Yesterday, I began considering R. R. Reno’s recent manifesto revoking, or at least greatly qualifying, the approval of free-market capitalism that characterized First Things in the days of Richard John Neuhaus and Michael Novak. The first step in Reno’s argument was the preposterous assertion that we have much more economic freedom today than in the past. I went to almost comic lengths yesterday to prove the obvious proposition that government regulation of the economy has vastly increased in the last forty years or so. Today, I consider some of Reno’s other arguments.
First, recall that Reno cares about economic freedom because, in his mind, economic freedom equals globalization (a mistake I’ve previously exposed), and globalization, he thinks, helps the economic elite but kills manufacturing jobs, thus impoverishing working-class Americans and increasing income inequality. In reality, the effects of globalization are mixed and complex: for instance, this paper by Harrison and McMillan explains how globalization sometimes increases the number of manufacturing jobs in the United States, and this paper by Hausman and Leibtag explains how globalization benefits American consumers, especially poorer ones, by lowering the prices of consumer goods. Although the net effects of globalization vary considerably from person to person, the overall effect is likely positive, even for most lower-income Americans.
What’s Wrong with Our Economy?
Still, Reno is on to something when he senses that something is wrong with the economy. He misses the key fact, however, which is the abnormally low growth rate of the last ten years. In the latter part of the twentieth century, the Gross Domestic Product (GDP) of the United States grew, on average, about 3.25 percent per year. During the Obama Administration, however, growth averaged only about 1.5 percent per year. In 2008, the GDP was about $14.7 trillion. If that figure had increased at a rate of 3.25 percent per year from 2009 through 2016, then in 2016, GDP would have been about $19.0 trillion. As it was, GDP for 2016 was only about $16.7 trillion. That lost $2.3 trillion is worth about $7,121 per year for every man, woman, and child in the United States. If Reno wants to know the source of economic angst in the land, this is it. The lives of Americans have not been improving in material terms at anything like the rate they used to. In economic jargon, we are $2.3 trillion “behind trend.”
Growth is the broadest and deepest measure of economic change: it affects every individual and every business, and there is nothing outside it that can offset changes in it. The growth rate thus swamps all other economic variables, including the effects of globalization that Reno worries about. If we had averaged even 3.0 percent annual growth since 2008, we would be so much more prosperous that nobody would be talking about such things.
So why has growth been so low for so long? Some people, like Larry Summers, argue that we’re seeing secular stagnation, a permanent reduction in the potential of the economy due to declining population growth, lower capital intensity of important industries, and falling relative prices of capital goods. Other people, like John Taylor, think that the Obama Administration’s regulatory policies created a huge drag on the economy by deterring businesses from investing in capital goods and hiring new employees. Who’s right? I think Taylor is, but the question is ultimately an empirical one, and it’s too soon to say for sure; we need more evidence. I note, however, that with President Trump promising (and in part already delivering) regulatory and tax reform, growth numbers have jumped back to historical norms. GDP grew at 3.1 percent in the second quarter of 2017 and 3.3 percent in the third.
Do Free Markets Lead to Free Love?
Having missed the big picture in economics, Reno blames capitalism for other things that get him down, like the transgender movement. How does capitalism cause transgenderism? According to Reno, because of the extreme degree of economic freedom (he imagines) people have, they get used to choosing things, and this leads them to want to choose their genders too.
By its terms, Reno’s claim is an assertion that a set of economic circumstances causally produces certain normative beliefs about sexuality in the people who live in those economic circumstances. It is thus a bit of dialectical materialism, a philosophy with a deservedly bad reputation. But leaving aside its dubious pedigree, the claim is still an empirical one that is testable in various ways. For example, if Reno is right, then as economic freedom increases, people should expect and demand more sexual freedom. Is that how history really works?
It’s easy to see that it is not. For, the period of greatest economic freedom in the modern era was the late nineteenth and early twentieth centuries up to the time of the First World War, an era of almost entirely free flows of goods, labor, and capital across international borders. At the time, most countries didn’t even require travelers to show passports, and there was virtually no regulation of the private economy except for the prohibitions on force and fraud and the enforcement of contracts. By Reno’s lights, this era of laissez-faire capitalism should have been the heyday of sexual liberation. In reality, however, it was the Victorian age, a time of the most repressive sexual mores, both socially and legally.
