A test -an anarchic view of CST

[fakename]

This attempt at responding to catholic social teaching is done from an anarcho-capitalist position. As such, any and all criticism/critique is much appreciated!

The market is universally disliked as being a source of all types of vices. But I would argue that it is through this market that morality is best served.

So in a totally free society without a state this society would have to abide by several rules of CST: subsidiarity, solidarity, just wages, just prices, the freedom of unions and other organizations, the preference for the poor, and of course the freedom of religion to help man reach the beatific vision.

The way the market could do this is many fold. Firstly the market is obviously the principle of subsidiarity itself because it continually exposes people and organizations to competition which ensures that not one single thing could dominate the rest. This is primarily because profits serve to attract competitors.

Secondly the market could provide for solidarity in that the market, from what was said above, allows organizations to exist and so it allows groups of people to associate together for purposes that were unattainable otherwise. See ricardo’s law of comparative advantage, the division of labor, and the rise of cooperatives and corporations, etc. And these organizations need not be business ones but also extend to things like churches, charities, and indeed courts and private defense agencies.

Thirdly just wages and just prices are defined as wages needed to supply a family in comfort and the profit needed to reimburse the capitalist for risk. But both of these things are eminently attainable under freedom since the for the latter, no businessman would agree to less while for the former no wage earner would agree to less. For if any of them did they would not receive the returns they needed to live at the level they want or live the lifestyle they want.

Fourthly the market could help man reach his destiny by allowing him the freedom to speculate on all matters within the reach of reason. This would allow religion to grow and develop at a faster pace than it otherwise could.

At this point I realize that maybe a whole thread couldn’t answer all critics so aside from making a blog, I respectfully give to you the URL to the mises institute which is best at articulating how markets work. Specifically read Man, Economy, and State which is offered for free. That will help you understand where my arguments are coming from.

thanks for reading

 

[fakename]

Reading the above I seem to look like I’m plugging for the Institute -I assure you I do no such thing, nor are they paying me big bucks! Feel free to ignore the link I just hope no one takes it as impudent on my part.

 

[John21652]

It is a fundamental principle of social philosophy, fixed and unchangeable, that one should not withdraw from individuals and commit to the community what they can accomplish by their own enterprise and industry. (Pope Pius XI, Quadragesimo Anno, 79)

Noble sentiment indeed!

Your mises institute is peculiarly a classical economics school. Classical Economics carries within it a set of assumptions - flexible prices, Say’s law, and saving-investment equality. Flexible prices also refers to labour prices. You mentioned unionism. They undermine the flexibility of labour prices. Unions as they operate today use rent-seeking behaviour to fix wages artificially high, outside the market. This market distortion reduces the market adaptibility to reset wqages. So, to have the market work correctly, we need to ban unions.

Says Law tells us supply creates its own demand. This is supply side economics. Reagan loved this approach. Says Law also assumes perfect information flows throughout the market. Keynes punched holes in this theory, but the Internet wasn’t around during JMKs day, so it may be possible to state that information flows are now near perfect. So, we can’t have any government control of the Internet. China does, so we might have to consider that in a global market context.

The last assumption is Savings-Investment equality. This means that the part of income saved, and not spent, will be used as investment capital. However for this to occur, interest rates must be flexible and be able to fluctuate according to the demand for capital. Therefore, we should have no central bank regulation of interest rates.

The ‘market’ requires a contractual/consensual relationship between people if it is to work properly. Maybe the classical economists had an optomistic view of human nature, one where a strong morality existed. Do we still have it? The market, if backed by strong contract law should work properly, IMHO.

However, we are not confident enough to wind back the clock of regulation and so allow the market to work. Keynes has soured our psyche with the ‘need’ for a central power to oversee the ‘market’ and iron out its imperfections. Dare we go back?
Any takers?

 

[fakename]

of course, imperfect information is mainly a problem of state elimination of marketing and the skewing effects of licences. The market would overcome this problem with people paying independent investigators.

