sixmilliondollarmanOn today’s campuses, the reigning principle on most academic matters is to avoid meddling in the affairs of others. Beyond very broad curricular requirements, we are to allow respective experts to patrol the boundaries and content of their own disciplines. It is considered to be bad form to snoop around in others’ business. But, this doesn’t seem to be a very good example of “critical thinking,” and one area in which I think we need more critical thought is the reigning approach to the study of economics.

Economics is today regarded as the model of the social sciences, the one “human science” that approaches the status of the natural sciences. Increasingly technical and mathematic, modern economics has developed powerful analytical tools that provide extensive data on which to base contemporary policy and even some impressive predictive models. According to the canons of the natural sciences, economics is the reigning example for the rest of the social sciences.

However, much of the explanatory strength of economics rests on a narrow and even unrealistic understanding of human behavior, particularly an understanding of the human creature as a utility-maximizing rational actor. Stripped of conflicting devotions, shorn of history and culture, reduced to a few basic motives (especially fear and greed), economic man became highly analyzable data point, but arguably only insofar as he has ceased to be truly human. As Paul Krugman has recently written, the economics field largely failed to predict our current economic crisis due to a basic disconnection from reality: “The economics profession went astray because economists, as a group, mistook beauty – clad in impressive-looking mathematics – for truth.”

Yet, even as economic assumptions can be questioned on the basis of whether they meet the standard of good science, there is a deeper problem with the modern study of economics: those very “unreal” assumptions have tended to be imperialistic in shaping much of modern humanity’s self-understanding. Far from being merely “descriptive,” the basic assumptions of economics – that human beings are acquisitive individual utility-maximizers living in a world of scarcity – deeply shape modern humanity’s view of itself. And, more than anything else, it is this view that lies at the heart of our current economic crisis – itself a spiritual crisis. A false anthropology – one in which humans are defined above all by their fears and appetites – undergirds a system that encourages materialism, short-term thinking and a utilitarian relationship to the natural world and fellow humans. It discounts bonds born in self-sacrifice and love, and the attendant social structures that foster and perpetuate those motivations. The root of our economic crisis was not narrowly technical – and not solvable by mere economic or regulatory reform – but fundamentally anthropological, denigrating an alternative understanding of human nature that places a priority upon the personal over the impersonal; on the sacrificial over the acquisitive; on love over lust; and premised upon a view of creation as a bountiful gift of a loving God rather than a condition of miserly scarcity demanding the conquest of nature.

Based on typical course offerings in most Departments of Economics, one would hardly suspect that there are other economic approaches that start with a fundamentally different set of anthropological assumptions. Especially relevant at an institution like Georgetown is a rich tradition of Catholic economic theory, from the tradition of Church Doctors to papal encyclicals to alternative economic approaches that include the Distributism of Chesterton and Belloc. In its orbit one would count the economists E.F. Schumacher and Wilhelm Roepke, authors respectively of Small is Beautiful and A Humane Economy. These authors stress the role of economics in sustaining good and stable communities and families, where the activities of economics are understood to be subordinated to a more comprehensive understanding of the human good. This was the theme of Pope Benedict XVI’s most recent encyclical, Charity in Truth, a text that has received little official attention on campus.

Eschewing modern assumptions, this approach is equally critical of both big business and big government – arguing that any economy that permits organizations “too big to fail” will require a massive government that assists in their creation and maintenance. It was thinkers in this tradition who were generally more accurate in predicting the recent economic crisis. Basing their judgment less on sophisticated models than on the insight that human institutions that grow too large ultimately weaken our attachments and encourage narrow self-interest and irresponsibility, such thinkers warned of the likelihood of an economic (and ultimately, social) unraveling.

Recent events have shown that the modern study of economics not only misinterprets the world, but that it changes it in ways for the worse. It is time for a better economics, and – not limited to that end – time for a truer and reality-based understanding of human nature.

(This column appears in today’s edition of The Hoya, Georgetown’s student newspaper)

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  1. Well said.

