Some members of the Loyola community perceive that a Catholic institution should not have an Austrian economics master’s program because such a program would frustrate the university’s obligation to propagate Catholic social teaching. I perceive, however, that outside of the economics faculty and a few others, Austrian economics is poorly understood.
Austrian economics does not discuss ethics. Austrian economics attempts only to describe how humans behave; no outcome is described as good or bad. If there were a Nicene Creed of Austrian economics, it would include at least these central tenets: that the relative prices of goods tell producers and consumers the relative values of goods; that this price mechanism enables individuals acting independently to create spontaneous order; that only individuals, aware of their own special circumstances, possess the information necessary to create spontaneous order; and that business cycles arise from distortions in prices, especially interest rates.
Where does this impinge upon Catholic social teaching? This is not exactly clear. The whole field of economics is somewhat unflattering in its general depiction of humanity as servants to mammon and perhaps rightly deserves to be called “the dismal science.” Economics, however, does not justify this behavior; it merely describes what economists see, as is the case with any science.
Austrian economics is largely deduced from axioms. Economists who reject Austrian economics generally do so because they reject Austrians’ methodology. Their discontents, however, would probably seem to the Catholic Church as arcane as the “filioque” controversy seems to atheists. Thus, it seems unlikely that the Catholic Church would require a certain methodology in economics. I have not examined the entire deposit of faith, however, and if the magisterium has spoken on this issue, then problems may arise.
What likely offends Catholic social thinking, however, is not Austrian economics, but rather the ethics of libertarianism, especially libertarian views on social welfare programs and regulation, for Catholic social teaching does discuss these issues. Indeed, Austrian economists tend to be libertarians, probably because Austrian economics tends to predict that government intervention will result in outcomes that most people would consider to be bad. Libertarianism, however, does not follow necessarily from Austrian economics. Furthermore, assigning value judgments to economic outcomes is itself an enormously complicated task, chiefly because of the enormous disagreement concerning inequality.
Sorting out a Catholic identity for our university in the midst of these conflicting concerns is a complicated task. The university, however, does not exclude other programs that tend to attract students and faculty with, for example, pro-choice views. Thus, it would be inconsistent to exclude an Austrian economics program merely because the students and faculty are likely to be libertarians.
Edward Seyler can be reached at [email protected]
