Many conservative pundits can only say the words “social justice” while sneering. Fortunately, Ryan Anderson isn’t one of them. Here he takes two prominent conservative public intellectuals—Peter Wehner and Arthur Brooks—to the woodshed for the unfortunate lacunae in their new book, Wealth and Justice: The Morality of Democratic Capitalism.
Here’s a portion of the conclusion of Anderson’s perspicuous piece:
Wealth and Justice highlights both the strengths and weaknesses of the conservative case for democratic capitalism. Yes, capitalism protects liberty and free enterprise, and it raises the standard of living as it creates and distributes wealth. But Wehner and Brooks say hardly a word about property duties or about what a just distribution of wealth on their view would look like (one fears that for them it is whatever the market produces). Also, in their rush to defend capitalism against critics, they fail to discuss any of its downsides. For a generation wrestling with economic questions (see: Occupy Wall Street and Tea Party), conservatives need to provide a more thoughtful consideration and response to what worries people about capitalism.
First, capitalism and culture. Much of Wehner and Brooks’s defense of capitalism relies on the strength of the civic and social order. But while they want this sphere to influence the economic sphere, they have little to say about how the economic sphere also influences culture. For them, capitalism didn’t corrupt Madoff, Madoff corrupted capitalism. One need not be a Marxist, however, to note that our economic arrangements influence our culture and morals. Every notable political thinker has thought this; start the list with Plato and Aristotle. So saying that the answer is “better capitalists” doesn’t take seriously the effect that capitalism can have on character, especially given its reward structure. And while Wehner and Brooks mention the neoconservative Daniel Bell’s Cultural Contradictions of Capitalism (only to dismiss his worries), they have little to say about the consumerist and materialistic culture that capitalism can promote. Ditto on the debasement of popular culture with mass-produced, market-driven “art.”
Second, social justice. Wehner and Brooks assert “that capitalism is best at doing what it is most often accused of doing worst: distributing wealth to people at every social stratum rather than simply to elites. The evidence of history is clear on this point—the poor gain the most from capitalism.” Is this really true? It depends on how one reads the passage. Yes, considered historically, the poor gain the most from capitalism as compared to alternative economic regimes, especially where communism is presented as the only alternative regime. But do thepoor benefit the most from capitalism, as compared to the rich? This is a concern that animates many, and not only those in the OWS movement. Wehner and Brooks are silent about it….
Perhaps most disconcerting, however, is that Wehner and Brooks offer no principles of justice on how individuals should deploy their wealth, and in a book titled Wealth and Justice this is disappointing. Supporting free markets and limited government doesn’t even begin to address the question of how citizens should behave in the market: Can a citizen be guilty of injustice in how he uses his wealth? Do citizens have duties—in justice—to distribute their wealth? Wehner and Brooks are silent….
The real question facing developed capitalist countries now is what type of capitalism to have, and what type of wealth distribution. Among the most thoughtful thinkers on these questions, few are strict egalitarians, and so even here Wehner and Brooks have engaged a strawman. One might think current disparities in wealth are unjust, not because material equality is the goal, but because human flourishing is, and too many people lack the requisite material goods for that flourishing. Income and wealth equality isn’t the concern, but having sufficient goods to meet one’s needs and fulfill one’s vocation is. Likewise, one might worry about the disparate political power that comes with gross material inequalities. Wehner and Brooks say nothing about these concerns.
Read the whole thing.
November 10th, 2011 | 4:58 pm
As soon as I read it a few days ago, I knew it was an article worthy of printing and keeping.
Alas, he leaves us only with a call for conservatives to develop a sound position on social justice, without providing us anything to go on.
The whole article was one big tease! It was a good tease, though.
November 10th, 2011 | 6:53 pm
“having sufficient goods to meet one’s needs and fulfill one’s vocation is [the concern].”
To each according to his needs. Hmm, sounds familiar.
A person “needs” food and shelter. Pretty much everyone in 21st century America has these and much more. In fact, most of our “poor” are fabulously wealthy by the standards of truly poor people. In Kenya I met a woman who owned nothing but her clothes. No public transportation system to ride, no running water much less hot water on demand, no TV, no radio, no ipod, no refrigerator, no electricity, no microwave, all things that are common in even the “poorest” American households. Food? Give me a break. In America a person is more likely to be obese if his income is below the poverty line than above it.
