The Oxford English Dictionary defines economics as “the branch of knowledge that deals with the production, distribution, consumption, and transfer of wealth.” In this short essay, Edward P. Seyler, economics senior, considers the relationship between economics and social justice. This is a shortened version of a lecture he gave at a LUCAP General Meeting on January 31, 2012.
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Edward P. Seyler, Economics ('12)
Economics, along with other disciplines, ought to inform every discussion of social justice.
This is not to say that advocates of social justice need to know everything about economics. In fact, a person can become a good deal wiser from but one principle of economics: the problem of unseen consequences. Perhaps someone has tried to persuade you, for example, that the Second World War, excluding the death and destruction at home and abroad, was good for the United States economy because it created jobs (commonly heard from people who have forgotten rationing).
This principle of unseen consequences emerges strikingly in a parable of the early 19th century French writer Frederic Bastiat. In this parable, a hooligan hurls a brick through a baker’s window (apparently aestival riots are a centuries-old tradition in France). While the baker laments this new expense to repair the window, his more perceptive neighbors see beyond the immediate and recognize this as an economic stimulus for the entire village: The baker will have the window repaired and hire a glazier, who will take his newly acquired wealth and buy something else from others, who will in turn spend it, and thus enrich many others as the process wends outward in ever-expanding circles. The rising tide will lift all boats, and eventually the baker will be more than rewarded by living in a more prosperous town.
While these villagers accurately perceive one possible chain of events, they have not fully explored what has now become a hypothetical reality: suppose that the hooligan, instead of wandering down cobblestone streets littered with projectiles and temptation, had been in school translating the Aeneid. The baker, meanwhile, had plans to buy a suit. In this alternate reality, the tailor, instead of the glazier, profits from the baker’s purchase; but with these profits he goes out and spends, just as the glazier would have, and the village is still stimulated by ever-expanding circles of economic activity.
Edward giving his talk during a LUCAP General Meeting in Miller 114.
The only difference is that in the world with the broken window, there is no suit. Indeed, the very proposition sounded preposterous to begin with: Why would breaking a perfectly good window make the world a better place?
Unseen consequences are often not part of the discussion in popular economics. Unseen consequences, however, are very important to scholars in the field of political economy, and ought to be taken seriously by anyone striving for social justice.
One prime example is the tariff. Sometimes people support tariffs out of a sense of duty to support their fellow citizens’ enterprises. Indeed, we might voluntarily patronize our own friends and family at the expense of strangers, but why are strangers in our own country more worthy of our business than strangers elsewhere? Indeed, we are only considering one aspect of the tariff: Tariffs help domestic producers and foreign consumers, and hurt domestic consumers and foreign producers. Too often does this debate focus only upon domestic producers, when in fact there are three other parties involved.
The study of international economics is obviously more complicated than I can describe here, but the public opinion that drives policy debates is often easily manipulated by special interests.
Economics is not a stand-alone guide to the world. Economics is a descriptive science; it can say (or attempt to say) what is. It cannot, however, offer a moral criterion for evaluating outcomes.
Those who advocate social justice can trust economics as a light to their paths; but some kind of moral principles are required to sort through what is seen, to reject what is bad, and to follow the right path. I hope that more advocates of social justice will continue to recongize economics as a brilliant companion in their pursuit of faith, hope, and charity.
If you wish to contact Edward about this piece, you can e-mail him at epseyler@loyno.edu. If you wish to give a presentation on a subject that you are passionate about, please e-mail Rolando López at ralopez@loyno.edu .
