If anyone says, "I love God," but hates his

brother, he is a liar; for whoever does not love

a brother whom he has seen cannot love God whom

he has not seen.

This is the commandment we have from him:

whoever loves God must also love his brother.

(1 Jn 4:20-21)

The answer, of course, is yes; but not without difficulty once one becomes aware of the moral premises that permeate economic theory. But that is getting ahead of the story.

After finishing my B.A. in accounting and philosophy-- the former to earn a living since I was married with two children when I graduated and the latter because I loved it-- I worked in public accounting long enough to get my C.P.A. and then begin to teach at a local junior college while continuing to practice public accounting part-time. During this time we became very involved in our local parish, particularly in its social ministry. It was then that our Christian faith became revitalized as we came to realize through study of the bible and Catholic Social Thought that we all are called to do God's work in this world. To love God is to love neighbor.

The Biblical Tradition

The strong emphasis in the Old Testament prophets calling for social justice and condemning excessive and irresponsible wealth changed my way of seeing the world. Central to the biblical view is that justice in a community is most directly tested by its treatment of the powerless in society, most often described as the widow, the orphan, the poor and the stranger (non-Israelite) in the land. The prophets continually call the king and the people back to commitment to justice for the powerless. They direct scathing attacks at the rich and powerful who "sell the just man for silver, and the poor man for a pair of sandals. They trample the heads of the weak into the dust of the earth, and force the lowly out of the way"(Am. 2:6-7). Isaiah pronounces God's judgment on those "who have devoured the vineyard; the loot wrested from the poor is in your houses" (3:14). Jeremiah condemns the man "who builds his house on wrong, his terraces on injustice." He praises King Josiah because "he dispensed justice to the weak and the poor." Jeremiah then adds the startling statement: "Is this not true knowledge of me? says the Lord" (22:16). He then adds, "your eyes and heart are set on nothing except on your own gain" (22:17). Thus, doing of justice is equated with knowledge of the Lord. The practice of justice is constitutive of true belief. And the pursuit of self-interest is seen as a stumbling block to knowing and serving God.

If Jesus is, as Christians claim, Lord and the son of God, then he is Lord of every aspect of our lives, including the economic one, and his teaching and example must have some relevance to economics as well. In fact, Jesus followed in the prophetic tradition, taking the side of those who are powerless or on the margin of his society such as the tax collectors (Lk. 15:12), the widow (Lk. 7:11-17; Mk. 12:41-44), the Samaritan (Lk. 17:11-19); the sinful woman (Luke 7:36-50). and children (Mk. 10:13-16). Jesus' description of the final judgment in Matthew 25 (31-46) still haunts me with its powerful message of what it means to be a Christian.

"When the Son of Man comes in his glory, and all the angels with him, he will sit upon his glorious throne, and all the nations will be assembled before him. And he will separate them one from another, as a shepherd separates the sheep from the goats. He will place the sheep on his right and the goats on his left. Then the king will say to those on his right, 'Come, you who are blessed by my Father. Inherit the kingdom prepared for you from the foundation of the world. For I was hungry and you gave me food, I was thirsty and you gave me drink, a stranger and you welcomed me, naked and you clothed me, ill and you cared for me, in prison and you visited me.' Then the righteous will answer him and say, 'Lord, when did we see you hungry and feed you, or thirsty and give you drink? When did we see you a stranger and welcome you, or naked and clothe you?

When did we see you ill or in prison, and visit you?' And the king will say to them in reply, 'Amen, I say to you, whatever you did for one of these least brothers of mine, you did for me.' Then he will say to those on his left, 'Depart from me, you accursed, into the eternal fire prepared for the devil and his angels. For I was hungry and you gave me no food, I was thirsty and you gave me no drink, a stranger and you gave me no welcome, naked and you gave me no clothing, ill and in prison, and you did not care for me.' Then they will answer and say, 'Lord, when did we see you hungry or thirsty or a stranger or naked or ill or in prison, and not minister to your needs?' He will answer them, 'Amen, I say to you, what you did not do for one of these least ones, you did not do for me.' And these will go off to eternal punishment, but the righteous to eternal life."

The concern with justice was reinforced by our participation in the parish based Christian Family Movement which utilized the observe-judge-act methodology to bring Christian values to bear upon the problems of the social, economic, and political worlds in which we live. Thus, while still innocent of economic theory, I begin to study the specifically Christian approach to the economy embodied in Catholic Social Thought and tried to put those teachings into practice through local action such as lobbying the state legislature for migrant labor laws, sponsoring immigration for Dutch-Indonesians, and working in soup kitchens.

