Natural Law and Economics: Total Strangers or Separated Lovers?

What does the natural law have to say to Economics? What can Economics teach philosophers of natural law? These questions were at the heart of the Witherspoon Institute’s recent conference at Princeton University (paper drafts available online). As with many interdisciplinary meetings, with scholars trying to understand one another’s technical vocabulary and disciplinary concerns, the first response of some participants was perplexity. In today’s academic climate, the fields of Economics and natural law seem not to have much in common. Moral philosophy is normative, while economics is empirical in orientation and predictive in aspiration. While the tools of economic analysis have become increasingly mathematical, natural law thinking has been developed within analytic philosophy, which concentrates on the meaning of concepts and language. As a result, natural law philosophers are not typically concerned with economic matters, and when they are they treat them in the light of their concept of justice. Economists, meanwhile, systematically refrain from making judgments of moral value, supposing that individuals define their own goods or preferences and that the job of the economist is to calculate the consequences of their acting to attain these goods or preferences.

Relations between the disciplines have not always been so distant. Scholastic natural lawyers trained in the tradition of Aristotle and Aquinas developed defenses of private property and free trade that influenced authors such as Grotius, who in the seventeenth century laid the groundwork of the modern law of nations and thus the basis of modern trade. John Locke subsequently wrote an incisive account of the natural right to property as the source of economic prosperity, and Adam Smith, who wrote a treatise of moral philosophy before authoring The Wealth of Nations, described what he called a system of natural liberty as the matrix of genuine wealth. Although in the nineteenth century both moral philosophy and economics in the English-speaking world developed under the influence of utilitarianism, contemporary theory in both natural-law moral philosophy and economics emphasizes the centrality of the human person and the practical choices he makes concerning human goods or values. In this regard, the question of the relation of natural law to economics is on the one hand the extent to which economic calculations can be based on notions of objective good established by practical moral reason, and on the other hand the extent to which practical judgments by individuals about their good can be informed by an awareness of global consequences.

While conference participants did not arrive at a consensus on these issues, I think it is fair to say that the conversations identified an intellectual space defined by three dimensions. The first involves the question of the rational foundation of inquiry, announced by the opposition between natural law and utilitarianism. Is the measure of good intrinsic to human activities as known by experience and critical reflection, or is the goodness of human actions determined by the sum of their consequences, that is, by their utility? To the natural law philosopher, the utilitarian is needlessly vague in identifying the good, or supposes a commensurability among various goods that does not in fact exist, or defers too readily to subjective claims of good that can be shown with a little reasoning to be mistaken. To the utilitarian, the natural lawyer is peremptory in his pronouncements and inattentive to genuine differences among persons in their subjective experience of goodness. Besides, too complex an account of incommensurable goods precludes analysis of aggregate effects before it begins, though such analysis is obviously needed to explain, for example, the establishment of price equilibria or the behavior of markets. If the distinction between natural law and utilitarianism is fundamental in principle, though, it may not always be unbridgeable in practice. Natural lawyers agree that knowledge of the probable consequences of one’s actions is crucial to sound moral decision-making, denying only that the measure of consequence can guide choice without first examining whether the preferences at issue are morally acceptable. Utilitarian economists, on the other hand, while able to explain the behavior markets in crime and contraband, nevertheless admit the distinction between a legitimate and an illegitimate market based on the nature of the supposed good in the exchange.

A second dimension concerns the form of economic relations and stretches between the free market on the one hand and socialism on the other. Here things are complicated by the fact that natural law and utilitarianism have been invoked in support of both positions. The classic tradition of natural law grew out of a tradition of political philosophy that began with Platonic communism, and although Aristotle’s critique of common property (and Plato’s own recognition in his Laws of its impracticality) quickly became canonical, natural law was traditionally defined in terms of the common good, which seemed to suggest some need for authoritative distribution or redistribution of the wealth of the city, or at the very least for public provision of goods that can be shared by all. Modern natural rights thinking, by contrast, stresses the primacy of individual goods and thus the naturalness of the market, though on some accounts these natural rights prove brittle, yielding to the government instituted to protect rights plenary authority to revise them. Although the differences between classic natural law and modern natural rights can be a source of confusion, several authors bridge this gap: the later scholastics, such as Tomas de Mercado and Francisco de Vitoria, developed a tradition of natural rights based on Thomistic categories that in some ways anticipates Lockean thought, while Scottish Enlightenment authors such as Gershom Carmichael and Francis Hutcheson sought to synthesize or balance Locke and Aquinas. In brief, natural law, far from being a source of doctrinaire prescriptions, is a vital form of practical reasoning, seeking guidance for human action in an understanding of human nature itself—and is no more settled than our knowledge of ourselves.

Globalism versus localism defines the third dimension at issue. Indeed, the precipitant for the conference was a recent article in International Affairs by Harold James of Princeton University suggesting that the friends of global trade and liberalization would find in the discourse of natural law a better guide and guard than in functionalist economics or imperialist realism. Natural law offers an intellectual framework that might facilitate dialogue and exchange among peoples with different, even clashing, cultures, attending to “the fundamental values that follow from our acknowledgement of the intrinsic dignity of humans.” Precisely because it begins with human dignity, much scholarship in natural-law moral philosophy in recent years has concentrated on the rights and duties of the person, particularly those involved in sexual morality and the formation of families. No one who follows these issues will be surprised to learn that differences quickly appeared among conference participants on questions about the impact of the globalizing economy on family life or about the need for families to prepare their children for participation in the larger world. Mediating between the family and the world at large, the state and the various institutions of civil society play important roles in establishing and maintaining moral communities. They bring along, of course, their own traditions and acquire texture from their choices and their circumstances—but, again, natural law reasoning is flexible enough to recognize most of these and in fact to encourage them as the concomitants of liberty. The challenge is to ensure that amidst cultural difference genuine human rights are respected and the commerce and interaction of peoples can flourish in a condition of general peace. Questioning whether this outcome would be better assured by spontaneous market forces and evolving business practice or by expanded institutions of global governance occasioned lively debate.

Lest these latest remarks sound hopelessly utopian, one should remember that the natural law tradition includes an account of just war, not speculation about perpetual peace. Nevertheless, the mood of the conference might be described as cautiously optimistic, despite the enormous economic and political challenges of the current moment. In contrast to the pragmatism, alternately wide-eyed and grim, that seems today to reign in high councils, the natural law tradition seeks out steady principles to steer human action in the midst of rapid change and looks for balanced development rather than spectacular reversal in human affairs. It is neither tolerant of man-made disaster nor expectant of humanly engineered salvation. I have used the metaphor of dimensions that construct imagined space to indicate the room available for research, reflection, deliberation, and choice as we seek to comprehend natural law and formulate economic policy in our contemporary predicament. “No free government, or the blessings of liberty, can be preserved to any people but by a firm adherence to justice, moderation, temperance, frugality, and virtue, and by frequent recurrence to fundamental principles,” wrote the revolutionary Virginians in their 1776 Declaration of Rights, in many ways the model for the Declaration of Independence a month later and for the French Declaration of the Rights of Man and Citizen a decade or more afterwards. Our circumstances and our institutions now are not a little different from theirs then, but the spirit of natural law—jealous of liberty, confident in virtue, attentive to principle—endures. Couple this spirit with evidence—also presented at the conference—of sound economic understanding in a debate among Chinese scholars dating from 81 B.C. and you get a sense of the possibilities that ought to be explored.

The papers presented at the Natural Law and Economics Conference can be found on-line at the conference website.