May 31, 2011

The Eminently Real Free Market (II): Disparaging Imaginary Constructions as “Illusions” (2)

Mr. Ferrara was off to a good start when he quoted Ludwig von Mises. Unfortunately, however, quotation per se doesn’t satisfy all of one’s obligations. The purpose of the quoted author matters, as does the relevance of the quoted material to one’s thesis. And so we wonder how that passage on the theoretical role of imaginary construction (see yesterday’s post) triggered this:
One of the principal reasons the “pure or unhampered” market has never existed (except in the imagination of Austrians) is that capitalist entrepreneurs themselves have militated against its [the free market’s] existence from the very inception of the capitalist eras by obtaining special favors, protections and exemptions from the post-Catholic and then post-Christian nation-states that replaced the decentralized structures of political authority in Christendom. (12) (Italics in the original.—A.F.)
Now, just who is asking the historical question Mr. Ferrara was moved to answer with such gusto? Mises certainly was not. In the section of Human Action immediately before the one from which Mr. Ferrara quoted, that is, Section 2, “The Method of Imaginary Constructions,” Mises justifies the product of theoretical creativity that Mr. Ferrara would have his readers regard as an illusion. Since one may read that brief section in its entirety here, there is no need to summarize it in this post. The free market, so defined, “has never existed” for the simple reason that it is the fruit of a thought experiment (Gedankenexperiment).*
Of course imaginary constructions don’t exist. The question is whether they illuminate what does exist, including events that occur. Such concepts focus attention on different factors, holding all but one of them constant, permitting the theorist to conjecture what the effect of changing one of them might be. One may say just as obtusely that subatomic particles exist only in the imagination of theoretical physicists, and perhaps that is Mr. Ferrara’s view of their field as well.
Unlike those particles, however, which are only objects for us, we human beings can test what Human Action says about us by reflecting on what we are doing when we are acting and see whether Mises’ articulation squares with that reflection. Because Mr. Ferrara is in such a hurry to hold Austrians up to ridicule, however, he misdirects his readers’ attention away from Mises’ theoretical interest to a gratuitously asserted thesis of historical causation.
We will keep Mises’ noble scientific intention before us as we examine Mr. Ferrara’s understandable effort to change the subject by impersonating an historian.
To Be Continued

May 26, 2011

The Eminently Real Free Market (I): Disparaging Imaginary Constructions as Illusions (1)

Followers of this blog may rightly wonder what commitment of time our review of TCATL, Part I, Chapter 2, “The Illusory ‘Free’ Market,” will demand of them. That the previous 31 posts only got us to page 11 is not a source of pride. The examination of the next 30 pages (12-41), however, will not require nearly as many mini-essays. We will not rush things, of course, but no one is more interested than we are in laying bare the confusion on display in Part II (chapters 3-17). That each chapter illustrates defects already identified in our preliminary posts should help streamline the task of documenting just how a given chapter fails to achieve the goals Mr. Ferrara set for it.
He begins Part I’s only substantial chapter with a conclusory statement of his position. What he calls an “essential preliminary” to the ensuing “discussion” (his word for the rest of his book) is the reader’s “understanding of the insuperable problem that undermines the entire Austro-libertarian defense of what they call the ‘free’ market: that it does not exist in the real world, as they themselves admit.” (12)
To claim to understand something is to imply that it is actual, for one cannot understand what is not there to be understood. What Mr. Ferrara intends for his readers to “understand,” however, is nothing more than the uncharitable construction that he puts upon his Austro-libertarian opponents’ words, an interpretation he apparently cannot trust his reads to arrive at on their own after he puts the evidence in front of them. The only thing he leaves for them to decide is whether Austro-libertarians are too stupid to notice that the free market doesn’t exist (even though they admit it doesn’t), too dishonest to call attention to this cognitive dissonance, or too schizophrenic to care how they’re perceived. (I will not further annoy the reader by referring to Mr. Ferrara’s tedious use of scare quotes around “free,” as in “‘free’ market”).
After this tendentious start, Mr. Ferrara quotes Ludwig von Mises to the effect that the free market is an imaginary construction. Unfortunately, however, he never explains what Mises meant by “imaginary construction.” Had Mr. Ferrara done that, his reader would understand that this imaginary effort serves a theoretical, not an historical, purpose. The debate would then be over whether or not it does this well. Parties to the debate would be armed with competing philosophies of theory and practice. Mr. Ferrara expresses no interest in such a debate.
The Austro-libertarians’ theoretical or scientific intention, once recognized, would undermine the defamation, implied in the chapter’s title (and repeated at the head of its every odd-numbered page), that they suffer from an illusion. An imaginary construction might illuminate reality, but illusions can only occlude it. One who suffers from an illusion is disqualified from serving in a scientific capacity.
Let’s see who’s shutting out reality. Mr. Ferrara quotes Human Action from the opening paragraph of the third section of Chapter XIV, “The Scope and Method of Catallactics,” the section’s title being “The Pure Market Economy.” As the words his elliptical dots obscure are relevant for assessing his diagnosis of a cognitive break with reality by Austro-libertarians, and as the words that immediately follow give a fuller sense of Mises’ theoretical interest, we will italicize them:
The imaginary construction of a pure or unhampered market economy assumes that there is division of labor and private ownership (control) of the means of production and that consequently there is market exchange of goods and services. It assumes that the operation of the market is not obstructed by institutional factors. It assumes that the government, the social apparatus of compulsion and coercion, is intent upon preserving the operation of the market system, abstains from hindering its functioning, and protects it against encroachments on the part of other people. The market is free; there is no interference of factors, foreign to the market, with prices, wage rates, and interest rates. Starting from these assumptions economics tries to elucidate the operation of a pure market economy. Only at a later stage, having exhausted everything which can be learned from the study of this imaginary construction, does it turn to the study of the various problems raised by interference with the market on the part of governments and other agencies employing coercion and compulsion.
This is a window into Mises’ theoretical context, with which Mr. Ferrara announced in the previous chapter that he has no interest (except when it suits him). As we can see, however, Mr. Ferrara’s several omissions are arguably germane to his topic:
(1) The ontology of the market, namely, the division of labor, private property in capital goods, and market exchanges, which flesh out the meaning of the “operation of the market,” which “institutional factors” might obstruct.
(2) Mises’ view of government as that agency of coercion that allegedly confines its tender mercies to protecting market actors from other forms.
Anarcho-capitalist students of Mises like Murray Rothbard deny that the government can “abstain from hindering its [the market’s] function”: governments can only supply instances of the “hindering” and “encroachment” which the imaginary construction is to bracket out.
We understand that Mr. Ferrara may not be interested in whether Mises’ “minarchism” is less grounded in reality or coherent with Mises' own theoretical strictures than is anarchism. We fail to see, however, how Mr. Ferrara can integrally avoid the question of coercion in any responsible “discussion” of free markets.
(3) The theoretical (not historical) purpose of Mises’ imaginary construction: it “elucidates” market operations by (a) distinguishing categorically between peaceful exchange and violent interference therewith, (b) considering the logic of the former apart from the latter, and then (c) studying the effects of the latter on the former.
Notably, Mises does not lump peaceful exchange and violent interference together as “human behavior.” The former is the norm, the latter subversive of it. This categorical demarcation is ethical, in a Kantian-logical way: it is possible to universalize peaceful exchange; it is not possible to universalize violence without destroying the human race (and a fortiori all possible subjects and objects of economics).
More significantly, Mr. Ferrara fails to disclose that the preceding section of this chapter of Human Action, that is, Section 2 of Chapter XIV, is wholly devoted to justifying the imaginary theoretical construction that he would have his readers confuse with an illusion.
To Be Continued

