Sinners in the Hands of Angry Modern Gods

Which is more trustworthy: the corporation or the state?

It’s a bit strange, perhaps, to start “new things” week with a post on markets. Markets certainly aren’t new. Neither are “free” markets a modern invention. People in the ancient and medieval worlds certainly traded with one another, in general with far less bureaucratic or regulatory interference than businesses encounter today. There were no environmental impact laws in those days. No complex corporate tax codes. Admittedly, merchants faced some other obstacles: monopolies and guilds, capricious sovereigns, (literal) highway robbers. Tariffs and tolls have existed for millennia. Markets have never been entirely free of top-down interference, but there is a real sense in which today’s free-enterprise boosters are simply trying to do something that humans have done, and relentlessly sought to do in ever-larger scales, since prehistory.

Of course, it’s more complex than that. States have grown much bigger, richer, and more powerful in the modern era, with more potential to dominate and manipulate massive populations. But so have the merchants. Let’s just say that everyone’s muscled up a good bit.

So here we are, sinners in the hands of these angry modern gods, the massive corporation and the Leviathan-like state. Both are immensely powerful. Both want something from you. And it turns out that both politicians and CEOs are very disproportionately likely to be sociopaths! Which should we fear more?

The obvious “right answer” is that both government and business have their proper lane and should stay in it, but in practice this question (“which one do you trust more?”) comes up a lot and can be surprisingly defining of a given person’s worldview. I think most people do, if they are honest and reflective, have an answer, or at least a gut feeling one way or the other.

Catholic Social Teaching, for instance, formally recognizes a role for both states and markets, with principles articulated for each. But in practice, it tends to defer pretty strongly to states. This isn’t so hard to understand. If you’re looking at the world through an Aristotelian lens, you’ll think in teleological terms. What is this or that thing/person meant to do, and how do we encourage them to do it better? How should the world be ordered? What’s most conducive to the common good? If those are the sorts of questions that concern you, you’ll naturally go looking for the authority most capable of ordering society in a just and humane way. What plausible candidates are there, apart from political leaders? Corporations don’t even pretend to make that a major goal; they’re mostly just out to sell you goods and services, and how likely is that to bring about the common good?

Catholic Social Teaching does have a formal principle for recognizing the good of organic, bottom-up order. This is known as “subsidiarity,” with the basic principle being that things ought to be organized at the lowest possible level. Devolve power down as much as you reasonably can.

It’s good that this insight makes it into the tradition somewhere, but in the run of normal discourse, it tends to get overpowered by multiple factors pushing the other way. In its standard articulation, subsidiarity is really a fairly weak principle, applied primarily in cases when lower authorities (families, communities, cities) are already able to handle a given problem on their own. That doesn’t give it much elbow room for active problem-solving. As Friedrich Hayek noted, we often find ourselves in a position where there aren’t any obvious, bottom-up solutions to a problem right now, though if we keep working it, solutions will eventually be found. On the other hand, if we create a massive state program, everyone will stop looking for solutions, and even pre-existing customs or institutions (which perhaps already solved the problem in most cases) will tend to decay. Catholic Social Teaching doesn’t deal with that kind of problem particularly well. I think it’s possible for an Aristotelian to get measured perspective on economics and the administrative state, but it’s a challenge. Aristotelian categories don’t adapt all that readily to some of the most significant discoveries of modern economics and political theory.

Classical liberals and libertarians, by contrast, tend to default to markets as the more trustworthy of our modern gods. They are individualists, so they dislike being ordered around by bureaucrats, but it’s more than just that. They also have a deep mistrust of power. They tend to assume that central authority will be weaponized by the greedy and the well-connected. Markets, in their view, are much better at solving problems, not because CEOs are reliably virtuous–remember the sociopath rule–but because their power is disciplined by competition. If Walmart doesn’t supply you with what you need, at a price you like, you can shop elsewhere. Corrupt, decadent CEOs will go bankrupt and find themselves cleaning out their desks. Corrupt, decadent politicians can hang around for decades like a bad cold, mooching off the taxpayers. And if they really get bad, then you might find yourself dealing with secret police, repressive laws, other forms of tyranny. The corporation’s worst-case is, in general, considerably less bad than the despot’s.

The classical liberal’s paradigm has its own weak points. It doesn’t always handle the “thicker” human goods/attributes with precision and grace. Healthy markets do in fact require a great deal of virtue, an argument that the economist Deirdre McCloskey has developed in very interesting ways. Without trust, deals tend to go south. Without prudence and a measure of fairness, companies will be badly run and widely hated. Virtue is really quite good for markets, and in general, probity in markets also reinforces public trust. But despite some good work on this by economists like McCloskey, mainstream libertarians and classical liberals still struggle to incorporate those (for them) odd-fitting truths into a larger picture.

