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Classical Liberalism and the Common Good
Eileen Norcross and Alex Salter discuss individualism, subsidiarity and the history of liberal institutions
By Eileen Norcross
In today’s episode of Discourse Magazine Podcast, Eileen Norcross, the vice president of policy research and a senior research fellow at the Mercatus Center at George Mason University, talks with Alex Salter, Comparative Economics Research Fellow at the Free Market Institute and associate professor of economics in the Jerry S. Rawls College of Business Administration at Texas Tech University. Salter’s research focuses on comparative political economy and institutional analysis, and his first book, Money and the Rule of Law: Generality and Predictability in Monetary Institutions, will be published in spring 2021. In this conversation, Norcross and Salter discuss the common good and classical liberalism and explore the apparent tensions between these intellectual frameworks. This transcript and audio recording have been slightly edited for clarity.
EILEEN NORCROSS: I’m here today with Alex Salter, who is the associate professor of economics at the Rawls College of Business at Texas Tech University and a Comparative Economics Research Fellow at the Free Market Institute. We’re here today to discuss a big perennial question, a big question with a long pedigree: Is liberalism, and in particular classical liberalism, at odds with the concept of the common good?
In recent years, the topic of the common good has been debated and discussed by Patrick Deneen in Why Liberalism Failed, in the Ahmari-French debate, and expressed recently in policy proposals by Sen. Marco Rubio, who offers common-good capitalism to correct what he claims are the downsides of globalized markets. In all of these conversations, there’s a common theme: liberalism, with its focus on the individual, has produced a society in collapse. We are fractured and atomized, consumerist and bereft of community.
Solutions to this predicament range from encouraging localism in government to a federal industrial policy to support key industries and an enhanced welfare state. This debate is by no means new. In the 1980s and 1990s, communitarian arguments came to the forefront, made by intellectuals such as Charles Taylor, Michael Sandel and Alasdair MacIntyre. Liberalism, it was argued, overemphasized individual rights and didn’t match the reality that people live in relation to one another in community, and that to be in community is not merely to be a member of an association, but to share common goals and to engage in the work of building the common good.
Both the current and past debates see society in decline due to rampant individualism. While the earlier debate offered more of a corrective to the liberal order, some current common-good advocates suggest that the current liberal order is not sustainable, and it contains the seeds of its own destruction, and that it will be eventually replaced with something else. So the big question is, does classical liberalism have a fatal blind spot, overemphasizing the individual at the expense of the community? Are its claims that classical liberal ideas form the basis for peaceful societies and human flourishing overstated? And perhaps most importantly, what is the common good?
Thank you for being with us today, Alex. I’d just like to jump right in with that “big picture” question. There’s been this broad concern over the last several years that the governing philosophy offered in particular by classical liberalism is focused on protecting core rights, limited government, and the free market policies in particular that it engenders do not support human flourishing, and in fact, they may be undermining it.
According to advocates, small-government free-trade policies have failed people, and the pursuit of private goods has led to atomization and worsened economic inequality and contributed to the weakening of social bonds. It’s not a new argument. What are your thoughts about this, and is there any truth to the concerns of the communitarians?
Classical Liberals, Atomistic Individualists?
ALEX SALTER: I’d be happy to start with that. First, Eileen, thank you for having me. I’ve been looking forward to this conversation. This is a very important claim, and it’s something that classical liberals have to wrestle with—not just because it’s a foremost claim in the public square and public debate right now, but because it’s an issue that really gets at the heart of liberalism as a philosophy. The new conservatives, the new communitarians, they make this grand claim about the deleterious effects of liberalism, and I think that we can evaluate that claim on multiple margins.
Let’s start with some of the things that they get right, in my opinion. I think that there are signs of an erosion of community. I think that if you look at the empirical social science literature, if you look at both the economic and sociological literature on, for example, communities and human capital, there are some signs that communal bonds are fraying and have been fraying for quite some time, for decades. That’s obviously not good news. The question is, is their diagnosis correct, and is their prescription correct? I would say that the answer to both of those questions is no.