 

[selylidne]

This attempt at responding to catholic social teaching is done from an anarcho-capitalist position. As such, any and all criticism/critique is much appreciated!

The market is universally disliked as being a source of all types of vices. But I would argue that it is through this market that morality is best served.

Hi fakename. I’m familiar with “anarcho-capitalist” thought and have read much of what the Mises Institute has to offer. There are several aspects of it that should give a Catholic pause. Most fundamental is this: Catholic libertarians like to emphasize how libertarian economics is likely to reach similar ends as Catholic social teaching, but nevertheless the two are built on different foundations, and consequently those who are partisans for one tend to distrust the other.

The way the market could do this is many fold. Firstly the market is obviously the principle of subsidiarity itself because it continually exposes people and organizations to competition which ensures that not one single thing could dominate the rest. This is primarily because profits serve to attract competitors.

Competition only prevents domination when those who are competing have similar capability. When their capability differs starkly, dominance of one is the natural result. Profits only indirectly serve to attract competitors, while they directly serve to strengthen the position of the one that profits. Nevertheless, I take subsidiarity to mean something different and more akin to a combined right to liberty and meaningful labor, which is that whatever can be adequately handled by smaller communities (down to and including the individual) should not be handled by larger communities. A “anarcho-capitalist” market will indeed involve more subsidiarity than our current state-capitalist market, and so is preferable on that grounds, but there are many other alternatives, including non-capitalist markets, which are far better than both.

Secondly the market could provide for solidarity in that the market, from what was said above, allows organizations to exist and so it allows groups of people to associate together for purposes that were unattainable otherwise. See ricardo’s law of comparative advantage, the division of labor, and the rise of cooperatives and corporations, etc. And these organizations need not be business ones but also extend to things like churches, charities, and indeed courts and private defense agencies.

This only means that the market tolerates solidarity. The market also functions without solidarity. Indeed, there are market forces working in both directions. When we can each achieve more together, the market brings us together. When at least one of us can achieve more separately, the market divides us. This is clearly asymmetric around the common good, favoring faction more than solidarity. Non-market systems are better at achieving solidarity. A common non-market structure is the corporation, which cannot exist in its current form in a free market. However, in the present state-capitalist system we see clearly that corporations work both for good and for evil, since the good of the corporation is always imperfectly aligned with the good of the community.

Thirdly just wages and just prices are defined as wages needed to supply a family in comfort and the profit needed to reimburse the capitalist for risk. But both of these things are eminently attainable under freedom since the for the latter, no businessman would agree to less while for the former no wage earner would agree to less. For if any of them did they would not receive the returns they needed to live at the level they want or live the lifestyle they want.

A capitalist market is oligopsonistic (it has few employers), which by supply and demand skews wages downward. Unions can help to push wages back up. The wage worker is constrained by the possibility of indigence to not walk out of an unsatisfying deal and instead to accept a low wage rather than no wage. The praxeological justification you’re using means only that person chooses the best of the options available to him. It does not mean that any of those options is in fact good. Non-capitalist markets, non-markets, or state intrusion into a capitalist market can all be consonant with with common good if they improve the available options.

Fourthly the market could help man reach his destiny by allowing him the freedom to speculate on all matters within the reach of reason. This would allow religion to grow and develop at a faster pace than it otherwise could.

Again, the market tolerates the leisure time for religious duties and spiritual searches. However, all its incentives are arrayed with the opposition, for leisure time is one of the most costly goods. You can find saints in both business and religious life, but when you want to aim your life at becoming a saint you go to the abbey, not the corporation. Our Catholic faith is clear that religious vows are not for everyone. Surely it is a sign of danger, however, that the market aims so squarely at the opposites of the evangelical counsels.

I respectfully give to you the URL to the mises institute which is best at articulating how markets work. Specifically read Man, Economy, and State which is offered for free. That will help you understand where my arguments are coming from.

thanks for reading

If you’d like, I’ll suggest some different works of other perspectives
The Republic, by Plato
The City of God, by St. Augustine of Hippo
Rerum Novarum, by Pope Leo XIII
Quadragesimo Anno, by Pope Pius XI
The Servile State, by Hilaire Belloc

or even
Organization Theory: A Libertarian Perspective, by Kevin Carson

 

[fakename]

Finally someone with a different opinion!

