Towards A Catholic Economic Anthropology (4) : Further Implications Of Market Co-Creative Service

Towards A Catholic Economic Anthropology (4) : Further Implications Of Market Co-Creative Service May 9, 2014

In the previous column, I outlined how I think Catholic theology should look at markets: as avenues for co-creation and service. Here, I want to draw out two implications of that view that I think are very important for having the proper view of markets.

1) Positive sum exchanges.

It is simplistic, but it is worth keeping in mind the lesson from economics 101 : in any economic transaction, both participants are better off, otherwise we wouldn’t have traded. The good or service I buy from you is worth more to me than the money I pay for it, otherwise I wouldn’t have parted from it ; your money is worth more to me than the good or service I sold you, otherwise I wouldn’t have sold it.

Again, this is a simplistic picture, but it gets at a fundamental truth of natural theology : the possibility of positive-sum exchanges. It is possible for exchanges to make all participants better off. It is possible, when we combine our resources, to all leave with more than we brought to the table.

Overlooking the reality of positive-sum interactions is, I believe, the source of the vast majority of errors in economic thinking. It was the fundamental error of Malthusianism : if there is a limited set of resources, then consumption can only reach a certain point, and anybody’s enrichment must come at the expense of somebody else, including future generations. The Magisterium that proclaims the command to “be fruitful and multiply” cannot accept this error. God provides. And the avenue through which He provides is through co-creation. Unlike God, we cannot create ex nihilo ; but we can take what God has given us and make things that are more than the sum of their parts. All art testifies to this profound truth.

The fundamental error of Malthusianism is to believe that the “fuel” of economic creativity is natural resources, which are finite, when in reality this fuel is human creativity which, by God’s grace is, for all practical purposes, infinite. Today, 100-proof Malthusianism still rarely rears its head (although it does so with alarmingly increasing frequence), but most other errors are inspired by the same fundamental error as Malthusianism : that the finality of economic interactions is to distribute existing scarce resources rather than create new ones.

2) God blesses risk-taking.

“Do not be afraid.” This basic attitude is at the heart of the Christian life. The Christian is the beloved child of the Lord of Hosts. “The Lord is my light and my salvation; whom shall I fear?”

This relates to the co-creative call at the heart of our Imago Dei. For in the Biblical view, the very act of divine creation itself is an act of risk-taking. God really does play dice with the Universe. From the beginning, God made the higher creatures free, and this freedom necessarily entails a measure of risk-taking on the part of God. For God created those creatures so that they may know and glorify Him, but in making them free He runs the risk of them rejecting Him, even to the end. The Catholic (and Biblical) worldview has no time for speculations whereby God deliberately damns people simply to manifest His justice or power or some other attributes.

All vocations include this element of risk-taking. To get married, to consecrate oneself to celibacy, to havc children, these are all great risks. To commit oneself to Christ is always to take a leap in the dark—a leap, we trust and know, into the arms of the Savior, but a leap over the abyss nonetheless.

We see this fundamental link between creation and risk-taking—again, a link which in us reflects the attributes of God—very well in the world of artistry. But we see it also in the social realm. A culture of life is necessarily one open to risk-taking. So, then, in the economic realm. A culture of economic creativity is also a culture of economic risk-taking. This cannot be said without caveats, and we will get to them, but it needs to be forcefully asserted, from the start, nonetheless.


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  • Thank you for this series on your ideas for a “new Distributism.” I’ve never studied economics (except for Marxist theory), but I am interested in understanding how the world could operate more justly, taking into account practical realities (i.e., Man’s nature, including our fallenness). The one thing that always struck me as fundamentally wrong about Marx & Engels’ Communist Manifesto was its complete lack of understanding of human nature. Even 40 years ago, as a completely naive high school student, I could see that. I’m interested in learning more about Distributism simply because it is the only economic theory that I’m aware of that really attempts to encourage a Catholic understanding of Man and his place in the world.

  • mochalite

    Excellent, though I wish you’d call it Christian Economic Anthropology … I don’t see a Catholic-Protestant divide here. You’re describing how all believers should view the world. Sadly, they don’t, as witnessed by liberal-speak here in the US. Your line, “… anybody’s enrichment must come at the expense of somebody else, including future generations” might have come from the 2012 Democratic platform, or from last night’s news!

