The Business Community Greets Papa

As most of you know, my authority on all things business is the Wall Street Journal, which dutifully arrives on my doorstep every day except Sundays and Holidays. This morning’s paper featured an Insert about Pope Francis’ visit to the Americas, “The Pope in America,” fully one quarter of which is devoted, not surprisingly, to “Business Leaders Answer the Pope’s Criticisms” (S6-S7). Fair enough.

Pope-Francis-in-CagliariThose readers with a long enough memory may recall my invoking the name and memory of Frank Knight in this blog on several occasions. Frank Knight, along with Jacob Viner, were among the instructors and colleagues of Milton Friedman at the University of Chicago. But whereas Milton Friedman had the luxury of defending free markets during the (until then) largest government-sponsored economic expansion in history, Frank Knight and Jacob Viner had the misfortune of defending free markets during their darkest hour, the Great Depression. And then as now God’s human representative on Earth, the occupant of Peter’s throne in Rome, was none too pleased with the pain and suffering Capitalism was unleashing upon the world. In 1939, however, it was even worse than today. For it was not only the Catholics, but the Protestants as well, calling for heads of business.

First it was Pius XI’s Quadragesimo Anno in 1931. But then in 1936 the Oxford Conference of World Protestantism issued their own “Report on Christianity and the Economic Order.” Both illustrated, in Professor Knight’s view, “exhortation without knowledge and understanding — of well-meaning people attempting to meddle with the workings of extremely complicated and sensitive machinery which they do not understand” (“Ethics and Economic Reform,” Economica 6:24 (Nov. 1939), p. 418).

Professor Knight’s condescending posture towards the Christian world’s two leading institutions in 1939 bears comparison to the remarks of today’s business leaders leading up to Pope Francis’ visit:

The substance of what the pope says may apply to his native Argentina and elsewhere in the developing world, said James Lucier, managing director at Washington research firm Capital Alpha Parners, but it suggests “a complete misapprehension [sic] of American capitalism and market economies in general” (S7).

Samuel Gregg, research director at the Acton Institute, a free-market think tank in Michigan, specifically faulted Pope Francis’ overall approach, saying it paints a caricature of market economies as “generally exploitative.”

“He doesn’t seem to want to concede the sheer number of people who have escaped from poverty as a consequence of the opening up of global markets and the activities of business,” Mr. Gregg said. “I know a lot of Catholic businessmen who are quite demoralized when they hear the pope talk about the daily reality in which they live” (S7).

And from Catholics in Congress:

“I’m not about to get myself into an argument with the pope,” Mr. Boehner [Republican House Leader and devout Roman Catholic] said. “There’s one thing we know about this pope: He’s not afraid to take on the status quo” (S7).

“You never know what you get with the white smoke,” said Rep. Raul Grijalva (D., Ariz.) a fellow Catholic.

“I’m a Jesus guy, but I don’t agree with the pope,” said Senate Environment and Public Works Committee Chairman James Inhofe (R. Okla.) a prominent skeptic of global warming. “It’s the whole extreme liberal agenda and just because he’s the pope doesn’t mean that it’s any more gospel than it would be otherwise.”

Rep. Paul Gosar (R., Ariz.) said he would boycott the pope’s speech to protest a potential focus on climate change. “When the pope chooses to act and talk like a leftist politician, then he can expect to be treated like one,” Mr. Gosar, who is Catholic, wrote in an op-ed on

“The pope is the highest authority on issues of Catholic religious doctrine,” said Catholic Rep. Mario Diaz-Balart (R., Fla.). But “he has no more authority on issues of foreign policy or on issues of economic policy than frankly any other individual,” the law-maker said.

Although unlike today’s capitalist cheerleaders both Jacob Viner and Frank Knight were outspoken athiests when it came to religion (Viner as a secular Jew, Knight came from a large Plymouth Brethren family), Knight was keenly interested in the contributions religion had made to the ethos of modern capitalism. Here Knight was more inclined to follow Thorstein Veblen and Friedrich Nietzsche than Max Weber. It was on account of their slave mentality that Christians had quietly and submissively embraced the work-discipline imposed by early capitalism.

Thus, for example:

But there is enough to make it clear that the intent of the teachings was to have these conditions accepted and recognised as “given” factors in the world in which individuals and groups have to live their moral and religious lives. Besides the much quoted injunction to “render unto Cesar the things that are Caesar’s,” found in all three synoptic Gospels, there are even more pointed passages, such as the categorical command (in Matthew only) to obey the Scribes and Pharisees (though not to imitate their deeds !). The epistles repeatedly enjoin obedience and respect to political rulers, and command servants to be obedient and respectful to their recognised masters. This last injunction appears in at least a half-dozen places, in as many Books in the New Testament. The word for “servant” covers, if it does not specifically mean, slaves, and it is a familiar fact that the Church never condemned or officially opposed slavery (400).