    I would direct your attention to the work of Philip Mirowski, an economist who has been arguing for decades that the modern discipline of economics is premised on a set of actually impossible assumptions. His book More Heat Than Light: Physics as Nature’s Economics, Economics as Social Physics is a remarkable take-down of the discipline, showing how it is essentially an attempt to do for political economy what physics did for our understanding of the natural world, i.e. make it rational, understandable, and predictable. He also shows how the abject failure of any school of economics to accomplish this goal by its own terms, or, indeed, to maintain a single coherent theory about what the school in question believes about economics, has not prevented both economists and the world at large from believing that economics has and should have the status of a science rather than an exercise in moral philosophy. Which is how it began.

    Along the same vein, I would point out the inherent incongruity of a English professors attempting to assert fairly ambitious political, social, theological, and philosophical programs with absolutely no respect for history. It’s one thing for disciplines to enrich each other with a plurality of perspectives and expertise, but English departments seem far readier to simply assume that what they do makes them experts on anything to which they care to attempt. This is part of the reason no one takes them seriously (*cough* FPR *cough*).

  2. Patrick,

    Well said. This was the recent subject of my Master’s Thesis, and one that is very near and dear to my heart. The field of economics is nothing more than Taylorism applied on a Macro-scale, with all the dehumanizing flaws of reducing humans to mere economic data points. The results are predictable, and yet we repeat the mistake over and over. After having found Roepke, Nisbet, Belloc, the papal encyclicals & other advocates on human scaled economics in my studies, I have wondered why they are nowhere to be found in the curriculum of Business Schools and Economics programs. Perhaps because these programs themselves have become Taylorist factories themselves, focusing on improving their efficiency at churning out diplomas, without questioning the status quo.

    Keep up the great work. This is a topic that we need to see more of, not just on FPR, but in the mainstream press as well.


  3. I’m a huge fan of *qualitative* economic discussions. That aspect of low-level, undergrad economic courses drove my interest in making the subject my minor. But I suppose this qualifies more as theory, or the philosophy of economics. And the promotion of this seems to be the object of Professor Deneen’s post.

    In light of the Catholic social tradition, I’m surprised this isn’t a bigger part of Catholic university offerings. Perhaps all of this work is being done in political science? But if it were, I’m sure Professor Deneen would’ve said so in the post.

    BTW: For a very fine historical discussion of the distributism of the Chesterton brothers and Hilaire Belloc, everyone should read Jay Corrin’s *Catholic Intellectuals and the Challenge of Democracy.* A most excellent work. – TL

  4. To be fair, one school of economics did predict the current economic crisis. Economists of the Austrian school have been screaming bloody murder about it, and they have pointed also to the dangers of big business colluding with big government. Most Austrians would argue, however, that your anthropology is your business – it is not really an economic question. Sorry to nitpick – a very interesting article.

  5. Alasdair MacIntyre in his book “After Virtue.” argued that the Enlightenment (from which Classical Economics and Liberalism derives) was doomed from the outset because it ascribed moral agency to the individual. He went on to argue that this made morality no more than one man’s, or woman’s, opinion. As a consequence there was a general abandonment of the search for the purpose of human life, the search for the common good. Adam Smith’s Invisible Hand became the new guiding star. Research in evolutionary psychology in the last twenty years, however, has affirmed MacIntyre’s view by telling us that we are hard-wired to continuously operate along a spectrum between self-concern to other-concern. To do this honestly and conscientiously we, therefore, have no option but to engage with others in picking and choosing, in other words to engage in democratic process. Confronted with our current dilemmas the task before us is, therefore, to combine incentive with fairness and both with sustainability. This has to mean the remodeling of our political and economic organizations to reflect all three of these qualities in both the public and private sectors. A new search for balance in organizations will have to take place whereby democracy will help us avoid the unenlightened mistakes of the past.

  6. Agreed, except that I do not know, and Patrick does not know, that “more than anything else, it is this view that lies at the heart of our current economic crisis – itself a spiritual crisis.” See wm’s comment, or consider the fact that folks that think like Krugman (i.e., Dodd, Frank, etc.) are up to their necks in the shared blame for the current situation. On this topic we’re sailing into waters too complex to be solved by one discipline or one theory. What we need is numbers guys able to see beyond them.

    My references on the dangers of utility-maximizer economize-everything thought would be French: Delsol and Beneton. And on this topic, even McIntyre is pretty good.

