The Path to Liberal Economics

“Getting and spending, we lay waste to our powers.”  This line of Wordsworth’s sums up how many people think about economics.  It is a mean, selfish, illiberal discipline.  Perhaps compromise with its teachings is necessary, but it is never desirable.  Economics can never be a peer to disciplines like history, literature, philosophy, or theology.  In other words, economics cannot be humane.

Nonsense!  Economics is not a science of wealth, or rather, not primarily a science of wealth.  Economics does have something to say about the production and distribution of commodities, of course.  But this is a consequence of its central teaching, not the teaching itself.  Economics is a science of purposive human action.  It provides a universal logic for interpreting human history.  Because of this, it is an essential component of a liberal worldview.  Economics is indeed humane.

The liberal tradition in arts and letters teaches us that humane studies are primarily formative.  Liberal education is character-focused.  It should enculturate us in traditions that bring out the best within us.  Whether contemporary education is doing a good job of this is questionable.  Nevertheless, the ideal is fixed, like the North Star: Certain lessons are essential for all persons to learn, and cultivating these patterns of thought is the greatest task of liberal education.

Economics can and must be used to make sense of the human condition.  The unity-in-diversity—one might say the catholicity—of human society is rendered intelligible by the rationality postulate.  Rational choice forces the economist to be humble, and respect the humanity of the agents the economist studies.  Analytical egalitarianism is a direct implication of rational choice.  Those who search for the hidden rationality in seemingly incomprehensible behaviors and institutions can reassure themselves that they are equipped to grapple with human nature.  Economics cannot say everything about something.  But economics can say something about everything.

Sadly, humane economists often have to contend with inhumane economists, which casts aspersions on the whole discipline.  Humane economists use rational choice as a tool of understanding.  Inhumane economists use rationality as an instrument of social control.  A prescriptive, as opposed to descriptive, approach to rationality is dangerous: The economist often is unaware of crossing the line that separates social science from social criticism.  Economics can be used to improve the world, but to reduce the field to its instrumental value in policy or institutional design would besmirch its liberality.

A liberal economist must employ rational choice.  The relationship between the social scientist and his toolkit is not only a matter of prudence, but loyalty as well.  Rational choice constitutes economics as a discipline.  We must steadfastly adhere to the things that make us what we are before we can grasp them intellectually.  When Israel received the Torah on Mt. Sinai, they promised, “We will do and we will understand.”  The Law could only be discerned after it was affirmed.  Millennia later, St. Anselm used the motto “faith seeking understanding” to describe this approach to the highest things.  The Greek word for faith used throughout the New Testament, pistis, does not mean belief in the manner of mental assent.  It more nearly means rootedness, trust, and reliability.  In this sense, economics too requires faith.  It is obviously not as dreadful as walking with the Almighty!  Nonetheless it has in common with religious traditions, and humanistic traditions more generally, that it can only be understood from the inside.

So, let us immerse ourselves in the economic way of thinking!  In future posts, I will explore classic texts from liberal educational curricula to show how economics can enrich our reading of these texts.  Currently, I have planned a series each on the Odyssey (Homer), the Laws (Plato), and the Acts of the Apostles (St. Luke).  I am sure more will follow.  But first, we have a bit more critique to get through.  My next series will bridge these introductory posts with the positive project by surveying how economics itself evolved.  Once upon a time, most economists did see themselves as developing a science of wealth, with rational choice largely inchoate.  As economists’ self-understanding progressed, they realized that limiting economics to the study of wealth was needlessly constraining.  The process by which economists arrived at this insight is an important part of the discipline’s history, and it also matters for those who promote the liberality of economics.  After discussing this evolution, I will show why a wealth-focused economics cannot be truly liberal.  My foils will be Works and Days (Hesiod) and Household Management (Xenophon).  In other words, we will first see how not to do liberal economics.