Reviewed by Dr. Peter E. Chojnowski
The most important thing to remember when considering Heinrich Pesch’s Ethics and the National Economy (IHS Press, with English translation by Rupert Ederer) is the challenge it poses to those who would “separate” ethics from economics. As an economist and philosopher, the author insists that ethics is the very soil from which any truly scientific consideration of economic activity ought to emerge.
According to Pesch, man’s social nature directs him beyond family life toward that more comprehensive human association, the State. He contends that “the state is supposed to do for its members what they…cannot accomplish.” But he complete rejects of any type of statism or totalitarianism. He insists that the authority of the State does not exist for its own sake, but for the sake of political society; it exists to safeguard the rights of the community against private interests.
In Chapter IV, “Work and the Worker,” Pesch proclaims that “Man is the lord of the World!” This dominion of man, however, is only achieved by work; for “without continuous and persistent work, mankind could not sustain itself, and the largesse of our national environment with its materials could not function in the service of man.”
And it is work, rather than ownership of financial capital, which serves as the basis of all economic culture and society. Here Pesch contradicts the idea that the right of private property is absolute. He says, “…the institution of private property was established by virtue of the law of nations (jus gentium) as one of the natural rights and requisites of man…. However, in the Christian view of things, there is no such thing as an unconditional, free, absolute right of private property that does not involve also obligations.”
For Pesch, and for the whole Catholic social teaching that he articulates, private ownership is not an end in itself. Neither does the right to private property trump all other human rights. On the contrary, the right to life and to the necessary means of subsistence must be insured; which only the State can do. Indeed, the State’s very raison d’etre is to do just that. But Pesch emphasizes that in the event of extreme need, the right to own a material thing must give way to the right of a person to survive.
Two critical issues are raised in Chapter VI of Ethics: the Just Price, and the Just Wage. Since the idea of a “just price” seems to create alarm in the minds of some neo-liberals, it is heartening to see Pesch insist that economic exchange is not “gift-giving,” but rather an exchange of economic values; and that no one intends to suffer a loss of some of his wealth in the process.
Pesch refutes liberal capitalist doctrines on pricing with this primary thesis: “Behind supply there are suppliers, and behind demand there are demanders, causes which operate freely, human deliberation, human ambitions, human passions, and human power relationships. Therefore what is needed is the intervention of regulating factors and protection against speculative falsification, against artificial manipulation of the fluctuation of prices which makes it possible to earn vast amounts of money in a short time.” What contemporary liberals/libertarians choose to ignore is that there is no business success in today’s capitalist system without the leave of the bankers. One is only “free” in this system if the bankers give you the loans and the credits that will “allow” you to be successful.
For those who dream of the day when the world, and truly free men, will not have to beg leave of the bankers, Pesch gives cause and counsel.
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