  7. George Soros’s theory on Reflexivity is also useful in enabling us to understand the dangers of how a particular outlook can become self-prophesying, self-reinforcing and ultimately self-destructive. Soros made his $11 billion fortune by understanding this reflexive process going long on a bubble’s inflationary stage and short just before it burst. Here is the link to his video lectures on Reflexivity. You need to scroll down to find them:-

    As we know to our cost the failure to appreciate that one man’s morality was another man’s poison in the huge growth of corporate financial capitalism has proved to be disastrously reflexive.

  8. Establishment Economics always has been a kind of Hallmark writ large, writing captions for sympathy cards sent after the rubes have had their larder swiped clean.

    Before the Fall, it writes ad campaigns.

    Mr. Scott is spot on with his warning about the One Big Theory.

  9. Dr. Deneen,

    Thanks again for your clarity in explaining some of the fundamental assumptions shaping our economic climate. It is helpful as I continue my journey to a better philosophy and world-view.


  10. Thanks, Prof. Deneen. I hope some Georgetown students are reading this!

    Ryan, I really shouldn’t get into internet discussions with you. But I don’t think anyone on this site (including “English professors,” by which I can only assume you mean Jason Peters) looks at philosophical, theological, and economic questions with “absolutely no respect for history.” This is an extremely broad and baseless claim . When I read your comments, especially on Mr. Peters’ posts, I wonder why you’re reading them. You seem to be reading them with absolutely no consideration that maybe he knows something you don’t, which results in such winning arguments as, “C’mon, guys, he thinks cars are bad,” as if this is reason enough to dismiss him entirely. I question this tactic on two levels: 1. you don’t know me from Eve. Why do you care if I (or anyone else who frequents FPR) agree with Mr. Peters? 2. The very fact that I read this site suggests that I, like other FPR readers, think that something is quite amiss with the way that we live including *gasp* our reliance on cars.

    I’ll be clear, in case you misinterpret what I’m saying: good for you for reading this site. In my opinion it’s the best thing on the internet, save some discussions of Jayber Crow in my inbox. But it’s only worth reading if you read with openness that other people might know more than you. Otherwise, it’s worthless to do. This doesn’t mean you need to agree with everything that is said here (I don’t), just that you take it seriously.

    Finally, of course you mean history as it was taught to you. Rest assured, the progressivist version of history taught to you was taught to the rest of us as well. How could it not be? But, if something is amiss with the reformation/enlightenment periods (as you seem to agree), shouldn’t we question the historical interpretation that results from this? Shouldn’t we question the technological method that follows, that is about dominance of the earth rather than understanding of it?

    I’m sorry to other FPR readers (and to Mr. Deneen) as much of this comment is off-topic to this specific post.

  11. The comments of wm and Carl Scott make me want to call for Mr. Medaille, but I don’t want to see the same fireworks show yet again, at least for a while.

    Suffice it to say that while the Austrian economists are more right than the likes of Krugman, who would be Austrian if his bleeding heart left enough blood for his brain to see his authoritarian sentimentality for what it is, their refusal to acknowledge the role of anthropologies (i.e. what we think humans are and how they choose, live, etc.) leaves them perpetually clueless as to why these humans don’t listen to them.

  12. “This was the theme of Pope Benedict XVI’s most recent encyclical, Charity in Truth, a text that has received little official attention on campus.”

    What?! A Catholic text receiving little official attention at a Catholic university?

    Not to question Prof Deneen’s honesty, but I find that difficult to believe…

  13. I would submit that the enlightenment did not reduce morality to one person’s opinion. The enlightenment had a foundation in the Protestant critique that any body of doctrine which dictates morality is necessarily one person’s opinion, rather than God’s Word. In short, although the Roman Catholic church has, particularly since the Reformation, provided the world with many valuable standards of humanism, when it had power to DECIDE and DICTATE and ENFORCE what was moral, it became for that very reason corrupt and immoral.

    Now we all know that divorced from any religious or moral foundation at all, enlightenment philosophy has been used in modern times to deny that there is such a thing as morality. However, we are each, individually, accountable to God, who is the ultimate source of morality. What we have lost is the ability for private morality to exercise honest and honorable influence over individual behavior, therefore over community and culture, which, in a democratic republic, shapes the secular laws determined through referenda and representation. We need to get all that back without resorting to bishops issuing marching orders to voters of their respective denominations.

