It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest. Adam Smith 1776 “The Wealth of Nations”.
This comment, and others like them from Adam Smith, is often quoted as the inspiration for free market policies and “economic rationalism”. Its underlying implication is that competition is of ultimate benefit to the consumer, since it causes the supplier to offer better prices, quality and service than competitors, in order to survive and prosper. Like most economic theories, it is supported by those who have never risked a dollar in business themselves, preferring the safety and security of academic or bureaucratic sinecures.
There is no doubt though, that competition between enterprises has been one of the factors in seeing the West outstrip all other economic systems. The ponderous bureaucracy and corruption associated with doing business in many nations has, historically, given the entrepreneurial western nations an edge. But, underpinning that competitive economic environment has been a system of shared values that limited the capacity of businesses to let self-interest take the place of public interest. We still need individual conscience and law. By conscience, we mean a system of internal self-evaluation based on widely shared humane values that are supported by social institutions and custom.
But we are seeing the golden calf of competition leading to anti-social behaviour by large corporations, eager to gain market share. For example, newspapers can compete in ways that are inherently anti-social, such as sensationalism, dumbing down, sexploitation, jingoism, shock horror and generally appealing to the worst characteristics in people. Indeed, many commentators take the view that it appears to be almost a policy of the media to feed the people trash. Rubbish sells, they say.
Agri-business corporations can compete by genetic manipulation of foodstuffs without proper safeguards or risk management. Tobacco manufacturers can compete by adding more addictive substances to their products, thereby ensuring an adequate supply of future customers, irrespective of the threat to health.
Manufacturers can compete by moving factories offshore, where sweatshop exploitation of workers, and child labour, mean that products can be produced cheaper than in a country where adequate industrial safeguards exist. Health funds and hospitals can compete by contracting with doctors for the provision of services at a fixed cost, even though this may result in rationing health care to the ill and helpless.
If there is no generally accepted moral code, recognised in the legal system and codes of governmental conduct, then the “economic rationalist” assumption that competition in the economy will result in the best deal for citizens is way off the mark. In a country like Australia, that has a Christian heritage in its laws and social institutions, it is easy to feel relaxed about these things. ‘Not to worry’, we say.
But will “economic rationalism” produce just and humane societies? Will free trade and market competition turn the Beijing regime into humane democrats who respect the rights of individual citizens? Will it de-brutalise the Indonesian regime? Will it create order out of the chaos that is now Russia?
We think not. We are inclined to agree with Pope Pius xi who, in his Quadragesimo anno, in 1931, said;
“Free competition, though within its limits it is productive of good results, cannot be the ruling principle of the economic world. It is necessary that economic affairs be brought once more into subjection to a true and effective guiding principle.”
In our view, a market economy requires a decent society with decent people to exist, before it can operate in the public interest. Free market economics has failed in Russia because free markets cannot function outside a morally based social framework. “Economic rationalism” cannot, of itself, produce a moral society, and without a moral society “economic rationalism” leads to corruption, exploitation, injustice and social upheaval.
The Judeo-Christian tradition, with its objective morality and authoritative spiritual truth, has been all but erased from the intellectual and cultural establishment. In its place is emerging a new ideology that rejects every kind of intellectual or moral authority. We fear that “economic rationalism” is part of that new order and we need to be sure that we want to travel down that path before selling ourselves out to it.
We are inclined to look upon this time of the year as a season of ‘peace and goodwill’. That is part of the cultural heritage that is being jettisoned in favour of postmodern ideologies that not only diminish human beings in theory, but also make human lives worthless in fact. Even so, most people in Australia will be celebrating Christmas this year, as always, and most will do so, as always, without really understanding where the ‘peace and goodwill’ bit comes from. Most assume that Christmas is about being nice to each other and that the ‘peace and goodwill’ of Christmas is something that is meant to exist between people. That is not the case at all.
The peace of the Christmas message is the peace that God offers to each one of us. It is the peace that comes from reconciliation with God, the ‘peace that surpasses understanding’. Similarly, the goodwill is that shown by God to mankind; it is the offer of restoration to His presence and company, as told in the parable of the prodigal son.
This Christmas, as the days get darker and more difficult, as there seems less hope, less liberty and less peace, the offer is there, as always. We only have to take it up to have peace for;
From thy fears He’ll give release, In acceptance lieth peace.