The Crisis in Catholic Social Teaching on Economics

0:00It is a really great honor for me to be here today and I want to thank Lou for inviting me and just shows, you know, what a couple of books can do. My wife, my wife wanted to come to this today. My wife is essentially a musician. She wanted to, can everybody hear me by the way? Is this thing on, you know? She wanted to be here today and she impulsively said, I'm going to this and we got the ticket and everything and she realized she had too much work to do. and she just had taken two weeks off to go to South Carolina to help out my daughter-in-law who just had a baby and the baby was very ill the baby's fine now thankfully so she realized she just spoke too soon but she definitely told me she wants to come next year but anyway i think because she backed out we're entitled to make a couple of jokes at her expense these are true stories though

0:50I sent away for the Bad Mises t-shirt with Carl Menger's picture on it and the first time I wore it she was walking by and she kind of just caught the picture in the name in the corner of her eye and didn't pay any attention to it but later on she says I can't imagine you wearing a t-shirt glorifying Joseph Mengele after thirty five years you just don't get to know a person very well do you? And the other story was, it was just the other night, the shirt is very soft and I'm a terrible sleeper. If everything isn't quite right, I just can't sleep. So the shirt's soft. I turn into a night shirt. I wear it to bed. So I get into bed and she looks at me and she says, you know, I can't really get used to a strange face getting into bed.

1:40So anyway, the original topic of the talk suggested by Lew was, why can't religious people understand the benefits of the market? And I thought that was a great idea, but since I'm a Catholic, cradle Catholic, I've studied under Catholics and I'm into Catholic things, theology as well as economics and politics, I thought maybe if I just focused on the Catholic Church for a while, that would be much more appropriate for me to do. A few years ago I gave a paper at the Austrian Scholars Conference entitled The Intellectual

2:38In that paper, I documented the hostility of many of the main Catholic writers in economics to the free market. I demonstrated their ignorance of basic economic theory. I showed that many of these writers were literary men, using extremely negative similes and metaphors to describe an economic system that they had already decided was evil. I showed that the Church authorities themselves were hostile to the free market for two basic reasons. Firstly, they equated classical liberalism with the French Revolution and the bloody attacks of that event on the Church. And secondly, the Church's political power was being severely eclipsed in the 1800s.

3:27And this was blamed by the Church authorities on liberalism in general, without distinguishing the various types of liberalism, nor looking at the economic theory separately from the anti-Christian attitudes of some liberal thinkers. Much to the chagrin of contemporary parators of these attitudes, who equate them with official Church teaching, the Catholic Church had been moving slowly toward an acceptance of the market. Even Pope Leo XIII, who was not really hostile to capitalism in general, made private property a natural right in the same way that John Locke did, in contradistinction to St. Thomas Aquinas, for whom private property was merely the most practical way to assure productivity.

4:12Pope Pius XI, who condemned Communism and Nazism, nevertheless set back the trend toward the approval of the market when he wrote the following. The ultimate consequences of the individualist spirit in economic life are those which you yourselves, venerable brethren, the bishops, and beloved children, the believers, see and deplore. Free competition has destroyed itself. Economic dictatorship has supplanted the free market. Unbridled ambition for power has likewise succeeded greed for gain. All economic life has become tragically hard, inexorable, and cruel.

5:00Which just brings me back to my childhood. I came from a very wealthy family. My dad was a big accountant. My mother taught in the New York City school system the highest paid teachers of the nations, and we didn't even have air conditioning. Today, I have a really low salary, Jesus Christ, a small Catholic college, and I have central air and central heat, and we've got like three cars, and so I don't... I can't deal with this. Now, of course, in a way, pious can't be blamed for thinking this. The world was in the midst of the Great Depression, and no one at the time knew that it was caused, as Murray Rothbard and others have shown, by the various central banks and governments' manipulation of the currencies. Nevertheless, this attitude has been picked up by many Catholics who do not understand the development of doctrine, nor the idea that these specific economic and political theories are really outside the realm of ecclesiastical authority, which should ascertain the accuracy

5:53of its facts prior to making moral pronouncements about them. Slowly but surely, as I showed in that paper, the Church began to distance itself from these These Attitudes Until a break was made by Pope John Paul II in his encyclical, Centesimus Annus. Now I have it on the highest authority that Pope John Paul II, prior to writing Centesimus Annus, spent a whole day with Friedrich Hayek. This discussion with Hayek, as well as having a number of advisors in the writing of the encyclicals such as Michael Novak and Rocco Battiglione, may account for the difference between this encyclical, not only from John Paul II's predecessors, but even from some of his own previous writings on the market.