You could take the claims one at a time. You could address their call for industrial policy, for example. Based on how economists study this question, it’s simply not the case that opening up the United States to international trade caused a sudden evaporation of the manufacturing base. If you look at all the manufacturing indices, manufacturing output is at an all-time high. We’re just able to produce that output with fewer and fewer inputs because we’ve gotten so much better at technology, at capital accumulation. We’re basically able to economize on labor in our manufacturing sector. Now, I realize that that comes with an ethical tension. I only bring it up because the argument that we’re outsourcing our manufacturing base to China or somewhere thereabouts just doesn’t really fit the narrative.
Also, I would push back against the broader claim that it’s liberalism itself that’s responsible for these problems. First of all, I don’t think it makes much sense to talk about one big, gigantic, overriding liberalism. There are many kinds of liberalisms that arose from many various strands in the Enlightenment many centuries ago, and they are really quite different from each other. Perhaps the most different are the French rationalist strand of liberalism from the English-Scottish empiricist strand of liberalism. Many people have quibbled with F. A. Hayek’s take on this, but I still think that his take is basically correct.
Once we realize just how many differences there are between these liberalisms, and how differently they view questions of social organization, and in even some case, the basic question of what it means to be human, what I think the new common-good conservatives are doing is focusing on one subset of one strand of liberalism, calling it the entire tradition, reading only a fraction of its authors and then offering the least charitable interpretation of their take on what it means to live in community. To sum up what I just said, I think that some of their concerns are well-founded; I do not think that their diagnoses and cures are well-founded.
NORCROSS: It seems that some of that criticism, when it does home in on classical liberalism—and we’ll get to this—even a subset of that tradition, which is mainline economics, that the idea of community is in fact not alien to the classical liberal tradition, but really, it’s woven throughout it. What do you think about that? The kind of arguments that the classical liberal tradition has generated in the mainline tradition that allows for, indeed, local groups, associations, to thrive. What’s the tension there?
SALTER: I think that’s basically correct. I think it’s actually most fruitful to view even the various kinds of liberalisms as new theories of community. It’s true that many of these theories of community found themselves rigidly axiomatically on certain natural rights, but they do those to work towards a richer and fuller understanding of what is the appropriate form of social organization for humanity. Now, I happen to think that many of those perspectives are wrong. I’m very much more in the empiricist, pluralist tradition of the Scottish Enlightenment, and not very much a fan of the way of viewing society that came out from the French Enlightenment, just a quick example.
Even to that, you could talk about the nuances of the English take on liberalism, the German take on liberalism. There’s even a meaningful sense in which you could talk about a Spanish take on liberalism. I think all of these philosophies, at their heart, they are trying to understand the basis for a just social order and where social order actually comes from. They differ in their starting assumptions. They differ in the way that they relate empirical social science to a priori moral claims in evaluating these communal tensions. But to call classical liberalism as not concerned with community really overlooks the foundational questions that motivated the various people who called themselves classical liberals. They were anything but atomistic individualists.
Methodological vs. Radical Individualism
NORCROSS: In the development of the notion of man and his relationship within society, within that classical liberal tradition, the mainline tradition in particular I think has a pretty rich view of man. It starts with this concept of methodological individualism. I was wondering if we could talk a little bit about that and how some may wrongly conflate that with a call to radical individualism. Maybe that’s how in translation these ideas aren’t done the best service when these ideas are taken out there into the policy space. Any thoughts on that?
SALTER: I have several. I think the best place to start is to recognize that a lot of what people who call themselves liberals are talking about when they speak about methodological individualism is a component in the engine for doing social science. Even though liberalism viewed itself, even from its earliest days, as a moral science trying to uncover the moral orders in broader society, it was always concerned with investigating how societies actually work.
Methodological individualism grew out of the quest to understand where regularity in the social world comes from. Because of that, many people mistakenly think that methodological individualism is an anthropology, in other words, a doctrine about what the human person is at his core. Many liberals have an anthropology; some liberalisms have an anthropology baked into it. But methodological individualism per se is not an anthropology. It’s a way of doing social science.