May 24, 2011

Let’s Have at Those Caveats! (V): Conflating Science and Ethics (2)

To review: the direct aim of a scientific activity is knowledge, which is one kind of good. The common, interpersonal good of justice is a rather different kind. We pursue ethical science in order to attain knowledge of the good, including justice. Such knowledge is related to our extra-scientific, real-world pursuit of justice as means is related to end.
Austrian praxeologists claim that among the many objects of scientific inquiry is human action, formally considered: the human effort to substitute a less satisfactory with a more satisfactory state of affairs.1
We cannot stress formally enough. The claim is that human action may be fruitfully examined apart from the ethical motivations and consequences of those efforts. That is, human beings act purposively, and acting on purpose has a logic of its own, to which logic moral judgment of the purpose is irrelevant.2 It is an abstraction that illuminates the concrete from which it is abstracted, and such illumination is its sole justification. That is, it is an enriching rather than an impoverishing abstraction, or so praxeologists claim.
Reasonable people can and do debate whether we may profitably and responsibly consider human action apart from the moral quality of the ends of human action. Not so for Mr. Ferrara: his ipse dixit is that economics it is an ethical science, and therefore one may not prescind from the moral quality of either the means or the ends pursued.
Mr. Ferrara’s preference for an antiquarian definition of “economics”3 would not merit extensive criticism had he not expressed it with disrespect for those with whom he disagrees. It is the glory of the human mind to analyze and synthesize, to differentiate what is compact in human experience and then reflectively reintegrate those features, aspects, or dimensions into a systematic cognition of the object.
The claim of the praxeologists is that each human action has not only a particular telos or purpose, but that human action as such has a universal logos or intelligibility that we can grasp intelligently and affirm reasonably. From our knowledge of that logos we can deduce historically invariant principles. We invite the reader to engage in such self-reflection and logical analysis as we examine Mr. Ferrara’s distortion of a school of thought whose writings more than meet the standard of intelligent, reasonable, and responsible discourse. Unfortunately, however, the road to that examination is littered with sentences like this:
We will examine the Austrians’ attempt to disguise as technical economics, with the aid of “praxeology,” a pseudo-science of human behavior based on subjective utility theory, what are really a priori value judgments underlying a “philosophy of liberty” that stands in direct conflict with Catholic doctrine and even the simple rational recognition of man’s nature as an ensouled creature of God. (Emphasis as in the original.—A.F.)
Let’s ignore Mr. Ferrara’s imputation of bad motive (“attempt to disguise”) and the scare-quotes—par for the course in this “fraternal appeal” to fellow Catholics. Much more interesting is his ironic failure—given his professed subscription to what he will later refer to as “the Aristotelian-Thomistic system” (50)—to recognize that praxeological reflection and deduction qualify as episteme or science in the Aristotelian sense.
A few comments.
Praxeology, far from being “based” on marginal utility theory, is its theoretical ground.4 As we shall see, there is no evidence that he understands the whole any more than he does the part.
As for a priori value judgments, they are inevitable, even for Mr. Ferrara. (Or did he find out empirically that murder is morally objectionable?) The germane question is whether, and how, they can be justified. A common way to justify a claim to have discovered an a priori truth is retortion, whereby the very attempt to deny the putative truth depends on its being true. (In this chapter he fails to specify the a priori value judgments Austrians allegedly make, so we cannot yet test their rational undeniability.)
In any case praxeology, the subject of Chapter 6, only presupposes that human beings act, that is, move their bodies with conscious purpose in order to enact causal scenarios for realizing their purposes, scenarios they envision and from among which they freely choose. But that is not a value judgment (except in the sense that every act of judgments presupposes the value of truth). It is a wertfrei claim about reality.
We postpone a full answer to the charge of “direct conflict” between the philosophy of liberty and Catholic doctrine. Like so much else in his “caveats,” it is a gratuitous assertion, which we are within our rights to gratuitously deny.
By way of promissory note, however: we will show a harmony between the two. That is, we are not content to argue that the libertarian philosophy and Catholic doctrine are merely logically compatible. We rather hold that the philosophy—its essence, not every conclusion of every adherent of that philosophy—illuminates an aspect of the Gospel of Jesus Christ and has implications for living and implementing the Gospel by believers.5
Catholic doctrine is nothing without the Gospel, which can be discerned in its essence (but not in its fullness) apart from the former, by “a simple rational recognition,” to borrow Mr. Ferrara’s phrase. That is, a person hears or reads the Gospel and is immediately attracted to it. Catholic doctrine offers an explanation of that attraction and builds on it, which doctrine subserves. Our distinctive claim is that the Gospel is essentially libertarian, spiritually, ethically, and politically.
If Catholics can learn from Aristotle, who thought some human beings were slaves from the moment they are born (Politics, Bk. 1, V-VI), while others ought to be killed before they are born (Politics, Bk. 7, XVI), perhaps they can also learn from a libertarian admirer of the Church like Murray Rothbard, despite his own grave blunder regarding abortion. How Catholics may learn from this or that non-Catholic is to be decided only by reflection on what the latter wrote, not a priori. (Stay tuned.)
As we quoted Mr. Ferrara in our last post:
. . . this book [TCATL] is not concerned with “economics” as an academic discipline involving such technical matters as supply and demand curves and schedules. (11)
You bet he’s not concerned with such things. Unfortunately, they’re interwoven into the things with which he is concerned.
Thus there will be no discussion of the purely technical economics in Austrian economics. The focus, rather, will be on the Austrian School’s ventures into areas in which it can have no claim to special competence: human action, philosophy, ethics, politics, liberty and justice. (11)
The consideration of evidence of the Austrians’ allegedly unqualified venturing lies in the future. In the meantime, it is good to remember that an expert in one field can, and usually does, have broad knowledge in areas beyond that of his or her expertise. Provided he or she qualifies his or her labors in another’s vineyard and is willing to defer to qualified experts, there is no problem. If there were, then ipso facto Mr. Ferrara was unqualified to have written TCATL (although I’m not sure pointing that out to him would have had any effect).
Finally, here’s what we meant the other day when we said he “exempts himself from his own anti-theoretical proviso.” (11)
One seemingly technical matter, however, will come under examination: the role of Austrian utility theory in Austrian arguments in favor of a “market society” and against Catholic social teaching on the errors of economic liberalism. (11)
Let’s see . . . no discussion of purely technical economics of the Austrian school . . . except for one of the technical doctrines for which it is best known (which is, after all, only seemingly technical).
Let us not dilute the impact of Mr. Ferrara's self-exemption with further commentary.
We confess that we were not able to resist the temptation to “review this strategy-summarizing section line-by-line” and “confine our comments to a few characteristic sentences.
It’s time to get into heart of TCATL, beginning with Chapter 2, “The Illusory ‘Free’ Market.”