6:44But in order to more thoroughly understand the tension in the thought of Catholics regarding the free market economics, it is necessary to examine more closely the nature and influence of the German historical school. Now we Austrians know that the German Historical School was the main theoretical obstacle to Carl Menger's attempt to advance a science of economics. And we can list the main tenets of this German Historical School as follows. First, it was that this is my own distillation of it, you may have others. It based itself on the epistemology of Jungian nominalism and Skepticism. Therefore, it rejected natural law. In other words, it rejected human beings' participation in the common nature. Therefore, it rejected the possibility of a science of economics in favor of a mere historical explanation of economics in each country. Basically, it was just purely historicism. It sees each state as the only real unit, rejects the idea of the Person, which you'll see later is very Hegelian. And therefore, it led to the idea

7:53of communitarianism and the organic state, and lastly, nostalgically yearn for the things of the medieval past to accompany the things in the last principle. So, for example, gills and the emphasis on agriculture and that kind of thing. And this is why they are called of Romantic Economists. Now many of those principles of the German Historical School contradict the time-honored Catholic approaches to life. The key here is that the Catholic thinkers most influential in earlier economic thought and church teachings were adherents of this same German Historical School, such that Catholic and hostility to the free market is neither based on theological grounds nor on a science of economics, but merely on an adaption of this German historical school's approach.

8:53Now the question we've asked, and I don't think others have really asked this, I haven't read everything that's ever been written, but we need to ask where the German historical school came from. We know that it was there, we know they thought like this, it was encouraged by the Kaiser and everything else, where did it come from? What is the source of all this misguided thinking that is not dead but it is still with us in many circles? Its origins can be traced back as far as Jean-Jacques Rousseau, who is known to be both a reactionary and a romantic. Rousseau was a reactionary because he saw all of modern society as evil. First private property and then the division of labor coming from private property created Work and Therefore Inequality. And here's a fairly lengthy quote which distills what he thought. He says, property was introduced, work became necessary, and the vast forests were changed into growing fields that bid to be watered with the sweat of men, where

9:53one could soon see slavery and misery germinating, ripening along with the crops. Now this development Now this development destroyed the pristine primitive life that he referred to as the life of the noble savage. Continuing Rousseau, as long as men were satisfied with their rustic cabins, as long as they confined themselves to sewing together with thorns or fish bones, the pelts that they used as clothing to adorn themselves with plumes and shells, to painting their bodies with various colors, as long as they applied themselves to tasks that took no more than Now, this view was substantially different from the contemporary mainstream views.

10:52Despite the fact that Diderot's Encyclopedia contained an essay by Rousseau on political economy, where he expressed much of the same views quoted above, it contained many articles and plates extolling technological advances. Many Catholic thinkers of the 19th through the 21st century see Rousseau as indirectly the father of the French Revolution, which these thinkers despise. They also lump together the capitalism, capitalism with the mentality that led to that revolution. But there is inherent contradiction here. If Rousseau was the father of the French Revolution, and the French Revolution gave impetus to the free market system, how can one reconcile Rousseau's anti-capitalism with the allegedly pro-capitalist French Revolution? The truth lies in the problem of romanticism, which from Rousseau onward would plague the continent.

11:47In the diagram, I start with German romanticism, but they got that from France, that came in from France big time. Essentially romanticism can be described as a cult of the past. In the case of continental Europe, a hearkening back to the Ancien Regime and its supposedly Romanticism is a reaction to the Enlightenment and to the French Revolution in general, without discriminating among any benefits which have flowed from this period of history. One can see why Romanticism would have a great effect on politics and economics, and cannot cannot be considered a purely literary outlook as some tend to do, nor was this all. Romantics, for example de Mester and Bonald, and to some extent Edmund Burke, rejected the idea that there was a universal reason which applied to everyone in favor of the uniqueness of each nation and culture. This was really a rejection of natural law and hence of a universal Science of Economics.