As the twentieth century progressed, we got ever more economic regulation—especially in the United States from the time of the New Deal. Simultaneously we also got more and more sexual freedom. These opposite movements are even mirrored in constitutional law, where it is a commonplace to point out that once the Supreme Court stopped protecting economic freedom (e.g., NLRB v. Jones & Laughlin Steel Corp., Wickard v. Filburn), it started protecting sexual freedom (Griswold v. Connecticut, Roe v. Wade). Hence, if we are to infer anything from the historical record of the last one hundred years or so (a fool’s errand, in my view, of which more below), the inference would be the exact opposite of the one Reno draws: as a matter of correlation, economic freedom is inversely related to sexual freedom.
What about Reno’s idea that the market undermines family life, civic involvement, churchgoing, and so on? Well, the historical argument applies here too: if Reno were right, it was during the laissez-faire era when we really did have great economic freedom that family life, civic organizations, and churchgoing should have collapsed, not today in our much more regulated economy. Once again, the historical evidence is against Reno.
So too is the contemporary sociological evidence. That is, if the market really destroys family life, civic involvement, and churchgoing, you would expect people steeped in free-market ideology and enjoying high incomes from elite jobs in globalized industries to be the most adversely affected in this regard. Are they? Again, no. Charles Murray, who actually cares about facts and data, has shown that it is just the opposite. As explained in his highly illuminating book Coming Apart, the economic elites (the people who live in “Belmont” in Murray’s metaphor) have very high rates of marriage and household formation, very low rates of divorce and out-of-wedlock births, and very high rights of participation in civic organizations and church attendance. It’s the people at the other end of the income spectrum (“Fishtown”) who never marry (or get divorced if they do), have children out of wedlock, don’t participate in civic organizations, and stop going to church. Once again, Reno’s analysis entails predictions contrary to known facts.
Capitalism Can’t Give Life Purpose and Meaning, and It Isn’t Supposed To
What about Reno’s idea that we need “ends, purposes, and projects to which we can entrust our loyalty,” as well as “clarity about the ends economic freedom should serve: the renewal of marital stability and fruitfulness, the restoration of democratic institutions,” and encouragement in seeking “higher things than can be had in any market”?
Does Reno mean that, on an individual level, we must all reform our lives, care less about material things and more about spiritual ones? If so, I agree emphatically, but I would say too that this is perennially good advice, true in all times and places. It has nothing in particular to do with capitalism in the early twenty-first century, which it must if Reno’s riff on capitalism is to have any point. Indeed, since the whole purpose of his article is to criticize capitalism, which is a set of legal rules organizing the economic aspects of a society, one would think that Reno advocates some kind of significant structural change in society that will help people pursue the important ends Reno has in mind.
Does he want Congress to re-enact Glass-Steagall, perhaps? He never says so, and indeed he never mentions any other potential reforms either. He expressly says capitalism is our “fate,” which sounds like we’re supposed to keep it. But if this is right, what is the point of the article? I mean, if we all promise to remember Reno is down on capitalism, then what?
The truth is that Reno’s article is not practical but theoretical. He is seeking understanding, even a vision, and he thinks that he has achieved a deep new insight into the nature of things when he says that capitalism somehow fails to direct us to the important ends that we should be pursuing. Perhaps Reno thinks he’s disagreeing with Novak here, but Novak never said anything so utterly foolish. On the contrary, Novak knew, as indeed should anyone who gives it a little thought, that capitalism does not, cannot, and is not intended to help us identify the final end for human beings. Just as the institutions of political democracy allow a pluralistic people who disagree on all manner of things to live together in peace despite their disagreements, so too capitalism is a set of economic arrangements that allow human beings, who have in some other way identified important ends for their lives, to pursue such ends in partnership with people who share these ends while still maintaining peace with other people who are pursuing different ends.
In this regard, democracy and capitalism are both astonishing achievements of human genius and great triumphs of the human spirit. Nevertheless, precisely because their purpose is to allow people with different ends to live together peacefully, it is foolish to look to capitalism (or democracy, for that matter) for guidance about which ends one should pursue. Criticizing capitalism for not doing what, by its very nature, it cannot do, is fatuous. There are institutions in society that can, should, and occasionally do help people identify such ends, but they are churches, universities, charities, and families.