“There are several aspects of it that should give a Catholic pause.”
I’m interested, what other aspects of austrian econ are bad and why from the catholic POV?

“Competition only prevents domination when those who are competing have similar capability. When their capability differs starkly, dominance of one is the natural result. Profits only indirectly serve to attract competitors, while they directly serve to strengthen the position of the one that profits.”

It’s true, in competition there must be a winner but that is why capitalism supports solidarity -a plurality organically becomes absorbed into a single unit. And secondly I would like to point out that although profits do strengthen the position of he that profits, still it attracts competition through two ways 1) knowledge of these profits are disseminated to others and then 2) these others then compete in niches that the original profiteer can not fill.

“Nevertheless, I take subsidiarity to mean something different and more akin to a combined right to liberty and meaningful labor,”

Now that 's something interesting, could you elaborate? I always thought that sub. was about allowing those who possed the potential for useful labor to exercise that potential but I never connected it so explicitly to rights or the morality of rights.

“including non-capitalist markets, which are far better than both.”

Mutualism?

“This only means that the market tolerates solidarity. The market also functions without solidarity. Indeed, there are market forces working in both directions. When we can each achieve more together, the market brings us together. When at least one of us can achieve more separately, the market divides us. This is clearly asymmetric around the common good, favoring faction more than solidarity.”

I guess I need to study up on what solidarity means. The reason I think the market would provide what I call “sold.” is because the market works in both directions: solidarity when people profit more from it and subsidiarity when they don’t. This I see as consonant with the common good since the market is just building up groups if the profits (or what amounts to the same, the useful labor) of the group are great and taking them down if they are not.

“capitalist market is oligopsonistic (it has few employers), which by supply and demand skews wages downward. Unions can help to push wages back up. The wage worker is constrained by the possibility of indigence to not walk out of an unsatisfying deal and instead to accept a low wage rather than no wage. The praxeological justification you’re using means only that person chooses the best of the options available to him. It does not mean that any of those options is in fact good. Non-capitalist markets, non-markets, or state intrusion into a capitalist market can all be consonant with with common good if they improve the available options.”

Okay I would disagree with the oligopsonisitic market since that model relies on perfect information and homogenous goods, etc. in order to be a model. But on its own terms I think that it is possible to have both just wages and wages being skewed downwards. For instance if the just wage is 10 bucks, but due to labor competition it goes from 100 bucks to 10 then we have an instance of competition driving down towards the just wage. In other circumstances I would agree with you that unions would be a good for the sake of unified bargaining so I concede the truth of that point. But from what I’ve been told it seems that wages can still be below what a third party would consider just and still be just. So if the just wage is known to be $100 but you see a worker getting paid $10 I think it would still be a just sum as long as that worker was perhaps staying at home (still a teenager perhaps) or being well-provided for by someone or just doesn’t want a family.

"The praxeological justification you’re using means only that person chooses the best of the options available to him. It does not mean that any of those options is in fact good. "

good point.

Non-capitalist markets, non-markets, or state intrusion into a capitalist market can all be consonant with with common good if they improve the available options."

I agree with the first two (if they mean cooperatives?) but disagree with the last -state intrusion is always a drain on production.

“Again, the market tolerates the leisure time for religious duties and spiritual searches. However, all its incentives are arrayed with the opposition, for leisure time is one of the most costly goods. You can find saints in both business and religious life, but when you want to aim your life at becoming a saint you go to the abbey, not the corporation. Our Catholic faith is clear that religious vows are not for everyone. Surely it is a sign of danger, however, that the market aims so squarely at the opposites of the evangelical counsels.”

If anyone has a problem with market incentives they can always change the incentives without going outside of the market -a revolution in the form. If for instance you think that your business is concentrated on making too much profit you can have the choice, to give your money away to charity or to start a charity or to directly help the poor or disabled, etc. But I admit I am really quite confused about how the market is supposed to provide incentives that are by their nature against the church and how is leisure time expensive?