12:57There was also an apocalyptic tendency in some of the German romantic thinkers, which is especially noteworthy considering that Germany was the place where romanticism had taken root the most. The French Catholics deplored the state of Europe after the revolution, but contrasted that with, quote, what we all await. Demester rejoiced that the revolutionary fire, quote, had cleansed the place in preparation for the True Architect. This is interesting, too, because I saw the same things in my town of Front Royal, Virginia, which is very much a Catholic town because of the college that's there, regarding Y2K. Because there were a lot of people who thought this was the end of the technological world as we saw it.

13:45They were thrilled about the idea, and they stocked their basement with all sorts of food because we were going to go back to a barter economy. And everything was to be the way it should have been. The German Friedrich Schlegel picked up this idea of an apocalyptic return to medieval culture from Demestra and spread it from Berlin with the aid of his brother and Schliermacher Novalis, Teek, Halsen and Schelling. To the romantic expectations of the rebirth of medieval culture and economics must be We added the contribution of George Wilhelm Friedrich Hegel. Hegel believed in free exchange, but he also said that free exchange took place in civil society, and civil society is subject to control by the state. Trade would be controlled by the state for its own ends, which are not necessarily the same ends as the citizen. Not only is this a rejection of much economic Law, but also it is the origin of the organic state, as well as economic nationalism.

14:51For Hegel, the perfection of the will of the world spirit is found in governmental edicts. If one takes out the reference to the world spirit, one arrives exactly at the view held by Heinrich Pech, who's right up there in the top middle of the diagram, and other Catholic economic thinkers. The reason for this control by the state, and also the view that all nations are unique, is seen in Hegel's conception of internal relations. The Hegelian doctrine of internal relations proposed that everything was an organic unity, and Community, such that one could not understand one aspect of, say, society on its own without understanding all of the other aspects of that society together.

15:49This meant that one could not develop a science of economics. One could only speak of economics as it operated in the milieu of German, French, or English culture. There were no laws of human action that applied to people as people, hence the Hegelian influence on the German Historical School predisposed it to see economics as the development of economic institutions in a purely factual or positivistic way, and not in any way connected with the universal laws of human action, or coming from a common human nature. Another Hegelian influence on the German Historical School was the idea of the essential importance of agriculture. In his philosophy of right, Hegel holds that agriculture is the backbone of Society. Well, you can kind of understand that in those days, you know, food was not as plentiful as it is today.

16:37And of course, people relied on agriculture. You can understand that. But it was detached from the economic realities of whether and to what extent the agricultural component of society is a benefit to that society. Hale considered agriculture as an estate and should in itself receive representation in the legislature. By Catholic distributists of the early 20th century and of today, Hegel sees an almost mystical component in agriculture. This is what he says, the substantial or agricultural class, is another name for the agricultural class, has its capital in the natural products of the soil which it cultivates, a soil which is capable of exclusive private ownership and which demands formation in an objective way and not mere haphazard exploitation.

17:26In the face of the connection of agricultural work and its fruit with separate and fixed times of the year and the dependence of harvests on the variability of natural processes, the The aim of need in this class turns into provision for the future. But owing to the conditions here, the agricultural mode of subsistence remains one which owes comparatively little to reflection and independence of will. And this mode of life is in general such that this class has the substantial disposition of an ethical life, which is immediate, resting on family relationship and trust.

18:17So in other words, you can have family relationship, trust and ethical life unless you're in agriculture. The real beginning and original foundation of states has been rightly ascribed to the introduction of agriculture along with marriage, because the principle of agriculture brings with it the formation of land and consequently exclusive private property. The nomadic life of savages who seek their livelihood from place to place brings back to the tranquility of private rights and the assured satisfaction of their needs. Along with these changes, sexual love is restricted to marriage, and this bond in turn grows into an enduring league, inherently universal, while needs expand into care of a family and personal possessions into family goods.

19:02Security, consolidation, lasting satisfaction of needs and so forth, things that are the most obvious recommendations of marriage and agriculture, are nothing but forms of universality, modes in which the rationality of the final end and aim asserts itself in these spheres. Interestingly enough, the focus on agriculture has become an almost full-time occupation of some Catholics through the rebirth of the idea of distributism, originally begun in England by Hilaire Belloc, whose dates were 1870-1953, and his adherents such as Father Professor Vincent McNabb, whose dates are 1868-1943.

