The Institute was established to honour the accomplishments and visions of two late Victorian prime ministers |
‘Between a good and a bad economist this constitutes the whole difference—the one takes account of the visible effect; the other takes account both of the effects which are seen and also of those which it is necessary to foresee.’ |
‘The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; |
I. INTRODUCTION
While the ends of organic Toryism are political in nature — that of realising the common good — a successful polity is founded on a firm economic foundation. From the conservative perspective, this basis is located in the classical economic school of laisser-faire or the ‘free economy’, with particular recourse (for this author) to the Austrian School of Economics and Catholic Social Teaching (CST).
The appeal of Austrian economics and CST are two-fold: First, each emphasises the importance of the person, either (respectively) in the idea of methodological individualism or as man created in the image and likeness of God (imago Dei). Second, practitioners of Austrian economics, such as Gene Callahan in Economics for Real People (Mises Institute, 2004) are also keen in making a distinction between ‘economic gain’ and ‘psychic gain’ — actions based on maximising the profit motive or for reasons other than economic in nature, based on personal, aesthetic, or religious grounds (to name a few). Further in this overview this distinction is classified as being either endogenous or exogenous in nature.
(It should be noted briefly that there are schools of economics that do not make this distinction, for whom humanity has material ends only; as Pius XI wrote of Socialism: ‘possession of the greatest possible supply of things that serve the advantages of this life is considered of such great importance that the higher goods of man, liberty not excepted, must take a secondary place and even be sacrificed to the demands of the most efficient production of goods (Quadragesimo Anno, §118).’)
From this second perspective, CST has outlined a role for the State in realising human ends and the common good that may be frowned upon from a purely Austrian economic perspective. Much of this CST theory is based on a conception of the personalist principle (see below), which argues that we are both free-willed, autonomous individuals but also individuals who live in communities that contribute to our well-being and full development. Ludwig von Mises himself noted this ‘duality’ in Human Action (Mises Institute, 1998):
Methodological individualism, far from contesting the significance of such collective wholes, considers it as one of its main tasks to describe and to analyze their becoming and their disappearing, their changing structures, and their operation. And it chooses the only method fitted to solve this problem satisfactorily.
First we must realize that all actions arc performed by individuals. A collective operates always through the intermediary of one or several individuals whose actions are related to the collective as the secondary source. It is the meaning which the acting individuals and all those who are touched by their action attribute to an action, that determines its character (42).
But these communities are never to subsume the rights and duties we enjoy under natural law, and so CST comes full circle with Austrian economics in their joint defence of individual liberties against an all-encompassing and all-consuming Statism.
* * *
As Aristotle advised that the mean may often be found in either deficiency or excess, so for the organic Tory the via media of a just polity may often be found in a modicum of State intervention — what the Compendium of the Social Doctrine of the Church termed ‘positive subsidiarity (see §186)’.
John Paul II summarised this approach to economic analysis in Centesimus Annus:
If by ‘capitalism’ is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a ‘business economy’, ‘market economy’ or simply ‘free economy’. But if by ‘capitalism’ is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative (§42).
The free economy, then, consists of free markets working within the rule of law: regulations and various legal mechanisms to ensure justice. Pius XI wrote that ‘Free competition, kept within definite and due limits, and still more economic dictatorship, must be effectively brought under public authority in these matters which pertain to the latter’s function (Quadragesimo Anno, §110).’ It is important to recognise and assert that ‘the latter’s function’ of State oversight is itself proscribed so as not to unjustly interfere in the responsible economic actions of free citizens (also see ‘A Defence of Free Markets and the Rule of Law’). The public authority must know its own limits within the economic sphere, without succumbing to Statist impulses: ‘the State must not absorb the individual or the family; both should be allowed free and untrammelled action so far as is consistent with the common good and the interest of others (Leo XIII, Rerum Novarum, §35).’
II. DISTINGUISHING THE AUTONOMOUS PERSON FROM THE COMMON WEAL
Another tenet of Catholic Social Teaching that underpins an organic Tory perspective on political economy is the Thomistic personalist principle: that is, society is understood much as a living system, with each part conducive to the health and well-being of the whole. For the sake of the whole, therefore, individual parts must receive a subsistence level of benefits — without which not only the citizen, but the whole body politic — would suffer. Basic healthcare, a general education, and welfare relief are three examples. From a different angle, the question may be asked: How can the ill and indigent, with insufficient skills, contribute to society and realise their full potential? In his 1872 Crystal Palace speech, Disraeli framed the question as ‘the elevation of the condition of the people’, and asked:
...is it at all wonderful that they should wish to elevate and improve their condition, and is it unreasonable that they should ask the Legislature to assist them in that behest as far as it is consistent with the general welfare of the realm?
However, as Jacques Maritain emphasised in The Person and the Common Good, treating individuals as ‘parts in the whole’ is not to imply that they are nothing more than ‘means to an end’ (culminating in, for instance, the State). People retain their autonomy and free will as persons, and are the ends for which the State comes into being. A person remains, in Maritain’s phrase, ‘a whole in the whole’.
In a natural body the principle of unity unites the parts in such a manner that each lacks in its own individual subsistence [...] if we examine the relations existing between the several members and the whole body, in every physical, living body, all the different members are ultimately destined to the good of the whole alone; while if we look to its ultimate usefulness, every moral association of men is in the end directed to the advancement of all in general and of each single member in particular; for they are persons (Mystici Corporis Christi, §61).
Sometimes the language of the free market may give the impression that the logic of the market place takes precedence over human concerns. As has been argued above, however, the market is always posited within a framework of laws and regulations. But is the market the sole arbiter of human aspiration? Within the organic Tory philosophy, the answer is ‘No’. Beyond the area in which the market is competent lies the realm of civil society and the State. Though a necessary component, the market is not a sufficient element in realising the common good. As Wilhelm Röpke, a noted Austrian economist, famously said, ‘It is the precept of ethical and humane behaviour, no less than of political wisdom, to adapt economic policy to man, not man to economic policy (A Human Economy, Henry Regnery [1960], 6).’