    What passes for conservative economics, as well a what passes for liberal economics, is utterly antagonistic to any focus on family, for example, because the employee is merely a Tayloristic tool of the employer. If the employee has a family, they are expected to “put the company first.” In a truly free market, an individual could put their family first by finding another employer, but most sources of employment are, in this sense, “too big” to set aside.

  14. Isn’t the neoliberal notion that the market always knows best the embedment of morality in atomized opinion?

  15. Very nice. Much of this has been covered by Herman Daly and John Cobb, and, of course, generally ignored.

    Sadly, there’s not much reason to expect things to get better soon. I recently had a conversation with the new head of the London Business School, who I think in most respects is a pretty bright guy, suggesting that all students get a course in economic externalities–that it should be a requirement. His response wast something along the lines of stop being delusional–why would studens need to learn that? Sigh.

  16. Anamaria, I don’t think I’m misreading you, but I do think you’re misreading me. You’re far, far too uncharitable. I certainly do believe that there are people who know things that I don’t. And when they say those things, I tend to refrain from comment, as I’m not a big fan of me-too-ist postings.

    Dr. (I assume it’s Dr. anyways) Peters was not my only implied target, but he is a chief offender. Let me show you what I’m talking about. Remember the exchange over this post? I’m sure you do. There, Peters attempted to use an argument from history to make a point about technology. Fair enough.

    Peters cites a speech by Lord Byron. Before responding, I tracked down the speech in question and read it. Go ahead, read it for yourself. I’ll wait.

    Does the main thrust of the speech have anything to do with Peters’ point, that the Luddites represent a principled stand against industrialization? No! Not in the slightest! It’s about a particularly difficult domestic situation caused by the aftermath of the Napoleonic Wars. Byron is critical of the Lords’ handling of the situation, not the fact that the situation needed to be handled. His solution is not to abandon the evils of industrialization but to 1) make use of the civil legal system before calling in the military, and 2) stop spending so much on foreign aid that people starve within a hundred miles of London. Yet Peters plucks the one quote from that speech–which is all over the Internet, do a search, will you?–having anything to do with his argument and in so doing ignores the bulk of Byron’s argument. Color me unimpressed.

    Where, then, does Peters draw his historical characterization? From historical sources? From a historian? No! From that omnicompetent novelist, Wendell Berry! And I’m supposed to take this seriously… why exactly? I grant that Berry is a good novelist, but I’ve no evidence for the belief that he has any idea what he’s talking about historically. Do you? I appreciate the fact that Dr. Peters is far more knowledgable than I about Mr. Berry, but this is starting to look like a man with a hammer thinking everything is a nail.

    This was a particularly glaring example, but the site is full of others. There is a consistant disregard for history throughout. And don’t call me “progressivist”. That’s not what I’m going for. Can’t you see? I’m not the one operating under the Enlightenment concept of history, you are. I’m advocating for a nuanced, complex, and interdependent concept of history rather than the simple “Things were great, and then the Industrial Revolution screwed it all up” Romantic story which is the dominant trend on FPR.

    I’m talking about things like: blaming the disintegration of the medieval manor system on industrialism when it in fact had been coming apart for centuries due to demographic pressures; advocating for a return to what is held up as the Framers’ original design when the design in question was abandoned by said Framers as unsatisfactory; calling for radical modifications of federal structures in the name of restoring the balance federalism when exactly those ideas were rejected by the Framers as unbalanced; and most of all, arguing for economic and logistical structures which absolutely cannot scale beyond a minimal population engaged in subsistence agriculture.

    If anything, my brush wasn’t adequately broad to capture the scope of my complaint. It’s not just history that’s regarded, but logistics. There is very little appreciation around here for just how complex the material organization of life really is, for the fact that even the most basic agricultural implements have for centuries required significant industrial infrastructure. I’m not arguing that this life is better or worse than that of ages past. But I am dismayed by the fact that so many articles on FPR display a complete disregard for the realities of the way we live.