19:49A new publisher, IHS Press, and I hate to give them publicity, has been started and pompously proclaims that Catholic social teaching has been dormant these many years, but has now been resurrection through their distributist publications. Quote, the editors are firmly convinced that the wisdom of Catholic social thought is today largely a buried treasure, untapped and almost wholly neglected. From this romanticism, the German historical school derived the idea of the corporate state. The emergence of corporatism was, with romanticism, a reaction to the development of liberalism in the classical sense, industrialism, and sought to reintroduce the alleged harmonies and organic moral order of the medieval period prior to industrial society.

20:42This would be accomplished by establishing quasi-public, state-licensed intermediate bodies in each industry, subject to government control. Each body would be composed of organizations of employers and employees. Industry-wide economic decisions would be made within each corporate body, subject to state approval, which would assure those decisions were in the national interest. Now this idea, brought up by people like Spahn and that kind of people, influenced Pesce. The CEO doesn't bring this up. Pesce-influenced Nell Brunning and Pius XI has that same plan in Quadrigia Samuano. That's his plan. At the time, it was called Mussolini Economics for good reasons. And the interesting thing is, after that encyclical, the official church dropped it like a hot potato. But a lot of these people in the church today are still continuing the idea that this is really going to work and it's a reasonable thing.

21:36Now the reason for this type of arrangement conformed to much that has already been discussed with the addition of the notion that these thinkers saw competition as evil and therefore it must be limited. Corporatism believes the market to be chaotic, how many times have you heard that, the chaos of the market, self-interest to be identical with selfishness, and workers automatically paid subsistence wages by greedy capitalists unless given official representation in the of Corporatist Bodies. Again, very faulty economic theory here. Hegelian notions of benevolence, in a sense, omniscience of the state are seen in corporatist theory. By the time we get to the thought of Heinrich Pech, whose dates are 1854 to 1926, and his Lehrbuch Der Nationale Economy, which is five volumes published between 1909 and 1926, touted Founded on one website by a non-economist who might happen to know as the world's greatest Catholic economist, Catholic economic thought has already imbibed a great deal of romanticism, Hegel and the thought of the German historical school and corporatism.

22:46Now there are some common roots here with Nazism. At this point let us return to the thought of the socialist Ferdinand Lassalle, who's Lassalle and Marx were on the same team for a time, but broke over the method by which each saw that socialism had to come about. While both of these men were German, Marx was an internationalist. He believed in a spontaneous industrial worldwide revolution and saw government as essentially an employee of the moneyed interests. The state could never be trusted to aid in a revolution until after the overthrow of the capitalist by the proletariat.

23:35The state apparatus would then be used by the now empowered workers to wipe out the last vestiges of capitalism and bourgeois class consciousness. As this is accomplished, the state withers away. LaSalle, on the other hand, believed that government was the main method that should be used to install socialism in society. Mises characterized LaSalle's thought as follows, quote, He proclaimed the gospel of class war, the progressives as representatives of the bourgeoisie he held were the mortal forces of labor. You should not fight the state but the exploiting classes. The state is your friend. Of course, not the state governed by Herr von Bismarck, but the state controlled by me, LaSalle. Since, however, LaSalle and Bismarck opposed the progressives, they became allies and they even met secretly.

24:26Quote, again, Mises, they both aimed at supreme power in Germany. Neither Bismarck nor LaSalle was ready to renounce his claim to the first place. And evidently they plotted together to work this out and LaSalle was hoping that somehow Bismarck would vanish and he would get the job. Talk about romanticism. But the fact that LaSalle died at the young age of 42 in a duel in 1864 did not quell the movement toward the LaSallean plan. Bismarck knew that the proletariat made better monarchists and he would use them against the liberals and the parliament. The fact that Bismarck installed the state socialist system demonstrates this point. But LaSalle's influence goes way beyond this immediate historical period. And again, this is von Mises again.

25:12LaSalle's brief demagogical career is noteworthy because for the first time in Germany, the idea of socialism and eitatism or statism appeared on the political scene as opposed to liberalism and freedom. Lassalle was not himself a Nazi, but was the most eminent forerunner of Nazism and the first German who aimed at the Fuhrer position. He rejected all the values of the Enlightenment, a key point for our discussion, and of liberal philosophy, but not as the romantic eulogists of the Middle Ages and Royal Legitimism did. He negated them, but he promised at the same time to realize them in a fuller and broader sense, again back to Romanticism. Liberalism, he asserted, aims at spurious freedom, but I will bring you true freedom, and true freedom means the omnipotence of government. It is not the police who are the foes of liberty, but the bourgeoisie. The state is God.