It’s the simple recognition that if we’re going to try and explain things like the distribution of factor payments across labor and capital, the fact that there’s always milk on the shelf at the supermarket when I want to go and pick it up, the way that you want to start and answer these questions when you get these spontaneous orders is, how can we think about it as resulting from individuals making decisions? Because ultimately, the locus of decision-making is the individual from the standpoint of positive social science. Groups do make decisions, but those decisions are constituted by a given decision mechanism that is engaged in by—wait for it—individuals.
I think oftentimes what you have the new conservatives saying is, “Aha, liberals take this methodological individualism starting point and they apply it too widely, and therefore they lose sight of the broader social orders.” No, we’re trying to explain them, not exhaustively, but we are trying to come up with a social scientific explanation of where these things come from. They’re mistaking, I think, a moral doctrine, which it is not, for a positive engine of social science, which it is.
NORCROSS: It basically boils down to, people act, entities don’t act, and we’ll get into this a little later. It would seem in some of the common-good arguments that they make that mistake of thinking that communities act, and they have an end that they act towards, where it really has to do with individuals acting within communities in relation to one another. Is that fair? Did I characterize that correctly?
SALTER: That makes a lot of sense to me. This does also touch on moral considerations; it’s not just about positive social science. Take someone like Adam Smith. If Adam Smith were commenting on society today, I think that he would be very concerned with, for example, lingering unemployment in the area that we now sometimes refer to as the Rust Belt. He wouldn’t just shrug his shoulders and say, “Well, that’s the market mechanism.” The first thing to do is to recognize, well, no, we’re not losing our manufacturing base to China. It’s more due to automation than international trade.
At the end of the day, an unemployed person is an unemployed person. If they’re having a hard time adapting to new patterns of sustainable specialization and trade—that’s a phrase from a book by Arnold Kling that I admire a lot—if they’re having trouble adapting to that, then we need to understand where the frictions are and where the tensions are. Because in addition to advocating dynamism in society, we also have a commitment to respect the human person. If our new economic transformations are finding a way such that they’re systematically shutting out a subset of our community, that’s a problem.
You simply cannot read someone like Adam Smith and assume that he was a market fundamentalist. He did have concerns about the human person. What he did that’s so noteworthy, what he did that’s so important, is clearly separate, here’s where we’re going to talk about what’s going on, and here’s where we’re going to talk about how we think about that in a broader theory of where regularity in social life comes from. You sometimes encounter this idea that liberalism means overlooking the aspects of market activity, for example, that we don’t like. Again, that’s simply not in the tradition. I don’t see how you can get that from reading the mainline classical liberal tradition.
Defining the Common Good
NORCROSS: We’ll come back to that later, I’m sure, but I’d like to pause right now and have us think about a definition or talk about a definition about the common good. It’s a very malleable term. It’s used by different people sometimes to mean different things. Aristotle had a notion of it; John Locke had a notion of it as the public good of the people, meaning the protection of peace and security. John Rawls relates the common good to social justice concerns.
There’s also the common good as it’s understood out of the Christian tradition dating to Augustine, and as has emerged in the last 150 years in Catholic social thought. There are still yet other variants, and the word gets a lot of play. In your work, you’ve looked at the Catholic social thought concept of the common good. What do you think about all these multiple definitions, and what are your thoughts on how it’s used, and what is a good working definition of the common good?
SALTER: It is a tricky concept, and many people do define it differently. Oftentimes, you see some thinkers use that as an excuse to not take the idea of the common good seriously. That’s not an approach that I favor. I actually think that the Christian tradition is right on the fundamental nature of the common good. I really don’t think it gets any better than St. John Paul II’s definition, which is, the common good is the sum of all total conditions necessary for a community to flourish as that community.