    Why am I here? Why do I bother? Because I think the FPR project is worth doing, and anything worth doing is worth doing right. That means seriously engaging with both history and the realities of the world in which we live, not waving them away as irrelevant and thumping our rhetorical chests in outrage when someone dares question the large-scale viability of the agrarian lifestyle or suggests that hey, technology has its uses.

    Though I will say that the fact that no one seems to care about these concerns is sufficiently discouraging that I’ve been commenting less and less frequently. All I can say is that until people around here start caring about history, FPR will continue to have little practical influence beyond a defense for particular lifestyle choices. For an idea whose time has come, this is depressing.

  17. Ryan Davidson — as I’ve intimated before, industrial agriculture is not sustainable. Peak oil will kill it off. If you really think that one website with a limited audience will bring about the changes that are necessary, you should reconsider your opinion. When things get bad, the average American is not going to care about the historical causes so much, though they will be looking for people to blame. The discussion of Constitutional questions may be of some practical benefit to some, not so much for others, but it is worth talking about, if only to know how far things have gotten. At the very least it shows that a sola scriptura approach to written documents fails–what is needed is a cultural tradition that gives the proper interpretation of that document and the necessary virtue to ensure that it is observed.

    If you want something with an immediate concrete impact, without a re-imagining of “conservatism” or whatever is being attempted here, go to Transition Towns or a similar project instead.

  18. pb, as I’ve indicated before, there’s a difference between “industrial” agriculture, with its excessive dependence on petroleum-based fertilizers and pesticides, and “industrialized” agriculture, which uses machines to cultivate huge swaths of land with very little human labor.

    You’re setting up a false dichotomy, i.e. that we have to choose between rejecting everything about current agricultural methods on one hand and animal-powered family farms on the other. We don’t. We can easily choose to keep combine harvesters while using more responsible, sustainable methods. As evidence, I submit for your consideration the fact that the vast majority of “organic” produce is produced on factory farms which avoid most of the more damaging problems associated with industrial agriculture while still pissing the hell out of the hippies. As further evidence, I submit for your consideration the fact that the vast majority of the Midwest–which is semi-arid after all–would be largely useless for agricultural purposes without significant industrial irrigation infrastructure.

    I’m less interested in historical causes per se than I am in a recognition that we are where we are (and what we are, as far as that goes) because of what has happened before us. That the past does in fact matter, at the very least because it can teach us how and why things are the way they are. I have no time or sympathy for arguments that x is the problem and y the solution which fail to contextualize themselves in historical reality.

    And the constitutional issues weren’t brought up by me. I was merely responding to them.

  19. What’s keeping the machines running? There’s no difference when we are talking about natural sources that make either possible.

    As for industrial irrigation — let’s talk then about water depletion, ok?

  20. This discussion on sustainable agriculture is an interesting twist on the traditional media-infused dichotomy between “capitalism” and “counter-culture.” It is pretty evident that if we all went “back to the land” in a chaotic, unplanned migration, 90% of us would starve to death. The current population of North America is fed by intensive agriculture, and there simply isn’t enough land are to support 300 million people if we all had our own little subsistence farms. Its also true that the strain of national Republican support for business expansion and infrastructure was inspired in part by recollections of, e.g., Abraham Lincoln, that his father failed economically due to lack of ability to get his crops to a market that would allow him cash to buy what he couldn’t produce himself. We don’t have to go back to that level of poverty and isolation to renew local seasonal production of fruits and vegetables over importing it all from California and Florida. The rising price of oil will impose some of that on us, as the cost of shipping rises. I must admit, right now I depend heavily on being able to buy fresh bell peppers year round. I don’t like them canned.

    It is at least plausible that electric farm machinery could run on a combination of photocells and batteries charged by windmills, or small generators on streams crossing the relevant farmland. We might also prioritize machines for the most debilitating labor, while increasing labor intensive production in some tasks now done by machine — the ones humans can more easily handle without being worn out and prematurely aged. Then there are the possibilities for generating and burning methane from animal wastes, processing what remains into sterile fertilizer without relying on oil, and new forms of crop rotation. These all require more decentralized production, but also a well integrated industrial economy to supply the necessary technology. It might even require an electrical grid, so temporary surpluses can be channeled to areas of equally temporary deficit. The sun doesn’t shine equally each day on each square mile.

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