Monday, April 4, 2011

Free Market v. Free Competition

We've been spending a lot of time on economic justice issues lately (we've got a rather important paper in preparation, to say nothing of the upcoming Rally at the Fed on April 15 . . . and you were planning on attending, weren't you?), but we should always remember that one of the more pivotal organizations in the Just Third Way is the Center for Economic and Social Justice. The Rally at the Fed, for example, while directed at achieving economic justice by democratizing access to money and credit for the purchase of capital, is an example of social justice, which targets institutions for reform so that individuals can exercise their rights within those institutions.

While all this is, of course, good, it doesn't leave us much time for the daily blog posting. While we tread water waiting for inspiration to strike for another series of short pieces, or can integrate the writing of a longer piece into a series, we thought we'd present a few thoughts on social justice from the late Father William Ferree, "America's greatest social philosopher," one of CESJ's co-founders. In his pamphlet Introduction to Social Justice, Father Ferree lists a number of "laws and characteristics of social justice." Among these is the "Second Law" of "Cooperation, not conflict." What does this mean?

Given the uniqueness of each human person, the particular good of each individual is different. Any particular good that is falsely made into an ultimate principle and exercised without any limits whatsoever must necessarily be in conflict with every other particular good:

Two kinds of such conflict are possible: free competition, which doesn't care if others are wiped out; and dictatorship, which makes sure they are wiped out. Free competition as a principle of society can only lead to greater and greater conflicts of interests, until finally the society itself is destroyed. Dictatorship is a refinement of the same system, by which one kills off one's competitors at the beginning instead of at the end, thus making sure (it is hoped) that one at least will survive. (Rev. William J. Ferree, S.M., Ph.D., Introduction to Social Justice. Washington, DC: Center for Economic and Social Justice, 1997, 36.)

Here we have to understand that "free market competition" and "free competition" are not synonyms. A truly free market necessarily embodies limitations on the rights that are exercised within it, such as private property and freedom of association. To be just, a free market implies a juridical order (John Paul II, Centesimus Annus ("On the Hundredth Anniversary of Rerum Novarum"), 1991, § 42) that clearly defines the exercise of rights, provides a level playing field, and enforces contracts when necessary. "Free competition" without a market circumscribed by a strong juridical order is simply economic lex talonis, "law of the jungle," in which anything goes, and the strongest takes all. Only cooperation, organization for the common good, can make a real society. This does not mean overriding or ignoring individual goods, but integrating them into the whole effort.

Unfortunately, people who don't understand social justice often assume that the free market and laissez faire capitalism are simply two names for the same thing, despite the efforts of the popes and others to explain the matter with extreme care. This leads to attacks on the market, and various accusations that, while they no doubt make the accusers feel very virtuous and extremely socially just, do nothing either to clarify matters or correct the situation.


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