Every kind of social group has a common good, from the family to the town to the nation. The common good, of course, doesn’t make much sense if you don’t believe that these entities have their own independent existence, something that I actually do believe. That’s another tension that you sometimes see people accusing liberals of, this reductionist liberal philosophy, where if you take methodological individualism too seriously, you can’t believe that the family is real and greater than the sum of its parts, or you can’t believe that the nation is real or greater than the sum of its parts. Of course, that’s not true. It’s just about focusing on what the nature of the claims are, and what the question at hand is, and lastly, what tools you’re going to use to address which claims.
I personally think the common good is a well-defined concept. I think it’s a very important concept, and I think that it has a central role in the art of political economy, the deliberation that we have on the nature of the good society. I say that, by the way, as someone who is not in communion with the Roman Catholic Church, so I think that these ideas are important. I think that they’re worth taking seriously. I think they’re especially important for liberals to take seriously because they are a necessary part of the toolkit for having the conversations that we need to have about the tensions and problems that currently confront liberal society.
NORCROSS: One thing that’s interesting about the development of CST, or Catholic social thought, is that its modern formation 150 years ago was really in response to the Second Industrial Revolution and the upheaval at that time as people were moving from farms to cities and life was disruptive. Although there were overall material improvements, there was a worry about the disruption of all this to community. This led to the rise of progressivism and other philosophies and prescriptions. Is there not a similar undercurrent to some policy-driven common-good proposals today—it’s a reaction to these disruptions? Any thoughts on that?
SALTER: I think it is a reaction to those disruptions. I think it’s also coming from a recognition—and this part I think is actually true—that there are sociopolitical fault lines in society that went largely undiagnosed up until the 2016 election. I think that a lot of people were using the election of Donald Trump and the movement that grew around him as an opportunity to push this richer notion of the common good. In their defense, I think that the fault lines that they identified actually did exist, in retrospect.
Alex Salter Now you see problems like the opioid epidemic.
Now you see problems like the hollowing-out of former manufacturing towns, perpetual underemployment amongst a certain class of people. These are problems. A society that takes seriously that human persons have infinite dignity and worth needs to find a way of dealing with these problems.
My main objection to the common-good conservatives, aside from my objections on philosophical grounds which we talked about already, but just on more narrowly means-ends grounds—the grounds that economists are supposed to defend as theirs—I think that most of the proposals that they are actually calling for not only do not contribute to the common good, but will actually harm it.
Industrial policy is an easy example. It used to be that conservatism understood the dangers to the human person, understood the dangers to the local communities in which people live and flourish and find meaning, created by a large, hierarchical, distant, centralized state that picked winners and losers. Unfortunately now, we seem to have forgotten that wisdom in response to the opportunities presented by an ephemeral political moment.
I’ve been pretty disappointed by that. Nonetheless, I’m going to stick to my guns and insist that if you actually evaluate these policies on means-ends grounds, do they make sense, given our common goal of trying to respect the dignity of the human person and get these people in a way that’s back into a productive relationship with each other and reinvigorating these communities? Can it actually be done with those kinds of policies? I think the answer is pretty clear: no.
From the Ground Up
NORCROSS: The common good then sounds like a ground-up phenomenon, not a top-down phenomenon, that the common good perhaps is being conflated with this idea of the national interest. That’s been a tension, I think, throughout the history of the notion of the common good: who’s defining it, and what’s the government’s role there?
SALTER: Great follow-up questions. I think that there is an element of the common good that is top-down, in the sense that the federal government does have a role in creating certain conditions that are necessary for the maintenance of the common good. Some of those just by their very nature coming from Washington, it’s got to be pretty top-down. That being said, if you take the common good seriously, you also have to take the concept of subsidiarity seriously. Subsidiarity teaches us that decisions should be left to the most local political community possible, or that is feasible.
The reason for that is, because specific human persons are closer to those sources of political order than more distant ones, they can participate more fully. They can offer their feedback. They can engage with their governors. They can take part in this public deliberative process, which is in part soul craft, as uncomfortable as it might be for someone who identifies as a liberal to say that. But keeping those decisions closer to the people that they actually affect is necessary to make them more accountable, those decisions. Also, to give people a stake in those decisions and have them take part in the process in a way that contributes to their own flourishing.
