Andrew Yuengert
Professor of Economics, Pepperdine University
Every year the Lumen Christi Institute conference on Catholic Social Teaching and Economics invites high-profile economists to the University of Chicago to present their work and engage in the ongoing conversation between economics and Catholic Social Teaching. On a larger stage, the Pontifical Academy of the Social Sciences regularly places top economists next to theologians, philosophers, and bishops to explore issues of common concern.
Why would an economist ever want to enter into a conversation with Catholic Social Teaching (CST)? Economists, like most people, take moral questions seriously, and think that the work of economists can and should inform attempts to answer these questions. Because CST is morally and intellectually serious, and invites prominent economists (Catholic and non-Catholic) into its conversations, it is an obvious candidate for attention from economists. Of course, economists who are Catholic have additional motivations: the conversation takes place on their home turf, and is overseen by their spiritual shepherds.
Constructive engagement with Catholic Social Teaching is easier said than done, however. If an interested economist begins by picking up the latest social encyclical (Caritas in Veritate, for example), he will immediately find himself in an unfamiliar world. It’s not just that the vocabulary is different, although unfamiliar concepts like ‘solidarity’, ‘subsidiarity’, ‘the common good’, and ‘the universal destination of goods’ make frequent appearances. CST appears to take for granted propositions that are very heavily contested in economics. Moreover, these arguments are often stated in what to economists sounds like naively utopian language.
It is easy to find examples. After the opening three chapters of Caritas in Veritate, which together offer an intriguing perspective on the role of love and gift in the economic order, the encyclical embarks on a tour of the practical challenges facing the world. Along the way the pope advocates for an international redistribution of energy resources (para. 49), a redesign of western welfare systems in order to free up extra resources for international solidarity (para. 60), and (in para. 69)
a reform of the United Nations Organization, and likewise of economic institutions and international finance, so that the concept of the family of nations can acquire real teeth…. Such an authority would need to be regulated by law, to observe consistently the principles of subsidiarity and solidarity, to seek to establish the common good, and to make a commitment to securing authentic integral human development inspired by the values of charity in truth. Furthermore, such an authority would need to be universally recognized and to be vested with the effective power to ensure security for all, regard for justice, and respect for rights.
Even economists who support significant increases in international authority will be struck by what appears to be a too-easy confidence that law-abiding, internationally neutral, common-good-seeking, powerful global institutions are possible in a world full of corrupt authoritarian regimes and self-interested democracies, most of which use the United Nations to cynically advance their national interests and ideological agendas. Is this the moral insight we are supposed to find in Catholic Social Teaching? Is this the teaching? Economists can be forgiven for finding it difficult to focus on the principles of CST when the proposed applications are so jarring. There is no need to list more examples, since any economist who has read the encyclicals can easily add to the list.
I am sympathetic to any economist who reacts this way upon first exposure to CST. However, this reaction springs in part from a misunderstanding of the nature of the Catholic social project. The encyclicals are not catechisms; they are not marching orders for Catholics. They are part of an ongoing conversation among Catholics and interested others about the good society in light of the gospel, and an exhortation to work toward that society. Moreover, not every section of an encyclical is written with the same apostolic confidence, with the same weight of authority. The more practical the advice, the more reliant on judgments about the facts of the matter, the less claim it has on our consciences. We should not reject these practical statements outright, because they are the judgments of an important participant in a crucial conversation, but there is abundant room for sharp and reasoned disagreement about institutions and policy.
The social encyclicals are part of an ongoing conversation about social reform. All people of good will are invited to join it. How can an economist enter in? First, by understanding the goal and the nature of the conversation. A conversation takes work, and makes demands on both parties. What follows is a set of principles to guide an economist’s understanding of CST.
Principle #1. The goal of Catholic Social Teaching is social reform in light of the gospel.
In Solicitudo Rei Socialis (41), John Paul II insists that CST is a moral theology. The ‘moral’ qualifier identifies CST as a practical theology; its goal is action aimed at reform of society. In the language of economics, CST is normative. Its purpose is not simply to understand, but to put that understanding to work. In Mater et Magistra (226), John XXIII wrote that “it is not enough merely to formulate a social doctrine. It must be translated into reality.” When an economist engages CST, he or she is engaging in a practical project. To contribute fruitfully to a practical project, you must understand its goals, the better to gauge the relevance of your insights and to communicate them.