The Catholic Social Thought Tradition

Let me sketch-in the tradition of Catholic Social Thought that I learned. It is rooted in a commitment to certain fundamental values-- the right to human dignity, the need for human freedom and participation, the importance of community, and the nature of the common good. These values are drawn from the belief that each person is called to be a co-creator with God, participating in the redemption of the world and the furthering of the Kingdom. This requires social and human development where the religious and temporal aspects of life are not seperated and opposed to each other.

As a result of these fundamental values two principles permeate Catholic Social Thought. The first is a special concern for the poor and powerless which leads to a criticism of political and economic structures that oppress them. The second is a concern for certain human rights against the collectivist tendencies of the state and the neglect of the free market.

Ever since Rerum Novarum in 1891, Catholic Social Thought has taught that both state socialism and free market capitalism violate these principles. State socialism denies the right of private property, excites the envy of the poor against the rich leading to class struggle instead of cooperation, and violates the proper order of society by the state usurping the role of individuals and social groups. [RN, 7-8; CA, 13-14] Free market capitalism denies the concept of the common good and the "social and public character of the right of property" [Quadragesimo Anno, 46], including the principle of the universal destination of the earth's goods [RN, 14; CA, 6]; and violates human dignity by treating labor merely as a commodity to be bought and sold in the marketplace. [RN, 31; QA, 83; CA, 33-35] Pope John Paul II summarizes the thrust of Catholic Social Thought when he says: "The individual today is often suffocated between two poles represented by the State and the marketplace. At times it seems as though he exists only as a producer and consumer of goods, or as an object of State administration. People lose sight of the fact that life in society has neither the market nor the State as its final purpose, since life itself has a unique value which the State and the market must serve." [CA, 49]

The concept of the common good in Catholic Social Thought emphasizes both the dignity of the human person and the essentially social nature of that dignity. Both civil and political liberties on the one hand and social and economic needs on the other are essential components of the common good. The common good is not the aggregate of the welfare of all individuals. Rather it is a set of social conditions necessary for the realization of human dignity which transcend the arena of private exchange and contract. Such conditions or goods are essentially relational. To exist they must exist as shared. In short, individual persons have rights to those things necessary to realize their dignity as human beings. Catholic Social Thought argues further that in pursuing the common good special concern must be given to the economy's impact on the poor and powerless because they are particularly vulnerable and needy.[ CA, 11]

Pope John XXIII, in his encyclical Pacem in Terris, set out in detail a full range of human rights that can only be realized and protected in solidarity with others. These rights include the civil and political rights to freedom of speech, worship, and assembly. He also includes a number of economic rights concerning human welfare. First among these are the rights to life, food, clothing, shelter, rest, medical care, and basic education. In order to ensure these rights everyone has the right to earn a living. Everyone also has a right to security in the event of illness, unemployment, or old age. The right to participate in the community requires the right of employment, as well as the right to healthful working conditions, wages, and other benefits sufficient to support families at a level in keeping with human dignity. [PT, 8-27; CA, 8, 15]

Catholic Social Thought repudiates the position that the level of unemployment, the degree of poverty, the quantity of environmental destruction, and other such outcomes should be left to the dictates of the market. Emphasis on the common good means that the community has an obligation to ensure the right of employment to all persons [CA, 15], to help the disadvantaged overcome their poverty [CA, 19, 40], and to safeguard the environment. [CA, 37]

Although Catholic Social Thought defends the right to private ownership of productive property [RN, 10, 15, 36], the common good sometimes demands that this right be limited by the community through state regulation, taxation, and even, under exceptional circumstances, public ownership. [Popularum Progressio, 23] The attainment and safeguarding of human rights somtimes requires the overriding of market outcomes. Therefore, Catholic Social Thought insists that "government has a moral function: protecting human rights and securing basic justice for all members of the commonwealth. [Pacem in Terris, 60-62] Pope John Paul II says society and the state have the duty of "defending the basic rights of workers", defending those "collective and qualitative needs which cannot be satisfied by market mechanisms," and "overseeing and directing the exercise of human rights in the economic sector." [CA, 40, 48]

Catholic thought sees society as made up of a dense network of relations among individuals, families, churches, neighborhood associations, business firms, labor unions, and different levels of government. Thus, every level of society has a role to play in ensuring basic human rights and the common good. In Catholic Social Thought this is expressed as the "principle of subsidiarity":

Just as it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community, so also it is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do. For every social activity ought of its very nature to furnish help (subsidium) to the members of the body social, and never destroy and absorb them. [Quadragesimo Anno, 79; also CA, 15]