1We call contentment or satisfaction that state of a human being which does not and cannot result in any action. Acting man is eager to substitute a more satisfactory state of affairs for a less satisfactory.” Mises, Human Action, Chapter 1, Section 2.
2On the formal fact that man uses means to attain ends we ground the science of praxeology, or economics; psychology is the study of how and why man chooses the contents of his ends; technology tells what concrete means will lead to various ends; and ethics employs all the data of the various sciences to guide man toward the ends he should seek to attain, and therefore, by imputation, toward his proper means.” Murray Rothbard, The Mantle of Science, 1960.
3 Ultimately, nothing hangs on a word, everything on what we mean by our words. The Austrian Nobelist Friedrich Hayek proposed to replace “economics” with “catallaxy” or the science of exchange. Were that ever to catch on and displace “economics,” Ferrara and other advocates of (empirical) Catholic Social Teaching could keep the term.  The problem of how knowledge of man’s catallactic situation informs ethical reasoning would remain.
4 In Human Action, marginal utility is defined in the seventh chapter; praxeology, the first.
5 As I wrote in an early post: “. . . the Catholic worldview is a congenial philosophical home for libertarianism . . . . Catholicism should move out of the shadows of libertarian discourse and onto center stage. Catholics can make a difference to the libertarian movement by stressing rather than soft-pedaling their distinctive worldview.” “In Few Things Charity?” March 9, 2011

May 20, 2011

Let’s Have at Those Caveats! (IV): Conflating Science and Ethics (1)