26:11Now, this begs the question, who was more dangerous in the long run, Marx or LaSalle? There never was a spontaneous Marx-type revolution since he wrote the Manifesto in 1848. Lenin revised Marx's theory into a state socialist theory more similar to LaSalle's than to Marx. Stalin, Mao, and Castro became socialist dictators, self-appointed spokesmen for the working class, installing their version of socialism from the top down in the best LaSallian tradition. But the United States has not escaped the influence of LaSallian thought. Ever since the progressive era, it has been widely assumed that an all-knowing, all-virtuous government has had the interests of the ordinary worker at heart.

27:03How many professors did we have in college who thought that? I think we all have. The Progressive Movement was actually a conglomerate of movements which had the following principles in common, repudiation of the free market economy, concern for the underprivileged, popular control of government, employment of the process of government for the purpose of bringing industry under popular control. These motives are stated almost identically by the famous Jesuit theologian political theorist, Father John Courtney Murray S.J. And while these ideas will be discussed some other time, suffice it to say that they were not scientific economic notions, but stem from the assumptions of LaSalle and the German Historical School. Now two things I'd like to add in this spot.

27:51The first of all is the influence of Carl Schmitt. Carl Schmitt was a Catholic and a jurist, a political legal theorist at the time, and And he took what was called the Fuhrer Principle and developed it to a high pitch. The Fuhrer Principle essentially said, and by the way this was an attack on the chaos of parliamentarianism in the market, he essentially said that every country has to have a leader of Fuhrer who represents in himself the interests and the thoughts and the hopes and dreams of all of the people. And ultimately, even if you do have a parliament, he still makes the final decisions, and he doesn't really have to listen to anything else in the society.

28:37Well, this is exactly the same as Rousseau's legislator, the guy who declares what the general will is. This is exactly the same. So you go from the romanticism of Rousseau all through this other stuff until you get the romanticism of the Fuhrer principle of of Carl Schmitt, who was a devout Catholic, you see. The second thing is this. When Hitler wanted to get his emergency powers through after the Reichstag fire, he didn't have the votes. I guess you had to have a two-thirds vote to change the Constitution, to give him all his emergency powers. He needed 21 votes. Who did he get the votes from? The Catholic Center Party, because he promised not to persecute them. They said, okay, here. Now, hindsight, of course, is 2020. Maybe they didn't think that anybody could be as bad as he eventually wound up being.

29:27But there you go. So in other words, the Catholics coming from this whole tradition actually, you know, gave Nazism a big oomph. Now what I'd like to do in the final part of my talk is just to move a little bit to the philosophy of John Paul II when he was a philosophy professor. and uh... this appears, if you haven't read it, it's not an easy book to read but this appears in his book, The Acting Person and it's interesting, Mises writes Human Action, he writes The Acting Person uh... now this is not a treatise on economics, it's just a treatise on philosophy but it's very very interesting because you can see here that Carol Wojtyła and Ludwig von Mises were taking the philosophical currents of the time and basically you know withdrawing from them the same perspective on human nature which one of the nice things about the Austrian school is that it is very it is very philosophical that has within it the seeds of understanding real

30:26people and what they really are instead of some fabrication Waitiwa on one hand is an Aristotelian Thomist, on the other hand is a phenomenologist and because of this he's very good at combining metaphysics and ethics He says, people are understood through action, people are understood through action. There are four points, I guess, he makes in this book. He says, in human experience, we experience not only sense perceptions, but we experience things and people, and those are two parts of the world. The subject of action is the human person.

31:25And we can know ourselves as a subject of action by kind of maintaining an objective distance from ourselves. And this is very similar to what Smith had said in his theory of moral sentiments. Man is an objective judge in our own life, which looks at what we're doing and makes moral judgments. Man also has self-possession, self-governance, and self-determination. Possession... Well, I won't go through all the meanings of the terms, I just want to get to the key of it. Possession means that a person's actions flow from his authority over himself, flow from his authority over himself.