“The Republic, by Plato”

Thank you for the list, I was just wondering though, what is it about Platonism that you find to be particularly Catholic?

And on a second note, have you ever read anything by pesche who inspired the social encyclicals, is he any good? And how can I read him online (or can I read him online for free?).

Thanks for the post by the way!

 

[selylidne]

Sorry for the delayed response; life happened. Double-quote paragraphs are me, single-quote paragraphs are fakename.

I’m interested, what other aspects of austrian econ are bad
and why from the catholic POV?

Austrians economists and CST are at odds over usury, minimum/living wage and other just prices, taxation and limits to property rights, etc. On “anarcho-capitalist” matters instead of economics, can you imagine showing your bishop Walter Block’s book, “Defending the Undefendable”?

“Nevertheless, I take subsidiarity to mean something
different and more akin to a combined right to liberty
and meaningful labor,”

Now that 's something interesting, could you elaborate?
I always thought that sub. was about allowing those who
possed the potential for useful labor to exercise that
potential but I never connected it so explicitly to
rights or the morality of rights.

Subsidiarity is often described as that larger communities should not usurp matters that smaller communities can handle. This implies a societal preference for both decentralized decisions (which is liberty) and decentralized actions (which is meaningful labor, in that whatever is within your ability and important to you, you do yourself instead of relying on others).

“including non-capitalist markets, which are far better
than both.”

Mutualism?

That’s one option. Bakunin’s ideas of collected industries are another. Medieval-style guilds are another. Distributism is a fourth. No doubt there are many options.

I guess I need to study up on what solidarity means. The
reason I think the market would provide what I call “sold.”
is because the market works in both directions: solidarity
when people profit more from it and subsidiarity when they
don’t. This I see as consonant with the common good since
the market is just building up groups if the profits (or
what amounts to the same, the useful labor) of the group
are great and taking them down if they are not.

As I see it the market builds groups only if all members expect to profit, maintains groups only if all members profit, and tears groups down if even one member does not profit. If you’ve ever tried to get a large group to agree on something, you can see why this set-up is likely to promote factionalism instead of unity. (Yes, we have giant corporations now, but that’s due to government interference in the market.) Solidarity is also the idea that an injury to one is an injury to all, whereas markets usually try to ensure that an injury to one is his own problem, and maybe a source of profit to others.

Okay I would disagree with the oligopsonisitic market
since that model relies on perfect information and
homogenous goods, etc. in order to be a model.

Um, it isn’t a model at all, and has nothing to do with information flow or homogeneity. It’s a plain fact of everyday experience and nearly true by definition. A capitalist market is one with many sellers of labor and few buyers of labor. “Oligopsony” means “few buyers”.

Non-capitalist markets, non-markets, or state intrusion into
a capitalist market can all be consonant with with common
good if they improve the available options."

I agree with the first two (if they mean cooperatives?) but
disagree with the last -state intrusion is always a drain on
production.

Yes, but a drain on production can improve the common good. CST example: resting from work on Sunday!

If anyone has a problem with market incentives they can always
change the incentives without going outside of the market -a
revolution in the form.

Not “always”. The poor have little to bargain with.

If for instance you think that your business is concentrated
on making too much profit you can have the choice, to give
your money away to charity or to start a charity or to
directly help the poor or disabled, etc.

Such behavior would increase your prices over those of your competitors. The market tolerates charity as a choice by consumers, but not by producers for long.

But I admit I am really quite confused about how the market is
supposed to provide incentives that are by their nature against
the church and how is leisure time expensive?

What sells best? Promises of sexual prowess, wealth, and independence. The evangelical counsels are chastity, poverty, and obedience.

Leisure takes time and isn’t productive. You know you could be rich if you put all your time into trying! The opportunity cost of leisure is high, which is the sense in which it is very expensive.

“The Republic, by Plato”

Thank you for the list, I was just wondering though, what is it
about Platonism that you find to be particularly Catholic?