III. PRIVATE PROPERTY AND THE UNIVERSAL DESTINATION OF GOODS [TO COME]
IV. THE DYNAMIC OF THE FREE ECONOMY
Markets may be said to be moral, endogenously, in the reciprocal satisfaction of agents for scarce resources, based on mutual trust and collaboration; exogenously, an argument may be raised that markets are amoral: that in a humane economy built upon free enterprise, the State is one actor (along with individuals and institutions of civil society) ensuring that those who are disadvantaged by the internal logic of the market—the human lives affected by unemployment, by evolving methods of production, and by requirements to leave supportive, inter-relational communities and relocate to environs unknown—are not forgotten.
And there are other examples where the free market can be said to have a limited view of the common good: the logic of increased production fed by Schumpeter’s ‘gales of creative destruction’ will favour economies of scale over economies of community — large factories and supermarkets over indigenous industries and local suppliers of goods and services. As a counterpoise, Leo XII’s call in Rerum Novarum for greater property ownership (see §§ 45-46) was taken up by Chesterton and Belloc as a movement for distributism:
...the stability of this distributive system (as I have called it) was guaranteed by the existence of co-operative bodies, binding men of the same craft or of the same village together; guaranteeing the small proprietor against loss of his economic independence, while at the same time it guaranteed society against the growth of a proletariat. If liberty of purchase and of sale, of mortgage and of inheritance was restricted, it was restricted with the social object of preventing the growth of an economic oligarchy which could exploit the rest of the community. The restraints upon liberty were restraints designed for the preservation of liberty; and every action of Mediæval Society, from the flower of the Middle Ages to the approach of their catastrophe, was directed towards the establishment of a State in which men should be economically free through the possession of capital and of land (Belloc, The Servile State).
Great care ought to be taken, however, not to impose permanent (or temporary) agents of ‘equilibrium’ or stasis from without the proper parameters of the economic cycle (Frédéric Bastiat, for instance, wrote of natural harmony); and for proponents of organic Toryism not to mistake the necessary intercessions of the State for a vibrant common good with efforts at establishing idyllic utopian conditions. Once begun, where do such efforts stop? History suggests with the abrogation of individual liberty and personal autonomy.
It is also important for the State not to favour one group of economic actors over another; this would run contrary to a general understanding of the common good—or the public interest—that it was the State’s raison d’être to uphold. As von Mises wrote in Economic Policy:
‘It was not the idea of the eighteenth century founders of modern constitutional government that a legislator should represent, not the whole nation, but only the special interests of the district in which he was elected; that was one of the consequences of interventionism. The original idea was that every member of the legislature should represent the whole nation. He was elected in a special district only because there he was known and elected by people who had confidence in him (100).’
It is easy to extrapolate from these ‘special interests of the district’ to what is now referred to as crony capitalism or monopoly capitalism: To uphold the ideals of the free market is to denounce any monopolistic-oligopolistic practices that unfairly favour the few at the expense of the many.
Instead, the free market encourages the widest possible exercise of innovation and creativity. The agents of civil society—voluntary associations, co-operatives, and community initiatives—require the freedom and flexibility to allow those people with the requisite skills and local knowledge and with most at stake to assume their legitimate role in self-development and self-realisation.
V. ECONOMIC ROLE FOR CIVIL SOCIETY AND THE STATE
Some would argue that the sort of State-supported efforts on behalf of the common good (as advocated above) act as impediments to innovation and self-realisation; that such State activity is interventionism (if that is in fact what it is): ‘The middle-of-the-road policy is not an economic system that can last. It is a method for the realization of socialism by instalments (Ludwig von Mises, ‘Middle-of-the-Road Policy Leads to Socialism’).’ However, as Friedrich von Hayek wrote in The Road to Serfdom,
‘The successful use of competition does not preclude some types of government interference. For instance, to limit working hours, to require certain sanitary arrangements, to provide an extensive system of social services is fully compatible with the preservation of competition. There are, too, certain fields where the system of competition is impracticable. For example, the harmful effects of deforestation or of the smoke of factories cannot be confined to the owner of the property in question. But the fact that we have to resort to direct regulation by authority where the conditions for the proper working of competition cannot be created does not prove that we should suppress competition where it can be made to function. To create conditions in which competition will be as effective as possible, to prevent fraud and deception, to break up monopolies – these tasks provide a wide and unquestioned field for state activity (London: IEA edition, 46).’
In building, thus, upon the principles of a free economy, moderating them according to circumstances—always in mind that too much intervention will distort a natural harmony and undermine the proposed objective of prosperity for all—organic Toryism may be identified with the aims of progressive conservatism: progressive in its willingness to use every legitimate tool at the disposal of civil society and the State to promote the welfare of all.
And in making the claims of this progressive conservatism, of a sound economy in the service of the common good—‘the free economy plus’—its proponents in this time of global financial distress, national challenge, and public suffering, stand at a unique moment of opportunity:
There is a tide in the affairs of men,
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat;
And we must take the current when it serves,
Or lose our ventures.
W. Shakespeare, Julius Caesar, IV, iii, 249-55.
Frédéric Bastiat |
Adam Smith |
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‘The Austrian School of Economics and Catholic Social Teaching both stress the autonomy of the individual, and while CST is sympathetic to limited State action in pursuit of the Common Good, Austrian economics helps keep this impulse in check by reiterating, among other things, that governments must have a care for the long-term as well as the short, and for the general welfare as opposed to special interests.’ |
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