This principle provides for a pluralism of social actors. Each, from the individual person to the federal government, have obligations. Higher levels should not usurp the authority of lower levels except when necessary. However, the principle works both ways. When individuals, families, or local communities are unable to solve problems that undermine the common good, the state governments are obligated to intervene, and if their resources and abilities are inadequate, then the federal government assumes the responsibility. This principle also extends into the international economy. As Pope John Paul II says, "this increasing internationalization of the economy ought to be accompanied by effective international agencies which will oversee and direct the economy to the common good, something that an individual State, even if it were the most powerful on earth, would not be in a position to do." [CA, 58]

The right to private property and the principle of subsidiarity limit the role of the state while the principle of solidarity [CA, 15] requires that society and the state intervene in markets to protect human rights, particularly of the poorest. The thrust of Catholic Social Thought, therefore, has been to repudiate both state socialism and free market capitalism. What economic system does it endorse? Explicitly, none. As Pope John Paul II says: "The Church has no models to present" [CA, 43] of the best economic system; that is for history to decide in each individual case. However, implied in Catholic Social Thought is a preference for a regulated market economy that protects the poor, defends human rights, allows all to participate in social groups such as trade unions, and controls market failures such as environmental pollution. The degree of regulation is not a matter of principle but rather a case of prudential judgment in particular cases.

Economic Theory: From the Golden Age to a Post-Modern World

With this theological and philosophical background I was drawn into graduate work on economics by my desire to attain a better understanding of the causes of poverty and how to overcome it. The national chaplain of CFM, Fr. Louie Putz, urged me to get a masters degree. As a result I went back to school and got a M.S. degree in social science and afterwards went, with my wife and four children, to teach accounting, mathematics, and economics at the Catholic University in Ponce, Puerto Rico. It was the university vice-chancellor, Msgr. Ivan Illich, who invited me to teach in Puerto Rico. During our stay he became my mentor and convinced me that I needed to get a Ph.D in economics before anyone would listen to what I had to say. I accepted an assistantship at the University of Maryland with the intention of concentrating on the problems of development in Third World countries.

The early 1960s, when I was in graduate school, appeared to be a propitious time for a Christian to be studying economics. Paul Samuleson's neo-classical synthesis version of Keynesian macroeconomic management was in high gear and it did appear that the curse of unemployment with its attendent poverty would be overcome. But the history of the next two decades belied that complacency.

After a golden age of economic prosperity, 1960 to 1973, guided by Washington economic policymakers, the American economy faced difficult times. Between 1974 and 1980 the New Deal-Keynesian economic consensus came apart at the seams. The simultaneous appearance of high unemployment and double-digit inflation-- the clearest manifestation of an economic crisis-- belied the ability of prevailing economic policy to confront these new challenges.

In 1980 Ronald Reagan represented an alternative social consensus-- a return to less government and freer markets. In November 1988 the American electorate decided to continue the same course for another four years with George Bush. Yet, when the 12 year Reagan-Bush record is examined closely, only in the case of inflation had the underlying problem been confronted. Unemployment remained high, productivity did not dramatically increase, and a host of other problems-- huge budget and trade deficits, increased poverty, and in general a prosperity haunted by structural distortions in the economy and an underclass all too often hungry and homeless-- grew despite blithe denials. The 1992 election of Bill Clinton changed little. Recovery from the Bush recession reduced unemployment and the budget deficit but most of the other problems remain.

Growing Disillusionment

From 1964 to 1975 I was on the faculty at The American University. Since 1975 I have been at the University of Notre Dame. During this time I became ever more disenchanted with traditional economic theory as the vehicle to develop adequate policies to overcome poverty in the Third World or in the U.S. I found myself unable to accept the values embedded in economic theory, particularly the elevation of self-interest because it supposedly leads to efficiency, the neglect of income distribution, and the attempts to export these values into studies of the family, the role of the state and so on. But Christian thought and biblical tradition make self-interest a central aspect of fallen human nature which as Christian believers we are bound to strive to counter with prayer, good works, and the cultivation of virtue. As a result I started researching and writing on the philosophy of science as it applied to economics.

This work has led me to two important conclusions. First is the conviction that economic theory is not value free as is so often claimed but, rather, it presupposes a set of value judgments upon which economic analysis is erected. Second is the realization that the economy itself requires that the self-interest of economic actors be morally constrained. My current research attempts to explore the role that ethics actually plays and should play in economic analysis and policy.

Economics and Ethics

Economics and ethics are interrelated because both economists (theorists and policy advisers) and economic actors (sellers, consumers, workers) hold ethical values that help shape their behavior. In the first case economists must try to understand how their own values affect both economic theory and policy. In the second case this means economic analysis must broaden its conception of human behavior. Ethics enters economics in a third way-- since economic policies and institutions impact people in differential ways, questions of efficiency cannot be seperated from the ethical issues involved. But that is a topic for another time.

