The debate about the effects of capitalism on character is a long-running one. In the eighteenth century, Adam Smith worried that, while the division of labor brought wealth, which facilitated human flourishing, the narrowing and repetitive character of work might have deleterious effects. His mixed feelings were shared by many other observers of the emerging commercial order. Today, many prominent thinkers on both left and right question the morality of capitalism.
This is not just an idle philosophical question—it is important for the future of our societies. Will capitalism eventually eat itself? Are economists leading our society to destruction? Will capitalism and the liberal political order be overtaken by authoritarian alternatives?
For those who work within Aristotelian-Thomistic ethics, the debate has a particular edge. The most prominent contemporary advocate of that tradition, Alasdair McIntyre, has repeatedly and strongly expressed the view that capitalism and Aristotelian-Thomist teleological ethics are incompatible. MacIntyre is by no means alone. In different ways, many of our best contemporary philosophers and theologians, including Kathryn Tanner, David Bentley Hart, Charles Taylor, John Milbank, and Stanley Hauerwas, have called into question the compatibility of Christianity and free market capitalism.
These are philosophers and theologians whose work I admire. While I believe they are mistaken, their arguments are generally thoughtful and nuanced. Unfortunately, the views of the less eminent are often more extreme and less well-informed. In fact, there seems to be a systematic problem with philosophers and theologians writing on economics. When they write about other sciences, they tend to inform themselves through formal study or through engagement with scientists. For some reason, this is not the case when it comes to economics.
This is a serious problem. In my view, bad writing by philosophers and theologians about economics is a moral issue. If their views about economics are taken seriously—as they often are in churches and in policy advocacy—they threaten the life-changing effects of free markets for the poor across the world.
Why This Matters
Anyone who doubts that free markets have facilitated better lives for millions across the world in recent decades should read the Princeton economist Angus Deaton’s The Great Escape or the Chicago economic historian Deirdre McCloskey’s three volume defense of capitalism addressed to skeptical friends in the humanities.
Ideas matter, especially ideas about economics. They lie behind the policy settings that determine whether the poor have a chance to advance or not. The idea that free international trade is a neo-liberal plot to exploit the poor in Africa and enrich the powerful in the West, for example, leads to African countries’ erecting barriers to trade and opposing the multilateral trade liberalization agenda of the World Trade Organization. These policies, in turn, deny African farmers the chance to sell their products on fair terms on world markets—and thus the chance to escape from poverty.
Such anti-trade policies cost lives. It would be interesting to do the calculations on exactly how many lives, along the utilitarian lines of Peter Singer’s The Life You Can Save. My guess would be that it would be a much larger number than the number of lives saved through foreign aid. Perhaps the most effective altruism is better economics.
But do the writings on economics of philosophers and theologians like MacIntyre, Kathryn Tanner, David Bentley Hart, and John Milbank have any influence? What are the channels through which their influence operates?
Our world remains (despite the hopes and predictions of secularists) an overwhelmingly religious place, and Christians are still the largest religious group. Only a small proportion of Christians read these theologians (even though their views on economics are more accessible and widely circulated than their academic theological writing). Still, what matters most for forming the views of Christians is that their priests’ and pastors’ views about economics are shaped in seminaries where these philosophers and theologians have huge influence. This seminary formation shapes the teaching of priests or pastors for years to come.
Another channel is through the work of church agencies, whose leaders’ views are formed in the same manner. Church-related agencies dominate the international aid industry as well as domestic social services. In my country, Australia, over 40 percent of social services are provided by church-related agencies, often under government contracts. Bad economics have a huge effect on the policies and activities of these agencies.
MacIntyre on Markets and Economics
To illustrate my point, I will examine one case in detail: that of Alasdair MacIntyre. Why does MacIntyre believe that his Thomistic Aristotelianism is incompatible with capitalism and economics? The issues, according to Robert Miller (quoted by David Schaengold here at Public Discourse), are as follows.
First, MacIntyre argues that capitalism is immoral because it systematically teaches people to regard as a virtue the vice of greed. Capitalism does this by educating people to regard themselves primarily as consumers so that “what constitutes success in life becomes a matter of the successful acquisition of consumer goods.” . . . Indeed, “the drive to have more and more becomes treated as a central virtue.”
The first issue requires some unpacking. Certainly, for Marx one of the characteristics of capitalism is a drive by the capitalist class to accumulate, which means reinvesting the surplus they appropriate, rather than consuming the surplus. More debatably in Marx it meant the expansion of demand to absorb increasing production; I say debatably because for Marx one of the sources of capitalist crisis is insufficient demand. Today there is less doubt that the expansion of demand, through endless expanding desire through advertising and other means, is a characteristic of our system. These are problematic features of our system for MacIntyre.
There are also problematic features of economic theory. Part of the fabric of contemporary mainstream economics is an assumption that more is better—pick up any advanced microeconomics textbook and the insatiability of consumers is one of the assumptions on which the theory of demand is built. Insatiable desire is at odds with the view of human beings and their flourishing in Aristotelian and Thomist philosophy—Mary Hirschfeld’s recent book Aquinas and the Market is excellent on this.
