Archive for the justice and charity Category

Love & Justice

Posted in Capitalism, justice and charity with tags , , , , , on 01/29/2010 by rossemmett

Comments prepared for the Moral Case for Capitalism Forum
James Madison College, Michigan State University, January 28, 2010

Over the past year, I have returned several times to two very different sources of inspiration for my thinking about economics and society. Both sources will probably surprise those of you who have had me in class: i) Michael Moore’s movies; and ii) the two recent encyclicals by Pope Benedict.

I’ll confess that I’ve always enjoyed Michael Moore’s movies. By now, they’re predictable, of course, and he re-uses the same tricks each time, but I fall for them, and laugh at his shenanigans. His sense of fairness and his view of the world are similar to those of a lot of people I know, and I share some of his values. He sees himself as a spokesperson for the average Joe, and he admires the “kinder, gentler” nation to the north of us, which was my home for almost half my life. He tells us he loved the social contract he calls capitalism: a world in which Michigan’s large corporations looked out for their workers, the workers looked out for the companies they worked for, and the government provided the things that the employers and workers couldn’t provide for themselves. He is morally indignant that corporations and politicians actually put their own interests first, seeing it as a massive betrayal of capitalism’s social contract, and of the virtues of ordinary people. Despite his admiration for the system, he is led to the conclusion voiced by the Catholic priest from here in Lansing whom he films saying: capitalism is evil. [See Moore’s Capitalism: A Love Story]

Moore’s movies always leave me with a paradox: if capitalism is evil, and his gloom and doom sentiments about world that capitalism created are true, I can’t help wondering why he pines for a mythical world in which his version of capitalism flourished (say, Flint about 1957). And if his gloom and doom sentiments about the world aren’t true (not all of the world is Flint, after all), well, then maybe capitalism is something other than what he thinks it is. My own view of morality and capitalism has taken me down the second side of this paradox.

Which brings me to the Pope’s encyclicals. I’m not Roman Catholic, but have long found the encyclicals well worth reading. Especially the ones by Pope Benedict, whose writings display both his careful scholarship and his appreciation for the ordinary lives of real people. What Benedict has done in his first two encyclicals is to take the entire history of papal social teaching and encompass it within the simple expression: God is love. In doing so, he has succeeded not only in a brilliant philosophical endeavor, but he has also re-invigorated Christianity’s engagement, both intellectually and practically, with the secular modern world. [see Deus caritas est and Caritas in veritate]

Now love is something that economists are not comfortable talking about. Discussions of capitalism usually focus on efficiency and productivity arguments: the closest most economists get to the topic of love is talking about the economics of sex and marriage (check out the chapter on the competition prostitutes face in the new edition of Freakonomics for an example). Even Adam Smith, who as the first economist was also the last to integrate ‘benevolence’ as well as ‘self-love’ into his economic thought, downplayed love. Benevolence is not quite the same as “charity”: the former reflects my willingness to take the interests of others into account in choosing my actions; the latter asks of me to give of my own to others.

Discussion of benevolence takes us quickly into the topic of justice: giving each of us our due, acknowledging our rights. Discussion of love transcends, and possibly completes, justice: As Benedict says, “The earthly city is promoted not merely by relationships of rights and duties, but to an even greater and more fundamental extent by relationships of gratuitousness, mercy and communion.”

Well, what does this discussion of love and justice have to do with capitalism? I want to draw out two implications for your consideration today.

First, it is ironic that a capitalist society – with its priority on freedom, a value I haven’t mentioned yet today, rather than justice – provides the potential to transcend justice; whereas non-capitalist societies, whether they be mercantilist – give us our due – or socialist – give everyone their due, do not. I was struck long ago by the realization that the first requirement of a socialist society is the denial of charity: a socialist society is undone if people voluntarily choose to give up what is their own. This is one of the reasons that voluntary associations are so uncommon in non-capitalist societies: voluntary associations are one of the ways in which we transcend the requirements of justice, giving freely of what is rightfully ours as an expression of charity and love.

My second point has to do with innovation. As some of you know, I have been working for a couple of years now on a project I call “The Constitution of Innovation.” Ample evidence exists that innovation is the fundamental driver of long-term economic growth, but economics is ill-suited to provide us guidance on how to encourage innovation. For the economist, innovation is almost “an act of God” – something we cannot predict or control that intrudes on our smoothly functioning system and disrupts it. Joseph Schumpeter’s description of innovative entrepreneurship as “creative destruction” gives you a good sense of what economists think of it.

As with charity, non-capitalist societies are particularly bad at enabling innovation. We often say that this is because they do not respect property rights, and there is some truth in that, but my own argument runs deeper: innovation is an act of love.

Think about it for a second: if you develop something new just for yourself, it isn’t an innovation, it has no social consequence. New creations are only innovations if they create value for other people. As I define it, innovation is the process of creating value for others; put in the terms I’m using here, it is a gift of yourself for the sake of others as well as yourself. The value created by your innovation will far exceed the value you receive from its entrance into the market. Of course, market societies ensure that the value you receive will be in some way proportionate to the value you create for others. But that’s the unintended consequence of my action: not what I set out to do. Just as capitalism provides the potential for charity because it doesn’t primarily aim at justice, so too it provides the potential for innovation because it doesn’t settle with simply ensuring that we continue to do what we are currently doing.