Values and Economists. Economists construct theory from a particular world view, resulting in basic concepts, such as efficiency, being value-laden. A world view greatly influences the scientific paradigm out of which one works; value judgments are closely associated with the world view; theories must remain coherent with the world view; facts themselves are theory-laden; therefore, the whole scientific venture is permeated by value judgments from the start. This world view shapes the interests of the scientist and determines the questions asked, the problems considered important, the answers deemed acceptable, the axioms of the theory, the choice of `relevant facts,' the hypotheses proposed to account for such facts, the criteria used to assess the fruitfulness of competing theories, the language in which results are to be formulated, and so on.

Let me illustrate the world view argument with neo-classical economics (See Wilber and Hoksbergen 1986). The world view of mainstream neo-classical economics is closely associated with the notion of the good embedded in its particular scientific paradigm.

It is founded on a world view made up of the following propositions:

1. Human nature is such that humans are:

a. Self-interested.

b. Rational. That is, they know their own interest and choose from among a variety of means in order to maximize that interest.

2. The purpose of human life is for individuals to pursue happiness as they themselves define it. Therefore, it is essential that they be left free to do so.

3. The ideal social world is a gathering of free individuals who compete with each other under conditions of scarcity to achieve self-interested ends. As in the natural world with physical entities, in the social world too there are forces at work which move economic agents toward equilibrium positions.

Neo-classical economists either accept the preceding empirically unverifiable and unfalsifiable statements or, barring overt acceptance, conduct scientific inquiry with methods based thereon. To state it simply, neo-classical economists believe that humans are rational maximizers of their own self-interest and that humans act in a rational world characterized by forces which move things toward equilibrium. The belief in self-interested rationality survives contrary evidence. Experimental studies by psychologists and economists indicate that people are concerned about cooperating with others and with being fair, not just preoccupied with their own self-interest (See Frank, et al 1993).

It seems fairly clear that judgments of value, of a particular notion of the good, are directly implied by propositions one and two of this world view. If the purpose of life is that individuals pursue happiness, and if they do so self-interestedly, then it certainly would be good for individuals to receive what they want. Here is the basic notion of the good permeating all neo-classical economics: individuals should be free to get as much as possible of what they want. That this basic position is, in fact, a judgment of value, or of the good, is a point willingly granted by many economists.

To conclude, the paradigm or research program of any scientific community is circumscribed by boundaries laid out in a world view which, while not perhaps individually subjective, is nevertheless empirically untestable, or metaphysical as Boland and others would say (See Boland 1981; McCloskey 1985). How then do value judgments about the good, the just and the right enter into scientific analysis? Such value judgments are themselves entailed by the same world view which gives rise to theoretical and factual analysis. `What is' and `what ought to be' are thus inextricably comingled in the data, the facts, the theories, the descriptions, the explanations, the prescriptions, and so on. All are permeated by the a priori world view.

It must be recognized that there is no alternative to working from a world view. Making explicit the values embodied in that world view will help keep economics more honest and useful. Ethics is a basic component of economic analysis and it is surely self-deceptive to claim to do value-free economics. Scripture will be a major source of ethical guidelines for any attempt at an economic theory informed by Christian belief. But the relationship of Scripture to ethics is a tremendously complex one

The Bible originated in a completely different culture and historical setting than our own. Economies in the ancient world were largely agricultural, rather than industrial; religion and society were much more closely linked; and a communal anthropology prevailed, in contrast to modern individualism. It is questionable to assert that specific Scriptural rules can be transported directly into the modern world. God's will was mediated to the Israelites in their concrete historical situation, and can only be mediated to us in our historical situation. We should certainly attempt to discern basic ethical principles in Scripture and apply them to our economic analysis, but this is different from finding exact blueprints. Catholic Social Thought is an attempt to use Scripture and Tradition to address the problems of the modern economy.

Values and Economic Agents. Economic theory, with its myopic focus on self-interest, obscures the fact that preferences are formed not only by material self-interest but also by ethical values, and that market economies require that ethical behavior for efficient functioning.

Economic theory focuses on people as hedonists who want to maximize pleasure and minimize pain.⁽²⁾ It assumes that pleasure comes primarily from the consumption of goods and services; and that pain comes primarily from work and from parting with your income. Thus, given resource constraints, the goal of the economy should be to maximize the production of goods and services. In short, more is better.