“Another Caveat,” Mr. Ferrara’s second and final postscript to his book’s meager first chapter, consist of two paragraphs in which he
(a) prejudicially mocks as a “diversionary tactic” any (so far unexamined) rebuttal to his charges based on economics as that word has been understood post-Xenophon;
(b) imputes evasiveness to any Austro-libertarian critic who maintains that questions of justice have a value-free economic dimension that we must consider apart from the value-laden dimension (to which the other cannot be reduced) and then
(c) exempts himself from his own anti-theoretical proviso.
Although we are tempted to review this strategy-summarizing section line-by-line, we will resist and confine our comments to a few characteristic sentences. We will answer that strategy as implemented in detail and seriatim. (In this post, all quotations from TCATL are from page 11 unless otherwise indicated.)
. . . this book [TCATL] is not concerned with “economics” as an academic discipline involving such technical matters as supply and demand curves and schedules. 
This express lack of concern, odd in a book subtitled “the Catholic Church’s Teaching on Man, Economy, and State,” has consequences for one’s thinking on ethical matters, consequences we will itemize.
Rather, it is concerned with economics in the classical sense of the word . . . . (Mr. Ferrara appends a footnote on the derivation of “economics” from the Greek οίκονομικóς [oikonomikos], which he might have further analyzed into οίκος [oikos, household) and [νόμος, nomos, law].)
Here’s what Mr. Ferrara means by “economics,” which must not be confused with the “academic discipline” on pain of misunderstanding the mischief Austro-libertarians are allegedly up to:
. . . a practical ethical science whose aim is commutative and distributive justice among men in their dealings concerning the bounty of the earth—but men first and foremost as members of families, the fundamental units of society. . . . [Economics is] a branch of ethics—moral philosophy . . . .
Now, if economics is a branch of moral philosophy, Mr. Ferrara argues, then every faithful Catholic must regard economics as "lying within the domain of moral theology and thus subject to the teaching authority of the Church, as Pope after Pope has insisted (contrary to the opinion of Austrians).” 
But if it isn’t, then it doesn’t. And, to belabor what should be obvious, papal insistence is not, contrary to Mr. Ferrara's opinion, a criterion of logical demarcation of one kind of question from another. 
In the history of every science there occurs an intellectual breakthrough that enables scientific community to advance from an understanding of things in their relationship to the inquirers (e.g., our observation of apples falling) to an understanding of things as they relate to each other (e.g., f = ma). That is, an explicit theoretical interest emerges out of the practical and ethical interest, and that emergence entails a shift in horizon. The theorist doesn’t deny but merely prescinds from the practical or ethical or moral dimension of the object.
An earlier, “classical” stage in the history of a scientific inquiry is not necessarily nobler, truer, more innocent, less corrupt than its “modern” offspring.  One may as well claim that geometry lost its way when it ceased to be the measuring of land and began to be a study of the properties of shapes; or insist that physics, the science of motion, space, time, force, and mass, has not been faithful to its origins as the study of things that grow. The more abstract understanding encompasses the more concrete, but liberates our understanding of the concrete from its contingent circumstances. Reasonable people may argue about whether this kind of abstraction enriches or impoverishes our understanding of reality, but for Mr. Ferrara there is no debate.
The phrase “bounty of the earth” diverts attention from the salient fact that virtually all material goods, between the Garden of Eden and Paradise, are scarce (non-abundant). That reality anchors the economic question. "Scarcity," however, is a word we never encounter in his book. It apparently has no relevance for him to the formulation of   practical problems.
To the satisfaction of which of several competing wants does a parent, landlord, capitalist, pirate, gangster, or finance minister first employ a unit of a given resource? What opportunity cost does his or her choice entail? The answers to both questions (to list no others) require us to think about the logical (not psychological) parameters of human action. To differentiate such questions from “What morally ought I do with that unit?” is to take a significant step in one’s intellectual development. 
Mr. Ferrara shows no sign that he grasps this differentiation, let alone its significance.
To Be Continued

May 13, 2011

Let’s Have at Those Caveats! (III): Freedom as Conformity, Capitalism as a Post-Christian Structure, and Other Humpty-Dumptyisms

When I use a word it means just what I choose it to mean—neither more nor less.” Humpty Dumpty in Lewis Carroll’s Alice in Wonderland