Heh. Plato was as Catholic as it was possible to be before it was possible to be Catholic. The western Church used Platonist philosophy heavily for its first thousand years, and the eastern Church never gave up the habit!

 

[Aboveallbereal]

Simple point re morality and state “redistribution”

Lower class family breakdown is now the norm. Why? parents know that the ultimate provider, the real pater familias, is the state with its ability to expropriate monies from some to subsidise the incontinences of others. Given the existence of this altennative to parentaly provision it is quasi inevitable that parents act as they in fact do act and cease to provide and rather rely on the state.

In a market economy illegitimacy rates would be at low single figures and people realised their children and any possible children actually depended on their acting as responsible committed adults.

 

[selylidne]

the ultimate provider, the real pater familias, is the state with its ability to expropriate monies from some to subsidise the incontinences of others.

Heheheheh. No, I’m not too old to laugh at potty humor.

 

[fakename]

I replied in the quote box -sorry

Sorry for the delayed response; life happened. Double-quote paragraphs are me, single-quote paragraphs are fakename.

Austrians economists and CST are at odds over usury, minimum/living wage and other just prices, taxation and limits to property rights, etc. On “anarcho-capitalist” matters instead of economics, can you imagine showing your bishop Walter Block’s book, “Defending the Undefendable”?

“As I see it, I can be against usury, walter block, unjust wages, and still be an austrian. Although the tax issue is dicey I think that being against taxes is still okay as long as you still pay them.”

As I see it the market builds groups only if all members expect to profit, maintains groups only if all members profit, and tears groups down if even one member does not profit. If you’ve ever tried to get a large group to agree on something, you can see why this set-up is likely to promote factionalism instead of unity. (Yes, we have giant corporations now, but that’s due to government interference in the market.) Solidarity is also the idea that an injury to one is an injury to all, whereas markets usually try to ensure that an injury to one is his own problem, and maybe a source of profit to others.

“When all people profit in a market they don’t profit equally so it is possible to have large businesses or groups in a market because they don’t all have to agree to the same level of profit to be a member.”

Um, it isn’t a model at all, and has nothing to do with information flow or homogeneity. It’s a plain fact of everyday experience and nearly true by definition. A capitalist market is one with many sellers of labor and few buyers of labor. “Oligopsony” means “few buyers”.

“I guess I meant it has to do with equilibrium models and so it is somewhat wrong as equilibrium can’t hold in reality.”

Yes, but a drain on production can improve the common good. CST example: resting from work on Sunday!

“Voluntary rest on Sunday improves production by saving strength but an involuntary rest would simply create idle resources.”

Not “always”. The poor have little to bargain with.

“Then they should save up, ask for money, or pool their wealth, or get a better job…
But aside from this, if a company can market its stuff to more people for more money then it will. You can always make more money selling to rich people+poor people than just rich alone. therefore companies will always try to market their stuff to poor people and they will afford it.”

Such behavior would increase your prices over those of your competitors. The market tolerates charity as a choice by consumers, but not by producers for long.

“Charity is just a consumption decision like any other. If a producer decides to use his profits giving to the poor or buying gilded gold, the analysis is the same and if the market is okay with one, it is okay with the other.”

What sells best? Promises of sexual prowess, wealth, and independence. The evangelical counsels are chastity, poverty, and obedience.

“What keeps the church from advertising itself as giving superior virtue or promising rewards in heaven? Wouldn’t such marketing attract those who want virtue? Therefore capitalism allows for niche markets for people who want virtue. But ultimately everyone wants virtue so the market will provide for virtue.”

Leisure takes time and isn’t productive. You know you could be rich if you put all your time into trying! The opportunity cost of leisure is high, which is the sense in which it is very expensive.

“Regardless of this it is still true that people watch movies, attend operas, etc. So leisure time, regardless of expense, seems to be possible in capitalism.”

Heh. Plato was as Catholic as it was possible to be before it was possible to be Catholic. The western Church used Platonist philosophy heavily for its first thousand years, and the eastern Church never gave up the habit!

