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The Meaning of Wealth

Originally posted at Talk to Action.

I based the title of my last post, The Miserly Society upon a term used by the economist John Maynard Keynes (1883-1946). In this post I want to further explain what the revolutionary thinker meant by “miserly”; how it ran contrary to what wealth meant to him as well as his contemporary, the Catholic economist Monsignor John A. Ryan (1869-1945); and how their often similar views matter now more than ever — especially in responding to the economic agenda of the modern American Religious Right.

Keynes’ and Ryan help us to answer such questions as “what is the meaning of wealth?” And “what is its purpose and how much is necessary?” These are fundamental questions that need to be answered afresh in every age. And for liberals in America, we also need to answer “what is the relationship between wealth creation and liberty? Our answers to these questions have everything to do with the political viability of the Left – religious or otherwise.

Both economists – one a British atheist and the other, an Irish-American Catholic priest – understood the elements of economic justice. And although Keynes arrived at his views from different experiences and beliefs, he defined it in a way Ryan would approve: the balancing of economic efficiency, individual rights, and yes, social justice. As I pointed out in my last post, the gathering of wealth has a purpose beyond simply becoming rich; it was a means to live an agreeable, reasonable life, free of the privations of poverty.

Author Robert Skidelksy summarized Keynes’ take on wealth in Keynes: The Return of the Master :

By ‘love of money’ Keynes means two things, between which he did not always distinguish. The first was the objectless pursuit of wealth. The second was a specific subset of the first, which was the disposition to ‘board’ or not spend money-the psychology of the miser. The first was the engine which drove our capitalism; the second was the brake on its progress, which related particularly to uncertainty.

As well as:

Briefly stated, his conclusion was that the pursuit of money – what he called ‘love of money’- was justified only to the extent that it led to a ‘good life.’ And a good life was not what made people better off: it was what made them good. To make the world ethically better was the only justifiable purpose of economic striving.

Keynes’s contemporary, the distributive justice advocate Monsignor Ryan arrived at a similar conclusion. Ryan biographer Harlan Beckley wrote in Passion for Justice: Retrieving the Legacies of Walter Rauschenbusch, John A. Ryan, and Reinhold Niebuhr:

All persons have a right to whatever they need to achieve the proximate end of their rational nature. Satisfying this aspect of the canon of needs demands near equality in the distribution of a minimal level of “external goods, because all people have equal needs for a decent livelihood, rational liberties, education, and so forth.”

Keynes and Ryan both rose to prominence in the first half of the twentieth century when economics was viewed as a moral science, and both men did so through an Aristotelian lens. We may define this approach as seeking to engage in endeavors in a just, virtuous manner, eschewing extreme behavior for moderation. It also incorporates the idea that there is an undeniable connection between contribution and receipt and the individual and society. Ryan came to such thinking through his Thomistic training; Keynes via his studies under the philosopher G.E. Moore.

Their view about the role of taxes and the economy run contrary to what we usually hear from the contemporary Religious Right: That progressive taxation is either confiscatory (Michael Novak) or must remain low for moral reasons (Robert P. George). It perfectly echoes the conservative claim that higher tax rates on the wealthy constitutes “a penalty for success.”

This idea has gained more traction than many of us would like to believe. But just this week alone I had two friends claim that taxes are a penalty for success when I suggested that the well-to-do could handle a modest increase on their federal tax rate – especially those corporate CEOs who either hoard their companies’ profits, and pay themselves exorbitant salaries, bonuses and dividends instead of investing in new equipment or better yet, workers’ salaries.

But such notions as “confiscation” and “penalizing success.” have little to do with the realities we face. “The goal of progressive taxes,” as Beckley observed about Ryan, “for example, was to equalize sacrifices, not to achieve equality. Taxes should never be so progressive as to discourage socially useful activity or deny rewards for productive efficiency.” To put into a contemporary context, imposing a 40% tax rate upon an unmarried CEO earning seven figures a years is a bit more just than a rate of 35% — especially when a married laborer earning $35,000 a year pays a federal tax rate of 25%.

As I discussed in my last post, taxation is an important tool for creating wealth for an entire society. Those who espouse the evisceration of such useful taxation are frankly arguing on behalf of an oligarchic few. The complaint about the cost of nannies and elite private schools for their children not withstanding, taxation can alleviate burdensome national debt, finance job-creating infrastructure construction, control inflation and prevent the concentration of economic power in the hands of the few. Indeed, the dogmatic opposition to progressive taxation is the economic mindset that creates the fertile ground for sub-prime mortgages and the buccaneer financial instruments upon which they are predicated.

And yet, Novak has claimed that progressive taxation is a denial of liberty, an unwarranted intrusion on the successful to their right to wealth. When Novak and his ilk raise the issue of liberty in this way, they do not mention how their unwillingness to part company with an extra 4% of their bountiful income so that the greater part of society can achieve a measure of financial independence may well violate a key component of liberty itself, the harm principle. According to philosopher John Stuart Mill, this is the concept that “the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others.”

What the laissez-faire apostles of the Religious Right are advocating is not liberty, but a form of harm; i.e., reliance upon those who provide credit. When wages are kept low, credit becomes the only viable option to provide for food, clothing and shelter. Such behavior does not define ethical behavior or religiosity let alone liberty, but instead, the attributes of the miser.

Novak and George are attempting to equate taxation with sin in the eyes of religious Americans. This effort to cloak laissez-faire economics with holiness, and to elevate miserliness as inherently moral, is at odds with historic Christian principles.

Keynes and Ryan lived in a time when the well-being of the individual being inextricably linked to the betterment of the whole society was an ascendent idea. In that period, free-thinking people understood that miserliness and an open-ended definition of economic liberty both caused and prolonged the Great Depression. Certainly Keynes and Ryan understood that true economic freedom was tied to reasonableness, self-discipline and yes, social justice. And while they were imperfect in their applications of social justice, they were central players in pointing us in a better direction; a trend that lasted until the coming of a late twentieth century conservatism.

Now, a different set of thinkers seems to have America’s ear. That set includes neo-conservatives such as Robert P. George and Michael Novak who, their Catholicism notwithstanding, make the perverse case for the wealthy miser and call it liberty.

Opposition to the judicious use of taxation is not the Religious Right’s only economic poison pill. In the next post we shall examine how Robert P. George would have real prosperity crucified upon a cross of gold.

Related Posts:

The Miserly Society

Catholic Tea Party Economics

Catholic Right: Are the Neo-Cons Out and the Tea-Partiers In?

Catholic Neocons Distort Church Teachings on Economics


One Response

  1. Highly Recommended Reading:

    Besides the books hyperlinked above, I strongly suggest the following:

    Paul Davidson’s The Keynes Solution: The Path to Global Economic Prosperity


    Joseph Michael McShane, S.J.’s Sufficiently Radical: Catholicism, Progressivism and the Bishops’ Program of 1919

    Besides this invaluable tome, I strongly recommend Arthur M. Schlesinger Jr.’s Crisis of the Old Order: 1919-1933, The Age of Roosevelt, Volume I, particularly chapter 23, “The Agenda of Reform.”

    Why? Simply because it discusses the period starting from 1919 through the inauguration of FDR. The similarity of economic issues between now and then is uncanny. In fact, it seems that we are fighting the same battles that progressives thought we had won seventy-five, plus years ago.

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