I would contend that the new conservatives are correct in that there is a role for the national government in creating the conditions necessary for the common good, but their balance between local and more distant political communities is unfortunately out of alignment. They’re placing way too much emphasis on Washington and not placing nearly so much emphasis on the municipal and/or state level, or even the neighborhood. There are many, many places that we should look for communal political projects for the cultivation of virtue other than Washington, D.C.
NORCROSS: That would seem to address some of the communitarians’ concerns of people being actively involved in community life, creating the conditions to allow for people to do so. Then when there’s greater centralization, you close off those opportunities effectively. Now, you mentioned federalism. There’s also a link, it sounds like, to the polycentricity of Elinor Ostrom and this idea of the entangled political economy, that complex ordering that’s going on in nonprofit, in governmental settings, in market settings, and that this is a very rich environment in which people indeed come together to solve problems in living together. Any thoughts on that, on the Hayekian/Ostromian connection to this concept of the common good as something that we pursue under certain rules of the game as opposed to a concrete end?
SALTER: Yeah, I think that that’s where the rubber hits the road, so to speak. When you start actually looking towards what makes for flourishing communities—assuming that that’s your prior, that’s the question you want to answer—you’re going to have both a moral purpose and an explanatory purpose in any project for social science that you undertake.
Using the tools bequeathed to us by scholars like F. A. Hayek in his studies on complexity and spontaneous order, as well as Elinor Ostrom in her studies of polycentricity, how in a given geographic area there can be multiple overlapping centers of decision-making that can sometimes cooperate, sometimes compete, and how that, even though it’s seemingly messy, can actually deliver better public services, better resource management than simplified, streamlined, distant, top-down procedures can.
All these are a necessary part of the toolkit of what Tocqueville called the art and science of association—figuring out how communities can actually govern themselves in a way that respects the dignity of human persons but is also effective in delivering those governance goods that we need to live effectively and peacefully together. So it’s a two-pronged project. We sometimes separate the explanatory from the moral for the purposes of the theorist.
It’s not necessarily that we’re sundering reality. We’re not making, as the philosophers would say, an ontological claim when we work with the positive-normative distinction. Instead, we’re focusing on one aspect of the social world, trying to better understand it, and then we can integrate that insight with a bunch of other related insights that coincide and build up this conversation on the nature of the good society, which is really what political economy is all about. At the end of the day, we are still engaged in Adam Smith’s project.
The Medieval Roots of Liberal Institutions
NORCROSS: I’d like to switch gears a little bit. A lot of people stake their concept of classical liberalism to the Scottish Enlightenment and other enlightenments. Your work has looked a bit at the pre-Enlightenment roots of some of those institutions. What can we learn about going deeper and beyond the Enlightenment, and what has your research revealed? I know you’ve done some work on the polycentric nature of medieval society. Tell us anything you want. What have you found in digging beyond it and going deeper into history about how institutions are formed?
SALTER: This is a very exciting opportunity. I’m always happy to talk about what I’m working on. The first project that you were referring to . . . it’s true that I’ve done some research on the political institutions of medieval Europe. A lot of this is co-authored work with my colleague here in the Rawls College of Business, Andy Young. We’re currently working on a book project where we contend that the roots of political liberalism, by which we mean things like respect for individual rights, checks and balances, divided powers, etc., actually go back to the High Middle Ages.
You sometimes encounter this narrative that modernity is a radical break with what came before, and it wasn’t until we got modern, coherent, centralized states and new ideas and a new centralized legal system that we started having the bounty of economic modernity that came from the Great Enrichment, and all these other liberal rights that we all enjoy and take for granted. Andy and I are pushing back on that, saying, no, the way that you want to understand political liberalism is it’s actually an inheritance from a much older series of institutions that prevailed during the High Middle Ages.