32:13And he says flights of fancy, imaginary utopias, or, you know, worshipping the past, haha, or things like that, is a flight from that self-possession. This is the same thing you find with drug addiction or alcohol addiction. It's kind of fascinating that he's really equating the romantics with drug addicts and alcoholics. Now, if a person is self-possessed, they are also self-governing. And this is man's distinctive property. The purpose of self-governance is to order one's actions to his existential ends. In other words, you order one's actions to the things that your nature is supposed to be doing or supposed to be enhancing.

32:59Man Acts are rulership over the dynamic energy of one's being. It has self-control, control Self-Governance and Divine Governance are related, since man is the only being whose existence is willed for its own sake. And true freedom exists in this self-governance. So self-governance now makes possible self-determination.

33:48You say, I will to do something, or I may, but I will not do it, I don't will to do it, etc. The person acts with self-awareness. He wills what exactly exists. You can't will what can't or won't exist. And the will is decisive in each of these cases. Now, there's a difference between act and action in his thought. An act is mere thinking. And I'm not sure, I don't speak Polish, I don't know Polish, so I don't know what word exactly uses for that, but that's the way it's translated. So that an act is mere thinking. But an action is actually doing something. So mere thinking really has no meaning. Like you say, talk is cheap? Well, thinking is cheap. So you can think about doing something, but that doesn't show anything about yourself. It's actually going out and executing the thought which shows something about yourself.

34:52When a person does an action, the world is permanently changed. Even if it's a small action that can't really be measured, the world is permanently changed. And in doing an action, you actualize your nature. You actualize your nature. It fleshes out what we really are. For example, you have, say, a five-year-old. Well, you might want the five-year-old to be a big industrial tycoon or a monk or pool hustler or whatever, but he's the one that has to make the decisions through life. And eventually, when you get to be my age, you can't really change that. I can't go back and say, you know, I want to be a professional football player by dying about two minutes on the field, so that would be the end of it.

35:37I can't do that anymore. But the path I've taken, I've made myself, if you will, I have the responsibility of Creating Myself by This. All right, I don't want to go on too much with this, but anyway, the whole point of this thing is that John Paul II, Carol Wojtyła, pushes the idea of responsibility, creativity of mankind, which is very similar to what the Austrians believe about men. If we didn't think this was true, we wouldn't support the free market. We'd say, no, people have to have somebody else to tell them what to do. The Theory of Money is kind of a higher level or whatever. Now this flies in the face of all this, because none of the people on this board, on this little diagram here, believed in any of this. They believed men couldn't be trusted to do the right thing.

36:25They didn't believe that men were co-creators with God, that they had that responsibility. And John Paul II says in one of his works, he says, None of the advances we have today, technological or anything else, is opposed to the biblical injunction to go and multiply and subdue the earth, that this is all part of what God has planned for human beings to do, to be the co-creators with Him. Thank you very much. Questions? Do we do questions? Yes, sir? Can you give us a little bit more, sort of a, give us a capsule summary of Pesce's thought?

37:12The IHS people seem to have latched on to him as a great economist. Right, yeah. Pesce is interesting. Pesce understands industry. He understands that there needs to be trade between people and things like that. But after a certain point, after you and I are trading, There has to be a government policy to decide what's good for you to have, what's good for you to produce, and what's not good to produce. So in other words, the government itself has these ends which are accomplished over and above the ends of the individuals. In other words, we see society in the market as sui generis, right? He doesn't. He sees the society in the market as generated from the top and just we're allowed to do a little training of ourselves to keep ourselves going and that kind of thing. So that is very much the essence of his thought.

38:01And if you didn't have the state guiding and telling everybody what to do, then there would be market chaos. It would be totally chaotic, people producing all sorts of things, and for some reason we would produce what people didn't want to buy. He had no concept of the sovereign consumers and that kind of thing at all. Let's see, he also believed, he also accepted the wage fund doctrine and the, getting old here, the iron law of wages, yeah, the iron law of wages, sure, from the classicals, but also from von Kettler, who pushed that like crazy.

