I read with great interest R. Cort Kirkwood’s review of Christopher Ferrara’s The Church and the Libertarian (“Anarcho-Utopia Revisited”) in the November issue of Chronicles.  Mr. Kirkwood does a great service by pointing out the pitfalls, from a Catholic perspective, of some of the thinking of some adherents of the Austrian School.

While Mr. Kirkwood warns against getting involved with the Austrians, I would like to share what I learned from those “two agnostic Jews.”  About 1973 I was introduced to Ludwig von Mises via Fr. Bernard Dempsey, S.J.’s discussion of Mises’ theory of interest in Father Dempsey’s book Interest and Usury.  From Father Dempsey’s writing I got no sense of Mises’ anti-Christianity or Jewishness, only a sense of respect for his economic analysis of the phenomenon of interest.  In the 90’s, after a partial rereading of Father Dempsey’s book, I was prompted to learn more about Mises’ understanding of the nature of fractional-reserve banking and its contribution to the boom-and-bust cycle.  Last year I learned of Dr. Stephen D. Long’s comparison of Father Dempsey’s and Mises’ understandings of fiat money and its effects on the distribution of income.   Both concluded that fiat money distorts income distribution, one by way of moral reasoning, and the other by way of economic reasoning.  This convergence demonstrates to me that truth unifies, as well as the soundness of a teaching of Vatican II: “Consequently, economic activity is to be carried out according to its own methods and laws but within the limits of morality.”

In June 1987, I had a chat with that other agnostic Jew, Murray Rothbard.  He told me that the Church in Europe was the greatest institution supporting liberty.  This was the first I had ever heard of the Church being associated with liberty.  In that same chat he told me that Jewish communists played leading roles in the subversion of Russia—another first revelation and something that my Catholic teachers never told me about.

From Rothbard’s 1995 book Economic Thought Before Adam Smith I learned of the great role that the Scholastics played in developing economic thought.  Again, this knowledge is something to which, as an economics major from a prominent Catholic university, I had not been introduced.  How could they not have introduced me to Luis de Molina, S.J., and Juan de Mariana, S.J.?  Or Oresme?  Or even Heinrich Pesch, S.J.?

Another conclusion that has been reinforced from reading these “two Jewish agnostics” is the wisdom contained in the Catholic “principle of subsidiarity.”  Mr. Kirkwood rightly notes that the “‘free market’ . . . doesn’t exist and never has,” and then recounts the role that governments have played in the rise of economic centralization and pauperization—“proletarians,” in papal parlance.  What I came to understand is the role that fiat money plays in this centralization.  Does anyone recall TARP funds and all those bailouts?  This pattern goes all the way back to the creation of the Bank of England in 1694.  At least the Austrians are developing an understanding of the monetary aspects of this excessive centralization.

My advice to those contemplating the Austrian School is to go there, stay on the Catholic path, wear nonslip shoes, and savor all the good it has to offer—and take your chances, until they eject you.

—Florian Zalewski

Fon du Lac, WI

Mr. Kirkwood Replies:

Nothing is wrong with Mr. Zalewski learning from the libertarian Austrians, as they do have some correct things to say about government’s centralization of power and the origin of boom-and-bust cycles.  Mr. Ferrara gives them their due, and Catholics should not dispute the Austrians when they are correct.  After all, even a broken clock is right twice a day.

But the Austrian School is a major problem for Catholics.  Consider just two points I raised in my review of Mr. Ferrara’s fine book.

The Austrians insist that the magisterial teaching of the Catholic Church, including numerous papal encyclicals, either says nothing valuable about the operation of an economy or that the Church is incompetent to do so.  In fact, the Austrians insist that the popes need to shut up because they do not have the standing to judge anything about economics.

The Austrians argue that government must permit human beings—or, more specifically, corporations—to make economic decisions without respect to the moral law; economic analysis must avoid judgements about right and wrong or justice.  In economics, there is no right and wrong.  An interest rate can never morally be judged to be too high; a wage can never morally be judged to be too low.  There is no such thing as a just wage.  It is wrong, they insist, to interfere in a man’s business decisions or tell him he must pay a certain wage, for such rules constitute coercion, on the one hand, and theft, on the other.  The market rules.  Nothing must violate a man’s right to use his property as he wishes, whether for abortion or anything else, for such violations of the right to private property are wrong and unjust.  Yet all these claims are themselves moral judgments.  So while denying that economics has anything to say about morals, the Austrian ideology never ceases speaking in moral terms.

Second, at least three of the leading Austrians present themselves as traditional Catholics.  One of them, we hear, is an expert in liturgical music.  It is not for me or Mr. Ferrara to say they are or they aren’t, for we cannot judge their souls.  But we can say their public writings would not lead one to either conclusion.  The cornerstone of libertarian and Austrian thinking is the principal of “self-ownership,” a nonsensical and anti-Christian teaching.  This ideology drives the Catholic Austrians to publish articles that advocate allowing a woman to sell her children to a homosexual couple.  A minimally schooled Catholic, Mr. Ferrara argues, could never accept such an outrageous claim.  But that is where the principle of “self-ownership” takes you.

Mr. Ferrara’s overall point is that the Catholic Austrians treat Mises and Rothbard as if they were popes who teach infallibly.  That is the central Austrian error.

Again, Mr. Ferrara did not say the Austrians are wrong about everything.  He said they are wrong about one very important thing.  That thing is the magisterial teaching of the Catholic Church and the teaching authority of the pope on economic matters.

In other words, Mises and Rothbard may have some profound insights on the economy, but that is as far as it goes, and that is as far as any Catholic can go with them.  A Catholic cannot accept their radically anti-Christian teachings.