We have descried that by free Mr. Ferrara means—without irony—morally restrainedHe now asks the reader to entertain another symbol, a potential source of confusion because used in the same context: “free” market:
. . . as used through this book, the term “free” market refers not to private property or free enterprise as such, but to the post-Christian structures of “actually existing capitalism,” which (see Chapter 2) is anything but a free market in the Catholic sense of freedom as a moral faculty exercised in conformity with the divine and natural law. (11)
That is, he apparently thinks it good form to stipulate the meaning of a term one of whose words is in scare quotes.*
Mr. Ferrara borrows the phrase “actually existing capitalism” from Kevin Carson, the left-libertarian theoretician from whose critique of “mainstream” libertarianism he borrows heavily (even though Catholics “cannot possibly go where left libertarians will take them” [14]) and on which we will comment when our survey of TCATL brings us to it.
Let’s drop the redundant “actually.” Mr. Ferrara’s object is extant or “existing capitalism.” But whether extant or extinct, what does capitalism itself mean? The history of the usage of capital or word capitalism by socialists or anti-socialists will not help us here.
Perhaps “post-Christian structures” is a clue. The prefix post- implies a timeline: the temporal structures dubbed Christian came into being (implying pre-Christian structures), had their day in the sun, and then passed away (to be resurrected one day in a glorified Distributist body?). That, according to Mr. Ferrara’s lexicon, is capitalism. In any case, when those “structures” prevailed in the West—in unspecified centuries and countries, under unspecified rulers—there allegedly were free markets “in the Catholic sense of freedom as a moral faculty exercised in conformity with the divine and natural law.”
We suppose that the “faculty” in question is the human will. We accept arguendo Mr. Ferrara’s faculty psychology, whose validity he presupposes as though everyone knows what he’s talking about. Even if the mind is a network of interacting “faculties” (or “modules” or “organs”), one cannot sensibly be said to exercises one’s free will only when one conforms to the law. One also exercises it when one transgresses the law. That is a necessary condition of culpability. If the word free and its cognates were to pertain only to the decision to conform to the law, we would need another word to refer to the decision to transgress the law. We couldn't say that transgression is ever chosen, for choosing presupposes freedom, and freedom—“true freedom”—is ordered only toward conformity to the law. A reductio ad absurdum if there ever was one.
Equivocation once again mars Mr. Ferrara's argument: freedom as the positive spiritual strength, virtue, or power (dunamis, cf. 2 Tim. 1:7; 2 Tim. 2:1-2; Eph. 3:16-17) to do the good and avoid evil crowds out the meaning of freedom as the negative condition of not being restrained, prevented, hampered, or hindered in the use of one’s property by force or the threat of force.** Markets may be free in the latter sense regardless of how free or unfree market participants are spiritually. Mr. Ferrara’s confusion prevents him from considering how knowledge of markets is a factor in moral deliberation.
There is also his equivocation on law. As we have discussedlaw may refer to legislation or it may refer to principle. Divine law is a kind of legislation, and natural law (with God as its source) a kind of principle. The choice to conform is possible in the former case, but not in the latter. One does not sanely entertain the option of not conforming one’s behavior to a law of logic, to a physical law or, as we will elaborate in due course, to an economic law.***
According to Mr. Ferrara, the masses “[toil] for the wealthy in the cubicles of large corporations while living under a mountain of credit card and mortgage debt that also redounds to the benefit of a capitalist oligarchy” (10). Indeed, they do, but not under unrestrained capitalism, but rather under a mercantilist welfare-warfare bureaucratic state, which Austro-libertarians would dismantle root and branch. Commitment to an unhampered free market order does not entail rule by a few but, if anything, a radical “consumerocracy.”
The consumers patronize those shops in which they can buy what they want at the cheapest price. Their buying and their abstention from buying decides who should own and run the plants and the farms. They make poor people rich and rich people poor. They determine precisely what should be produced, in what quality, and in what quantities. They are merciless bosses, full of whims and fancies, changeable and unpredictable. For them nothing counts other than their own satisfaction. They do not care a whit for past merit and vested interests. If something is offered to them that they like better or that is cheaper, they desert their old purveyors. In their capacity as buyers and consumers they are hard-hearted and callous, without consideration for other people. Ludwig von Mises, Human Action, Ch. XV, Section 4, “The Sovereignty of the Consumers.”
Before Mr. Ferrara can judge whether “consumer sovereignty” so described is good or bad, to be promoted or opposed, he has to ascertain whether or not markets, to the extent that they are free, tend to establish it. This he will not do.
To Be Continued
* “The tic-like use of scare quotes renders many of his statements ambiguous. To a critic of any of those uses, Mr. Ferrara can always retort, “I wasn’t referring to x!  I was referring to ‘x’!” Or: “I didn’t say S’s assertion was heretical!  I said it was ‘heretical’!” Of Sound Bites, Panic Buttons and Scare Quotes, March 14, 2011. And so with “free market” and “‘free’ market.”
** “Political-economic freedom is not to be confused with the positive spiritual power to resist temptation to sin and instead do the right thing, with which Christians (among others) are concerned (Gal. 4:31-5:1), indeed, for which they pray. That concern is no warrant for unfavorably comparing that freedom to that power. They are distinct, but not rival dimensions of human living, related as interior to exterior, as it were.” Freedom is Restraint, May 5, 2011.
*** Although one may commit two equivocations in one sentence, it unfortunately takes more than one sentence, many more, to expose them. It is time to cite Bishop Butler again: “. . . a complete and exhaustive answer . . . would need to be a much longer treatise than this.  It is easy to pack into half a dozen pages enough clever charges . . . to require a thousand pages in reply.  In this kind of warfare the aggressor always has an enormous advantage.” On Reviewing Propaganda, March 8, 2011. At the rate we are going, our complete and exhaustive answer to TCATL may very well exceed it in length.

May 11, 2011

Let’s Have at Those Caveats! (II): Socialism by Another Name Will Still Wreck Production