In the first centuries of its history, the appeal of Christianity was to the lowly strata of society, not to persons holding any sort of power. The lowly were clearly exhorted to accept the existing structure of status and power relations, to obey constituted authorities, and not to try to “do anything about it”. When persons in positions of power, and particularly rulers of states, came to be Christianised, they found little if anything in Christian teaching to guide them in the use of power (419).

The Christian movement itself had become highly organised along authoritarian lines, and the official interpreters of Christian doctrine regarded it as the first and main duty of the political authorities to support, and defer to, the authority and power of ” the Church “, i.e., of these officials themselves. And in performing this duty, political functionaries were by no means supposed to be either gentle or human (420).

There is ample evidence that our grasp of the historical, social, and political settings for the gospels has advanced fairly significantly since the 1930s and that few contemporary biblical scholars or historians of Christianity’s first four centuries would endorse Professor Knight’s authorities; although there is surely substantial evidence that most Christians in the early modern and modern periods found it convenient to interpret the biblical texts to support the emerging absolute Christian monarchies of western Europe. Nietzsche may, indeed, eventually have the last word here.

But it is the other side of this equation — the scientific economic side — not the moral side that most interests me. For what sticks out and calls for attention, particularly in the responses of the House and Senate Republican leadership, is their fear that His Holiness has somehow overstepped the bounds of religious propriety and has entered fields over which he holds neither expertise nor authority. And it is precisely here, I believe, that the conversation grows interesting.

Let us suppose, then, that Professor Knight (a principled atheist) is right. Let us suppose that questions regarding the proper functioning of the market should not be left up to well-intentioned dilettantes (such as His Holiness), but should instead be reserved for experts such as Professor Knight. In this case, what would the scientific judgment regarding human pain and hardship arising out of free market activity tell us?

The answer, of course, is that scientific judgment has nothing whatever to tell us about how we should respond to human pain and suffering. Or, assuming a more positive tone, science would only tell us that human intervention into markets, let us say through greater public regulation over those markets, imposes inefficiencies onto those markets. We could then ask whether these regulations — let us say, for example, regulations requiring that private capital contribute more to health, education, or welfare — make up these inefficiencies elsewhere, through for example, a healthier, better educated, more secure work force. But, clearly, precisely what economic science could not tell us is whether, taken by itself, promoting health, education, or public welfare were, in and of themselves worthwhile ends to pursue. Nor, however, could economic science tell us whether the distortions imposed on markets or the inefficiencies endured were not worth the efficiencies they introduced elsewhere. All that economic science could tell us is that, up to the margin, some market actors would lose and others would gain (or some actors would both lose and gain) some set of goods or efficiencies.

But, one senses that both Professor Knight and the distinguished members of the House and Senate Republican leadership are saying less than they mean to. They are not only saying that they would like the Pope to leave economics or climate science up to the experts. For, on both accounts “the experts” have spoken loudly and clearly and their words do not match up with the sentiments of the House and Senate Republic leadership. To the contrary, it is as though an alternative ethic, equally or perhaps even more unscientific than the Pope’s, were intruding into the discussion.

According to this ethic, free, unregulated markets, irrespective of the pain and suffering they cause, are in and of themselves goods worthy to be valued. This may be true. But it is not by a long shot scientific. Science, as we have already seen, can only speak intelligibly about margins. Individuals and industries wander across their margins all the time and the worst judgment that falls upon them is insolvency; which, to my knowledge, business men and women are regularly guilty of without incurring either moral reprobation or divine retribution. That’s just how economics are supposed to work. End of story. No metaphysics required.

But one suspects that Mr. Inhofe means more than this. Regulating capital is not only unwise, but unholy. Demanding that capital contribute a larger share to health, education, and welfare not only deprives investors of a greater return (which is surely true); but it also violates a divine law respect the rights of private investors to the highest possible returns, even if these prove harmful to the public. Regulating carbon emissions not only introduces inefficiencies or distortions, but violates a divine right that capital enjoys over the disposition of the Earth.

Nothing that the Pope will say during his visit to America will violate sound economic science. Yes, he may say things that might result in distortions or inefficiencies. And he may say things that result in greater efficiencies and fewer distortions. That is of the nature of human action. Human action changes markets. Beyond this, however, His Holiness will also say things that are well within his divine calling. He will speak about the consequences that follow for God’s children and for God’s creation from the economic decisions we make. We might debate over whether these consequences follow from these decisions. We might even debate over whether we should care about these consequences. Finally, we might debate over whether the Pope enjoys the authority to speak on God’s behalf for God’s children within the Roman Catholic Church or within the Christian Church more broadly.

But at least where economic science is at issue, there will be nothing that the Pope says that will violate the most fundamental principles of economic science. To the contrary, here the onus falls entirely upon those who have deified capital and free markets, evidently granting them precedence even over the sound teachings of the Chair of Saint Peter.

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