had apparently cured itself.

The Contentment of a High Standard of Living

The Bible attests to the fact that a high standard of living yields contentment irrespective, indeed in spite of, the absence of economic freedom. The Israelites, having left the economic slavery of Egypt were experiencing a lower standard of living as economically free nomads.

And the whole congregation of the people of Israel murmured against Moses and Aaron in the wilderness, and said to them, “Would that we had died by the hand of the Lord in the land of Egypt, when we sat by the fleshpots and ate bread to the full; for you have brought us out into this wilderness to kill this whole assembly with hunger.” (Exodus 16:2-3)

The prodigal son had given up hope of being a master rather than a slave, but at least his father’s slaves enjoyed a high standard of living, while the pigs he tended ate better food than he.

“And he would gladly have fed on the pods that the swine ate; and no one gave him anything.  But when he came to himself he said, ‘How many of my father’s hired servants have bread enough and to spare, but I perish here with hunger!’” (Luke 15:16-17)

Non-Capitalist Systems and the Standard of Living

In the typical capitalist democracy, the non-owners of the means of their livelihood, are politically free. They are not economically free, although they enjoy a high standard of living. In contrast, the citizens of the Peoples Republic of China are neither politically nor economically free. Does this preclude their enjoying a high standard of living? Apparently not, as voiced by Bernie Sanders:

… [W]hat we have to say about China in fairness to China and its leadership is, if I’m not mistaken, they have made more progress in addressing extreme poverty than any country in the history of civilization, so they’ve done a lot of things for their people.

Taking per capita smartphone users as an indicator of the standard of living in 2018, the US was 5th at 77% and the PRC was tied with Japan for 18th at 55%. Due to the size of China’s population, there were three times as many smartphone users in the PRC than in the US.

Is a High Standard of Living Sufficient for Human Dignity?

Only persons can be free. What is required for human dignity is freedom, including freedom in the economic sphere. That is the underlying theme of Belloc’s The Way Out. Humans are made in the image and likeness of God because they have free will. The basis of economic freedom, as identified by Belloc under the term distributism, is ownership of the means of one’s livelihood by the individual, or ownership by a group of partners. Such partners would not be holders of stock certificates, but members of a guild of craftsmen.

Conclusion

Economic freedom is a truly human good. Humans, like animals, can experience a high or low material standard of living, but only humans can experience freedom and servitude. The wild coyote is unrestrained, but he is not free, because animals lack self-cognizance and lack free will. Restrained by instinct and training, the domestic dog obeys his master for whatever his master will give him, but the dog lacks the cognition and free will to be in servitude.

I would be the first to choose fleshpots over economic freedom, but I know such is a moral weakness. It is also true that every human effort to achieve social justice will fall short because of our darkened intellects and weakened wills, thanks to Adam’s sin. Nevertheless, economic freedom is a worthy goal. It depends on the personal ownership of the means of his livelihood by the individual craftsman or his membership as a partner in a guild owning and operating a larger enterprise.

Under the current economic system of our society, the most obvious experience of economic freedom, other than that of medical doctors, is that of the individual, self-employed craftsman in the field of home maintenance and home improvement. Such economically free artisans are too few to impart the tone of economic freedom to our society as a whole.

Saints Paul and Josephine Bakhita, pray for us.

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4 thoughts on “Economic Freedom in the Light of Personal Freedom”

  1. There are a number of things right in this article and several that are wrong. In the interests of brevity I will confine to just one significant. The term “free” does not require the inclusion of “equal.” The employee-employer relationship can be free without being equal. If the employees is able to work somewhere else he is both free and the equal of the employer. The instance cited was a distortion of the free market caused by nonsensical and coercive government policies. Such policies continue today as government searches for more and more control over the lives of citizens. The problem with true free market economics is that it has rarely been tried without meddling on the part of government or other seekers of power.

  2. Thanks for the reply Mr. Drury.

    Do we as Catholic Christians think all human activity is made better when we bring our Christianity moral choices to the activity? Of course. Markets are no different. They are mirrors of society’s values. If we dislike what we see in the mirror, the task is to change the image maker not call the mirror bad. The mirror reflects what is.

    I like the story of the Prodigal son. Many lessons there. I’m not sure which one you are looking to draw from it. Did the Prodigal son have very few choices when the famine hit. Yes, of course. Because he made very bad choices ahead of the famine. What other lesson would you have us learn. The man lived in the very lap of luxury with opportunities to learn trade and craft all around him at his father’s house. But he squandered it. This is life. This is how things work. The lesson is take advantage of all the gifts you have been given because the famine is right around the corner and you know now which will be of value. The value of his life as any life is infinite. But what he brought from a purely economic view was little. He had no life in him because of his avarice. I’m glad he realized his hate for his father was bad. He made the free choice to leave and he realized he had that option. Again – great news! But what if he had stayed? I think that is what you are pointing at. And here, who knows what opportunity would have presented itself the next day, the next week, the next month? The message is – learn what you can while you can. You will find opportunities. Take them. Be a joyful human being. Sometimes you have to serve the pigs until the next opportunity comes. We could easily look at Joseph as another “prodigal” son. But he managed to use the gifts God gave him. He kept his heart and he was able to save his family in a different time of famine. If you want to be able to help the needy, use the opportunities and talents God gives you and always be joyful.

