Review: Catholic Economics, Part II

Yesterday, I began my review of Angus Sibley’s Catholic Economics: Alternatives to the Jungle. As noted, his critique of contemporary mainstream economics because of its strong libertarian biases is foundational and comprehensive, that is, Sibley argues that the assumptions of economics are themselves suspicious because of their faulty anthropology and confusion about the degree to which their claims justify the designation “scientific.” Sibley is equally devastating when he turns his attention to specific issues that our modern economies face and today, I shall conclude my review by looking at some of these.

Sibley’s chapter “Competition and Consumption” is worth the entire price of the book. He begins:

Competition is an obsession of our times, especially among economists. What is worse, governments share this obsession, largely because of the “misguided experts effect” that I have described in chapter 1. Most of us have, to some degree at least, caught the virus. Economists have succeeded in persuading us that any restraint on competition is inherently unethical, immoral or corrupt.

Can anyone doubt the truth of these statements? Look at the drafting and political defense of the Affordable Care Act. The root problem with our health care system, from a human and ethical point of view, is that we treat health care the way we treat other commodities when it really isn’t. I don’t have a car know because I can’t afford it, but if I need surgery, I can’t put it off. So, we have insurance, introducing another layer of competition and profit seeking into the mix. We are told that competition keeps costs down, yet we pay more than any other country in the world for health care and our health outcomes are no better and, in some instances, even worse. The answer is to remove economic competition from the delivery of health care, and introduce a single payer system, but that is impossible in America. So great is the propaganda in favor of competition, the most obvious solution is the most politically impossible one.

Sibley notes that when Adam Smith first advocated for unrestrained competition, there were existential constraints on competition due to limited transportation and communications technology. “With today’s cheap and rapid transport and instantaneous worldwide communications,” he writes, “it has become possible for everyone to be in competition with everyone, throughout the world.” Sibley goes on to critique the ill effects of the “winner take all” ethic too much competition breeds, noting that in areas like the arts, the winner take all ethic makes superstars out of one or two talented musicians or painters, heaping great rewards upon them, but offers markedly less to the rest of the almost equally talented artists. He offers eight arguments for restraint of competition, such as avoiding over-consumption, the success of countries like Switzerland in maintaining low unemployment and high standards of living by regulating competition, the negative effects of hyper competition on financial markets, and the concentration of economic firm as more powerful, larger firms drive out, or buyout, the competition. Sibley quotes from a host of successive papal teachings to show that Catholic Social Teaching has always been suspicious of too much competition and, reading some of the quotes from Pius XI, writing almost one hundred years ago, they certainly ring presciently true.

Sibley’s chapter on labor is appropriately entitled “The Libertarian Disrespect for Labor,” and this is not only a reference to the political efforts of libertarians like the Koch Brothers to crush labor unions and their influence. Mainstream economic theory does not value labor per se, but sees it only as one commodity among others, a thing to be gotten at the cheapest possible price. He quotes Ludwig von Mises, a darling of libertarians, who wrote “labor is dealt with like any material factor of production and sold and bought on the market.” In this way of thinking, “[w]ork is thought to have no human value apart from the market value of what it produces.” As Sibley notes, if we adopt this view, “we grossly misunderstand and devalue our very selves.” He derides the “fetish” of labor productivity. And, importantly, Sibley contrasts all this with the traditional Catholic view that work is proper to the human person, that the human person cannot fully reach his or her potential without work, that work offers essential, integral dignity, not mere calculi of productivity. In his next chapter on unions and full employment, Sibley deploys quote after quote from magisterial teaching, including many quotes from Pius XII who is too often left out of the catalogue of social justice teachings because he did not produce a specific encyclical, as did Leo XIII and Pius XI and John XXIII and Paul VI and John Paul II and Benedict XVI. All of them saw work as something more than a commodity.

Sibley’s chapter on free trade versus fair trade destroys some shibboleths offered by advocates of free trade, but most especially, he confronts the supposed logic which sees the “laws of the market” as impervious to human modification. He points to the growth of the fair trade movement as a sign of hope, a small sign so far, but one which corrects the imbalances in the market in humane and fruitful ways. His chapter on the role of politics again collates a raft of papal teachings that see a robust role for government in defining and pursuing the common good, not mere increased productivity and consumption. Catholic Social Teaching has never shared the suspicion of government that one hears so frequently in political discourse today, even while it does register concerns about the state overwhelming intermediate social organizations like churches, unions and smaller communities. 

The book ends on a disappointing note, with a chapter entitled “The Way Forward” that recapitulates the arguments in the book without actually offering practical guidance about a way forward. Perhaps that should be Sibley’s next book. But, despite weak chapters at the beginning and end, this book should find its way into introductory courses as Catholic business schools throughout the U.S. and abroad. Sibley’s familiarity with both the theory and praxis of the modern economy makes his critique especially telling, and his commitment to Catholic Social Teaching affords him a sound basis for that critique. The book is a tour de force against laissez-faire and should become a point of reference for anyone who thinks our new Gilded Age is a thing in need of repair and reform.