Does the Market Economy Need a Moral Rebalancing?

In The Price of the Common Good, Mark Hoipkemier critiques the Chicago school of economics and its “Austrian fellow traveler Friedrich Hayek,” saying we need a “richer vocabulary” about wealth, business, and the firm that at the same time avoids “a finger-wagging, moralizing tone.” Our discussion of wealth, he says, is “impoverished.” He thus sets out to build a fresh and balanced “moral architecture” for understanding the market economy through a “grammar of common goods” that understands the “communal action” and “common goals built into the market economy.”

Hoipkemier advocates for a “pluralist political economy” that would uphold “the common goods that we already share, address the injustices of the market, and lead us to create “new forms of solidarity that can better achieve the goals of human communion.” The only way to do this, Hoipkemier says, is to discover what he calls the “shared ends built into institutions such as the market and the business corporation.”

He refers to his synthesis as “Aristotelian pluralism,” which he says avoids reducing all things either to private goods or public goods. If there is more to a corporation than its shareholders, then all ends, not just those of the shareholders, should be considered. For Hoipkemier, this teleological approach, concerned as it is with ends, inevitably calls for greater worker control over business firms.

Thinking about human exchange and markets as a cosmos of common action, according to Hoipkemier, also means seeing the common ends and, therefore, the solidarity that is already there. It means moving beyond viewing all relationships as modes of individual benefit and instead noting their reciprocal aspects. Hoipkemier’s “pluralist political economy” avoids what he calls the excesses of the Chicago School and Hayek's “unsound” confusion of ends and purposes.

Hoipkemier, however, finds much to admire in the oft-debunked economic history and political economy of Karl Polanyi, who argued in effect that governments invented markets, that people before the 1700s didn’t think in terms of “truck, barter, and exchange,” and that there would be no markets of any appreciable kind without authoritarian government. Polanyi, it should be noted, was as mistaken about markets as he was about the human person. Hoipkemier likes Polanyi’s critique of capitalism but wants to try to save markets because he thinks Polanyi is too pessimistic.

The greatest weakness of this book is not so much that it takes Polanyi seriously as what it does not take account of at all: the best extant scholarship on markets, business, and the common good. Rather than a pretense at starting a conversation about markets, common goods, and civil society that must resort to resurrecting Polanyi, Hoipkemier would do better to join the one already in existence.

A significant portion of this existing scholarship originates from official Roman Catholic sources, including the Compendium of the Social Doctrine of the Church, which contains many pages discussing the complexity of the common good in relation to individuals, social groups, and the State.

There are a host of other thinkers, such as Pope Benedict XVI (Joseph Ratzinger), Michael Novak, and Luigi Sturzo, who have written on reciprocity, gratuitousness in commercial relationships, relational goods, justice, and the market. The economist Kenneth Boulding has discussed friendships of all types, including friendships of utility, pleasure, and the one Hoipkemier barely addresses, virtue.

Hoipkemier never cites or makes use of the Journal of Markets & Morality, (full disclosure: I work at the Acton Institute, publisher of this journal), which has been around for decades and focuses on issues like reciprocity, gift, solidarity, and civil society. Indeed, one of the most recent volumes begins with an editorial about Pope Benedict XVI’s Caritas in Veritate and the need to conceptualize economic forms that are neither the State nor the market. It is a mystery why Hoipkemier doesn’t engage with or even cite Caritas in Veritate, which is rigorous and insightful precisely where his own study aims for rigor.

The lack of any critique of Michael Novak's works is particularly puzzling. Indeed, the “idiom of the ‘common good’” does not need to be “recovered,” as Hoipkemier claims, because it is alive and well, particularly in the discourse launched by Novak.

Novak criticized Fanfani and Max Weber for trying “to abstract the economic system from its lived incarnation within the political system of democracy, as well as within a culture that highly values common law, the principle of association, and social cooperation.”

Novak wrote of giving “primacy to community.”  But he recognized that “to build true and authentic communities, these societies must give primacy to persons. Both forms of primacy are important. . . . To secure the rights of the person, give primacy to the community. To build a genuinely human community, give primacy to the person.”  This, he thought, was the great lesson of the violent twentieth century.  

Novak faulted not “an excess of emphasis on individual responsibility” but rather “a false sense of community, anchored in the state” as the great tragedy of Western societies. He asked whether individualism had denuded associationalism, or whether the blame lay more with technocratic planners and big business.

We would all probably benefit from Hoipkemier’s engagement with Novak’s thought, as we pit Novak’s economic personalism against Hoipkemier’s teleological Aristotelianism. If we are to construct a new “architecture,” we first need to explore and tear down the existing structures rather than building on the sand of the Spenglerian theories of Bas van Bavel and the debunked, selective economic history of Karl Polanyi.