38:46And von Kettler, von Kettler himself was the first one to bring up the social question. Von Kettler was a romantic, he was in the romantic club with Gores, who was a German romantic, and he was von Kettler, he was a higher level person in society, never really saw a factory, never worked in the factory, but when he became bishop of Mainz, he saw all these workers that he had never seen people, so, looked so down and out and everything like that, but of course not realizing that life on the farm where they had come was even So he's all these poor people. What's the solution? The solution is this evil capitalism thing, because capitalism is keeping people at this level whereby they're paid only enough so they can have energy to come to work and that's it because the capitalist is so stingy. So therefore they're evil. So coming from that Pesh Saha, the only way we're going to remedy this is from above.

39:36Well, I didn't put everybody in there, I just put some of them in there, yeah. Well I mean, you would put Schmoller coming out of the German Romantic School, right, and then just stick him in that box and then have another hour to pesh. Yeah. And there were a lot of them. What happens when I was doing all this research? Geez, there are a lot of these people, so I only put a couple in for just interest in. Yeah. I see that there are Jesuit schools in Manila and the European Union. My understanding is that the early Jesuits in the city of Palo Alto were pretty much up to the typical Austrian and Christian bodies.

40:26The modern Austrians are up to the modern Jesuits, We are talking about our liberation theory, which is to define if the non-Atheist is part of the market, but not the economy. How would you come after the contention of the general order by the moderns and explain what was in and what is in and what is in?

41:00Their stuff has only come out in some circles, you know, so of course Rothbard writes about it, and Schumpeter writes about it, and Alessandro Chalfin wrote the books on it and things like that. But they are really ignorant of it. And the other thing is the Jesuits are interested more in what these guys have to say because they see these guys as Catholic. Like so many of the people I run into, you know, in my circles, this is the Catholic teaching. And the other stuff is just bupkis, and they don't know anything about the others, so, nice New York Yiddish phrase, but you can tell where I'm from. And that's where that happens, and they just refuse to see through it. Even my own doctoral mentor, Father Canavan, who is more on our side than most of these other Jesuits, nevertheless he thinks I've gone over the deep end, you know, with this stuff, but that's because he doesn't understand it either.

41:52I think he can kind of be excused, he's 83 now, so I'm expecting too many new things. Yes, sir? You mentioned some of those questions about the things you think about when you're discussing your actions, but I'm wondering how that's shared with the intentions of the people who are speaking in your heart, but what's the environment in your heart? Because I've been speaking in your heart for a very long time. Yeah, well, first of all, I would say the acting person is a philosophical work, not a theological work, But I think, thinking, let's take the case from scripture, which specifically related to adultery, right? I say to you, if you even think about adultery with a woman you've committed to sin already, and of course that's prohibited by the commandments, that's covetousness.

42:39So Christ also said that the bad things of a man don't come in from the outside, they come from him, they come out from him. So, I think it's fairly true, but nevertheless the doing of the thing is worse than the thinking about it. I think that's what he would probably say. So you're right. Sin-wise, if you think about, like if I think about robbing the bank and I happen to trip and break my leg on the way there and my machine gun goes down the drain, you know, and I go, oh shucks, I didn't make it. I've still robbed the bank, essentially. But the actual doing of the rob, rob the bank really, really fits in your persona now. I remember just recently, you know, my wife and I have been talking about some of these criminals you hear about and read about, et cetera, and how really evil and vicious they are and they have no sympathy for their victims.

43:28I remember talking to one of my theology professors about it and what she said is what happened was they started to make choices in their younger life which started them on a path and then their hearts got hardened and then that's kind of what they do for a living. Like I'm a professor. I can't really do much else, you know? And I see that because we have a tendency to say, oh, they must be crazy. No, they're not crazy. They started doing this and they got comfortable with it, and the tree bent in the wrong direction. Uh-huh. Let's just let me know not to go over. Yes, sir? I just picked up a point made by a gentleman from the Jesuit School. First of all, by the way, you should be aware that there are three things that you can do. One is knowing that women can do this. The second one is what a Christian would say if he was a portraitist, and the third is what a Jesuit is thinking.

44:13So now we can add why it is that they think that they've said that, but to take up a serious point, because I've just published a paper on scholastic economics and I was tracing the events from the 17th century and it seems to me that over that 600, 500 year period, the secure development, they're struggling with what they take the injunctions, particularly in regards to misery and other things, with the the development of the economic situation and gradually coming to terms with it. But there is a clear move from the more restricted to the less restricted from the empty markets, empty business or more… Sure. There is a clear development, sort of like this, after the 17th century and during the 17th century, we have two catallactisms difference, one is the reformation, the second is the enlightenment.

