Political Economy and Religion

Essays in the History of Economic Thought

Gilbert Faccarello

• Publisher: Routledge
• Year: 2020
• Print ISBN:
  9780367585907
• eBook ISBN:
  9780429823121
• Topic: Economics
• Subtopic: Economic History
• Index: Economics

Ever since Antiquity, reflections about economic problems have always been intertwined with questions relating to politics, ethics and religion. From the 18th century onwards, economic thought seemed to have been gradually disentangled from any other field, and to have gained the status of an autonomous scientific discipline, especially with the later use of mathematics. In fact, the growth of economic knowledge never broke off any ties with these other fields, and, especially with religion and ethics, even though the links with them became less obvious, they only changed shape. This is what this book illustrates, each chapter dealing with different periods and authors from the Middle Ages to the present times. Focusing in turn on the thought of the Scholastics, Ibn Rushd (Averroes), John Calvin, the French liberal Jansenists, Dugald Stewart, David Ricardo, Henri de Saint-Simon, Charles de Coux and French Christian Political Economy, Auguste Comte and Émile Durkheim, Henry Sidgwick, Arthur Cecil Pigou, and finally John Maynard Keynes, the studies collected here show how religious themes played an important role in the development of economic thought. This book was originally published as a Special Issue of The European Journal of the History of Economic Thought.

Agency, exchange, and power in scholastic thought

Richard Sturn

Later on from the mother science of theological philosophy an independent ethics detached itself which stood in close relation to political economy.

Joseph A. Schumpeter (1954a, p. 19)

1. Theology and political economy

Discussing the role of scholastic theology in the development of Political Economy faces specific challenges. First, it implies dealing with a great transformation within the systems of human knowledge. The point of departure is a world where discussions of ethics and socio-economic affairs are located within theological frameworks. This reflects a hierarchical order: the theoretical mapping of the social world is not composed of co-evolving subsystems, each with its own functional logic. It is even less conceivable that the logic of an autonomous economic sphere is considered the core of socio-economic theory. Second, while one may expect certain parallels between the way in which theological thought influenced modern science on the one hand and politico-economic thought on the other, the scope of those parallels may be limited, as the issue is more complex in the latter case: take for instance Langholm’s (1998, p. 175) cautious remark that “it is not at all unreasonable” to view the role of scholastic economic thought in intellectual history “as having been primarily normative.” The cautious phrasing indicates that some ambiguities may be lurking in the background. What about the status of explanatory passages in scholastic writings? And shouldn’t we take into account that the normative-positive distinction is itself a product of more recent thinking? Third, we are dealing with a heterogeneous range of influences, including Aristotelian philosophy, Roman law thinking and Christian Patristic traditions, as well as controversial issues developing in the scholastic period. Those issues are part of the intellectual evolution taking place from the thirteenth to the sixteenth centuries and include the divides between voluntarism vs. intellectualism, and nominalism vs. essentialism. Some of those developments are of enduring relevance for different strands of thought in emerging modernity. Fourth, given what has been said so far, it may not come as a surprise that we are discussing a heterogeneous group of thinkers, a common religious horizon notwithstanding. Heterogeneity is associated with the changing historical contexts over roughly three centuries as well as the specificities of Dominican and Franciscan traditions, or of the late scholastic Salamanca School. Fifth, considering the secondary literature on the subject, we are still confronted with a puzzling diversity of interpretations. This seems to be partly related to the complex intellectual background indicated above, and partly to retrospective biases operating at various levels, including the tendency to draft authors of the past in defence of more recent currents of thought. Just to give an illustration of those enduring differences: while some scholars are promoting what Langholm (1998, p. 61) calls an amazing ‘Austrian’ (i.e. subjectivist) reinterpretation of scholastic economics, the legal historian Wolfgang Ernst (2014, p. 62) emphasises scholastic price determination relying on “inherent qualities of commodities” irrespective of market interdependencies: “Just as other qualities could be attributed to commodities, so every commodity carries with it its ‘true’ price.”

To be sure, problematic interpretations were and are subject to circumspect criticism, showing that some claims are either untenable or at least need to be put into a more encompassing perspective. Chaplygina and Lapidus (2016) stress the duality of (1) normative considerations (How is the just price determined?) and (2) analysis of economic behaviour which may result in actual transactions violating the norm (see also Lapidus 1994). Ignoring the “scholastic duality” (e.g. assuming that scholastic economic reasoning is exclusively normative) is misleading. However, dealing with the duality in a retrospective manner is not without problems either, as it may be associated with retrospective biases (see Lapidus 1992; 1996): for instance, “scholastic duality” may be retrospectively taken to just foreshadow the duality between natural price and market price. Such a story would provide an illustration for Whig history of linear progress. It would imply the irrelevance of the epistemological and contextual specificities of the superseded ancestors. In contrast, discussing the role of seemingly analogous forms of “duality” in the context of two starkly different knowledge systems may give more accurate and interesting insights, as it sheds light on the evolution of knowledge by new combinations, including the possibility that certain questions are no longer part of the dominant mental models, even if they keep their relevance for the real world. What may be considered as progress in one respect may coincide with knowledge falling into undue oblivion, as stressed by Schumpeter (1954b, p. 6).

