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Tue, 01 Jan 2013 00:00:00 -0500Defending the Free Market: The Moral Case for a Free Economy
by Robert A. Sirico
Regnery, 256 pages, $27.95
The Emancipation of Avaricehttps://www.firstthings.com/article/2011/05/the-emancipation-of-avarice
Sun, 15 May 2011 00:00:00 -0400 The last few years have seen a surprising revival of the term greed. For many decades, the free-market right saw no harm in people making as much money as they could, while the left spoke only of inequality and injustice, both directing their economic attention to accumulation or distribution rather than motivation. Yet it was avarice that was notably on display in the various oversights and abuses leading to the financial meltdown. The vast bonuses, the reckless gambling, the collusion of auditors and regulators”all fruits, it seemed, of that unlovely vice. Tabloid journalists led the cry, followed shortly by clerics, happy at last to be able to talk about something other than sex.
But although once again popular, the term greed is not yet intellectually respectable. In the eyes of mainstream economists, greedy people are simply agents with certain preferences acting on certain incentives. Joseph Stiglitz, for example, insisted a few years ago (before the crisis) that those
who misbehaved in the corporate and financial world were not necessarily particularly venal, or more venal than those who occupied their positions in an earlier era; rather, their incentives were different, and their behavior responded to those incentives.
If anyone is to blame for the crisis, claim the economists, it is the politicians and regulators who created those incentives, or the thinkers whose false theories inspired them. But this only pushes the problem back a step. Why did so many politicians, regulators, and economists, some of them, at least, intelligent people, accept what in retrospect look like manifestly bogus theories? Surely motives of ambition and greed were at play here too”especially given the close connection between the intellectual, political, and financial elites.
And so the argument bounces back and forth. There seems to be no easy reconciliation between the popular view of the crisis, which focuses on greed, and more serious discussion, which focuses on institutional design.
This incoherence in our response to the financial crisis is not an accident. We are inheritors of two traditions of thinking about wealth, which lie side by side in our minds without mingling. On the one hand, we have it on ancient and venerable authority that the love of money is the root of evil and a sure path to corruption and servitude. Western travelers to China, where cash is given in pretty red envelopes to children and burnt in effigy before graves, feel the residual force of the old occidental distaste for the filthy lucre.
Yet these ancient classical and Christian traditions, which dominated moral discourse about wealth for millennia, have been overlaid by another, dating back to the Enlightenment, for which wealth creation is a perfectly innocuous or even benign activity”provided it is confined within legal limits. This revolution was accompanied by another, even deeper, revolution of ethical thought, which was eventually to become known as utilitarianism. These attitudes are now ensconced in centers of political power and in the discipline of economics. They rule our thinking heads, if not our feeling hearts.
So comprehensive has been the triumph of this twin revolution that sophisticated minds today find it hard not only to see the love of money as a vice, but to see how anything
the love of money could ever have been regarded as a vice. Greed has been relegated along with lust and perversion to the margins of moral language, where only priests and rabble-rousers seek to rummage.
The philosophers of the eighteenth century confronted a formidable legacy of thinking on the subject of accumulation, almost all of it hostile. This hostility was based not merely on aristocratic or monkish prejudice, as is often alleged, but on the reasonable supposition that the only intrinsically valuable thing in the world is a good human life. Money, and the goods purchasable with money, have value only insofar as they are conducive to a good life. To pursue them beyond this point is irrational. Thomas Aquinas put it in the
with his usual dry clarity: The desire for material things as they are conducive to an end is natural to man. Therefore it is without fault to the extent that it is confined within the norms set by the nature of that end. Avarice exceeds these limits and is thereby sinful. He adds that avarice darkens the soul by putting love for money above love for God, and compares it to idolatry, but these theological embellishments are not essential to his argument, which can be stated in purely secular terms.
Aquinas remarks on avarice summarize a long tradition of thinking on the subject, stretching back to ancient Greece. The legends of Midas, Croesus, and Erysichthon taught Greeks to see the pecuniary passion as sterile and violent. Philosophers such as Aristotle contrasted
, the restless desire for more, with
, the tranquil self-sufficiency of the sage. Roman moralists swelled the theme. Neither burning heat, nor winter, fire, sea, sword, can turn you aside from gain, declaimed Horace to the miser in his
. Nothing stops you, until no second man be richer than yourself.
Christian authors drew freely from this classical tradition, in particular Aristotles image of compound interest as a kind of monstrous birth. Repeatedly, by the most vile cunning of usury, gold is born from gold itself, runs Gratians
, the foundation of Western canon law. Never is there satisfaction; never will there be an end in sight for the greedy. Examples might be multiplied. For pagans and Christians alike, the misers sin lay primarily in his insatiability, his incapacity for rest. In a society that took its measure from the eternal identity of God or the circling stars, this ceaseless striving after more seemed tantamount to a breach in the cosmic order.