When I was poor I did not resent rich people or want the government to take their money and give it to me. I wanted to become one of them.
Joe Carter has this one nailed. The concern expressed over income inequality is usually nothing but covetousness (one of God’s big ten if memory serves) tarted up in sociological wonk-speak.
The government has spent over 16 trillion dollars on welfare since the 1960s. It has succeeded in reducing material want and utterly failed to eliminate poverty at the same time. How is this possible? Because in 21st century America poverty is a matter of the spirit, not a matter of material want, and no amount of taking from the rich to give to the poor will address that problem.
Now it is true that Jesus had a lot to say about caring for the poor, widows and orphans, and I am not trying to diminish those passages. I simply oppose addressing the issue as a matter of “justice.” The concept of justice means giving to each person that which is his due. Therefore, if you say “justice” requires me to give my goods to a poor person you are necessarily making a statement about relative rights and duties. You are saying he has a right to have my goods, and I have a duty to give them to him. That is NOT what Jesus had in mind. Yes, I have a duty to give my goods, but the poor person has no right to receive them. If the poor person has no “right” to receive my goods, by definition my refusal to give my goods to him cannot be an affront to justice. My duty is not grounded in the demands of justice. It is grounded in the demands of charity (in its original sense of “love” and not “ the giving of alms”).
This distinction has important implications for government policy. The government has every right to enforce duties grounded in justice. Indeed, that is one of its primary functions. Therefore, if my duty to give were grounded in justice, the government would be perfectly justified in taking my goods, forcefully if necessary, and distributing those goods to the people who have the reciprocal right to receive them. But the government has no business enforcing the entirely private demands of charity. For one thing, it is impossible for the government to even know what those demands are. This, of course, is why notions of subsidiarity are so vital in these sorts of discussions.
November 10th, 2011 | 9:11 pm
I’d be more impressed with talk about “social justice” if the talkers could more easily answer the question of how it differed from plain old reliable justice.
November 10th, 2011 | 11:15 pm
After criticizing Wehner and Brooks for “recounting, again, the ills of communism, and then mov[ing] on to ask a string of rhetorical questions about how far liberals want us to go in addressing inequality…[t]hey answer none of these questions, cite no egalitarian scholars who support such a worldview, and entertain no alternative conceptions of social justice,” Anderson proceeds to
1.) answer neither these rhetorical questions nor the others that he sets forth in his essay;
2.) cite no scholars -Left, Right or Other – who offer a version of social justice that addresses what he sees as the weaknesses in Werner and Brooks’ pro-capitalist position;
3.) offer no alternative conception of social justice (aside from an odd defense of “distributive justice,” and some extremely vague and politically useless formulations in the last two paragraphs).
How unsatisfying. What exactly is Anderson’s conception of social justice? Is he being coy, or is he just being anti-anti-anti-capitalist?
November 11th, 2011 | 5:02 am
Barry: “To each according to his needs. Hmm, sounds familiar.”
Indeed, Hayek advocated such an idea in his 1944 edition of “The Road to Serfdom.”
“Pretty much everyone in 21st century America has these and much more. In fact, most of our “poor” are fabulously wealthy by the standards of truly poor people.”
True, but that change didn’t happen overnight nor did it happen without any government intervention. As much as people complain about public education in America, it does appear to have succeeded in shrinking the supply of unskilled labor to the point that unskilled workers can earn wages they could only dream about in poor countries like Kenya — it isn’t just GDP per capita at work in raising the standard of living of the poor. At the same time, the welfare state ensures that no one goes hungry or dies from lack of medical care when they run out of money.
November 11th, 2011 | 9:34 am
Mark, do tell. My edition of The Road to Serfdom doesn’t include the part where Hayek turns out to be a socialist. Perhaps you can give me a reference or a quote.
November 11th, 2011 | 10:04 am
What I see here is a lack of common ground, based on “jumping the gun” and not agreeing on common terms before debating. The two sides will simply continue to talk past each other, each one becoming increasingly frustrated until they yield to the temptation to accuse the other side of malice or lying.
In socialist terms, “democratic capitalism” is an oxymoron. “Capitalism” means that ownership of capital is concentrated in the hands of a small private elite, while “democratic” means that all the people participate.
