Economics is, as the Austrian school economist Ludwig von Mises has put it, the study of ‘human action.’ Human action taking place in the real world, to be more specific. Economics is the attempt to understand human behaviour in the material sphere of action and choice, the best use of the limited factors at our disposal. While the study of economics is important for the citizens of a free society such as ours, it is often looked at askance or is taken for something it is not.
To the end of rectifying I will offer several brief thesis on economics, taking my direction from my own study thereof.
1. Economics is an essential study, showing as it does how we may best act in order to expand the productivity of our physical enterprises.
1a. Economics is not the sole source of knowledge about man’s behaviour, nor is it most important one. Economics, insofar as it is a science, reaches to a narrow and abstract understanding of mankind and his society.
1b. Economics may provide guidance for why a certain mode of behaviour is most advisable to a government, or to citizens or businesses, but it cannot provide the moral grounding necessary to give men the deeper compulsion to act in a certain fashion, beyond mere material considerations.
2. Economics must be based upon a particular moral vision of the world, to justify its own insights as good
2a. What economics may say is good, in the sense of beneficial, is not necessarily the same as moral good. The former pertains to what is of greatest utility for reaching a set of material goals. The latter is what is morally beneficial for a man.
3. Economics relies upon narrowly rational view of mankind, this view holds much truth to it. The basic axiom of Austrian economics concerning human actions is undoubtely true. What is not true is that it should be understood it purely material terms.
4. Homo economicus is not the be the starting point for understanding Man. The economic approach to man sees him in terms of action, knowledge and various means he has to gain his ends, and how those ends may be best accomplished.
5. An economic standpoint must be balanced by historical and moral considerations. The abstract approach to human action is but one way of dealing with man.
5a. History must be considered in looking at a society or government. The historical experience of a people will condition its behaviour and its ideas in different ways. To utterly ignore historical experience in favor of pushing an abstract ‘capitalims’ is no less harmful than to push an abstract ‘democracy’ on a nation which is unable to support it.
5b. Moral considerations are derived from historical experience, Divine Revelation (if any), religious convictions and the ideas in a culture. Morality will influence the acceptable limits of economic action.
6. Capitalism, as an abstraction consisting of a free market system founded on the division of labor, has emerged from Western experience, beliefs and ideas. It is the finest way yet found of providing for human prosperity and comfort.
6a. Capitalism must be supported by the convictions of Western moral ideas and theistic belief.
7. The market is no more than the actions of many people who act in freedom and according to their own perceived self-interests.
7a. Since the market is human action it must be limited by moral guidance as found in the West.
8. Without moral guidance and limitations by extra-market forces the free market tends to become an amoral agglomeration of men and women, bound only by the ‘cash nexus.’ Moral guidance cannot and must not come from enlightened despots, Gnostic elites or Progressive leaders. It can only be done by the choices of countless moral men and women, great and small, in accordance with Christian ethics.
Your Humble Servant, C. McDonald