A Blog of the Global Justice Movement

Thursday, January 31, 2013

The Death of Reason, IX: Economics as a Science Instead of a Religion

--> In yesterday’s posting, we decided (that is, I decided, and you presumably went along with it if you’re still reading this blog) that we can’t afford to go around basing our economics on anything other than reason — which is what we do in binary economics.  The other schools of economics in some degree get away from reason, usually either to justify or get around what Louis Kelso and Mortimer Adler called the slavery of past savings without ever really dealing with it.

That is why we believe that Capital Homesteading is the only rational solution to today’s economic and political problems, at least that we're aware of.  That, of course, is just another way of saying that it’s the only solution — for if a proposal is not rational, why would you implement it?

Capital Homesteading is an application of the principles of the Just Third Way, i.e., the three principles of economic justice and the four pillars of an economically just society.  These are all based on the natural law, as explained by Kelso and Adler in Chapter 5 of The Capitalist Manifesto (1958).  Justice in civil society necessarily implies relationships based on contract, not status.  That being the case, all economic transactions are necessarily based on contracts between persons of presumably equal status.

Difficulties arise when the persons are not truly of equal status, e.g., between owner and non-owner, but the presumption of equality is there until proven otherwise.  You would otherwise be assuming (contrary to fundamental precepts of the natural law) that all human beings do not have an analogously complete (“equal”) capacity to acquire and develop virtue, and thus do not have equal rights.  The Just Third Way takes this into account when it would limit the role of the State to (among other things) enforcing contracts in those instances in which one of the parties attempts to use the presumption of equal status when status is actually unequal to his or her advantage and the detriment of the other party to the contract.

Liberty — freedom of association/contract — is so fundamental to social life that Pius XI mentions it seven times in a single paragraph in Quadragesimo Anno (§ 87), and countless times by implication throughout the encyclical.  To disparage liberty/freedom of association/contract in social life in the hope of changing human nature and — contrary to explicit papal teachings — force social relationships to being based on need/charity/status, except in domestic society or in extreme cases in an emergency, undermines the natural law by trying to shift it from God’s Nature, self-realized in His Intellect (and therefore discernible by the force of natural reason alone), to your private interpretation of something you accept as God’s Will — a straight road to totalitarianism, as we’ve said already, and the chief danger to Catholic doctrine today. (Pius XII, Humani Generis, §§ 1-2)

In those instances where you have transactions between persons of unequal status, relationships come under charity instead of justice (except in extreme cases, when the State can step in and make an emergency redistribution), as Leo XIII explains in § 22 of Rerum Novarum.

Thus, in ordinary circumstances in civil society, “distributions” (“relationships” would be more accurate) are based on contract, except in extreme cases where a redistribution of existing wealth may be necessary in an emergency, in which particular case, and justified by the principle of double effect, specific relationships may temporarily take on characteristics of domestic society and be based on need, which implies a condition or status of dependency.

In short, respect for essential human dignity demands that people in civil society be treated as fully human and equal in status until and unless it can be proven otherwise, and relationships based on contract.

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