"Ancient Wisdom, Modern Economics"
by Thomas S. Hibbs - July 1, 2007
Reprinted with permission from our good friends at InsideCatholic.com, the leading online journal of Catholic faith, culture, and politics.
Small Is Still Beautiful: Economics as if Families Mattered
Joseph Pearce, Intercollegiate Studies Institute, $18, 350 pages
Joseph Pearce's Small Is Still Beautiful is one part commentary on and one part updated application of E. F. Schumacher's famous Small Is Beautiful. The constant reference to a book that many consider a minor classic is both a strength and a weakness of Pearce's own book. Imitating Schumacher, Pearce wants to return us to fundamental issues of economic life; he asks questions—concerning virtue, ecology, and the common good—too often suppressed in discussions undertaken by professional economists. But aside from some useful references to contemporary examples, the book does not extend Schumacher's argument in any notable way. Indeed, certain key issues, particularly concerning the prudential application of ancient wisdom to contemporary economic realities, are hardly addressed at all.
Following Schumacher, Pearce argues that the discipline of economics needs a threefold reform. It needs (a) a metaphysical self-critique that would address the question of ends, not just of means; (b) an expansion of its modes of inquiry to include qualitative experience as well as quantitative data; and (c) a greater attention to the wholeness of the human person rather than a reductionist focus on "economic man." These suggestions are all to the good. In mainstream philosophy, the narrow account of human action and motivation has been under fire for some time; what remains to be done is to determine precisely how a richer conception of human agency ought to inform the discipline of economics and where one ought to draw boundaries between economics and philosophical ethics.
Pearce is acutely aware that an older vision of the human person and the human good subordinated economics to a larger metaphysical conception of the cosmos and the place of human beings within it. The absence of any overarching sense of the whole is a precondition of a certain strain of modern liberalism, whose goal is to render us masters and possessors not just of external nature but of our very selves, which we can make, unmake, and remake according to our will. In response to this modern project, Pearce refers us to Solzhenitsyn, who criticizes the notion of infinite progress as an illusion of the Enlightenment, and to Schumacher, who urges that any activity that does not admit a self-limiting principle is of the devil. The notion of freedom as an untrammeled right to creation and re-creation is indeed problematic, perhaps even demonic. But there are significant obstacles to recovering this older conception of the universe, not least in modern natural science and its attendant disenchantment of nature.
For the ancients, even apart from metaphysics, economics could never be the highest science. The word derives from the Greek term oikos for household. As the science of the domestic sphere, economics exists alongside ethics, which is the science of the perfection of the human agent, and beneath politics, the architectonic art of the human good. In this sense, Pearce's slight reworking of Schumacher's subtitle—from Economics as if People Mattered to Economics as if Families Mattered—is closer to the ancient sense of economics. It also points up the enduring significance of local communities for our economic and political life.
Indeed, the notion of subsidiarity, derived from the tradition of Catholic social thought (of which Schumacher was so fond), surfaces with great regularity in Pearce's book. Put negatively, subsidiarity judges that it is "wrong to assign to higher levels in the organization functions which could be carried out lower down." There is a certain danger with this common way of defining subsidiarity, since the fundamental insight here is not so much about degrees or levels in a hierarchy as it is about certain natural communities and institutions, and the duty of the state to recognize these naturally existing societies and to aid in their flourishing. Pearce comes very close to capturing this point in his quotation from Pope Pius XI's Quadregesimo Anno: "Every social activity ought of its nature to furnish help to the members of the body social and never destroy or absorb them."