A libertarian like Milton Friedman illustrates the point pretty well. He was brilliant in many ways, a top-notch economist with many trenchant insights. But his recommended public policies do sometimes show a kind of blindness to deeper human realities. For instance, he pushed hard to transition from a draft to a volunteer military, arguing that this was both more ethical and likely to produce better soldiers. Maybe this was, all things considered, a good change. But he didn’t seem to appreciate how the status of soldiers might change when citizens increasingly came to view military service as just another career path. Similarly, he was wildly in favor of school choice as a way of improving public education, particularly for the poor. But his sunny optimism didn’t fully reckon with the immense challenge of building healthy institutions in regions where the social fabric is eroding on multiple levels. Competition isn’t fairy dust; sometimes cooperation, solidarity, and virtue really are the things you most need, and markets can only really be properly free when they are built on a foundation of law, with both a thick layer of supportive customs and social expectations, and also the sort of regulation that encourages probity and promise-keeping. You can’t build thriving companies in a world where people don’t honor their business agreements, or where companies regularly get away with lying about their profits and situation to attract investors.

I still have not named the “new thing” that modern Christians should accept. Perhaps “free markets” is the right term after all, but we need to build certain things into it. Scaled to the level of the modern corporation, markets start showing some surprising and counterintuitive characteristics. Bewildered by their complexity and intimidated by their globe-shaping influence, Christians may be tempted to approach the moral questions the old-fashioned way: Aristotelian principles plus human intuition. That won’t always go well. We have to be willing to keep learning about what markets, at that scale, are actually like. How they develop. Their real impact on human life and society. We have to deal with markets as they are.

Stated that way, this sounds like a very Aristotelian principle. “Treat things as what they are” is almost Aristotelianism in a nutshell! And in fact, I do believe that learning from modern economics, and responding accordingly, should be seen as the True Aristotelian Way. On the ground though, the reflexive Aristotelian tends to want to treat markets as just another part of the polis, a regular component of society that is properly ordered by (hopefully) virtuous statesmen. And that view has some serious limitations. It overestimates how well the statesman, or anyone, can understand and predict the behavior of markets. (This is normally referred to as “the knowledge problem”; markets are so large and complex that it simply is not possible for an authority to exercise prudent top-down control.) It’s also rather naïve in its settled assumption that leaders can be expected to be benevolent and good. Power, at the scale of the modern state, is deeply corrupting. And one of the most potent counter-forces available to us in modern times is… markets.

Classical liberals are often accused of “market worship” or of viewing market power as “magical.” Sometimes that criticism sticks. But actually, I sometimes think that it’s the Aristotelians, or perhaps I should say “market-critical political movements working from a clownishly simplified Aristotelian framework,” who are more prone to treating markets as magical. Because they often accept that markets are engines of modern prosperity and entrepreneurism, and thus in some ways essential, while refusing to be bothered with the question of what markets are like. They end up treating markets as a kind of public-policy multi-tool that statesmen can apply at will to any social goal. Reduce unemployment in this particular sector! Ensure that this or that class of workers gets paid at least X amount, and works under Y conditions! Guarantee that families under this income level have access to such-and-such goods and services, at a specified price! Get on it, markets.

That’s not quite how this works. Any time someone tells you that “a market is a tool,” or, more loftily, that “markets were made for man, not man for markets,” you can safely conclude that they’re taking the magical view. Which is wrong. A market is not “a tool,” nor was it “made,” at least in anything like the sense that a Swiss Army knife was made. It is not simply a product of intentional human design.

A market is better understood as an emergent ecosystem, a thick and organic architecture that combines centuries of legal custom, evolving social institutions, foundational rules of probity, and millions upon millions of uncoerced human choices. It resembles a language far more than a machine; no committee sat down to invent English, and you cannot pass a statute to force it to mean something it doesn’t. You can cultivate a market, you can protect its foundational rules, and you can certainly poison it—but you cannot simply program it to deliver your preferred outcomes on command. If modern traditionalists want to survive the crossfire between Leviathan and the corporation, we have to stop treating the market as a pliable instrument of the polis, and start respecting it as the living, complex reality it actually is.

Sometimes, that might mean trusting markets to solve problems even though it isn’t yet clear how they will do that. This is frequently the most effective way to achieve worthy goals, but also the most ethical and dignified way. Markets may not be magical, and corporations certainly aren’t always good, but as compared to the modern state, they are far more respectful of human freedom, and of the conscience and personal priorities of individuals. We have to care about that if we want to protect our ability to build Christian communities, raise families in the faith, and worship God.