NB: Although we are almost at the end of our review of the first chapter of TCATL, the subsection labeled “caveats,” we are still only providing counterpoint to Mr. Ferrara’s undefended stage-setting assertions. As we meet the support he offers for his claims in later chapters, we will respond accordingly.
Our inquiry into Mr. Ferrara’s reference to unrestrained laissez-faire capitalism and free market, in order to determine whether they have distinct meanings, continues from the previous post.
3. Does unrestrained laissez-faire capitalism refer to something that exists or existed in history?
Mr. Ferrara’s claim that laissez-faire capitalism “has encouraged the rise of ‘soft’ socialism in Western nations” implies an affirmative answer: if it never existed, it couldn’t “encourage” the rise of anything (whatever he meant by “encourage”).
But has laissez-faire capitalism ever been unrestrained and, if so, does that restraint continue? That is, does unrestrained laissez-faire capitalism describe anything real?
If it does, then given the staggering growth of regulation (with its prohibitions and diktats), taxation, war and conscription in the West in just the last century—we frankly admit that we have no idea what meaning Mr. Ferrara attaches to unrestrained.
If it doesn’t—that is, if private enterprises are regulated in the above-enumerated ways—then Mr. Ferrara’s criticism has no real target.  (On the next page, however, he will identify his target to be “actually existing capitalism.”)
4. Does free market refer to something that exists or existed in history?
For Mr. Ferrara, a free market is a morally restrained and guided one. The way he relates political freedom to morality illuminates neither, and keeping them related but distinct will occupy us in future posts.*
In any case, if Mr. Ferrara favors what he calls a morally restrained market, but not the current politico-economic establishment, which he wishes to transform along Distributist lines, he must hold that free markets either don’t exist or exist only to the degree that the Distributist ideal is implemented.
We have a long way to go before arriving at Mr. Ferrara’s exposition and defense of Distributism, but for now we may safely say that Distributism is what he means by free market society, or at least one that best “conduces to true social freedom.” (10)**
Mr. Ferrara rejects socialism without giving a reason or even defining that term. Of course, Pope Pius XI declared in Quadrogesimo Anno that “No one can be at the same time a sincere Catholic and a true socialist,” and perhaps that is reason enough for him. But what did His Holiness mean by “socialist”? He might not have meant what Mr. Ferrara’s Austro-libertarian adversaries mean. Socialism, according to them, is intrinsically unrealizable, because without markets for capital goods, the latter cannot be rationally allocated, and consequently no production of any commodity can be rationally directed. If they are right, then socialist parties cannot genuinely offer socialism, but only plans whose implementation would destroy production.***
“All right,” some of you may be thinking. “So what?” Simply this: the achievement of Mr. Ferrara’s desired “society in which as many people own property sufficient for the support of themselves and their families” presupposes a certain understanding of production and exchange, which Mr. Ferrara nowhere offers and, as we shall see in a future post, doesn't intend to.
Assuming Mr. Ferrara’s morally restrained free market society uses money, all the things that household A needs for “support”—its “basket of goods,” so to speak—must be for sale at money prices and then bought from the vendors of the products households B, C, . . . n. This situation holds for each of the other households. The totality of these situations is a vast interlocking network of interdependency.
Goods must therefore be priced “just right” so that the expenditures of households A, B, C, . . . n (i.e., their purchase of their baskets) equate, day after day, with of incomes of those same households. If expenditures are too high or (what virtually amounts to the same thing) if incomes are too low, the result is injustice (by Mr. Ferrara’s standard). Markets (individuals making and responding to offers) improve the situation for each market participant, but they are never so obliging as to guarantee the continual balancing those expenditures and income for all households as the contents of those baskets change, creating imbalances. In the name of justice, according to that notion of justice, something would have to be done to correct the imbalance.
If one’s concept of justice demands balance, however, then, barring a miraculously continual coincidence of expenditures and revenues, those charged with the responsibility of administering justice would have to intervene in markets to ensure that each household can afford its basket. Who’s going to bell the cat of minimizing expenditures and maximizing revenues? Central planners cannot solve for any variable without solving for all, which is impossible. They will irrationally allocate as far as they can, and then leave a mess for their successors to clean up.
At some point it begins to dawn on some planners that one can cut the Gordian knot simply by abolishing money and money prices with it. This would "free" those in charge of administering justice to command, directly and centrally, the production process, thus ensuring (or so they think) the just distribution of the contents of household baskets. Of course, eliminating money prices does nothing to meet the challenge of allocating resources.
If Mr. Ferrara believes that such allocation ought to be left to markets rather than to central planners—and I take him at his word that he does—then he must accept that allocation’s uncertain import for individual incomes and expenditures. One of those consequences is the very acquisition of “property sufficient for the support of themselves and their families.” (In any case, how does the mere holding of property, unless it consists wholly of immediately consumable goods, “support” anybody? Genuine support presupposes the above-noted network of interdependency.)
Every act of intervention rends the fabric of interpersonal cooperation, which St. Thomas regarded as a common good. The logic of interventionism leads to totalitarianism, which all but destroys that common good. Mr. Ferrara says he rejects socialism in favor of free markets, but adheres to a notion of freedom that seems to warrant such intervention.  
When we revisit Distributism, we will look for evidence that Distributists reject interventionism as cordially as they reject the socialism toward which Distributism inexorably leads and which  they can coherently oppose only by embracing free markets as Austrians understand them (i.e., by ceasing to be Distributists).
To Be Continued

* We remind our readers of St. Thomas Aquinas’ concerns, explored in previous posts, that despite one’s good intentions, one might succeed in morally restraining markets to the point of destroying the common good that is the framework of peaceful cooperation. We differ with the Angelic Doctor over how little moralistically inspired restraint it takes to do that.

** According to Mr. Ferrara in this video interview, Distributism virtually surrounds him as he dines al fresco in Lake Garda, Italy, “which is Distributism in action” [5:37]. Shortly thereafter he refers to “their [Austro-libertarians’] indefatigable defense of the corporate status quo,” which is either evidence of slander or a symptom of hallucination. We recommend this video to readers who would like audiovisual images to go with Mr. Ferrara’s sustained literary sneer.
*** It is impossible for human beings to fly by flapping their arms.  It is also impossible to avoid the dire consequences of so trying. (Trying to fly by flapping one's arms is, unfortunately, not impossible.) The best short introduction to the theoretical and historical issues is, in my opinion, Murray Rothbard’s 1991, “The End of Socialism and the Calculation Debate Revisited.”