In modern industrial economies such as ours, it is perfectly rational for people to accept a philosophy of consumerism. People have little opportunity to choose meaningful work because the nature of jobs is determined by competitive pressures. The demand for labor mobility disrupts a satisfying sense of community. And the enjoyment of nature is attenuated by urbanization and the degradation of nature resulting from industrial and consumption practices. Thus, the only thing left under the individual's control is consumption. And it is true that consumption can substitute, however inadequately, for the loss of meaningful work, community, and a decent environment. With enough income people can buy bottled water, place their children in private schools, buy a mountain cabin, and obtain the education necessary to get a more interesting job.

The Catholic tradition dissents from this materialist view of human welfare. In his 1968 encyclical, Populorum Progressio, Pope Paul VI wrote:

Increased possession is not the ultimate goal of nations or of individuals. All growth is ambivalent. It is essential if man is to develop as a man, but in a way it imprisons man if he considers it the supreme good, and it restricts his vision. Then we see hearts harden and minds close, and men no longer gather together in friendship but out of self-interest, which soon leads to oppositions and disunity. The exclusive pursuit of possessions thus becomes an obstacle to individual fulfillment and to man's true greatness. Both for nations and for individual men, avarice is the most evident form of moral underdevelopment. [para. 19]

On the twentieth anniversary (1987) of Populorum Progressio, Pope John Paul II wrote in Sollicitudo Rei Socialis: "All of us experience first hand the sad effects of this blind submission to pure consumerism: in the first place a crass materialism, and at the same time a radical dissatisfaction because one quickly learns...that the more one possesses the more one wants, while deeper aspirations remain unsatisfied and perhaps even stifled." [Para. 28] In his latest encyclical-- Centesimus Annus-- marking the one hundredth anniversary of Rerum Novarum, Pope John Paul II writes: "It is not wrong to want to live better; what is wrong is a style of life which is presumed to be better when it is directed toward `having' rather than `being,' and which wants to have more, not in order to be more but in order to spend life in enjoyment as an end in itself." [para. 36]

CONSUMPTION AND HUMAN WELFARE: AN ALTERNATIVE

Many working within the Roman Catholic tradition would argue that we must broaden our view of human welfare from that of a simple consumer of goods and services with consumer sovereignty as the goal. Instead, drawing upon Scripture, Tradition, and cross-cultural studies which have attempted to find absolute needs or needs that are expressed in a variety of societies, three components of human welfare can be specified for an economy. (See the various documents of Catholic Social Thought, particularly Economic Justice for All; Goulet; Wilber and Jameson.)

The first is what Denis Goulet calls "life-sustenance," which corresponds generally to physiological needs or basic material goods.People need the basic goods that are necessary for life-- adequate food, water, housing, clothing, education, and health care-- and an economy is successful if it can provide them.

A second component of human welfare is esteem and fellowship. An economy should provide a sense of worth, of dignity to its citizens. One's goods can be a measure of societal esteem, but surely there are other important elements. For Christians, Jesus' life and ministry were an apparent failure. His vindication came through resurrection after suffering crucifixion, not by God's intervening to prevent it, and by the continuing fellowship of believers that have praised His Name down through the centuries. Those who confess the Lordship of one executed as a political criminal can never simplistically identify success with virtue.

The institutions in which citizens work should support them physically and give them a sense of belonging and of contributing to an important undertaking. Society should have clubs, churches, and other entities which support the individual. If the family is the basic social and economic unit, as is the case in the U.S., the economy should provide support and encourage in families a sense of self-esteem that can help sustain them. Another term for this is fellowship; the economy should promote right relations among its participants, and to the extent it can, should keep life from being "nasty and brutish," while providing basic material goods to lengthen it.

The third component of human welfare is freedom. However freedom is a difficult goal to specify clearly. It obviously does not mean that all individuals may do whatever they wish, for that would be anarchy and the death of community. At its weakest, an increase in freedom means that the range of options open to the individual or the group has increased, that there are more choices available. This has its physical side in choice of goods, but it can also operate in other spheres such as the political or religious.

There are three component parts to the goal of freedom. The first, and the one which is usually at the center of much economic theorizing in the United States, is the provision of consumer sovereignty. Individuals should be able to choose the goods that they wish to consume.

The second part is worker sovereignty. People must have a choice of jobs, jobs they find meaningful and that enhance their human capacities.[See Laborem Exercens] Somehow workers must be given a voice in their workplace.

Third, a society must provide citizen sovereignty, a mechanism to aggregate peoples' preferences for community. What kind of community do people want? What kind of environment do they want? The concept of citizen sovereignty implies that a way to express preferences and to control communities is provided to the citizen. A number of mechanisms may be found which satisfy this requirement, in addition to the democratic voting procedures used in the U.S. One way of enhancing citizen sovereignty could be through strengthening local groups for citizen participation in decision making, e.g., parent-teacher organizations, zoning boards, and citizen review boards of police departments and other public agencies. Or perhaps local residents might participate in the operation of local industries in their areas, by electing representatives to firms' boards of directors to minimize the negative aspects of industrial production such as noise and pollution.

