Is "Laissez-faire" a "straw man"?

Yesterday, I wrote about the Catholic case against libertarianism. I had not planned on revisiting the topic but then my friend Rick Garnett, of Notre Dame, tweeted out a link to my article with the comment: “’Laissez-faire’ is a straw man, I think. Doesn’t exist.” Professor Garnett is one of the brightest and, usually, most incisive, commentators in the U.S. Catholic commentariat. I will attribute his pithy, but woefully inadequate, comment to end-of-semester fatigue combined with the limitations of the twitter-verse.

But, let us have the question: Is “laissez-faire” a straw man? Does it exist? The answers are no and yes.

First, it is possible to criticize an ideological perspective even if it has not been fully realized in fact. The Church condemned Marxism long before the Bolsheviks stormed the Winter Palace, and the Church was right to do so. The Church has also condemned laissez-faire economics since the time of Leo XIII even though, as Garnett’s tweet suggest, there is no country where laissez-faire, or libertarian, ideas has ever fully held sway. (I suppose there is an argument to be made that Somalia represents an extant libertarian state.)

Second, as my post yesterday made clear, this ideological perspective that I have labeled “laissez-faire” most definitely exists and, in the event, is trying to carve out a place for itself within Catholic social doctrine. It has been more than a year since I read Fr. Sirico’s book, “Defending the Free Market: The Moral Case for a Free Economy,” and about a year since I read Samuel Gregg’s “Becoming Europe,” but I do not recall either of these principals at the Acton Institute even once acknowledging a circumstance in which they preferred a governmental solution to a free market solution. Yes, they insist that government must guarantee the rule of law, and for them the rule of law more or less exhausts itself when it protects private property rights.  

Third, in the event, the ideas we associate with a laissez-faire perspective are not mere abstractions. The Glass-Steagall Act really was repealed. NAFTA, shorn of any meaningful labor or environmental protections, is the law of the land. The House GOP budget crafted by Congressman Paul Ryan really does advocate the privatization of Medicaid. The Senate Republicans really did try and filibuster the nomination of Richard Cordray to lead the Consumer Financial Protection Bureau, and not because Mr. Cordray was incompetent but because they did not want to see the Consumer Financial Protection Bureau functioning at all. Milton Friedman really had a powerful effect on policy debates in Washington and beyond. The IMF really does force small, indebted countries to sell of their state assets and adopt austerity measures regardless of the consequences for the poor. My friend Professor Garnett must allow that even if there is no such thing as a pure example of a laissez-faire society, there is an abundance of examples of policies and people trying to pull our society in that direction. If this is a straw man, that is some straw.

Fourth, dismissing “laissez-faire” as a straw man fails to recognize the power of ideas, no matter how fitfully they are concretized. Laissez-faire, or neo-liberalism, or libertarianism, is an ideology in the strictest sense of the word. It sees the set of ideas it espouses as a kind of transcendent, as something almost uncreated, like a law of nature. In this case, libertarianism believes that the “laws of the market” are so real, they cannot be argued with. Doing so is akin to Canute ordering back the waves. The laws of the market are inexorable, as is the common cold, but our laissez-faire friends see no need for chicken soup. They like their ideological infection and deify it. They treat their economic laws as if they were not, like all economic ideas, human constructs. Angus Sibley, in his wonderful book, “The ‘Poisoned Spring’ of Economic Liberalism,” argues powerfully that laissez-faire ideas are bad economics, not just morally and spiritually destructive. He uses the powerful metaphor of the trains in the London subway system. When it is necessary to repair an engine on one of the trains, it is necessary to provide a counterweight, because those engines are used to dragging a big train along. Without the counterweight, when the mechanic proceeds to test the engine, the engine will spin out of control unless the inertia equal to the weight of the train is applied. The engine will self-destruct. That is as fine a metaphor for what happened in this country in 2008 as any I have discovered. Sibley convincingly makes the case that libertarian economics is a false idol.

I would go further. Let us stipulate, for the sake of argument, that libertarian economic ideas are not false as Sibley suggests. Let us assume they are true. Still, the libertarians make of them an idol and it is wrong to erect an idol per se. What do I mean by this? I mean that imparting any transcendent attributes to that which is not transcendent is, per se, opposed to Catholic social doctrine. Believing that the “laws of the market” have an independent truthfulness to them, that provides the kind of a priori benefit of the doubt libertarians accord to free market principles, is idolatry. Again, economics, like politics, is a human creation. Our criterion for evaluating the truth of the claims the laissez-faire advocates make is outside their internal framework and they tend to elide that fact. To them, the laws of the market are absolute. That’s idolatry.

To be clear, for a Catholic, the criterion for evaluating a solution to any human conundrum is not to ascertain if that solution is a government solution, and to support it because it is a government solution, nor is it to defend a free market solution because it is a free market solution. Our criterion, as Catholics, is the human person, not an abstract commitment to the state or the market. Indeed, as Pope Benedict XVI indicated in his encyclical Caritas in Veritate, we need to move beyond this binary way of analyzing human affairs.

This criterion for Catholics operates at two levels. First, there is the lived reality. Our free market friends are fond of trotting out data to prove that capitalism has increased wealth and lifted millions of people out of poverty. I will concede there is something to the argument, although I suspect that human life expectancy rates would have increased because of advances in medical technology with or without capitalism. But, no system can be endorsed by a Catholic that also leaves so many millions of people struggling to survive. Our friends at the Acton Institute are suspicious of Pope Francis because they know the theories of the Austrian economists, but he knows the slums of Argentina. His knowledge of global capitalism is just as real, and probably much more so, than theirs.

The second level on which our Catholic criterion - that the human person is the measure for any and all economic ideas – operates is the acknowledgement that ideas have a reality to them as well, and that this reality must be deeply personal or it runs the risk of becoming an ideology. By placing the human person at the center of analysis, rather than abstract laws, we keep ourselves honest. There is a reason that ideology is usually used as a pejorative.     

It is often said that Catholic social doctrine is a kind of middle way between socialism on the one hand and laissez-faire capitalism on the other. There is some truth to this saying, but it is superficial and misleading. The value of Catholic social doctrine is not its moderation between two extremes. In this case, starting with Leo XIII, the critique of both socialism and capitalism was based on the materialism that is at the root of both. Catholic social doctrine does not begin with matter, still less with abstract theories about matter. It begins with the person, better to say, with a person, the person of Jesus Christ. Jesus Christ is the way, He is not an idea. He is a person, not an abstraction. Our Catholic evaluation of human economics, and human politics, and human culture, is rooted not in competing ideologies between which we seek a middle path. Our Catholic evaluation is rooted in what Jesus Christ revealed about the human person. By my reading, He revealed that we humans are called to communion and solidarity, and those are not values found in the libertarian canon. He did not urge us to competition. He did not commend an abstract freedom. Jesus Christ did not champion self-assertion or the profit-motive. We worship a crucified God, which is a rather strong argument against any Gospel of Success. Jesus calls us to become suffering servants of our fellows, as He did. That is why those of us who oppose laissez-faire economics do not stand idly by when the “laws of the market” yield human suffering and income inequality and social exclusion. That is why “laissez-faire” is no straw man.