Empirical Foundations of the Common Good - A Review

Empirical Foundations of the Common Good is the sort of project that offers hope for interdisciplinary dialogue. The premise of the book is to provide a response to the basic question how social sciences can inform theology. For the most part, the essays are helpful in this regard, especially for those who rely on traditional Catholic Social Teachings as a foundation for their theology.

With a few exceptions, the non-theologians’ explanations of their contribution to theology are helpful. The majority of the authors avoided the assumption that theology should conform to the findings of their discipline; instead they argued that their disciplines could inform the application of theology.

For example, Christian theology makes the moral claim that Christians should be engaged in seeking the welfare of the poor. Economics provides evidence for how best that should take place. Or, to state it differently, theology provides the telos for the method of economics. When political science, public policy, sociology, and economics claim to provide both the definition of the common good and the method for attaining to the common good, they transgress into the area of applied theology, or ethics. When discipline failure like that happen, the result is the current elevation of politics, economics, and sexuality to the status of summum bonum for society. That, as we see around us, is a guarantee of the pursuit of anything but a true common good.

After Daniel Finn’s editorial introduction, the volume contains eight essays by experts in a variety of disciplines, all making arguments about how their particular discipline contributes to theological arguments about the common good. Chapter One is political scientist, Matthew Carnes, showing how his discipline contributes to a cross-disciplinary discussion through four emphases within Political Science. In the second chapter, Andrew Yuengert asserts that economics can help theologians understand the role of individual choice in seeking the common good. Mary Jo Bane, a public policy specialist, argues in Chapter Three for the contribution of her discipline in helping theologians understand trade-offs implicit in pursuing the common good. In the fourth chapter, Douglas Porpora argues that sociologists have little to say about the constitution of the common good, but have a great deal of expertise in showing how to measure and evaluate the pursuit of those theologically identified ends.

Charles Wilber, an economist, echoes Porpora in his essay in Chapter Five. He argues that economics can help measure progress toward human flourishing, while acknowledging the failure of most economists to separate economic metrics from a holistic understanding of the common good. The sixth chapter puts bureaucracy in perspective, as Gerardo Sanchis Muños dissects the failure of public service to serve the common good. Theologian David Cloutier critiques contemporary iterations of Catholic social teaching, pointing to less individualistic emphases in earlier stages of the tradition in Chapter Seven. The eighth and final chapter, theologian-economist Mary Hirschfeld reasserts the importance of theology for the social sciences, so that a proper understanding of the common good may develop.

The clear message of this volume is that theology needs social sciences to understand how to accomplish its moral ends, while the social sciences need theology to inform them of the nature of the common good. In the present fragmented state of academia, there is too much isolation in separate ivory towers. That is unhealthy for students and tragic for the development of robust worldviews that have a defined end and cogent methodology.

Somewhat surprisingly, this volume is favorable toward markets, though critical of market economics untethered to a moral foundation. However, the various authors regularly affirm the improved possibilities for flourishing that come from enabling market economics. Given the use of Catholic Social Teaching by some to argue for forms of economic socialism, this is volume that deserves careful attention. It may be that proponents of various forms of socialism are, in fact, conflating a pursuit of the common good with discredited means to achieve it.

Like other volumes that Finn has edited, this collection of essays reflects careful conversation. The essays refer to one another and show signs of having been shaped by the arguments in various chapters. This makes the volume easier to read and more helpful for classroom instruction or dialog than many edited volumes that appear to be a random collection of voices shouting in the wilderness.

If there are two things clearly explained in this volume it is (1) that we need more interdisciplinary dialogue, else theology and social sciences tend toward tyranny, and (2) we need not abandon the methodology of market economics for central planning to better approximate the common good.

Note: I received a gratis copy of this volume from the publisher with no expectation of a positive review.

Is Governance Apart from Government Possible?

How much government is sufficient? What sort of governance is appropriate?

Contrary to popular belief, the common view even among free market advocates is that some government is good. Most people argue government is necessary to enforce contracts, ensure market participants act in good faith, maintain law and order in the street, etc.