Resisting the Allure of the Fortress of Solitude
The overall impression I get from Reno’s article is that he thinks that Something Has Gone Very Wrong and he is searching for The Grand Unified Theory that explains it all. In my experience, such quests are almost always futile. Social phenomena—whether Trumpism, political correctness, transgenderism, income inequality, globalization, or whatever—are invariably extremely complex and evolving things with complicated causal origins. Moreover, the origins of such phenomena tend to be independent of each other in important ways. Figuring out any one of them is a long, slow, slogging business, a difficult and mostly empirical inquiry fraught with uncertainty. Hence, totalizing explanations of any one phenomenon, let alone all of them together as Reno would have it, are virtually always wrong. Such explanations serve to comfort their adherents with a false sense of superior knowledge, but they provide no real understanding of anything.
Reno’s position resonates with young people today, and this distresses me, for—unwittingly and in all good faith, to be sure—he is leading them astray. I don’t mean that he is undermining support for capitalism; capitalism will be just fine with or without the support of First Things. No, I mean something rather more important. Young people today, especially the ones who are serious about religion and look to the editors of First Things for guidance, have to resist the tendency to declare a pox on all our houses. They have to resist the allure of an intellectual Fortress of Solitude, where they can sit and feel superior to everyone, the left and the right, the conservatives and the liberals, as well as all their elders. They have to resist the allure to go looking for something grand and noble in some exterior thing, whether it be anti-capitalism, Trumpism or anti-Trumpism, traditionalist dreams of a Catholic republic or the restoration of the Hapsburg monarchy, home-schooling, or the Benedict Option lived out somewhere on a windswept prairie.
Young people, just like old people, are called to something grand and noble, but it lies in no exterior thing, movement, or social arrangement. Rather, the kingdom of God is within you.
Griping about the state of society is a waste of time. Are things much worse today than in the past? In some respects, they certainly are: we kill over a million children a year in the womb. In other respects, however, things are vastly better: think of how much better we treat racial minorities today, of how much better we treat women, of much money we spend every year (both public and private) trying to improve the lot of the poor. Whether things are better or worse now than they were in the past is an unanswerable question, and nothing depends on it.
Rather, God in his providence placed each of us just where we are for the most excellent reasons, known to him but not to us, but reasons that also almost certainly do not involve remaking society to measure up to what we think God wants it to be. Rather, God created us, each one of us, in this time and in this place, to become saints in this time and in this place, and very few saints were responsible for great social reforms. Our Blessed Lord himself left society very much as it found it. Indeed, not to put too fine a point on the matter, but when God sees fit to effect great social changes, he has usually chosen not saints but a rather different sort of person to carry out the task.
Now, becoming a saint means loving God with all our hearts, all our minds, all our souls, and all our strengths, and loving our neighbors as ourselves. The first part of this is much more important than the second. When St. Paul the Hermit and St. Anthony of Egypt went into the desert, it was not because they were rejecting the society in which they lived—a society, incidentally, much worse than ours in practically every respect. They went into the desert because they were looking for God. When an unknown nun in a convent in provincial France, so undistinguished that her sisters worried that they would have nothing to say about her in her obituary, died at the age of twenty-four in 1897, she had passed through her social milieu almost without touching it. She had, however, found God, and she was the greatest saint in the last 350 years of the Catholic Church.
To the young person today who feels deeply and keenly that something has gone badly wrong with society and wants earnestly to change it, I say, you are right that something is badly wrong with society, but this is mostly because something is badly wrong with a fallen world. You would feel pretty much the same way in almost any age.
More important, if you are looking outside yourself for the answers, you are looking in the wrong place. Stop reading Reno and other eminences in First Things who are trying to explain the world to you; much of what they say is uninformed, and almost all of it is irrelevant. Rather, start reading Dom Chautard on The Soul of the Apostolate or Brother Lawrence on The Practice of the Presence of God or Dom Lehody on The Ways of Mental Prayer. The answers to the most important questions do not change with social circumstances. Seek first the kingdom of God, and all these other things will be given you besides.
We all need to work out our salvation with fear and trembling, but not with any anxiety about the world. There is no place for that. If God is with us, who can be against us?
Robert T. Miller is a Professor of Law and the F. Arnold Daum Fellow in Corporate Law at the University of Iowa College of Law and a Fellow and Program Affiliated Scholar at the Classical Liberal Institute at the New York University School of Law.