In the light of economists' claims about the importance of incentives for the operation of markets, is the treatment of human welfare in Catholic Social Thought viable. It could be argued that this broadening of the concept of human welfare may be impossible because of: a) the way markets create a bifurcation of people as consumers/workers, coupled with the competitive pressures that force business firms to become ever more efficient; and b) the consumerism which is rooted in human greed and the workings of the business system.

Let me take the provision of meaningful work as an example. Because of competition one firm cannot improve working conditions, raise wages, or democratize the workplace if the result is an increase in production costs(The easy case is where improved working conditions are also more efficient and thus both workers and employers have an incentive to make the changes). Competition from other firms will keep the costs from being passed on in higher prices and, thus, profits will decline. The bifurcation of people into consumers/workers means that what they prefer as consumers-- lower prices-- makes what they prefer as workers-- better working conditions and wages, more meaningful work-- less obtainable. Reliance on the market as the primary decision making mechanism bifurcates the decision into separate areas. What people want as workers will not be ratified by those same people as consumers. Since competition is now worldwide, even a whole country faces difficulties in mandating workplace improvements that raise costs.

The problem is reinforced, first by the fact that millions of Americans live in poverty and consume too little not too much, and second by both human greed and the constant effort of business to promote consumption as the ultimate end of life. This creates constant pressure to reduce prices by reducing labor costs, undercutting attempts to improve the quality of work life.

Why do we accept this? The process, usually implicit, of teaching people that true happiness comes from consumption permeates our entire culture and begins at a very early age. Gintis and Weaver provide a vivid example from an old Sears Roebuck Christmas catalogue.

Sears advertised...a new doll named Shopping Sheryl. Sheryl comes equipped with a supermarket which has a rotating checkout counter, a ringing cash register, a motorized check-out stand, shelves, cart, and groceries. Sheryl is a vinyl doll which picks things up with her magnetized right hand and grasps with her left hand. We can visualize Sheryl in her supermarket, picking and grasping, picking and grasping.

This is really the final result of the evolutionary process. People have emerged from the muck and the ooze, overcome the hardships imposed by nature, built dwellings, invented agriculture, etc.-- so that our children can have Shopping Sheryl and learn early in life that the true purpose of life is consumption. (Gintis and Weaver, p. 18)

WHAT NEEDS TO BE DONE?

Can anything be done to reduce the emphasis on consumption and to increase the possibilities for meaningful work and the restoration of community? I am not optimistic but as a Christian and as an economist I would focus on two possibilities-- the inculcation of more appropriate moral values and the judicious use of financial incentives (the latter which I will ignore in this paper).

Moral Values. We need to develop habits of morally constrained behavior, reinforced by cultural practices, so that short-run rewards become less important. We need values that transcend the narrow self-interest of the economic model as the guide for individual behavior. Is it possible to rebuild a moral consensus wherein we re-learn habits of morally constrained behavior? Yes, this is a major point of Catholic Social Thought, but economists must re-think their view of people as simply self-interested maximizers. They have made a major mistake in treating love, benevolence, and particularly public spirit as scarce resources that must be economized lest they be depleted. This is a faulty analogy because, unlike material factors of production, the supply of love, benevolence, and public spirit is not fixed or limited. As Hirschman says: "first of all, these are resources whose supply may well increase rather than decrease through use; second, these resources do not remain intact if they stay unused." (Hirschman, p. 155) These moral resources respond positively to practice, in a learning-by-doing manner, and negatively to non-practice. Obviously there are limits, if overused they become ineffective.

A good example is a comparison of the system of blood collection for medical purposes in the United States and in Great Britain. In the U.S. we gradually replaced donated blood with purchased blood. As the campaigns for donated blood declined, because purchased blood was sufficient, the amount of blood donated declined. In effect, our internalized benevolence towards those unknown to us, who need blood, began to atrophy from nonuse. In contrast, blood donations remained high in England where each citizen's obligation to others was constantly emphasized.

In his book, The Gift Relationship, Richard Titmuss questions the efficiency of market relationships based on purely monetary self-interest principles. Instead he hypothesizes that in some instances, such as blood giving, relying on internalized moral values (in this case, altruistic behavior) results in a more efficient supply and better quality of blood.

Titmus argues that the commercialization of blood giving produces a system with many shortcomings. A few of these shortcomings are the repression of expressions of altruism, increases in the danger of unethical behavior in certain areas of medicine, worsened relationships between doctor and patient, and shifts in the supply of blood from the rich to the poor. Furthermore, the commercialized blood market is bad even in terms of nonethical criteria.