Nowhere does Aquinas (or any of the authors he draws on) suggest that avarice might be redeemed by its beneficial social effects. Not only did he not perceive any such effects, but even if he had, he could not have accorded them any moral significance. Explanation of this point requires a brief excursus into Aquinas theory of acts and ends. An act, for Aquinas, has two ends: one proximate, which is what makes it the kind of act it is, the other ultimate, which is what the agent aims at in acting. If either end is bad, the act as a whole is bad. A good ultimate end cannot redeem a bad proximate end; thieving to help the poor is still thieving.
Acts furthermore have consequences which, though foreseen, are not ends of either kind, but mere double or side effects. These can sometimes render a good act bad, but never a bad act good. (Praising a little girl is kind, but less so if done in earshot of her jealous sister. Taunting a little girl is never kind, even if it warms her sisters heart.) Finally, acts have consequences that are neither intended nor foreseen. These come under the heading of accidents, and are morally indifferent.
It should now be clear why Aquinas was uninterested in the possible benefits of avarice. If an act is of an intrinsically bad sort, then any good consequences flowing from it, whether intended, unintended but foreseen, or unintended
unforeseen, are morally irrelevant. The act is vitiated from the start; nothing can redeem it. Aquinas knew from Scripture that bad acts sometimes have good effects. If Adam had not sinned, Christ would not have come into the world. But to permit evil for the sake of future good belongs exclusively to divine providence. We humans must take our bearing not from Gods providence, but from His law, which forbids evil absolutely.
If some pre-Enlightenment thinkers damned avarice as harmful to individual happiness or salvation, others condemned it as politically divisive. Crucial here was the ancient vision of the polity as a teleologically ordered whole, in which the public good is not just the product but the ultimate
of private actions, the towards-which they are directed. A bridle-maker, to use Aristotles example, aims at ease and agility in the cavalryman, the cavalryman at victory in war, and victory in war at the freedom and glory of the polis. Each small action is connected through a long chain of final causality to the greater good.
In a society so conceived, the avaricious man is an outsider, for his actions, even if they happen to further the common good, do not in any sense
at that good, but only at his own enrichment. He is a permanent potential subversive, if not an actual criminal. To the extent that the spirit of avarice and luxury prevails in a nation, patriotism and virtue will wither away.
This classical republican critique of avarice could (and often did) conflict with the ethico-theological critique outlined above. From the standpoint of the
, personal happiness or salvation might seem just as selfish a goal as monetary gain, while from the standpoint of salvation, devotion to the
might seem sheer tribalism. But there was no necessary opposition between the two viewpoints. Mainstream Christian thinkers recognized the health of the political community as a genuine if subordinate good, and so could embrace a modified version of the classical republican critique. No vice is worse [than avarice], wrote John of Salisbury in
, especially in those who are at the head of states or hold any public office.
Above all, all pre-Enlightenment thinkers agreed that avarice, whether primarily a spiritual or a political evil, is at any rate an
evil. Even if it has habitually bad effects, it is not bad because of these effects, but because of what it essentially is”a deflection of the will from its proper end, be that God, the public good, or some combination of the two.
None of this is to say that pre-Enlightenment attitudes to commerce were uniformly hostile. Aristotle and the early Church were fairly uncompromising, but from the late twelfth century onwards, schoolmen and friars strove to develop ethical principles appropriate to the emerging commercial society. Textbooks such as Johannes Niders fifteenth-century
De Contractibus Mercatorum
advised merchants on how to make a living without endangering their souls.
Still, the general attitude of this literature to commerce was one of accommodation to a distasteful worldly reality. Trade, like sex, was viewed as an inherently perilous activity, with its own distinctive temptations and vices. Its practitioners needed to be constantly on guard if they were not to fall victim to these. Nothing could be further from the outlook of the modern economist, for whom all commercial activity, provided it remains on the right side of the law, is morally unimpeachable. An intellectual revolution lay between these two attitudes. This revolution was initiated by the thinkers of the Enlightenment.
It is often said, following a famous suggestion of Max Weber, that modern capitalism has its roots in the Protestant work ethic. This is partly, but not wholly, true. Whatever the unique features of the Protestant work ethic, it was undeniably still an
”that is, a valuation of economic acts, like human acts in general, as intrinsically good or bad. The Puritan divines refer freely to avarice, sloth, luxury, and so forth, even if they use these terms somewhat differently than their medieval predecessors. The thinkers of the Enlightenment, by contrast, assess economic acts in a radically new way, as good or bad in virtue of their
. A long and tortuous path connects the Reformation to its Enlightenment successor. Nonetheless, since my interest is in the terminus of this path”the advent of modern economics”I shall confine myself to the secular Enlightenment.
Fable of the Bees
of 1714, the Anglo-Dutch essayist Bernard Mandeville put forward an outrageous suggestion. What if the private vices of avarice and luxury are transformable, through skilled political management, into the publick benefits of wealth and industry? With a satiric eye on contemporary England, Mandeville pictures a hive of vicious but prosperous bees: