Aquinas and the Market, Part 10, A Vision of Flourishing?

Over the last two posts we've discussed one of Hirschfeld's criticisms of the rational choice model in her book Aquinas and the Market: Toward a Humane Economy. Specifically, utility maximization assumes unbounded desires, causing our desires to outstrip resources, personally and globally. This causes many of the ills we observe about capitalism. And money, we also observed, supercharges the process. According to Hirschfeld, then, a key part of the path toward a more humane economy is a model of human choice that assumes that desires must be bounded. There needs to a capacity to say "enough," so that resources can be preserved, saved, and shared.

To make her argument about the need for bounded desires, Hirschfeld begins with one of the sharpest criticisms of the rational choice model. Specifically, what is the connection between preference satisfaction (utility maximization) and flourishing?

We've already observed how the word "utility" is taken as a cipher for well-being, happiness, and flourishing. But as we inventory the various ills of capitalism, from ruining the environment to increasing rates of mental illness and addiction, it doesn't seem that preference satisfaction is making us better off.

That said, economists have responded to this criticism. Specifically, economists can draw a line between being scientists versus ethicists. True, it is agreed, perhaps we do make poor choices in the utility maximization game. But the purpose of the rational choice model isn't to tell people how to live their lives. The model is descriptive, not normative. The model describes what people do, how they actually make their choices, as dysfunctional or myopic as those might be. Hirschfeld quotes two economists who've contended, "standard economics has no therapeutic ambition."

But that's not quite true, argues Hirschfeld. Specifically, as we've talked about, economic growth is used to make normative judgments. Growth is simply assumed to be "good." In short, economic growth is functioning here as a vision of human flourishing. Because if growth were uncorrelated with human flourishing then why are we pursuing it so relentlessly?

Beyond growth, Hirschfeld also points out how market "efficiency" is also used by both economists and policy makers to make normative judgements. Efficient markets are good, and inefficient ones are bad. Hirschfeld observes,

[W]e can observe that "efficiency" is invariably used in an evaluative sense. Policies and institutions are better or worse to the extent that they are more or less efficient. To take the example of most relevance to theological economics, economists typically urge us to recognize that many policies that might promote economic equality or alleviate poverty also generate economic inefficiencies...Textbooks present this problem as the trade-off between equity and efficiency.

The intuitive sense that efficiency is a good is related the the intuition that greater economic wealth or income is a good. If more of something is better, then it is desirable to get as much of it as possible from a given set of resources. In other words, efficiency is desirable because it would seem to be in service of something we value as good. [And] that good presumably has something to do with human welfare or well-being. To put this all as directly as possible, economic analysis is taken seriously by policy makers and the public at large because economics is thought of as the science of improving well-being, at least in a material sense. Were economists to seriously adopt the view [that standard economics has no therapeutic ambition] it would seem that economics could no longer command the public attention it currently enjoys. Yet most economists do, in fact, want to influence public policy.

Summarizing, if market efficiency isn't related to human flourishing then why would we give a fig about achieving it? We only care about market efficiency if it brings about social goods. And that's a helluva an "if." And what happens when market efficiency interferes with social goods, like equity? It seems like, in that instance, we would make choices to improve flourishing over market efficiency. But if efficiency is being leveraged against these social goods, as a good over against other goods, then it's functioning as a value, as having a therapeutic function.

In sum, economics isn't as value-free as it thinks it is. Implicitly, economics is chock full of values, and holds before us a metaphysics of human flourishing. And those values and that vision is open to theological critique. Economic growth and market efficiency are good, but they are just two goods among many other competing goods, other goods we care about, goods that promote health, happiness, shared prosperity, and sustainability. A humane economy challenges the metaphysics of maximization, where growth, profit, and efficiency are held and pursued as the greatest, ultimate goods, ends in themselves.

Flourishing, by contrast, isn't produced by maximizing a single good (material wealth), but by prudently balancing multiple goods, even when that balancing involves trade-offs in growth, profit, and efficiency. Those trade-offs are not failures or problems. Those trade-offs are prudent and wise. Because trade-offs are what happens when we balance and arrange multiple goods in our lives over seeking to maximize a single good, like profit or growth, over all others. Markets might "suffer" because of these trade-offs, but that's precisely the point: other goods are being inserted into the system, tamping down maximization, bounding previously unbounded desires, a signal that locations of "enough" are being located and settled upon.

In the end, I guess Jesus said it the best. You cannot serve both God and money.

There's going to be a trade-off.