In capitalist terms, “democratic capitalism” is redundant. Since the system presumably benefits everyone equally by offering equality of opportunity, and private charity and public welfare take care of the unfortunate, the socialist critique is off-base, for everyone participates to the extent that he or she has the desire or ability.
Neither side addresses the real issue, which is power. As Daniel Webster observed in the Massachusetts Constitutional Convention of 1820, “Power naturally and necessarily follows property.” Unfortunately, neither State ownership/control of socialism, or the limited ownership/control of capitalism, democratic or otherwise, takes into account the need to empower ordinary people with direct and meaningful ownership of an adequate capital stake, as Leo XIII virtually mandated: “We have seen that this great labor question cannot be solved save by assuming as a principle that private ownership must be held sacred and inviolable. The law, therefore, should favor ownership, and its policy should be to induce as many as possible of the people to become owners.” (Rerum Novarum, § 46.)
Why is this either ignored, redefined, or reinterpreted to make either socialism or capitalism the only possibilities?
It’s quite simple. Both capitalist and socialist economics assumes as a given that the only way to finance new capital formation is to cut consumption, accumulate money savings, then invest. This requires concentrated ownership of capital, either by the State or a small private elite, so that those who own or control simply cannot consume all they produce and are compelled to save, thereby providing sufficient investment capital for new investment, and thus job creation.
This is completely wrong. Most new capital is not financed out of existing accumulations of savings at all. Existing savings are typically used as collateral, not direct investment. New capital is usually financed by drawing bills on the present value of future marketable goods and services that the capital being financed is reasonably expected to produce, and either using these “bills of exchange” as money (trade or merchant’s acceptances), or discounting and rediscounting the bills at a commercial and central bank (banker’s acceptances). Thus, as Harold Moulton pointed out in “The Formation of Capital” (1935), his alternative to the Keynesian New Deal inflationary financing, new capital is financed by monetizing future production, not unconsumed past production. This removes one of the single most damaging barriers to widespread direct ownership of capital.
In the late 1950s and early 1960s, Louis Kelso and Mortimer Adler advocated restructuring the legal system to enable propertyless workers to become capital owners by financing investment using such “future savings” and collateralizing with capital credit insurance and reinsurance instead of accumulated savings. Recently, the Center for Economic and Social Justice has been proposing “Capital Homesteading,” a program to open up the opportunity for every citizen, not just workers in corporations, to become capital owners.
By using future savings to finance capital acquisition, the rich can be left with their accumulations intact. Taxes would (eventually) go down as the social safety net has fewer people to take care of, the national debt could be paid down, and the country shifted to a currency backed with private sector hard assets rather than government debt.
November 11th, 2011 | 11:14 am
[...] the poor benefit? Well, alas, yes quite a [...]
November 11th, 2011 | 12:49 pm
[...] Capitalism and Social Justice – Joseph Knippenberg, First Things/First Thoughts [...]
November 11th, 2011 | 2:36 pm
And so the discussion continues, without so much as a mention of the cause of the present, well-advanced, and probably, at this point, irreversible collapse of the global economy.
Usury.
You know, that itty bitty little thing the Church anathematized for a thousand years and more, until the best thinking of men persuaded the magisterium to abandon in practice the enforcement of what the Church had received from God?
There is a silver lining. Once the immiseration and destruction advance two or three more cycles down the line, we shall all be able to recall that the Church never reversed or amended Her condemnation of usury:
“I. The nature of the sin called usury has its proper place and origin in a loan contract. This financial contract between consenting parties demands, by its very nature, that one return to another only as much as he has received. The sin rests on the fact that sometimes the creditor desires more than he has given. Therefore he contends some gain is owed him beyond that which he loaned, but any gain which exceeds the amount he gave is illicit and usurious.
II. One cannot condone the sin of usury by arguing that the gain is not great or excessive, but rather moderate or small; neither can it be condoned by arguing that the borrower is rich; nor even by arguing that the money borrowed is not left idle, but is spent usefully, either to increase one’s fortune, to purchase new estates, or to engage in business transactions. The law governing loans consists necessarily in the equality of what is given and returned; once the equality has been established, whoever demands more than that violates the terms of the loan. Therefore if one receives interest, he must make restitution according to the commutative bond of justice; its function in human contracts is to assure equality for each one. This law is to be observed in a holy manner. If not observed exactly, reparation must be made.