45:07As a result of that you have a severe historical situation, right? Yeah. After that, you then have the point that you were making, which is that when you come to the emergence of romanticism, it's essentially anti-universal. It's localization and low localization and constant, it's the whole site, it's the spirit of the nation and all of these things. It's the rejection of universalism and rejection of science. And it's in that environment that the now dislocated world has to try and find a route, and I would argue to make a point here after, if you think about it, that it's only now, after almost 200 years, that we're finally in a position as capitalists to get back on track, right?

46:01Thomas Woods has debated, has said that he should be excommunicated. Because he and I are like peas in a pod, we'd agree on everything, but this guy just holds on to this as this was coming right out of heaven, you know. But yes, you're right, and it is moving in that direction. There are so many decent Catholics out, the Catholics that are involved in the Austrian economics movement, and that this fellow who said he should be excommunicated can't understand, he can't understand it. He quotes Austrians completely out of context. You know he hasn't read them. If you'll take a sentence, well, you know it's like you could do with St. Thomas. It's St. Thomas asked in the Summa, the question, does God exist? And you know the way the scholastics work. First you have objections. Then you have the other side. Then he explains. Well, if you take the objections to be the thought of the person writing, you get confused. So St. Thomas says, it seems that God does not exist.

46:48Ha-ha! St. Thomas was an atheist. And that's what he does. He takes one thing out of context and says, well, even the Austrians think this. It was not true if you read the whole book. Anybody else? I think it's had it's had a great influence on economics and Catholic economics and in the church it's had influence for example the the church has come out recently with a compendium of Catholic social teaching and they if you read through that I got that and I said oh gee here we go well you know they had Softpedal, a lot of this other stuff. It's selections from previous encyclicals, and they left out some of the more horrendous stuff. So if you look, you see the modern stuff is very market-friendly, and they put the things in the past that were more market-friendly and ignored the hostile type of thing. So that's working out there. Then there's this encyclopedia of Catholic social teaching, and if you go to the article on capitalism,

47:55It's written by a Benedictine priest. I don't know what his background is, so I don't know him. But everything he says is really market-friendly until he gets to the United States. And then he picks up Monsignor New Deal. What was his name? Monsignor John Ryan. He picks up on him, and all of a sudden it turns socialist, as if John Ryan was like the Pope. So they really don't know what they're doing. But the fact that the first part of that article, Would you like to comment on the growth of John Paul II's ideas between solicitudo socialis and reform 10 years before?

48:52things in there, of course. It's fairly long, so my wife would say I stop clock is right twice a day, but it was very market hostile in there. And he basically was parroting this or stuff that had gone before, which is weird because of his philosophical background he knew better, but it may be that he felt as a relatively new pope at the time that he had to continue in that hostile tradition. But again, I think the watershed period was when he met with Hayek, and I think Hayek straightened him out, and so that's why Sentesis is essentially different than that previous encyclical. Unfortunately, people still quote that other one. But it's very interesting that even popes can develop, and these things, remember, are not related to the theological directly. They're not pronouncements on the meaning of scriptural passages or saying, well, does the Trinity have five or six persons in, or anything like that. It has nothing to do with that. These are the church's reflections

49:49on Moral Aspects of Social Life. And it's interesting, because in Chanté's Amazonas, he says the church has no models to offer. Good, because in the past they were offering models. And finally, they now have dropped that, and I hope that continues. Now, however, I do have to say, the new pope, Benedict XVI, has written a very fine encyclical called Deus Caritas Est, God is Love. But in there, he has a little bit of social theory part, and he praises von Kettler. Michael Novak made a wonderful contribution to his economics.

50:47because he is another one who has thoroughly explicated why understanding and accepting a free market is totally consistent with Catholicism and the fact, as we would all agree in this room, in fact, the Ten Commandments is on the von Mises Institute emblem, that you have to have a moral society in order to have a functioning market. You have to be able to trust people. If you can't trust them, you know, and if the government is corrupt, well, that's kind of like redundancy, but if there isn't some stable rule of law and if you can't trust

51:47If we lose that, which is another subject, if we lose that, then it's going to be more difficult to run a market. Thank you so much. Thank you very much.