Odd Langholm’s work is another example for circumspect criticism of one-sided interpretations of scholastic writings on economic issues. However, for the present paper another aspect of Langholm’s work is still more important. I refer to his discussion of power and mixed will in “voluntary exchange”, which may be taken as showcase example for the non-coincidence of obsolescence and oblivion in the evolution of political economy. Langholm’s pertinent discussion is related to co-ordinates made explicit in the present paper. Those co-ordinates (called “agency” and “indeterminacy”) avoid taking ideas and concepts as the starting point elaborated much later, such as the labour theory of value, or the autonomy of the market sphere, or the spontaneous order based on self-interest. Working with “agency” and “indeterminacy” as co-ordinates should allow for a reasonably critical account of some continuity with regard to foundational problems, while at the same time taking seriously profound transformations of knowledge systems. Addressing perennial issues in socio-economic thought, they allow for considering the evolution and re-combination of concepts in historical comparison, while at the same time recognising fundamental shifts of perspective (“ruptures”). The first co-ordinate introduces “agency”, or more precisely, the distinction between agency-sensitive exchange vs. agency-neutral transactions. Important dimensions of agency-sensitive exchange in scholastic thought have been discussed by Kaye (1998, 2014),¹ Lapidus (1994) and Langholm (1998). In the present paper, I expand on the role of agency with regard to “regulation.” In the present paper, “regulation” is defined as non-spontaneous (agency-driven) adjustment of the terms and conditions of exchange by way of bargaining, arguing, norm-setting and norm-enforcement. (In contrast, self-regulation includes the spontaneous adjustment of relative prices and conditions of exchange). The second co-ordinate refers to indeterminacy. The strategic importance of indeterminacy for social theory comes to the fore in foundational writings by modern authors such as Binmore (2005, p. 66ff) and is summarised in Hardin’s (2005) “Indeterminacy and Society.” In the present paper, the conceptualisation of indeterminacy is related to the distinction between intellectualism and voluntarism. This distinction plays a prominent role in the historiography of natural sciences. Moreover, it is considered in the theory of international politics (see Pabst 2017) and is the central coordinate in Schneewind’s (1998) history of modern moral philosophy, which was one of the main influences in the pre-history of economics, as stressed by Schumpeter (1954a, p. 19). In politico-legal theory, voluntarism is considered an ingredient of Carl Schmitt’s “decisionism” (see Emon 2016). Schmitt’s (1922, p. 5) Political theology claims that “all significant concepts of the modern theory of the state are secularised theological concepts not only because of their historical development – in which they were transferred from theology to the theory of the state … – but also because of their systematic structure, the recognition of which is necessary for a sociological consideration of these concepts.”²

1 For instance, Kaye explains the concerns articulated by Henry of Gent in the second half of the thirteenth century in a way such that they can be understood in terms of agency-sensitive exchange. Henry used the metaphor of scales to support the idea of the just price system as a unique equilibrium accessible to human knowledge, insisting “on the place of subjective judgment and ordering (justitia animata) in establishing a true equality just price” (Kaye 1998, p. 106). Henry of Gent thus stresses ideas which are at odds with concepts entailing that prices are determined by blind system-wide forces, accidental circumstances, and incomprehensible interdependences.

2 According to Schmitt, legal thinking on political sovereignty is anticipated by the theological emphasis of discretionary agency which (one may add along the lines suggested by Emon 2016) gets specific leverage in a voluntarist worldview. According to Schmitt, this kind of thinking is in tension with modern rationalism, including modern political economy. We cannot discuss here the theoretical, meta-theoretical and historiographic problems with Schmitt’s view, including the problem that theological voluntarism influenced the natural sciences in a way which seems incongruent with the anti-rationalistic stance of his political theology. Irrespective of his eminent status as an influential and contested politico-legal theorist, Schmitt provides interesting speculations on combinatorial aspects in the history of ideas.