Edward Stringham’s recent book, Private Governance: Creating Order in Economic and Social Life, seeks to upend that common view. What he ends with is a thesis that points toward valuing and celebrating private governance, which is an idea vastly different that anarchy.

Summary

The book is divided into three uneven parts. Part One consists of three chapters that explain what private governance is and why it is often preferable to government. Part Two contains eight chapters in which Stringham walks through historical and modern examples of private governance in action. Part Three has three chapters attempting to summarize the lessons learned about private governance from the previous eleven chapters.

As Stringham outlines in his introduction, “Private Governance describes some of the major mechanisms that private parties use to produce social order and highlights how modern markets would not be possible without them.” Basically, he is describing the reality that the government cannot effectively regulate the market, no matter how hard it tries. That, however, is something entirely different than saying the market is unregulated.

The “legal centralist” view, as Stringham calls it posits the law as a sort of Deus ex machina that can step in to settle disputes, enforce contracts, and make everything go just right. Even among free market advocates, there is still a strong acceptance of legal centralism.

Instead, Stringam argues, club rules are both more effective, more fair, and more likely to result in mutually acceptable outcomes. Voluntary associations, which are a bedrock of a free society, are typically more effective in governing because they tend to be interested in overall success, not merely seeking self-justification or simply unconcerned for the outcome as much of the government can be.

This is a bold thesis, so Stringham provides a number of case studies to illustrate when private governance worked well in the absence of legal support. The most startling example is of the world’s first stock market, which was founded in the early 17th century in Amsterdam. The early market had a wide range of securities with contracts that the government expressly refused to enforce. And yet stock in the East India Company and other ventures were traded successfully between willing market participants. New derivative forms of stock were invented and futures contracts arranged, all without legal enforcement.

Similarly, the London Stock Exchange arose as a club designed to self-regulate to ensure fair play among its members. Because access to the market was not guaranteed, it encouraged right dealing. So, Stringham is showing, it isn’t that there was no governance, it is that the governance came from non-legal, club-style regulations.

Self-governance led to the creation of mandatory reporting requirements and audit requirements in some stock exchanges. However, those who were willing to accept more risk could form different privately regulated exchanges that managed risks less rigorously.

Stringham provides several other very interesting examples where, undeniably, private governance worked more effectively that legal structures could have. He recounts how PayPal uses private governance to ensure good faith on the vast majority of transactions; transactions that are too small to make legal recourse worthwhile. He recounts the successful use of private police forces in San Francisco when the government was unable or unwilling to deal with threats. He also spends a chapter talking about self-governance, which can be more successful than we allow often simply because of common grace. Stringham spends a chapter outlining the role and benefits of arbitration. He also helps to explain how private governance actually helped mitigate the 2008 financial crisis and how government action significantly contributed to the problems.

Whether you accept his final thesis or not, the examples he provides all illustrate the possibility of significant, complex forms of private governance that help markets and the people who engage in them flourish.

In the last few chapters, Stringham seeks to show how government strips away agency from the customer by intruding in the relationship between the customer and the company. He argues that more often than most acknowledge, governments cross over the threshold from helping to hurting those in the market. Surprisingly, he applies his thesis to the economic philosophy of Hayek and argues that Hayek was too strongly reliant upon government to regulate the market. Stringham concludes the book with an appeal to continue to value private governance, to argue for it, and to seek to reduce imperial entanglements in the market as much as possible.

Analysis and Conclusion

Stringham’s thesis is thought provoking. He argues it well and provides a number of case studies that illustrate clearly how private governance succeeded when most people would expect it to fail. While he didn’t pull me all the way into his camp in eschewing reliance on government enforcement, he does provide a great deal to reflect upon.