Principle #2. To accomplish social reform in light of the Gospel in the messy, contingent world of the social order, two kinds of knowledge are needed, and economics can contribute only the second kind.
The first kind of knowledge is knowledge of the goal to be accomplished. Christian revelation about the created dignity of human beings and their purpose, combined with two millennia of experience in this world, makes the Church “an expert in humanity” (John Paul II, Solicitudo Rei Socialis, 41). Note that the normative standard which orients CST’s practical project is knowledge; it is not simply a set of assumptions, or axioms. When CST articulates this knowledge (of human dignity, of the social nature of human beings), it speaks with its greatest authority and confidence. Economics does not claim to be able to judge between the various goals and purposes which motivate human beings, so it cannot help here. However, an economist in search of a ‘policymaker’ cannot find one surer of its goals and purposes than CST.
The second kind of knowledge includes all knowledge relevant to what can be accomplished in the social order as it actually exists. What are the possibilities and constraints on effective action in society? What are the forces which shape markets and communities? How do they evolve, and to what extent can they be shaped? What can be accomplished in a given time and place, amid existing cultures and political institutions, in a particular historical context? It is not enough to know what sort of society you wish to promote if you know nothing about how to get from here to there.
The Church does not claim expertise in this practical knowledge. Statements which invoke this sort of knowledge (that an uncorrupt United Nations is possible, or how energy resources might be redistributed internationally, for example) carry less authority in CST than statements about the nature and purpose of human beings. Practical knowledge is knowledge of context; of what is possible, of reasonable predictions of the consequences of various courses of action. It brings together the understanding of society developed in the various social sciences, the knowledge of the natural sciences, technological expertise, and practical wisdom about how to achieve ends in a chaotic, uncertain political and social world. Here the Church invites into the conversation those with relevant expertise, and does not claim any practical expertise of its own. John Paul II says it best in Centesimus Annus (43):
The Church has no models to present; models that are real and truly effective can only arise within the framework of different historical situations, through the efforts of all those who responsibly confront concrete problems in all their social, economic, political and cultural aspects, as these interact with one another.
Because the movement from vision and motivation to policy action requires both judgments about context and insights from secular social science, the popes are appropriately reluctant to claim for their suggested policies the same normative weight that they claim for their vision of human life in society. CST claims to be “an expert in humanity,” not an expert in policy prescription. Unfortunately, the policy sections of encyclicals (which carry the least authority) get all of the media attention, not their vision for society (which carries the most authority).
I wish popes and bishops were more modest in their policy pronouncements (see my argument here), but they cannot be entirely disengaged from practical advocacy: the teaching of principles requires practical examples of how the principles might bear fruit in action, and at times bishops must take an active lead in politics. To teach and shepherd, bishops must sometimes give practical advice, and to do this they must take a stand on the facts as they see them within the analytical framework they have adopted. Only academics have the luxury of extended reflection.
Nevertheless, I wish more of the concepts of economic analysis were evident in CST’s social analysis. The economist’s respect for incentives in a fallen world, the acknowledgment that at least some aspects of the economic order are undirected (sometimes to the social benefit and sometimes not), and the willingness to settle for a “somewhat better” or “somewhat less bad” outcome when perfection is not an option, rarely appear in the encyclicals. Here an economist can hope to make a contribution to the CST project, and here the frustration is greatest, since CST at times seems immune to economic insight. Economists find that their analysis of what is practically possible and their understanding of the economic order are often unwelcome, and are sometimes dismissed out of hand by theologians and bishops.
There are some obvious reasons for this seeming imperviousness of Catholic Social Teaching to economics. First, most bishops and theologians have had very little if any training in economics. Second, bishops are human beings, and can be as stubbornly sure of themselves and of their politics as the rest of us.
The fault may not be entirely in the bishops and theologians, however; at times it is the nature of the advice economists offer. This is the third principle:
Principle #3. Positive economic analysis cannot simply be taken off the shelf and dropped into normative analysis, unless the normative analysis and positive analysis share the same assumptions about what people value.