It is noteworthy that since the AIDS crisis started in the United States, physicians regularly recommend that patients scheduled for non-emergency surgery donate their own blood in advance.

The commercialization of certain activities that historically were perceived to be within the realm of altruism results in a conceptual transformation that inhibits the expression of this altruistic behavior. Contrary to the commonly held opinion that the creation of a market increases the area of individual choice, Titmuss argues that the creation of a market may inhibit the freedom to give or not to give.

The supply of blood provides a clear illustration of the problem. A person is not born with a set of ready-made values, rather the individual's values are socially constructed through his being a part of a family, a church, a school and a particular society. If these groups expect and urge people to give their blood as an obligation of being members of the group that obligation becomes internalized as a moral value. Blood drives held in schools, churches, and in Red Cross facilities reinforce that sense of obligation. As commercial blood increases, the need for blood drives declines. Thus, the traditional reinforcement of that sense of obligation declines with the result that the embodied moral value atrophies. In addition, the fact that you can sell your blood creates an opportunity cost of donating it free. Finally, there is an information problem. As blood drives decline it is rational for an individual to assume that there is no need for donated blood. The final outcome is that a typical person must overcome imperfect information, opportunity costs, and a lack of social approbation to be able to choose to donate blood.

This suggests that the type of policy recommended will have implications for the type of society that will develop. Inherent in the type of policy suggested is a preference as to the motivational attitudes that are appropriate and should be encouraged. The motivations on which the results are based are also important, that is, how we achieve these results needs to be addressed.

Beliefs and preference structures are important because they are the basis for individual motivation. An understanding of these also gives us a notion as to what are and what will encourage the continuation of certain valued feelings. When economists look to self-interest to solve social problems they are placing a higher value on and promoting their own beliefs about what is proper motivation.

Three conclusions can be derived from the issues raised by Titmuss. First, economic policies have a direct effect on both market outcomes and individual values. Second, economists should give attention to the effect that policies have upon values. How we achieve results is important. Finally, economists must recognize that the policy impact upon values exerts its own influence on future market activity. Thus, over time the type of values promoted by public action has significance even within the `efficiency' realm of traditional economic analysis.

I don't want to leave the impression that ethically based behavior and self-interest are always mutually exclusive. Proximity to self-interest alone does not defile morality. Moral values are often necessary counterparts in a system based on self-interest. Not only is there a `vast amount of irregular and informal help given in times of need' (Arrow, p. 345); there is also a consistent dependence on moral values upon which market mechanisms rely. Without a basic trust and socialized morality the economy would be much more inefficient.

It is easy to forget one of Adam Smith's key insights. It is true he claimed that self-interest leads to the common good if there is sufficient competition; but also, and more importantly, he claimed that this is true only if most people in society have internalized a general moral law as a guide for their behavior.

Peter Berger reminds us that `No society, modern or otherwise, can survive without what Durkheim called a `collective conscience,' that is without moral values that have general authority.' (Berger, p. 134) Fred Hirsch reintroduces the idea of moral law into economic analysis:

...truth, trust, acceptance, restraint, obligation-- these are among the social virtues grounded in religious belief which...play a central role in the functioning of an individualistic, contractual economy....The point is that conventional, mutual standards of honesty and trust are public goods that are necessary inputs for much of economic output. (Hirsch, p. 141)

People are capable of changing their values. In fact a principal objective of publicly proclaimed laws and regulations is to stigmatize certain types of behavior and to reward others, thereby influencing individual values and behavior codes. Aristotle understood this: "Lawgivers make the citizen good by inculcating habits in them, and this is the aim of every lawgiver; if he does not succeed in doing that, his legislation is a failure. It is in this that a good constitution differs from a bad one." While families, churches and schools play the most important role in shaping behavior and inculcating values, public laws have a role to play. For example, while law cannot make people stop holding racist beliefs, it can make them stop engaging in certain types of racist behavior. With time that behavior, say refusing service in a restaurant, becomes de-legitimized in public opinion.

The churches have an important role to play in this regard. Stanley Hauerwas argues that:

Christian enthusiasm for the political involvement offered by our secular polity has made us forget the church's more profound political task. In the interest of securing more equitable forms of justice possible in our society, Christians have failed to challenge the moral presuppositions of our polity and society. Nowhere is the effect of this seen more powerfully than in the Christian acquiescence to the liberal assumption that a just polity

is possible without the people being just. We simply accepted the assumptions that politics is about the distribution of desires, irrespective of the content of those desires, and any consideration of the development of virtuous people as a political issue seems an inexcusable intrusion into our personal liberty.