We refer to it as the pan-European constitution. It was a de facto constitution, not a de jure constitution. In fact, for most political thinkers throughout most of human history, the word constitution meant constitution de facto. The idea that you’re going to sit down and write a list of rules for rulemaking is a distinctly recent phenomenon in sociopolitical history.
Nonetheless, the various institutions of medieval Europe, the estates of the realm, the free trading cities with their chartered immunities and liberties, the various processes that all the stakeholders of the realm in medieval Europe had to bring to the table in order to actually agree with each other on governance innovations—here was a series of ways of governing that embodied checks and balances, fractured powers, etc., but nonetheless was not liberal. Instead, it was proto-liberal.
If you look around at the landscape of medieval Europe and link that to thinking in political philosophy, we think it makes much more sense to say that we got these ideas for the things that we now call political liberalism out of the experience with these decentralized, overlapping institutions that prevailed during Europe in the High Middle Ages. Whereas many economists and political scientists want to tell a story of discontinuities as to why we have good governance today and why we have high standards of living today, we instead tell a story of continuity. You can’t understand liberalism without understanding proto-liberalism, and you can’t understand proto-liberalism without understanding the High Middle Ages.
NORCROSS: That’s really fascinating. Indeed, a lot of the objections to classical liberalism in our current form of government, sometimes they start with the American founding, or they start with the Enlightenment as a failed project, but that seems to betray the fact that these institutions were discovered over time in that Hayekian process of trial and error as to what works, what doesn’t work, and it’s an inheritance, as you say. Is there something of the Hayekian discovery process in how those institutions came to be some of the ones that we enjoy today?
SALTER: It very much was a trial-and-error process, and let’s be clear, this was in no way, shape or form intended. It’s not like the political thinkers in 13th-century Europe all got together and said, “Hey, wouldn’t it be great if X, Y, Z institutions all prevailed at the same time? Let’s work on getting that about.” No, oftentimes it resulted from that most unfortunate political consequence, war. It resulted from conflict. It resulted from treaties, and settlements, and haggling, and bargaining, and evolved over time.
There was a really interesting book recently by a historian I believe named Walter Scheidel, but the title is Escape from Rome. He argues that the fall and collapse of the Roman Empire was actually a necessary precondition to the political decentralization of Western Europe, which was itself a necessary precondition to overall enriched economic growth that we take for granted now. Really, what you have is a series of historical contingencies. You had a bunch of stuff that had to go right, one of which I would seriously argue is Christianity and Christendom, the spread of the Roman Catholic Church.
All of these things had to happen at the same time, at the same place, and the result was a balance of powers and the bequeathing of a heritage that actually respected nonarbitrary governance: the idea that you could petition for address of grievances, the idea that you separated in many circumstances legislative from executive functions. Things like this, again, that are just normal for people living under political states now weren’t so normal centuries and centuries and centuries ago.
They were a hard-fought political equilibrium between various medieval elites, and that situation, once reached, worked well enough that the High Middle Ages constitution created some pretty good living conditions, given the constraints of time and place. No one’s saying medieval Europe was a utopia, but given the constraints of time and place, things were going reasonably well until the crisis of the 14th century.
Distributism and Catholic Social Thought
NORCROSS: Another question I’d like to ask you, I know you’ve got some ongoing book projects that are nearing completion, and I thought I’d ask a question about your interest in distributism, bringing it back a little bit to the idea of the common good and reactions to dramatic economic shifts. Tell us a little bit about distributism. What led you to that project? And we’ll just take it from there.
SALTER: Sure. I’ve actually been reading distributist authors, especially G. K. Chesterton and Hilaire Belloc, for years. I have to admit, in my first encounter with this literature, I was every bit as uncharitable to them as I claim the new conservatives are to classical liberals today. I thought that the distributist writings on economics were nonsensical. I thought that there wasn’t a whole lot of value we get from them. I just saw mistake after mistake with respect to how economies actually worked. I didn’t put much stock in Catholic social teaching at the time. I was more or less ready to write it off.