    You will find avaricious and evil men in the market, of course. But you will men of God there too. It’s not different than anywhere else. Learn to be gentle as doves and wise as serpents.

    Here are the alternatives Mr. Drury. We either have free markets and yes some people will take advantage of others but everyone always learns and becomes better at reducing scarcity and if Christians do our jobs in the market right, then hopefully in a moral way. Or we have the heavy hand of the state, literally dictating at the point of a gun, causing all kinds of havoc with the real market signals by crashing through them like naval carrier groups through a fishing pond wreaking destruction of the delicate and ever responsive scarcity signal creation of the market. This is the alternative to the market – the state ever power hungry, ever blood drenched throughout history and never capable of any subtlety or dexterity in the intricate web of human life. The state creates awful scenarios of unintended consequences because it can never see all the things going on in human life. Where the market lets each individual actor choose and through the larger process of the market all those individual signals are processed and accounted for and corrected or affirmed. And again, which is back to the main point of the article, it’s voluntary. You always, always have choices and opportunities.

    Frankly, Mr. Drury, by folks like you lamenting and filling people’s heads with the awful psychological poison that they have no choices in the market, that others have the power, it does make the market fail. You set the stage for the heavy hand of the tyrant who says “I will fix it.” I think we are better off with an cultural attitude of “I will learn and do my best and take the next opportunity that comes my way and make good of it and the next and the next.”

    The market signals scarce resources. It mirrors societal values. If we want markets for good, we need to bring Christ into the markets in our lives.

  3. Bob, I’m really sorry but you have completely misjudged the situation. I think you either forget or you don’t know the single thing we must always remember – real prices reflect real physical scarcity in the world. Free markets do the very best of anything to reflect that real scarcity in the world. Much better than any other institution. What you forget in this article is the millions and billions of transactions taking place across the market and each one being factored into another by the very next iteration of transactions. All of those transactions represent an approximation of real scarcity in the world. And as they work themselves out, they come to a better and better approximation of the true scarcity of the good.

    You say the freedom is only applicable to one person in the case of the grocer selling something or the business owner offering employment. This is utter rubbish. You are always free to go elsewhere. And that opportunity is what equalizes the relationship between the grocer and purchaser and the business owner and job applicant. You make it sound like the business owner or grocer has all the power. That is the kind of terrible attitude that leads to aggrievement politics otherwise known as socialism. The buyer in the case of the grocer can easily go to the next market or the farmer’s market or the bodega or any number of other places to buy or to find some substitute but cheaper alternative or to not buy at all. That is the very definition of FREEDOM for the purchaser. Similarly, in the case of the business owner offering employment ou say, “The one contractor has control over the means of production, while the other, the hire, has no control over any means by which to make a living.” Again, utter rubbish. The job applicant, potential star colleague, begged for competent employee – whatever you want to call her – is free to free to evaluate her skills and offer them to the employer at any rate she wants – to ask for more than is being offered or go elsewhere. The job applicant knows her skill level and those skills are clearly a way to “make a living.” She is free to offer them on the market to any taker or refuse to offer them whatever price. Again, full freedom.

    Please, I beg all of you, read Henry Hazlitt’s Economics in One Lesson for the single best introduction to what real economics is about.

    1. Your argument is that of Jay Richards, who identifies the working principles of Capitalism as ‘The Principles of Economics’. Socialism magnifies the faults of Capitalism and is not The Way Out of Belloc. Your illustration of employee freedom is that enjoyed by the Prodigal Son, who was free to quit his job as swineherd to seek employment elsewhere.
      Economics arises in any society in which there is a division of labor and where trade is other than barter. The fundamental principles of economics are the corporal works of mercy as opposed to avarice. In his Canterbury Tale, on the topic of avarice, the Parson identifies commerce as the exercise of virtue in service of others:
      “Of thilke bodily marchandyse, that is leveful and honeste, is this; that, there-as god hath ordeyned that a regne or a contree is suffisaunt to him-self, thanne is it honeste and leveful, that of habundaunce of this contree, that men helpe another contree that is more nedy. / And therfore, ther mote been marchants to bringen fro that o contree to that other hire marchandyses.”

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