Conclusion

There are other differences between economic theory and Christian beliefs. Economic theory abstracts man/woman into a rational calculator of pleasures and pains. Christianity teaches us the stories of the Good Samaritan⁽³⁾ and the Sermon on the Mount. Meaning and dignity come from being participating members of the faith community. And a faith community is neither created nor maintained by rational self-interest alone. We would do well to heed Boulding's caution of 30 years ago.

There is a danger...in a predominately commercial society, that people will take economic behavior as the measure to all things and will confine their relationships to those which can be conducted on the level of the commercial abstraction. To do this is to lose almost all richness or purpose in human life. He who has never loved, has never felt the call of a heroic ethic to give

and not to count the cost, to labor and not to ask for any reward has lived far below the peak levels of human experience. Economic man dwells in Limbo-- he is not good enough for Heaven or bad enough for Hell. His virtues are minor virtues: he is punctual, courteous, honest, truthful, painstaking, thrifty, hardworking. His vices are minor vices: niggardliness, parsimoniousness, chicanery. Even the covetousness of which he is often accused is a playful and innocent thing compared with the dreadful covetousness of the proud. On the whole he escapes the deadly sins, for his very vulgarity saves him from pride (how much better, for instance, is the commerical vulgarity of Coca Cola than the heroic diabolism of Hitler). But he misses the Great Virtue, and

in that he is less than Man, for God has made man for himself, and he has an ineradicable hunger for the Divine, the heroic, the sanctified and uneconomic. (Boulding, p.

Pope Leo XIII. Rerum Novarum (On the Condition of Workers), May 15, 1891.

Pope Pius XI. Quadraesimo Anno (On Reconstructing the Social Order), May 15, 1931.

Second Vatican Council. Gaudium et Spes (Pastoral Constitution on the Church in the Modern World), December 7, 1965.

Pope Paul VI. Populorum Progressio (On Promoting the Development of Peoples), March 26, 1967.

Pope John Paul II. Laborem Exercens (On Human Work), September 14, 1981.

_________________. Sollicitudo Rei Socialis (On Social Concerns), December 30, 1987.

_________________. Centesimus Annus (100 Years After), May 1, 1991.

U.S. Catholic Bishops. Economic Justice for All: Pastoral Letter on Catholic Social Teaching and the U.S. Economy, November 18, 1986.

Arrow, Kenneth. "Gifts and Exchange," Philosophy and Public Affairs, I, 4 (Summer 1972), pp.343-362.

Berger, Peter. "In Praise of Particularity: The Concept of Mediating Structures," Review of Politics (July 1976).

Boland, Lawrence. "On the Futility of Criticizing the Neo-classical Maximization Hypothesis," American Economic Review, 71, 5 (December 1981), pp. 1031-1036.

Boulding, Kenneth. Beyond Economics (Ann Arbor: University of Michigan Press, 1954).

Frank, Robert H., Thomas Gilovich, and Dennis T. Regan. "Does Studying Economics Inhibit Cooperation," Journal of Economic Perspectives, 7, 2 (Spring 1993), pp. 159-171.

Frey, Donald E. "The Good Samaritan as Bad Economist: Self-Interest in Economics and Theology," Cross Currents (Fall 1996), PP. 293-302.

Gintis, Herbert and James H. Weaver. The Poltical Economy of Growth and Welfare, Module 54 (MSS Modular Publications, 1974).

Goulet, Denis. The Cruel Choice: A New Concept in the Theory of Development (New York: Atheneum, 1971).

Hirsch, Fred. Social Limits to Growth (Cambridge, MA: Harvard University Press, 1978).

Hirschman, Albert 0. Rival Views of Market Society (New York: Viking, 1986).

McCloskey, Donald N. The Rhetoric of Economics (Madison: University of Wisconsin Press, 1985).

Titmuss, Richard M. The Gift Relationship: From Human Blood to Social Policy (London: Allen and Unwin, 1970).

Wilber, Charles K. and Roland Hoksbergen. "Ethical Values and Economic Theory: A Survey," Religious Studies Review, 12, 3/4 (July/October 1986), pp. 211-212.

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1. This paper can be downloaded from the internet at: http://www.nd.edu:80/~cwilber/pub/recent

2. This is not quite accurate. Many economists would say that in maximizing their self-interest people might choose to help others because it makes them feel good. But in practice economists focus on people wanting more goods and services.

3. In Hard Times, Charles Dickens dismisses the doctrines of classical political economy, as seen in the writings of his character Gradgrind as "proving...that the Good Samaritan was a Bad Economist." (See Frey, 1996)