My final comments: in university settings, I have lots of opportunities to interact with those who believe capitalism is all about greed, and expect an economist like me to think the worst of human beings. Their own socialism, however, is tinged with their cynicism about ordinary people and skepticism about the prospects for the human race. When they discover that I can be a hard-ass economist but not be cynical, and that I am hopeful about the human prospect without being naïve about how people behave, they can’t believe it.


Free to Choose

Posted in justice and charity, Theology and Economics with tags , , , , , , , , on 03/10/2009 by rossemmett

The lectionary reading a couple of Sundays back was Mark 1:40-45

A leper came to Jesus begging him, and kneeling he said to him, “If you choose, you can make me clean.” Moved with pity, Jesus stretched out his hand and touched him, and said to him, “I do choose. Be made clean!” Immediately the leprosy left him, and he was made clean. After sternly warning him he sent him away at once, saying to him, “See that you say nothing to anyone; but go, show yourself to the priest, and offer for your cleansing what Moses commanded, as a testimony to them.” But he went out and began to proclaim it freely, and to spread the word, so that Jesus could no longer go into a town openly, but stayed out in the country; and people came to him from every quarter. (italics added)

The expression “Free to Choose” is often identified with a view of economics which glorifies unfettered individual choice. The late Milton Friedman, a Chicago economist and Nobel laureate, is most frequently associated with the use of the expression, because it was the title of the PBS series he created back in the 1980s. But in this passage from Mark, we find Jesus freely choosing to heal a leper. Because leprosy made you unclean under Jewish law, a leper was unable to keep the law, and hence became a social outcast, cut off from family, friends and access to civil society. Jesus’ choice made it possible for the person to be restored to his family and community (and he immediately went out and told everyone how it happened, much to Jesus’ chagrin).

The leper knows that Jesus has a choice. He knows that Jesus can heal him, but also that Jewish law does not require it of him. And surely there were other lepers at the edge of town that day; why should Jesus choose to heal him rather than others? We can clearly get into some thorny theological issues with this story. But I’ll keep my focus on the choice for the moment.

Jesus chose freely to use resources at his disposal to restore another person to full participation in his community. Some will view Jesus’ free choice here as the opposite of the view of choice usually associated with the expression “free to choose.” After all, how many first-year economics texts proclaim that human are selfish and have unlimited wants? Suggesting that Adam Smith was the first to argue that unfettered selfishness in a market setting would promote the common good through wealth creation is de rigueur in introductory economics and, for that matter, among those who think they are thereby dismissing Smith, markets and economics. A trifecta!

Except they’re wrong about Adam Smith (and markets), but that would be a longer story to which I’ll have to return sometime. And they’re even wrong about Milton Friedman, who has a much more nuanced view of choice than the standard first-year textbook does.

Jesus’ choice to heal the leper was an act of charity.

I was tempted to say love, of course, because that’s the word we’d use today. And agape in the New Testament can be translated with either love or charity. But the theological meaning of charity carries along with love the sense of incorporating the other into one’s community. The command to be charitable to others implies my commitment to them as another member of my community. Treat them as you would yourself. Do not treat them as an outcast, as someone you would simply throw scraps of food or a few pennies to. Biblical charity is not what we think of as charity today: a way to feel good about a few causes and reduce my tax burden at the same time. No, charity is the ultimate act of welcoming someone into your community, of giving her status.

That is what Jesus did with his free choice.

If I was preaching, I’d tell you to go out and do likewise. But I’m an economist, and usually end up asking a different kind of question. Not to stop you from being charitable, but to broaden our appreciation for what is at stake.

One of the things I noticed when studying economic theory was that, in order to ensure justice, some approaches to social economic organization require society to deny people the right to be charitable. The argument is simple: if everyone is already a member of the community, and everyone has equal resources, then charity is unnecessary. Justice has already been achieved; why would you need charity?

There are two problems with the social “criminalization” of charity. First, it denies me the individual opportunity to exercise virtue in the context of a free choice. Put differently, such a society assumes I will be selfish, even though as a human being I am more than just selfish, and need opportunities to discover what that “more” involves. If I never have the opportunity to be charitable, I will never experience love. Secondly, the criminalization of charity allows the State to define who has status, to remove those who don’t have it, and to punish me for extending “status” myself to them through acts of charity.

The tension between justice and charity runs deep through every civil society. Justice may be the “the first virtue of social institutions” (Rawls), but it is not the only, or highest, virtue. When designing social institutions, we need to examine where the borderline of that tension lies. I am not afraid to say that as much as I value justice, in the end, “Love wins.”

NOTE: I want to thank Kit Carlson for including the expression “free choice” in her sermon on the lectionary readings, the sixth Sunday of Epiphany, 2009, at All Saints Episcopal Church, East Lansing, Michigan. That prompted this entry. Of course, she bears no responsibility for what I did with her expression!