May 5, 2011

Let’s Have at Those Caveats! (I): Freedom is Restraint

We are not quite finished with the first chapter of TCATL, but we are with the series “Demonize and Delete the Austrians.” We have addressed every issue arguably relevant to the title of Chapter 1, “Meet the Austrians,” that surfaced during our close reading. Its shabby treatment of the Austrians, which had precious little to do with history or biography, consumed all of three-and-a-half pages.
That being apparently too skimpy even for Mr. Ferrara, however, he appended another page-and-a-half of material whose topics relate more clearly either to TCATL’s introduction or to the second chapter (or even, by his own account, to the twenty-first!). He distributed that material across two sections subtitled “caveats.”* Posited ahead of Chapter 2 (“The Illusory ‘Free’ Market”), wherein Mr. Ferrara will offer justification of some his assertions, his “caveats” are nothing but assertions presented for assimilation into his readers’ mental innards.
One express concern of Mr. Ferrara’s is that his criticism of Austro-libertarianism may give the false impression that he is a socialist enemy of private property, an impression that purveyors of bugaboo among the Austro-libertarians will promote. Despite its odd location (and redundancy in the light of later chapters), we deem it worthwhile to examine his self-representation on this score.
A theme of Mr. Ferrara’s anti-market polemics, within and without TCATL, is that Catholic Austro-libertarians either (a) systematically misunderstand his straightforward points of criticism, or (b) do understand, but cloak their sin in rhetorical misdirection. A cursory reply will allow us to present the gist of our answer to his charge of incomprehension or culpable evasion, to the bare bones of which rebuttal we will add meat in ensuing posts. In his own words:
. . . the more free enterprise in the morally correct Catholic sense expounded by the Popes**, the better.
As the Church teaches, nothing conduces to true social freedom better than a society in which as many people own property sufficient for the support of themselves and their families, as opposed to toiling for the wealthy in the cubicles of large corporations while living under a mountain of credit card and mortgage debt that also redounds to the benefit of a capitalist oligarchy. (See chapter 21) Nor is this book in any way, shape or form an argument for socialism—the bugaboo Austrians and other “conservative liberals” always invoke in response to any critique of injustices within the capitalist status quo. The Church opposes socialism as firmly as she does unrestrained laissez-faire capitalism and, as already suggested . . . it is laissez-faire capitalism itself that has encouraged the rise of “soft” socialism in Western nations. (10. Emphasis in the original.)
As a way of framing the question, this is as confusing as it is tendentious.
Mr. Ferrara contrasts unrestrained laissez-faire capitalism to free enterprise—in the papally expounded sense, of course. In order to comment on this contrast, however, we will need to determine answers to several questions:
  1. Does free mean unrestrained?
  2. Does the phrase morally correct Catholic sense expounded by the Popes qualify the meaning of free to death?
  3. Does unrestrained laissez-faire capitalism refer to something that exists or existed in history?
  4. Does free market refer to something that exists or existed in history?
1. In the political-economic context, free does mean nothing more or less than unrestrained.  That is, it has a wholly negative meaning.  A person is politically free if he or she is not restrained, prevented, hampered, or hindered in the use of his or her property by force or the threat of force by others.
Political-economic freedom is not to be confused with the positive spiritual power to resist temptation to sin and instead do the right thing, with which Christians (among others) are concerned (Galatians 4:31-5:1), indeed, for which they pray. That concern is no warrant for unfavorably comparing that freedom to that power. They are distinct, but not rival dimensions of human living, related as interior to exterior, as it were.
The words free and unrestrained, however, while denoting the same thing, have a different connotation. Mr. Ferrara uses free before markets, but unrestrained before laissez-faire capitalism. A person is free, but a wild animal is unrestrained. Mr. Ferrara favors free, but not unrestrained markets.  He very much wants papally guided moral rules to restrain the metaphorical wild animals that roam in markets seeking whom they may devour.  To put it in such terms would, however, only expose the equivocation at the heart of his propaganda.
2. Our answer to the first question yielded one for the second. The phrase morally correct Catholic sense expounded by the Popes qualifies the meaning of free to death only if free means unrestrained. But by free Mr. Ferrara does not at all mean unrestrained.  Like most illiberals, he will not commit political suicide by mounting a frontal assault on the symbol of freedom or liberty. He prefers to keep the symbol but pour into it alien content.
To Be Continued 

* In Mr. Ferrara’s lexicon, an author may issue “caveats” about one’s own book to one’s readers. The Latin admonition, Caveat emptor (“Let the buyer beware”) is the warning of a third party to prospective customers, not a vendor's friendly invitation to them to enter his or her store. Caveat lector (“Let the reader beware”) is one writer’s warning about the work of another that he’s about to introduce. One may regard this blog as one, big Caveat lector about TCATL.
** Unless a particular Roman Pontiff is meant, “pope” should not be capitalized and neither should its plural.  