Hoipkemier finds both good and bad in Polanyi, as he does in Hayek, as he formulates his “Aristotelian Pluralism” synthesis. This is what a good scholar is supposed to do, not line up ideologically with a set of thinkers but rather pursue truth in all things. His choices of other key figures, however, feel cherry-picked to support his thesis that we lack the grammar of markets similar to the one Hoipkemier seeks. It is therefore worth looking further into who he includes and who he excludes.

Hoipkemier explores the work of the eighteenth century Italian thinker, Abbot Antonio Genovesi. In Genovesi, who was instrumental in formulating the foundational ideas of the Italian Civil Economy tradition, Hoipkemier finds a truer anthropology than he does in Adam Smith. He caricatures Smith as promoting a human person who is 100 percent self-interest and praises Genovesi’s argument that all human relationships reveal a strong reciprocity, even in market exchanges.

The problem with Hoipkemier’s approach is that he writes as if no one else has drawn on or critiqued Genovesi and those he inspired. Yet many others have, and Hoipkemier fails to engage them. For example, Flavio Felice makes the case for Melchiorre Delfico, the anti-mercantilist contemporary of Adam Smith and disciple of Genovesi, as “the ideal bridge between the Italian Civil Economy perspective and Adam Smith’s classical economy.” In the early twentieth century, the politically active priest and liberal, Luigi Sturzo, was also formative in the Italian Civil Economy school. That school of thought discussed by Hoipkemier has made its way into the communitarian Focolare Movement and the broader “economy of Francis” movement. The economist Luigino Bruni is the most prominent promoter of Genovesi and the Italian idea of a “civil economy.” Hoipkemier does, thankfully, cite Bruni’s work.

Felice, however, has criticized Bruni and others for failing to see that the “social market economy” rests on the principle of subsidiarity, an argument that descends from Delfico. For Felice, this means the market already has a civil aspect built into it. Felice may be right, or he may be wrong.  But surely this is a conversation worth having and an argument worth refuting if one is trying to revise how we ought to understand the common good.

There are three other scholars worth noting because their work has precisely addressed those questions about the markets and the common good and wealth that Hoipkemier calls “impoverished”: Robert G. Kennedy, Wolfgang Grassl, and Martin Schlag.

Writing about the relationship between business and the common good, Kennedy argues that “Catholic moral theology ... does not see a conflict, in principle, between moral behaviour and self-interested behaviour” even while not accepting in toto Adam Smith’s notion of a tradesman indifferent to the welfare of his customers. Kennedy has already done what Hoipkemier claims no one has.

Grassl explores questions related to the market, society, and the state. Unlike Hoipkemier, he deeply engages Caritas in Veritate because of its emphasis on the crucial distinction between “individuals” and “persons,” and because it addresses civil societies and the various ends of associations. Grassl even writes about the Italian “civil economy” that Hoipkemier praises.

Like Grassl but again, unlike Hoipkemier, Schlag recognizes the need to engage Pope Benedict XVI, noting that the former professor “did not advocate a return to the gift economy, typical of primitive societies, or other premodern and collectivist models.” What Benedict argues is that the economy is not only a mechanical system of exchange of goods but, first and foremost, is a relationship between persons whose needs and wants create value and have to be adequately expressed.” This doesn’t sound "impoverished," but rather seems to be the direction Hoipkemier is indicating.

Ratzinger, Felice, Grassl, Kennedy, Schlag, and Novak might all be wrong. But if someone claims there is a lack of discussion on the common good, business, and society, they should first systematically refute their arguments rather than mention the scarcity of scholars who have explored these topics extensively.

The deepest philosophical question raised by this book (again, through a sin of omission, not commission) is whether we arrive at what the human person is by examining the ends of their participation in the market, or whether we come to understand what a market is by starting with the human person. Indeed, Hoipkemier spends more time wondering what the market is for than asking what the market is. To answer the latter question, we must begin with the human person. If we do not get the human person right, our understanding of the nature of the market, the good of business, and the necessity of a vibrant civil society will suffer.

For all its talk about rigor and use of the adjective “Aristotelian,” this book is neither rigorous nor especially Aristotelian. Rigor would require a clear anthropology, a sustained treatment of the distinction between commutative and distributive justice, and clarity about the foundational preconditions for a functioning market, such as property protections and the rule of law.

Above all, it would require engaging not the straw-man foils Hoipkemier labels the “neoliberals of the strict observance” but the serious, intricate work of men like Novak and so many others. What we get instead is a decidedly “third way” corporatist vibe, hampered by too much idyllic imagination and not enough moral imagination.

John C. Pinheiro is Director of Research at the Acton Institute for the Study of Religion and Liberty. He is on X as @drjohnpinheiro.