The Market in Historical Perspective

I recently read The Church and the Market: A Catholic Defense of the Free Economy by Thomas Woods, Jr. Toward the end of the book, Woods writes the following:

Overwhelmingly it is the poor who have benefited from the extension of the market, and for whom the good things of civilization are available in much greater abundance than they were even for great kings of centuries past. That includes better housing, better health and sanitation, and dramatic declines in famine, disease, and infant mortality. Donald Boudreaux offers a useful thought experiment: suppose an ancestor from the year 1700 could be shown a typical day in the life of software magnate Bill Gates. He would doubtless be impressed by some of what makes Bill Gates’ life unique, but

A good guess is that the features of Gates’s life that would make the deepest impression are that he and his family never worry about starving to death; that they bathe daily; that they have several changes of clean clothes; that they have clean and healthy teeth; that diseases such as smallpox, polio, diphtheria, tuberculosis, tetanus, and pertussis present no substantial risks; that Melinda Gates’s chances of dying during childbirth are about one-sixtieth what they would have been in 1700; that each child born to the Gateses is [far] more likely than a preindustrial child to survive infancy; that the Gateses have a household refrigerator and freezer (not to mention microwave oven, dishwasher, and radios and televisions); that the Gateses’s work week is only five days and that the family takes several vacations each year; that each of the Gateses children will receive more than a decade of formal schooling; that the Gateses routinely travel through the air to distant lands in a matter of hours; that they effortlessly converse with people miles or oceans away; that they frequently enjoy the world’s greater actor’s and actresses’ stunning performances; that the Gateses can, whenever and wherever they please, listen to a Beethoven piano sonata, a Pucini opera, or a Frank Sinatra ballad.

In other words, what would most impress our visitor are the aspects of Gates’s life that the software giant shares with ordinary Americans.

It might be objected that such considerations as I have brought forth here are “materialistic,” and that there is more to life than refrigerators and television sets. Such an objection is nonsensical. If it were true, then Catholic social teaching itself would stand condemned as “materialistic,” since it to seeks an increase in material goods for workers and their families that they might live in reasonable comfort. The objection of materialism only reveals the incoherence of the antimarket position, which began as an argument that the market systematically exploited and impoverished the laborer. When the overwhelming weight shows this opinion to be ludicrously at odds with reality, the accusation shifts ground. Now the superiority of economic freedom has become all but impossible to deny, and the amazing abundance which we owe to such a social order is no longer a matter of serious dispute, we are now told even to think in such terms reveals a liberal attachment to the things of this world. This is what Joseph Schumpeter meant when he deplored those intellectuals for whom effective arguments on behalf of capitalism would lead them simply to move on to new criticisms of capitalism rather than to concede its value. (204-205)

Another concern Woods indirectly points to is a “parochialism of the present” shared by many academics and intellectuals. Rather than seeing the wealth that has emerged in the West as the result of an evolving market extension and integration process, they see present material prosperity in the West as normative. The poverty shared by so much of the world is considered abnormal. It is as if the existing wealth of the world has always existed, and the West simply aggregated it to themselves. But the wealth of our day was created by an evolving set of values, institutions, and market mechanisms that, when adopted elsewhere, has had the same wealth-generating impact. Yes, there is the ugly legacy of the anti-market practices of colonialism (that, in my estimation, likely retarded true economic growth.) In spite of these practices, not because of them, sustained economic growth developed and continues to expand throughout the world.

Democracies sometimes elect evil people who do evil things. By allowing political freedom, we set ourselves up for circumstances where undesirable people occasionally get power and do undesirable things. If this were not possible, there would be no true freedom. Nevertheless, we have faith that free people will serve as their own corrective force and that tolerance of such episodes is the price we pay for the much greater good done by political freedom. Similarly, some free people exploit their economic freedom, yet the greater good is served by having economic freedom in place. Political and economic freedom expanding throughout the world, along with their requisite institutions and values, are the answer to (not the cause of) the world’s political and economic problems.


Comments

8 responses to “The Market in Historical Perspective”

  1. Great post, Michael.
    Bingo!
    It sure seems to me that God created humans to be free so that when we live free, we also advance humanity and our spirit experiences joy. Conversely, the more humans are controlled by socialism and other despotic forms of government, the more our spirit is grieved and the less is done for humanity.
    I might also add that the Gospel and freedom are interrelated. The more freedom is allowed, the more the Gospel spreads, and the more the true Gospel spreads, the more freedom is allowed. Perhaps this is why so many oppose freedom.

  2. Thanks David.
    I think that too often freedom is viewed as license to do whatever we want. Instead, I think it is freedom to choose the good. It is the freedom to love others and be charitable toward them as we seek to create some semblance of shalom this side of Jesus return, thereby giving witness to the coming New Creation.

  3. Hi again Michael,
    Freedom is the ability (license) to choose to do whatever we want to do or to choose to do whatever we don’t want to do.
    I want to keep everything I earn for myself. I don’t want to tithe, but I can choose to tithe because I am able to earn more than enough to cover my essential expenses.
    I want to play golf everyday. I don’t want to get up and go to work every morning, but I can choose to go to work every day because the company I work for can make a profit off of my contributions at work.
    I want to have a harem. I don’t want to be faithful to my wife, but I can choose to be faithful to my wife because my faithfulness will create a stable family unit and honor God.
    Socialism, and to a lesser extent welfare, removes our options to choose. The free market is God’s economic system.

  4. Thanks David. I seem to have struck a cord with you. 🙂

  5. Democracy is not Freedom.

  6. Ron I think I know what you are getting at but would you care to elaborate more? I don’t want to end up responding to a point you aren’t making. 🙂

  7. Hi Michael,
    Yes you have struck a chord with me regarding freedom and specifically economic freedom. I am convinced God created us to be free and I am also convinced that part of our sinful nature is a desire to limit the freedom of others.
    All of my life I have heard about how charity is the proper response to poverty throughout the world, especially China, India, and Africa. All of my life, Americans have given tons of aid to Africa, India, Mexico, and other impoverished countries. For most of my life, the problem of poverty was never solved until India and China started making reforms to allow economic freedom. Now the problem of poverty is being solved. It is being solved with capitalism; free people making free choices to create products and services with more value than existing products and services.
    Hopefully, someday the countries in Africa will see the light. Hopefully, someday the countries in Europe will reverse direction before it is too late.
    Many of your other pieces strike a chord with me too. You link to intelligent articles and you add intelligent comments. Thanks!

  8. Thanks for your kind affirmation David.
    While charity is an essential and necessary part of response to God, it alone is insufficient for economic transformation. There is the well worn cliche about “Give someone a fish and he/she eats for a day. Teach someone to fish and he/she eats for a lifetime.” I might add that to this: Integrate the fisherman or woman into a wealth creating miracle like free market trade and integrated capital markets and that person will feed 100 people leaving others with the freedom to invest resources and skills in the development of other goods and services.
    Many corners of the world are catching on. It seems like change happens at a snails pace but by historical standards it is happening in a flash. It is an exciting time to be alive.

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