Significantly, it isn’t clear that Stringham adequately considers that lack of parity between customers and many corporations. For example, mandatory arbitration clauses are now included in many contracts as a standard feature. So, for example, customers defrauded by Wells Fargo’s malicious creation of accounts on their behalf were prohibited from legal action because of an arbitration clause. When there are no other legitimate options (most banks use some form of this clause), it creates a situation where the customer gets a far worse deal by some accounts. There is more to deal with on this topic, so I hope to conversation continues in the future.

Private Governance: Creating Order in Economic and Social Life
$34.48
By Edward Peter Stringham, Edward P. Stringham, Edward Stringham

Note: I was given a gratis copy of this volume with no expectation of a positive review.

A Few Things Happened at Acton University

Last week I spent four days in Grand Rapids, Michigan at Acton University. If you look for Acton University on the map you won’t find it because it is a conference, not a formal institution of higher education. However, the content is so broad and educational the creators began to call it a university.

 Acton Institute is a think tank and non-profit organization that exists “to promote a free and virtuous society characterized by individual liberty and sustained by religious principles.” They are known as free market advocates, but there is a lot more to it than that.

 The ethos is profoundly Christian, but also wholesomely ecumenical. By that I mean that the experience is ecumenical in that we were talking about our differences and enriching our common faith without negating the real, and sometimes deep, differences in our understandings of the Eucharist, role of clergy, and polity. These differences remain, but an authentic dialog between Catholics, Eastern Orthodox, and various stripes of Protestants (including a significant Baptist contingent) was made possible due to a commitment not to be contentious about the faith and a common interest in the topic at hand.

 The conference is interdenominational, intergenerational, intercultural, and interdisciplinary.

 One example of this was the informative discussion I had with an Orthodox priest about Alexander Solzhenitsyn. There were many points of difference, but I came away with a deepened perspective on the Russian Orthodox author. Of course, there were points where there was a lack of understanding as one Roman Catholic presenter noted that Catholics have the Nicene Creed while the Presbyterians have the Westminster Confession. The fundamental error in his statement went unnoticed by many, but I saw a number of folks shift uneasily as they decided to let it pass. The intent was good, so the conversation continued.

 One night I sat at supper with the president of a private, classical school in Chicago. We had a great discussion on transitioning into classical education from conventional schooling. We also talked about environmental ethics, alternative energy, and the quality of the food. He is a retired journalist, so he shared some of his reporting experience, which spanned several decades. Another night I had a long conversation with a retired efficiency expert who had consulted with companies throughout the world. He was Dutch, but had recently become an American citizen.

 Another night, I shared a table with some Nigerian pastors. They were amazed that we Americans could eat meat every night and cheesecake, too. Then, the bespectacled pastor asked me how he could get a pair of rimless glasses like mine, so we explored the wonders of online optical stores on a smartphone. His phone was nicer than mine. This was an international experience.

 Then there were philosophers, historians, lawyers, engineers, housewives, pastors, firemen, soldiers, butchers, bakers, and candlestick makers. Actually, I didn’t see any of the last three, but they may have been there. It was a profoundly interdisciplinary event.

 The highlights of the meeting was getting to meet Michael Novak, a well-known economist. Actually, I think the high point was when he asked me to get him some potato chips from the lunch line, but I’ll let you judge for yourself.

 The best lecture I went to was by Peter Kreeft. The formerly Evangelical, now Catholic philosopher from Boston College. He is an expert on Aquinas and the Inklings. His talk on Truth, Beauty and Goodness in C.S. Lewis was true, beautiful and good on its own. It was a pleasure to hear him masterfully unfold his topic and answer questions with such depth, breadth, and clarity.

 There were amazing conversations wherever you turned. People were talking about poverty alleviation efforts in their local cities, starting businesses, and funding charities. There was a fermenting energy bursting from every corner. It really is a wonderful thing.

 Everywhere capitalists, yet everywhere there was concern for human dignity and the rule of law. There is an energy in the movement. A synergistic momentum that propels attendees out of the meeting looking for a hill to take and a person to help.

 If you have a chance, you should go. It's an exciting place to meet people and consider future possibilities, and you never know where the road might take you.