Paul VI, in Octogesima Adveniens (40), notes that the social sciences are “at once indispensable and inadequate for a better discovery of what is human.” Economists often assume that their positive models (constructed solely to predict and explain observable behavior) can be adapted easily for normative work. On the contrary, positive analysis as it is pursued in economics (geared toward prediction and explanation, eschewing realism about what human beings are like) is not as useful as it might be to CST’s normative project. The reason for this is simple: realism about what is good for human beings is crucial for any normative project, and positive economic analysis is formally unconcerned with what is good for human beings.
Any normative project must be based on a realistic vision of what is good for human beings, because its goal is to advance the wellbeing of actual human beings. It is possible to construct a normative analysis based on a positive model (to analyze efficiency and inefficiency in light of its preference assumptions, for example), but the analysis will only be normatively useful to the extent that the assumptions on which it is based realistically capture what is good for human beings.
For example, models in which agents’ preferences are fixed, egoistic, and satisfy the usual axioms might be used to generate a set of accurate predictions about the effects of taxes and regulation on prices, output, and resource allocation. These positive predictions should be of interest to anyone interested in designing a just tax and regulatory system. However, once these models are used to make claims about the desirability of taxes and regulations—once they are used to evaluate efficiency—the realism of the positive assumptions matters. What is good or efficient among egoistic utility maximizers may not be good or efficient among human beings as they actually are. Moreover, once we begin to consider what is actually good for human beings, even such seemingly self-evident statements as “more is always better” may be false. The simplifications used by economists to make positive analysis tractable are all on the table in normative analysis, and can be challenged on the grounds of realism, and not just predictive usefulness.
Catholic Social Teaching is right to be suspicious of economic advice based on models which are self-consciously and proudly unrealistic, because its goal is social reform in light of the gospel. Unfortunately, their suspicions sometimes lead bishops and theologians to dismiss valuable economic insights. To counter this, an economist who cares about the project of social reform must do more than toss his positive models on the table and invite bishops and theologians to take them or leave them: she must place them in conversation with CST. She must learn something about CST’s account of human wellbeing, and think about its implications for her economic advice. For example, how might a model’s normative analysis change when egoistic assumptions are relaxed? The analysis of efficiency may become messier and less tractable, but a good economist can say something about which conclusions can be preserved and which conclusions are not robust when foundational assumptions are relaxed. In contrast, a bishop who is not an economist cannot conduct this kind of informal robustness check, and is more likely to chuck the entire economic framework.
This is a great loss. When economists refuse to conjecture how their normative advice might change when their positive analysis becomes more realistic, they rob CST (and other normative projects) of an important (if imperfect) framework for social analysis. (For an example of the sort of engagement that is possible when economists enter into this sort of dialog, see the section on economic thought in the Proceedings of a 2006 conference of the Pontifical Academy of the Social Sciences.)
My advice to interested economists is to jump into the conversation. Don’t be discouraged by the policy pronouncements in the encyclicals. Feel free to offer your analysis as a corrective (or in support). Your analysis may be misunderstood, and may be unwelcome, but there is no principled objection in CST to your engagement on policy matters. Nevertheless, be prepared to be challenged on the realism of your models: their ability to predict and explain can be normatively useful (even crucial), but unrealistic assumptions about human beings and human welfare are open to legitimate challenge when positive analysis crosses over into normative work. Your positive analysis, however excellent, may need significant modification to become useful as a framework for CST’s normative project.
This essay is only a sketch of the challenges facing an economist interested in Catholic Social Teaching. In future issues of this newsletter, Mary Hirschfeld and I will take turns going into more detail about the principles of CST and the challenges they present to economists who wish to take them seriously. In the next issue, Mary Hirschfeld will discuss the human person as understood in CST.
Andrew Yuengert is a Professor of Economics at Pepperdine University, and holds the Blanche E. Seaver Chair in Social Science. His research interests span economics, philosophy, and theology, including especially Catholic social thought. His most recent book is Approximating Prudence: Aristotelian Practical Wisdom and Economic Models of Choice (Palgrave Macmillan 2012). He holds a Ph.D. from Yale University. Yuengert is a parishioner at St. Paschal Baylon Church in Thousand Oaks, California.