Eventually, I started coming back to those writings as I decided to co-author a paper on distributism. By this time, my thinking for other reasons had started to change. Once I dug back into those writings, I saw the wisdom in them that I missed the first time around. I saw the insight that distinguished between the simple laws of markets or the laws of politics and, again, what I broadly called the art of political economy earlier—distinguishing the narrow means-ends arguments from the arguments about ends in the context of the good society.
Even just on if you want to restrict it to narrowly economic grounds, I found that there was a way to rationally reconstruct many of the claims made by Chesterton and Belloc such that you could make sense of them in light of the tools, techniques and concepts that contemporary economists, economists who are doing work right now, the way that we talk about things like governance and externalities and public goods. I was shocked to discover that this tradition, which I had all but written off, actually had a whole bunch of wisdom in it that I had yet to appreciate. And so, mea culpa for missing it the first time, but at least I’m getting it right the second time.
I’m currently writing a book on distributism, which is currently planned on being published with the Catholic University of America Press. In that book, I’m going to argue that there’s a lot of value in distributism that we can get good stuff from, provided that we read them in the right way, and we have a conversation between that and the more orthodox economic way of thinking so that we can sort out some of the interesting political-economic claims about basic institutions that distributists make from some of the claims that they make about the way that markets work that don’t hold up as well.
It’s not like I’ve gone to the complete other side of the spectrum. Chesterton and Belloc and people who are fellow travelers of that literature often do say things about the way markets work that are just empirically wrong, but we’re selling them way, way short if we use that as a reason to dismiss them. We’re not fully engaging with the purposes of their project. And we should be because I think there’s a fruitful conversation that can be had by bridging economics and distributism and Catholic social teaching and these other broader philosophies that can foster a conversation about how we can get liberal society back on track.
NORCROSS: That’s great. It strikes me that distributism—and please give us a definition of it—is not like Catholic social thought in that it’s not really meant to be a replacement to orthodox economics, is that correct? It’s not offering a theory on prices and how the market works, but it’s in response to social phenomena. Do I have that right? Tell us what we should know about Chesterton’s and Belloc’s projects.
SALTER: Yes, I think that that’s a correct statement. Distributism is not a school of economics in the same way as you would say the Austrian School of Economics or the Chicago School of Economics. Distributism represents a certain group of authors’ attempts to take the claims of Catholic social teaching, and using those claims as a guiding star, a destination, something that we should seek to embody in our social institutions, talking about what arrangements for politics and economics best fulfill those conditions.
Eileen Norcross Belloc and Chesterton were both believing Catholics, which is
why they treat Catholic social teaching as their lodestar because they’re actually trying to figure out how to make societies more socially just in the way as defined in Catholic social teaching. Given that, what they’re trying to do is actually closer to what we would call today comparative institutional analysis. They’re trying to figure out how to reorder the rules of the game such that the outcome of economic and political processes is more predictably commensurate with the flourishing of the family and more local governance arrangements, and sometimes—actually, frequently—smaller-scale economic arrangements as well.
A lot of times I think economists miss that fact. They simply read Chesterton and Belloc, who like small enterprises, and think, “Oh, they don’t understand economies of scale,” and then dismiss them. But if you read especially Belloc, the vocabulary he uses, he was clearly familiar with neoclassical economics as of the early 20th century. You just can’t write him off because he disagrees with you or takes a stance on an issue that you don’t fully appreciate.
These authors understood the literature that they were writing in. Even though they weren’t talking to academic economists and weren’t trying to do scholarly economics, as we would define it, they were nonetheless seriously engaged in a quest to understand the institutions that constitute a good society. Their claims can be evaluated, reconstructed, analyzed in terms of the tools of modern economics.
In fact, one economist, who himself was actually a very good economist, who was very good with this price theory, who understood how markets worked and still shared the concerns of the distributists and spent a large part of his career trying to advance their goals, was an economist named Wilhelm Röpke. He was a German economist whose most prominent book is A Humane Economy, written in the middle of the 20th century—a book that many, many people, including myself, come back to time and time again to sort of reconcile, “Okay, how can we figure out how to bring in alignment our analysis of how markets work, how politics actually do work with this broader social vision that we share?”