The second issue for MacIntyre is that of individualism. Miller writes:
As an Aristotelian, MacIntyre holds that the true final end can be pursued only by human beings acting together in a community. For this reason, “the best type of human life, that in which the tradition of the virtues is most adequately embodied, is lived by those engaged in constructing and sustaining forms of community directed towards the shared achievement of those common goods without which the ultimate human good cannot be achieved,” such as “families and households, schools, clinics, and local forms of political community.”
Contemporary mainstream economics certainly is methodologically individualist. Good economic explanations refer to individual behavior, aggregated where necessary to explain the behavior of groups. Evaluation too in contemporary mainstream economics tends to be individualist: the welfare of society is the sum of welfare of the individuals it comprises.
Some economists would argue their methodological individualism implies no endorsement of the sort of individualism that MacIntyre believes is incompatible with Thomist Aristotelianism. They would point out that economics has rich theoretical and empirical accounts of individuals joining together in common projects—firms, the provision of public goods, formation of churches, and so forth. Still, it is hard to resist the sociological argument that the individualist assumptions of a discipline with as much cultural esteem as economics encourage individualism in society.
In any case, individualism seems an undeniable feature of contemporary Western society. If many of the human goods of Aristotelian and Thomist philosophy are only attained though common action, then contemporary society is a problem for adherents to that tradition.
For MacIntyre, the fundamental problem with capitalism is that the virtues internal to the practices and the goods to which capitalism and economics are oriented are faulty. In the wake of the 2007 financial crisis, the way financial assets can be multiplied without an anchor in production or appropriate human limits has attracted particular criticism. For MacIntyre, growing in inequality is further evidence of the harmful individualism and absence of limits under capitalism. In his 2017 article “The Irrelevance of Ethics,” MacIntyre claims that ethical finance is a contradiction. Irrespective of the character and behaviour of the individual working in the contemporary finance industry, he argues, the practices that are internal to it and cannot be ameliorated by regulation render it immoral.
In MacIntyre’s account of economics, the eighteenth-century Scots David Hume and Adam Smith feature strongly. He then jumps to twentieth century American economics. Strangely, MacIntyre sees L. J. Savage rather than Gary Becker as the culprit for economics’ faulty view of rationality—namely, as the maximization of stable preferences. Unfortunately, MacIntyre’s reading of economics seems not to have gone beyond introductory texts. Each of the problems he identifies with this view of rationality (radical uncertainty, the social context of markets, short-termism, agents being insulated from consequences of their actions) has received a good deal of attention in the economics literature.
MacIntyre, Adam Smith, and Thomas Chalmers
One of the ironies of MacIntyre’s criticisms of economics is that his Scottish compatriot Adam Smith seems to offer much of what MacIntyre is calling for. I refer not to the Smith of contemporary mythology but to the real Adam Smith, author of the Theory of Moral Sentiments and Wealth of Nations. (Samuel Gregg has written previously on this unfortunate oversimplification of Smith’s thought here at Public Discourse.) In fact, MacIntyre’s economic seer Marx took much of his analytical apparatus in Capital from the famous Scot and his early nineteenth-century English followers. Recent scholarship has also shown the extent of Smith’s debt to one of MacIntyre’s philosophical heroes, Aristotle. Smith is often read today as a virtue ethicist—even as one who operates in a theological framework.
For Smith, the virtues of justice and prudence are internal to the practices of commercial society, benevolence is perfectly compatible with commercial society, and the underpinning virtue of self-command is both necessary for and nourished by commercial society. These are directed towards the end of human flourishing, as part of a great system directed by Divine providence. It is not exactly the same as MacIntyre’s Aristotelian-Thomist scheme, but it is much closer than MacIntyre seems to recognize.
An even deeper irony is that another Scot, Thomas Chalmers—the namesake of Alasdair Chalmers MacIntyre himself—endorsed a vision even closer to MacIntyre’s. In the early years of the nineteenth century, Chalmers led a program for urban regeneration in Glasgow, where small communities worked together to rebuild what we would now call social capital and to revitalize the economic life of the communities. The difference is that Chalmers believed that a free market order supported rather than undermined such activity, and he advocated such an order on moral grounds.
MacIntyre and other philosophers and theologians with similar views on economics might defend themselves by saying that they are merely offering suggestions for others to develop further and examine critically. Unfortunately, this is seldom their tone when commenting on economics, and the caveat is hardly ever attached.
Taking Economics Seriously
Of course, philosophers and theologians are perfectly free to comment on economic matters. Economics is too important to leave it for economists, and economists can learn much from those outside their discipline. However, philosophers and theologians, especially those with wide influence, like MacIntyre, have a responsibility to exercise due care in economic advocacy. We should also criticize economists who do not exercise due care when commenting on theological issues. The stakes, as I have argued, are high. Bad economics costs lives and makes many other lives miserable.
Thankfully, MacIntyre’s commentary on economics is separable from his main—much stronger—philosophical arguments, and much better economic alternatives are available. Aristotelian-Thomistic ethics would be much stronger if allied with an economic vision flowing from MacIntyre’s Scottish compatriots Adam Smith and Thomas Chalmers, and like-minded contemporary economists.