III. By these remarks, however, We do not deny that at times together with the loan contract certain other titles-which are not at all intrinsic to the contract-may run parallel with it. From these other titles, entirely just and legitimate reasons arise to demand something over and above the amount due on the contract. Nor is it denied that it is very often possible for someone, by means of contracts differing entirely from loans, to spend and invest money legitimately either to provide oneself with an annual income or to engage in legitimate trade and business. From these types of contracts honest gain may be made.
IV. There are many different contracts of this kind. In these contracts, if equality is not maintained, whatever is received over and above what is fair is a real injustice. Even though it may not fall under the precise rubric of usury (since all reciprocity, both open and hidden, is absent), restitution is obligated. Thus if everything is done correctly and weighed in the scales of justice, these same legitimate contracts suffice to provide a standard and a principle for engaging in commerce and fruitful business for the common good. Christian minds should not think that gainful commerce can flourish by usuries or other similar injustices. On the contrary We learn from divine Revelation that justice raises up nations; sin, however, makes nations miserable.” Pope Benedict XIV, Vix Pervenit
Sin, however, makes nations miserable indeed.
November 11th, 2011 | 5:11 pm
Although there is brief reference to Madoff, no discussion is made of speculation and the creation of a ‘bubble’. This unproductive, even destructive, form of capitalism is a source of our current ecomonic difficulties. Madoff did engage in outright fraud, what led to Lehman Bros. collapse was not called fraud, but a bad ‘gamble’ with a too large percentage of comapny assets. Do we allow such speculation knowing that this is creates a ‘boom-and-bust’ cycle?
The question to address is what is a sustainable model for an ecomony? I hear little to give me confidence that these authors and commentators have such a model.
November 11th, 2011 | 8:54 pm
Justice (without adjective attached), according to Aquinas, is fulfilled in acts of will to render to each their due. ‘Social’ justice, as opposed to individual justice, can only mean the justice of social systems. But can social systems exhibit will and intentionality? As Friedrich Hayek pointed out (in The Mirage of Social Justice), the market as a social system has no intentionality and thus can be neither just or unjust.
Socialist systems, of course, are designed to distribute by intention, so they can be unjust, as ample experience has confirmed. (Whether socialist systems can also be just is highly doubtful, first of all because those who control distribution serve their own self-interest and class-interest rather than apply principles of distribution impartially.)
Market (or capitalist) systems are, of course, governed by rules that are set intentionally through political systems. These rules can be unjust, as systems of ‘crony capitalism’ demonstrate. However, the rules can also be just, if based on principles of rule of law (vs arbitrary government action) and equal protection.
Whether ‘social’ justice calls for government to provide redistribution outside the market is a contentious issue that I will not address now. (Hayek, in his book, said he would not object to it.) Interestingly, the Roman Catholic catechism says only that social justice requires that society should provide the means for individuals and subsidiary institutions to pursue for themselves what is their due; it does not call for explicit redistribution and guaranteed outcomes.
In any case, ‘social’ justice does not apply to individual actions, and Ryan Anderson may fail to understand that point.
November 12th, 2011 | 12:18 am
Barry: “Mark, do tell. My edition of The Road to Serfdom doesn’t include the part where Hayek turns out to be a socialist. Perhaps you can give me a reference or a quote.”
“Socialism” is a strawman of your own creation. The original quote from Anderson dealt with assuring a minimum standard of living compatible with human flourishing. As requested, here is Hayek:
“An incautious handling of these questions might well cause serious and perhaps even dangerous political problems; but there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody. Indeed, for a considerable part of the population of England this sort of security has long been achieved.
“Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance — where, in short, we deal with genuinely insurable risks — the case for the state’s helping to organize a comprehensive system of social insurance is very strong.”
(“The Road to Serfdom”, page 148, in the edition posted to Google Books)
November 12th, 2011 | 1:33 am
“Most new capital is not financed out of existing accumulations of savings at all. Existing savings are typically used as collateral, not direct investment.”