NORCROSS: So it’s not simply an appeal. I know distributism sometimes is characterized as kind of a romantic idea, returning to an agrarian way, small is beautiful, that sort of thing. The authors are getting at what institutions give rise to the common good. Is that fair?
SALTER: Yes, and I do think that there’s an element about it that is romantic. In fact, Chesterton is unapologetic in his romanticism—small “r” romanticism. But just because you’re a romantic doesn’t mean you’re also not a realist. These two things are reconcilable, which is what they would of course think, given the perspective that they’re coming from, and given the importance that Chesterton and Belloc and the related thinkers place on reconciling principle and expediency at the basic level of social institutions.
Once again, it’s not right to read them as a school of economic thought. It’s more correct to read them as engaged in normatively focused comparative institutional analysis, which is a perfectly legitimate project. There’s no reason that we should ignore them today. In fact, they should play a more prominent role in how we ourselves talk about these things.
The Common Good and Political Economy
NORCROSS: One final question, or maybe just concluding thoughts in this ongoing conversation that’s emerging. Now it’s becoming embedded in policy prescriptions. We started off talking about some of the books that have been written, but now this idea of common-good capitalism—it sounds like that’s almost a deviation from what an authentic understanding of what the common good is from some of these areas of thought that are not all coming from economics but can help to inform economics. What would you tell economists who are interested in this, people working in the social sciences, how to think about the common good in their work? Is there more work to be done here, rather than just abandoning the notion of the common good as some vague concept that’s used to cover a lot of different things for different people? Any thoughts on going forward in this conversation that’s happening out there?
SALTER: Great question to end on. My short answer is yes. Again, I think that the place of the common good in a political economist toolkit is part of the normative presuppositions that underlie how we think about political-economic systems interacting and what we would want those systems to tend to produce. I don’t think that the common good has much to do with how we teach price theory at a basic level, for example.
I’m fully on board with the idea that there is a logic that markets work, how they work, and they work independently of how we want them to work. Where I think the common good enters into it is in these broader social philosophic conversations when we actually start to engage questions of, what happens when we change the institutions that govern property rights? What happens when we change the institutions that facilitate the nature of political or collective decision-making? That’s where the common good enters into all this.
Again, I have to plug him again. I really encourage people who take these concepts seriously, or need to be persuaded that they should take these concepts seriously, to go pick up Röpke’s book, A Humane Economy, because there he does a very good job distinguishing between the orthodox price-theoretic claims that many economists will be on board with, as well as the broader social values. But he not only distinguishes, he integrates. He actually shows you how those broader social values, how the broader comparative institutional project of which the common good has to be a part, can use and has implications for the toolkit that we as economists use every day.
These things are not as separate as we might think that they are. They do speak to each other, and they do have something to do with each other. Just because I wouldn’t change how the first sequence on a graduate price theory course should be taught—I think that that’s more or less correct—nonetheless, we’re selling ourselves short if we do not use that in the service of these broader conversations about the nature of the good society, which again, people with a whole bunch of range of ideological priors can engage in profitably.
James Buchanan, the famous Nobel laureate who taught at George Mason for a while, was no fan of the common good as Catholic social teaching defines it. Nonetheless, he was arguably the most successful economist of the 20th century at having these broader social conversations. Why? Because he had the toolkit, he had the broader framework and he understood the link between the two.
We don’t have to embrace all of Buchanan’s priors in order to do economics and political economy like Buchanan. I would contend that if you come into it with these broader social concerns, if you use the common good as something that can help inform you what comparative institutional analysis should drive towards, then you can do economics like Buchanan, but in a way that looks more like what Röpke would have wanted. At the margin, that’s what I think we as social scientists should be doing.
NORCROSS: Thank you, Alex. This has been a very rich conversation, and very enriching. I hope that we can perhaps continue it when your book is published, and to hear more on this topic. Thank you for being with us today to discuss this.
SALTER: Thank you very much. It was my pleasure.