Price vs. Value: Capitalism and Catholic Social Teaching

“There are some things money can’t buy — but these days, not many.”
Michael Sandel is a public philosopher at Harvard and a fiscal liberal. His latest book, What Money Can’t Buy: The Moral Limits of Markets, published April 12 by Farrar, Straus and Giroux, poses some very interesting questions from a Catholic social-justice perspective.
Since the communist regimes in Europe came tumbling down in what George Weigel called “the Revolution of 1989,” there has been a general American consensus that capitalism was ascendant and went hand in hand with democracy. Pope John Paul II’s 1991 encyclical, Centesimus Annus (On the 100th Anniversary of Rerum Novarum), also seemed to rehabilitate capitalism from the perspective of Catholic social thought.
That consensus, however, seems recently to have come under some strain. Public reaction in the United States to the recession, brought on by the collapse of the housing market, and reactions in Europe to austerity measures adopted in the wake of the fiscal crisis in Euroland suggest that an unalloyed admiration of capitalism is passing. What is a Catholic social thinker to think?
Perhaps he should think that the pendulum has finally swung back towards a greater balance. For a long time, Catholic social thought seemed to regard capitalism with a measure of suspicion. That suspicion was in part driven by a contradiction at the heart of classical capitalist thought: How does one achieve the common good if everybody is driven by his own self-interest?
According to Adam Smith, every economic actor chooses in the light of his own self-interest. Everybody pursues his own interests when it comes to making economic choices: How do I make more money? But if everybody is driven by self-interest, how is the common good ever achieved in society?
Catholic social thinking, after all, insists that society exists to achieve the common good, which is more than just the sum total of individuals’ self-interest. Smith answered this conundrum by postulating the agency of the so-called “invisible hand” — while each person relentlessly pursues his own self-interest, this “invisible hand” somehow magically manages to draw a modicum of common good out of this muddle of individualistic moneymaking.
The events of 2008 showed that, no matter how much money some banks, realtors or mortgage loan companies made on risky investments, the common good of Americans was hardly served by the ensuing national recession. Somebody, the effect of the “invisible hand,” remained invisible in the U.S. economy.
That said, Winston Churchill’s remarks about democracy also seem appropriate to capitalism: It might be the worst system, “except for all those other forms that have been tried from time to time.”
While some Catholic thinkers spoke of a “third way,” a realistic tertia via that could actually be put into practice in the modern, democratic world proved elusive. In practice, capitalist systems have historically been responsible for raising the living standards of the most people most rapidly, often also enabling individuals to excel according to their talents and industry. In a real world where leaders responsible for making economic policy have to make real choices, capitalism usually proves the one economic system capable of bringing prosperity to the greatest number of people.
Capitalism, it should be remembered, also cultivates a number of important moral habits. It encourages self-responsibility through the making of choices. It can stimulate habits of thrift and deferral of self-gratification: I may choose to put off what I want right now and save instead to obtain a greater good now beyond my reach.
But part of the problem remains that these good moral habits, these “virtues,” are only somewhat loosely tied to capitalism. A smart capitalist may decide to put off till tomorrow the greater good he cannot obtain today. But it still leaves one question open: What is the master value that should drive one’s choices in the economic field? The answer to that, for classical capitalism, remains: me making money.
Classical capitalism, therefore, at heart, lacks a (or, at best, has a very thin) set of normative values: What values should guide economic decision-making? In the end, the default value remains money. And the problem, Michael Sandel points out, is that monetary values often tend to push nonmonetary values aside. “Sometimes, market values crowd out nonmarket values worth caring about.”
That phenomenon, I would argue, is especially true in the contemporary world, where the “dictatorship of relativism” and modern “non-judgmentalism” have eviscerated any common set of moral values, particularly when those moral values might have some nexus to a religious basis like the Ten Commandments.
Every world has to have some values: There are no axiological vacuums. It’s not a question of whether there will be values, but, rather, whose values. And, in a secular world allergic to religiously inspired values, monetary ones are likely to be the values of choice.
Sandel notes, however, that “when we decide that certain goods may be bought and sold, we decide, at least implicitly, that it is appropriate to treat them as commodities.” But “some of the good things in life are degraded if turned into commodities.”
Indeed, as Karol Wojtyla pointed out 50 years ago in Love and Responsibility, there are finally two ways we can deal with another person: We can love him or we can use him. The only proper response towards persons, however, is love.
Sandel concludes that “without quite realizing it — without ever deciding to do so — we drifted from having a market economy to being a market society.” That shift deserves attention: As Wojtyla noted, “being” is more important, more self-determinative, than “having.”
From his philosophical point of view, Sandel is not likely to agree with some of the conclusions that Catholic social thought reaches, but his latest book does raise an issue about which both secular liberalism and Catholic social thought can find common cause: How do we deal with what we are becoming? Public discussion of that issue, he argues, is critical to helping “us to decide, as a society, where markets serve the public good and where they do not belong.” That discussion is long overdue.
(Quotations are from Sandel’s article “What Isn’t for Sale?,” which appeared in the April 2012 issue of The Atlantic, and drawn from his book.)

John M. Grondelski, a moral theologian, writes from Perth Amboy, New Jersey.