In the history of economic thought, voluntarism is not referred to with comparable intensity. While some authors such as Fanfani (2011), Weber (1959) and Kaufer (1998) explicitly refer to the role of voluntarism, little convergence of understanding becomes visible. This lack of convergence includes the issue of regulation. The doctrine of the just price was often read as a doctrine of thick regulation of markets. As is well known, this view is not uncontested. Hoeffner, Kaufer and many others seek to demonstrate the extent to which selected authors anticipated the logic of price formation as a self-regulating mechanism. Kaufer (1998) stresses that voluntarist scholastic writers endorsed thin, quasi-liberalistic modes of regulation. In contrast, catholic authors such as Fanfani and Hoeffner emphasise links between voluntarism and interventionism. Apart from dealing with interpretive ambiguities concerning the questions

• (1) Whether regulatory frameworks envisaged by scholastics are thick or thin.
• (2) To which extent scholastic thought on prices is some kind of proto-economics and to which extent is it an ethical theory (see Hamouda and Price 1997).
• (3) Whether certain authors anticipated a demand-and-supply model or rather a labour/cost theory of the just price or both.

shifting interpretive perspectives helps avoiding other retrospective biases. Moreover, it supports a richer discussion of the status and mode of regulation, including extra-legal modes of regulation guided by just prices in the context of contested, agency-sensitive exchange.

The rest of the paper is organised as follows. In Section 2, agency-sensitive exchange is introduced and used to shed some light on the diversity of interpretations in the literature. Section 3 expands on scholastic conceptualisations related to agency and discusses the background of coercion and mixed will in the context of the “principle of mutual benefit.” Section 4 briefly summarises voluntarism and intellectualism as theological paradigms related to the issue of indeterminacy. In the final section, I discuss the enduring relevance of this for different perspectives of socio-economic regulation.

2. Agency and exchange

Of the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of distribution.

Robert Lucas (2004, p. 13)

In this section, divergent interpretations of scholastic economic thought are confronted with a discussion of agency. The main currents of scholastic economic thought promoted a regulatory agenda stressing some dimensions of (“moral”) agency in exchange relations. They differ with regard to the foundations of regulation: the foundations of regulation may be more or less “economic.” Referring to diverging interpretations, most of them may be taken to stress different (and in some sense plausible) stances regarding those foundations, at least on a charitable reading. Stressing the theological background of agency, mixed will, and the voluntarism-intellectualism distinction provides an interpretive framework for making explicit pertinent differences.

By contrast, agency-neutrality plays a key role in an influential conception of the core of economic analysis, a crucial implication of which is epitomised by the introductory quote from Lucas (2004). The key assumption is exogenous enforcement of contract-related rights, providing the basis for spontaneous adjustment of the terms of free exchange. The sphere of free exchange is free from agency-sensitive issues which create room for regulation by ethical guidance, normative discourse, political bargaining, or arbitrary power. Less than perfectly well-defined legal norms (which would leave room for strategic manoeuvring) are an anathema. In particular, it is assumed that the distributive properties of contract terms do not influence the way in which exchange partners perform their contractually stipulated obligations. The scope of implications is vividly expressed in Lerner’s (1972, p. 259) AEA Presidential Address: “An economic transaction is a solved political problem. […] economics has gained the title Queen of the Social Sciences by choosing solved political problems as its domain.” Lerner’s considerations highlight the analytical status of a stable and enduring sphere of autonomous market transactions for economic theory. This is a sphere of human interaction based on voluntary exchange according to the principle of mutual benefit. On this basis, a sphere of social interdependences mediated by prices comes into existence. It is determined by anonymous, depersonalised forces conditioned by the objective data of the environment. Insofar the micro-foundations of pertinent theories invoke human agency, it is some abstract logic of consistent, instrumentally rational choice which is considered neutral with respect to substa...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Contents
• Citation Information
• Notes on Contributors
• Introduction – Sæculum
• 1. Agency, exchange, and power in scholastic thought
• 2. The concept of “lawfulness” in economic matters. Reading Ibn Rushd (Averroes)
• 3. The necessity to work, according to John Calvin’s duty of stewardship
• 4. Liberal Jansenists and interest-bearing loans in eighteenth-century France: a reappraisal
• 5. Defending free trade after physiocracy: On Dugald Stewart’s architectonic of passions, reason and Providence
• 6. Theological themes in Ricardo’s papers and correspondence
• 7. Religion and political economy in Saint-Simon
• 8. A dance teacher for paralysed people? Charles de Coux and the dream of a Christian political economy
• 9. Religion and the sociological critique of political economy: Altruism and gift
• 10. Henry Sidgwick, moral order, and utilitarianism
• 11. Pigou on philosophy and religion
• 12. Keynes and Christian socialism: Religion and the economic problem
• Index