I thought that Aristotle was closer to church philosophy in the ancient world. True Plato was more popular but it was Aristotle who was more correct in the end. Unless, perhaps you are referencing some statements Plato made in “The Statesman” which I never read…

It’s just that I heard that dialogue was more realist than “republic”.

 

[momor]

Don’t mean to butt in, but, may I make an observation as someone who knows nothing about the language or art (science?) of economics?

There can never be a perfect market system because we live in a broken world due to original sin.
Love of money is the root of all evil and there will always be those who pursue their love to the detriment of others. Systems will always evolve an imbalance of power to the point that external forces (regulations) are required to level the field. Once that happens, the “fixes” tend to cause as much or more of a problem than what they sought to repair. The system spirals down toward collapse and has to either be abandoned or built up again.

 

[selylidne]

As I see it, I can be against usury, walter block, unjust wages,
and still be an austrian. Although the tax issue is dicey I think
that being against taxes is still okay as long as you still pay them.

Hey now, don’t be against Walter Block. But how can you reconcile prohibition of taking interest on money lent with austrian-style libertarianism?

When all people profit in a market they don’t profit equally so it is
possible to have large businesses or groups in a market because they
don’t all have to agree to the same level of profit to be a member.

Of course it’s possible. It’s just difficult.

A capitalist market is one with many sellers of labor and few buyers
of labor. “Oligopsony” means “few buyers”.

I guess I meant it has to do with equilibrium models and so it is
somewhat wrong as equilibrium can’t hold in reality."

When there are 5000 people in a town and 800 businesses, there are many sellers and few buyers of labor there. What has this to do with models or equilibrium?

Yes, but a drain on production can improve the common good. CST
example: resting from work on Sunday!

Voluntary rest on Sunday improves production by saving strength but
an involuntary rest would simply create idle resources.

That’s just silly. Whether rest saves strength or is mere idleness is not affected by how voluntary it is.

Not “always”. The poor have little to bargain with.

Then they should save up, ask for money, or pool their wealth, or
get a better job…

You just argued that to escape market incentives, the poor should subject themselves to market incentives.

Charity is just a consumption decision like any other. If a
producer decides to use his profits giving to the poor or
buying gilded gold, the analysis is the same and if the
market is okay with one, it is okay with the other.

No, because if even one competitor chooses to reinvest his profits like a good capitalist, the charitable producers will rapidly become uncompetitive.

What sells best? Promises of sexual prowess, wealth, and
independence. The evangelical counsels are chastity, poverty, and
obedience.

What keeps the church from advertising itself as giving superior
virtue or promising rewards in heaven? Wouldn’t such marketing
attract those who want virtue? Therefore capitalism allows for
niche markets for people who want virtue. But ultimately everyone
wants virtue so the market will provide for virtue.

Sadly, if the church advertized itself that way, it would simply become a laughingstock. In some ways we live in a dreadful time, where due to her sins against children the church is generally viewed as morally inferior to secular society, or even as outright evil.

You essentially admitted my point, however, in calling the market for virtue a niche market. Mass markets are about pleasure, pelf, power, and pulchritude.

Regardless of this it is still true that people watch movies,
attend operas, etc. So leisure time, regardless of expense, seems
to be possible in capitalism.

The contention was not that market forces make leisure impossible, but that that they discourage leisure. When people engage in leisure, they act against market pressure.

I thought that Aristotle was closer to church philosophy in the
ancient world. True Plato was more popular but it was Aristotle
who was more correct in the end.

Plato was more popular among Christian scholars early on. Thereafter Aristotle’s works were lost to the west for centuries. I don’t think it makes sense to say one philosophy is more correct–Plato and Aristotle offer us different modes of explanation, and nowadays there are many other options widely used by faithful Catholics. Use whichever one is best for your purposes. For example, I think that “transsubstantiation” is an entirely valid (Aristotelian) description of what happens at the consecration of the Eucharist, but I don’t think it’s at all a useful description to modern minds.