May 3, 2011

Demonize and Delete the Austrians (XIV): On Not Seeing the Forest for the Woods

As this blog’s subtitle implies, we will take TCATL apart root-and-branch as we delineate and defend “an Austro-libertarian option for Catholics.”  We happily acknowledge the service that the writings of Thomas E. Woods have so far rendered in clarifying that option. It is not our primary purpose, however, to critically evaluate his ongoing contribution to that end.
Each time Dr. Woods’s words surface in TCATL, of course, we will have to consider whether Mr. Ferrara’s construction of them is charitable or not, his interpretation comprehending or not, his criticism sound or not. But we do not want to create the impression that the case for that Austro-libertarian option depends on the success of Dr. Woods’s efforts.
This blog therefore does not reflect Mr. Ferrara’s strong, if not unbalanced, focus on Dr. Woods, especially given the failure of the chapter (still) under review to fulfill the promise of its title (i.e. “Meet the Austrians”). Specifically, we do not presume to defend Dr. Woods against Mr. Ferrara, as though he were not capable of self-defense or has not demonstrated that capability. In some cases, we will refer the reader to those published responses. What concerns us is the truth of the matter that Dr. Woods and Mr. Ferrara address.
Having said that, we now present Mr. Ferrara’s explanation of his focus:
The controversy over “Austro-libertarianism” among Catholics has become so closely identified with Woods’s writings and speeches as to become impossible to address without mentioning and quoting him extensively, which will be done here. (10)
To which this footnote is appended 318 pages later:
In the interest of full disclosure, I must note that Woods and I were once colleagues and even co-authors of a book: The Great Façade (2002), a study of changes in the Catholic Church after Vatican II.  We have since had a public parting of the ways over Woods’s public attacks on the Church’s social teaching, which, unlike the changes discussed in The Great Façade, has been explicitly imposed on the faithful as binding Catholic doctrine by Pope after Pope since Leo XIII.  Thus far Woods has chosen to attribute my criticisms of his position to personal animus, even though other Catholics had subjected his views to severe public criticism for some seven years before I first mentioned him by name in my own writings on the controversy he has provoked. (328 n. 16)
If other Catholics had subjected Dr. Woods’s views to severe public criticism for seven years without his attributing it to personal animus, one explanation is that such animus is a distinguishing mark of Mr. Ferrara’s style of criticism. (Mr. Ferrara asserts, but does not here document, the alleged attribution.) Until we can compare the cogency and tone of those criticisms to those leveled by Mr. Ferrara, we cannot tell. (In my opinion, this “disclosure” should have been expanded and integrated into the body of the skimpy chapter.)
In any case, the issue is not whether Dr. Woods has received severe criticism over the years, but whether he has successfully rebutted it. It is also relevant to review the support, not just criticism, with which Catholic scholars have greeted his writings on  Church and market. Dr. Woods is not the first anarcho-Catholic, but he is the first to have a significant impact on the culture beyond the niche audiences, and this has moved some traditionalist Catholics to controvert him in their respected journals, thus engendering what Mr. Ferrara dramatically dubs a controversy.
Contrary to Mr. Ferrara, it is possible to address the phenomenon of Austro-libertarian Catholics without focusing on Dr. Woods as he does, as though he were a dangerously influential but isolated representative.* There is no call for such emphasis at the price of overlooking contemporary but “pre-Woodsian” anarcho-Catholics like James A. Sadowsky, S.J., who befriended Murray Rothbard in the early ‘60s and published in 1983 a critical examination of “Classical Catholic Social Doctrine”; or the widely read (and much-missed) Joseph Sobran, who “anarched” in 2002, the year Dr. Woods debunked Vatican II with Mr. Ferrara.
Mr. Ferrara’s reference to “Woods’s public attacks on the Church’s social teaching” (foreshadowing the middle section of TCATL) assumes what is in dispute, i.e., whether a teaching of a pope, or even of a series of popes, is by the fact that a pope taught it, part of the deposit of faith binding on Catholics. Mr. Ferrara begs that question, to which we respond: if a teaching is not found in the deposit or implied by what is found there, then it’s not binding. Period. The contrary assumption presupposes a certain model of church government which is also not de fide.
The monarcho-papalist is one such model.  It displaced the conciliarist model and influenced the way the faithful heard the news that the Pope wrote an encyclical; or desired to convoke an ecumenical council; or intended to displace an ancient liturgy (with little more than a reverent tip of the hat to the equally firm intentions of his predecessor papal-monarch, expressed in an Apostolic Constitution); or insisted on fast-tracking a canonization process.
An argument can be made for the choice of monarcho-papalism over conciliarism, but if it underlies one’s reception of a series of papal encyclicals—being at issue in a debate over part of the content of those circulars—then it must be made, not presupposed. (By the way, unlike St. Pius V’s Quo Primum of 1570, which intended the permanence of the Tridentine Rite, none of those encyclicals is an Apostolic Constitution.)
To put things with vulnerable polemical directness: Catholic traditionalists presuppose the necessity of the monarcho-papalist model. For them, of course, it not a “model” at all, for that implies alternatives: monarchy just conforms to the way things metaphysically are! By the implementation of that model, the Tridentine Rite could be
(a) established forever with a stroke of one monarch’s pen, but then
(b) effectively suppressed for (what seemed like) forever with the stroke of another’s, and then
(c) re-established, albeit with second-class status (the status of the “usurper” rite being simultaneously secured), with the stroke of a third’s.
For Traditionalists, the model is not to be questioned, but rather implemented and manned by one’s own personnel.
According to Mr. Ferrara, as noted in one of our first posts, “a faithful Catholic may withstand Paul VI to his face on Novus Ordo Missae, but not on the living wage, or John Paul II on episcopal consecration, but not on ‘consumerism.’” Mr. Ferrara’s polemic trades on an overstated (if not chimerical) division between liturgical “changes” one may legitimately protest and allegedly sacrosanct “teachings.” We will have opportunities to explore this Traditionalist conceit, which permeates TCATL.
As for “teaching,” if Jesus’ words at Matthew 23 on the scandal of disparity between preaching and practicing have any meaning, Popes have taught by the good they have done, and the evil they have acquiesced in and even blessed and ordered (e.g., imperial conquest and resultant slavery; the wresting of a liturgy from the faithful), no less than by the propositions they commit to writing and would have Christ’s flock take to heart.
If what any pope taught, however, whether by word or deed, explicitly or implicitly, was not among the truths Christ deposited with His Apostles, then divine protection from error does not extend to it. We have to examine such implied or stated propositions on a case-by-case basis.
On what coherent grounds, then, harmonious with Matthew 23’s censure, does a Catholic strenuously oppose the implementation of an Apostolic Constitution regarding the sacred liturgy (i.e., Paul VI’s Missale Romanum) while no less zealously sealing off from criticism a papal encyclical on economic justice?  There are, I submit, none.  Both are imperfect products of fallible men and are to be respectfully examined in order to locate the evidence not only of fruits of the Spirit but also of that fallibility.**  

* To name just two productive Austro-libertarian Catholic professors whom Mr. Ferrara neglected in favor of Dr. Woods:
(1) Jörg Guido Hülsmann, Professor of Economics, University of Angers (France), author of Mises: The Last Knight of Liberalism and the equally magisterial The Ethics of Money Production, who confessed: “Once a pagan interventionist, I first saw the truths of libertarian political theory, and eventually I started to realize that the light of these truths was but a reflection of the encompassing and eternal light that radiates from God through His Son and the Holy Spirit. This realization has been a slow process and I could not say now when and where it will end.”
(2) Jésus Huerta de Soto, Professor of Political Economy, Rey Juan Carlos University (Madrid), and author of Money, Bank Credit, and Economic Cycles and (to cite only one of his articles) “The Ethics of Capitalism”, whose explicitly anti-consequentialist point of departure is a passage from Pope John Paul II’s 1993 encyclical, Veritatis Splendor.
NB: The links embedded in the titles of the cited books will take one, not to advertisements, but to free files of the books themselves, available for immediate downloading.
** For the record: Apostolic Constitution or no, I regard the de facto suppression and displacement over forty years ago of the (“technically never abrogated”) Tridentine Rite and the verbal engineering that has accompanied its phased-in rehabilitation (“ordinary rite” vs. “extraordinary rite”)—to amount to a scandal from which it may take longer to recover than from the one sees more frequently in the news.