    You also said, “A culture of economic creativity is also a culture of economic risk-taking.” Absolutely true, but liberal leaders are selling more and more people on the notion that no risk is acceptable (who wrote that great piece last week on the implications of not just alleviating suffering, but preventing it? Blanking here).

    Anyway, perhaps oddly, this whole thing reminded me of Psalm 1:

    “Blessed is the man that walketh not in the counsel of the ungodly, nor standeth
    in the way of sinners, nor sitteth in the seat of the scornful. But his delight is in the law of the Lord; and in his law doth he meditate day and night.

    And he shall be like a tree planted by the rivers of water, that bringeth forth his fruit in his season; his leaf also shall not wither; and whatsoever he doeth shall prosper. The ungodly are not so: but are like the chaff which the wind driveth away.”

    Prosperity gospel televangelists pervert this, but the psalmist says clearly that bathing ourselves in God’s law (an essential part of which is the co-creativity you addressed) generates productivity and joy. Ignoring it, scoffing at it, using it to selfish purposes, generates nonproductivity and waste.

    • I hope non-Catholic Christians take as much as they want from this! Everything, if they want!

  • Kasoy

    The Bible account of the multiplication of the bread to feed the five thousand people reflects God’s own idea of economy – there is always enough for everyone if only men will be generous to share what they have. Risk taking as well as distributism must be based on our trust in God’s Divine Providence and having the right intentions for our ventures.

    • Of course that’s a miracle: Jesus taking a dab of food and multiplying it. There’s no way in that story for human generosity to have fed everyone.

      • Kasoy

        The generosity part in the story is the boy giving up his 5 loves and 2 fish to share with everyone else. God wants us to give whatever little we can afford and He will “multiply” it to help more. God wants us to have a share in His good works most esp in His Redemptive work of saving souls.

        John 6:9 – There is a boy here who has five barley loaves and two fish; but what good are these for so many?

        • You are right…I just usually hear “generosity” shortly followed by “the miracle was that everyone had enough to share, not this silly magician business Jesus was supposed to have done.” BTW that reminds me in catechism class I point out that had the child not cooperated, Jesus would’ve had nothing to multiply.

  • The problem with #1 is that an actual positive sum exchange isn’t necessary, a fraudulent one will do nicely. The problem with #2 is that most of what we see as risk taking in the market today, is anything but actual risk taking.

    • I agree with #2. And that’s a problem that Catholic social doctrine should address, but doesn’t really do at the moment. Which is why I’m writing all this stuff to begin with. 🙂

  • I haven’t read all your economic posts, but the ones I have we are in agreement. Why is that? Because we both understand the basics. Thank you for these. 🙂

  • James White

    Openness to life is amazingly important.

    If we think about capital returns or economic growth in the context of population growth, we see a strong relationship between openness to life and risk-taking. It’s just a shame we live in a world that is closed to life.

    For instance, we live in a world where fertility is falling across most countries and populations are ageing. In developed economies households are either expecting governments to fund retirement, or to fund retirements themselves, through allocating capital into financial markets with certain return expectations. This has created Bernanke’s savings glut, led by Japan, Germany, China and other developed economies, all of whom face not very nice demographics.

    In a low fertility economy, this ageing problem creates a tragedy of the commons. As individuals, taking less risk as I close on retirement in an uncertain world makes sense, having my assets fall by half in a crisis is not acceptable. But such an action, taken across many millions of households globally, leads to exactly the thing we’re trying to avoid, an absence of risk-taking and so a necessary fall in the risk-free rate. No risk means an economy unable to sustain higher risk-free rates.

    Furthermore, such risk aversion from low and middle income households, rationally scared about the future, plays into the hands of those who are able to take some risk (the wealthy). This exacerbates inequality: returns on risk rise while a narrowing of the capital base leads to lower labour productivity growth and so lower wages.

    Without population growth the world is doomed to lower returns on its capital, something that cannot be resolved quickly.

    The way you’ve drawn out openness to life with risk-taking is extremely valuable, thank you.

  • Razo Bravo

    So far, so good. I’m wondering where exactly the Cross is in all of this, but I understand that you are still developing the framework.

  • Just discovered this blog. As a Catholic and Economist, I really enjoy the discussion. Hopefully there will be more posts to come, and you haven’t abandoned the project.