This is a bit confused. If a business wants to, for instance, build a new factory as an addition to its capital stock, that requires marshalling the real resources of the economy. Someone has to feed and clothe the workers, dig up the raw materials that make up the concrete and bricks, put fuel in the trucks to transport said concrete and brisk to the project site, etc. Those real resources can only be mobilized when some people in the economy defer current consumption in favor of a future pay-off.
Those people who defer future consumption will be the factory owners themselves if financing is not available (which was true during the early days of the Industrial Revolution) or else will be financiers when the financial system is more developed. But someone has to do it — someone has to agree to spend his or her real resources on constructing the factory rather than on, say, a new private jet or a holiday house in the Caribbean.
November 12th, 2011 | 3:20 am
Barry: “Mark, do tell. My edition of The Road to Serfdom doesn’t include the part where Hayek turns out to be a socialist. Perhaps you can give me a reference or a quote.”
It appears my previous response may have not gone through. The reference is “The Road to Serfdom: Text and Documents–The Definitive Edition (The Collected Works of F. A. Hayek, Volume 2),” edited by Bruce Caldwell, page 148.
Whether you want to call this “socialist” or not is up to you. However, I believe you would be splitting hairs in trying to distinguish Hayek’s comments on these pages from Anderson’s call for a guaranteed minimum living standard for all people consistent with human flourishing.
November 12th, 2011 | 10:00 am
“Usury.
You know, that itty bitty little thing the Church anathematized for a thousand years and more, until the best thinking of men persuaded the magisterium to abandon in practice the enforcement of what the Church had received from God?”
Restrictions around usury are easy to reason around. Suppose you are a merchant in Genoa and you are sending a shipment to Venice that, because of the fact that steamships haven’t been invented yet, will take a while to get there. You don’t want to ask your business partner in Venice to ship gold to you as payment — that’s just wasteful. Instead, you have him write a note promising 100 lira, say, 2 months in the future. You then take this note to a merchant who happens to owe someone in Venice money, he pays you 98 lira for the note and then cancels out his debt in Venice when it comes time for your business partner to pay up.
And that is how merchant banking got started in Catholic Italy. Unless you demand that all commercial transactions always be settled immediately in cash, you are going to have debt instruments like commercial paper and bills of exchange emerge and people are naturally going to grant discounts for immediate payments and premiums for future payments. The result is a market for short-term debt securities.
November 12th, 2011 | 10:07 am
Rick DeLano
It is worth noting that Benedict XIV (Propspero Lambertini) was probably the greatest canonist to occupy the chair of St Peter, Innocent IV being his only possible rival.
November 12th, 2011 | 12:56 pm
Michael: The great Pope Benedict XIV will, I am certain, be vindicated in his mighty encyclical “Vix Pervenit”. When the inevitable collapse of the usury-based global financial system reaches the critical (and, under present usury-based thinking, inevitable) point of collapse, the world will have another instance where the abandonment of heaven-protected magisterial teaching has led, lawfully and predictably, to very great woe.
Mark: Nothing in your post is not fully allowed and commended by paragraph III in the citation of “Vix Pervenit” above. Such contracts are not sinful. Usury is sinful.
November 15th, 2011 | 9:03 am
I think the reason many sneer when they utter the words “social justice” is that many leaders in the Church and out of it, in using that term, have assumed that it must mean socialism or some approximation of it. The social justice encyclicals condemn socialism, though they often tend to be unclear on what a real, workable, just system would look like. Centessimus Annus goes one step further, and criticizes the “Social Welfare State”–read Europe, as I interpret this term.
As for the “distribution” of wealth, I’m gonna go with Thomas Sowell on this one. He makes the simple and common-sense point that distribution of wealth is the wrong way to think about it, because wealth is not distributed at all–it is earned. At least, that is true in a just system like the free-market system.
What exactly is the justification for saying that it’s more just to have equal “distribution” regardless of whether one earns it? Especially, how do you justify forcibly extracting resources from those who actually earned it, to give to those who choose to be poor?
Choose, I say. In our country at this time, those who are poor by and large choose it. First by their moral choices–having children out of wedlock and raising them in single-parent arrangements. Choosing to become addicted to various substances and behaviors. Immigrating, whether legally or illegally. Choosing to pursue one’s “dream” or “passion” while having no regard for providing for the needs of others–then wondering why one is not compensated.
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