I have just concluded my penultimate lecture in the History of Economic Thought: Adam Smith to Lord Keynes. And, as I have for almost a decade, I devoted the lecture to Jacob Viner and Frank H Knight, both University of Chicago economics professors, neither specially fond of Lord Keynes. Clearly, however, did I conclude with Lord Keynes, without reference to the emerging Chicago School, that could give the impression that we had already reached 1944, the Bretton Woods Agreement, and three decades of neo-Keynesian fiscal and monetary policy. We are not in 1944. We are in 1937. Before us looms a horrible war. And so it is important that we listen to and hear what the Chicago School is telling us on the eve of this horrible disaster.
It may seem odd to the chorus of libertarians and tea-partiers now packing the Republican delegation, but, to a person, your pre-war heroes — and many of your post-war heroes as well — held nothing but contempt for your political base. They were all atheists; not agnostics. They were atheists. They felt that any intrusion of ethics or morals into perfect markets yielded only distortions, moral hazard, misallocation of resources, and — if that was not enough — the end of western civilization itself. So clear was it to Professors Viner and Knight that western civilization did not rest on Christianity — that it was a science — that neither deemed it worth mentioning; until, that is, Christians began in large numbers to denounce the capitalist social formation; prompting Professor Knight to pen his now-famous third article in “Ethics and Social Reform” published in 1939 on the pages of Economica.
Professor Knight scarcely concealed his fury. In 1931, the Roman Catholic Church issued its infamous Quadragesimo Anno, its declaration opposing capitalism and demanding a living wage for all families. Five years later the world-wide Protestant churches added their voice at the Oxford Conference on Christianity and the Economic Order.
Capitalism — both bodies concluded — was anti-Christian.
Thus Professor Knight’s fury. In summary, Professor Knight responded that (1) Christianity, an ethical religion, has nothing whatsoever to contribute either to institutional, or economic, or political policy. It is ignorant of the contemporary issues. But (2) where it does contribute to the contemporary issues, its counsel is to obey authority. Therefore, when the Pope or the Protestants seek to leverage their faith against capitalism, they are both wrong and deluded.
Now. Self-evidently, this is not a message that would sell to contemporary voters; and therefore it is not a message that would sell to contemporary vote-seekers.
But here is where it gets weird. A student in my class — an alum — approaches me after class to remind me about the less than wholesome investments of the Roman church. True. So true. And about the contradiction between their holdings and their public position. Yes?
And, then I realize. OMG, my students — even my alumnae students — believe that my recounting of a position aligns me with that position. OMG.
The same Pope that issued the Quadragesimo Anno also supported the Nazi solution to this problem; not the Holocaust, but the totalitarian state formation of the Nazis.
Economic analysis is difficult because students may be inclined to see in your analysis solutions that you did not intend. So, for example, we discussed K Marx at length. I like K Marx. But I do not believe that the answer to our current problems rests in the working classes. (Nor do I believe did K Marx.) Pope John criticizes capitalism. (So do I.) But I do not believe that Rome’s analysis of capitalism is adequate. Nor, in fact, am I entirely in sympathy with the Protestant’s 1931 Conference. I think they were wrong.
What strikes me, however, is that we need to renew the capacity to read those with whose views we may disagree sympathetically, not only because we want to counter them more effectively, but because they may have something to say to us. There is no point any of us occupy outside the event horizon. Listening and understanding does not entail consent.
We have a problem here, a very serious problem. This problem may lead to the end of the Earth. It is therefore imperative that we understand it. I believe the Roman Church, in 1936, grasped a piece of what was wrong. So, too, did the Conference at Oxford in 1931. Yet, Professor Knight was so transfixed by the beauty of equilibrium that he could not see what was just around the corner: the invasion of Austria; the invasion of Poland; the Final Solution. He just didn’t see it. He couldn’t see it.
A Cardinal today was charged with sexual abuse in Australia. We will all today think of Rome. We will think of the bodily mortification entailed by contemporary Roman priesthood and we will all shake our heads in wonder. But sexual abuse does not arise from theology. It arises from the misuse of power. If Rome is abusing power, we need to know this. We need to address this.
The Roman Church owns much property and much wealth. We might wish to know how it uses this wealth.
But these issues are, in some sense, beside the point. They are surely not economic issues. It is 1939. Hitler is poised to enter Austria; to enter Poland. He is poised to initiate the Final Solution. And we are writing an article about how Protestants and Catholics are collaborating with Marxists to subvert the economic order.
Professor Knight. You missed the moment. Have we?