Redeeming Economics

by John D. Mueller - published by ISI books, 2010

A Book Review by Father John McCloskey

I can only do justice to John Mueller's magnum opus Redeeming Economics: Rediscovering the Missing Element (and it is "magnum," with 470 dense pages and copious footnotes) by comparing it to Adam Smith's Wealth of Nations, Ludwig von Mises' Human Action, and the wrongheaded but immensely influential General Theory of Employment, Interest and Money by John Maynard Keynes, or Das Capital by Karl Marx. Mueller analyzes economists from Aristotle up to and including Stigler, Becker, Friedman, Rueff, Robert Mundell, and Arthur Laffer (he of the magic napkin and the supply-side revolution).

However, he does so from a broader perspective than most of his recent predecessors. That's because Mueller is a full-bore Catholic who also draws not only on Augustine and Aquinas but the influential Rev. Heinrich Pesch, S.J., who profoundly affected the expression of official Catholic social doctrine after it was formally inaugurated by Pope Leo XIII's 1891 encyclical Rerum Novarum. Mueller also incorporates the papal teachings of the encyclicals of Popes Leo, Pius XI, John Paul II, and most recently Benedict XVI.

Wherever you stand on the political spectrum, it is becoming indubitably clear that economics as a positive science is not commensurate with biology, chemistry, physics, etc. The reason is simple. Those "positive" sciences deal with things that are created by God and about which new discoveries can frequently be made through observation and experimentation. Political economics, on the other hand, is finally and essentially about persons and families and the choices they make for a variety of reasons.

Mueller is the director of the Economics and Ethics program at the Ethics and Public Policy Center in Washington, D.C., and president of LBMC, an economic forecasting and analysis firm. He was a long-time advisor to the late Jack Kemp during the Reagan presidency and one of the main players in the supply-side revolution of the 1980s.

Mueller's Redeeming Economics (published by ISI books) challenges the assumptions and equations of classical and neo-classical economists by looking backward to the fathers of the West -- Aristotle, Augustine, and Aquinas -- to rediscover the "Missing Element," as he puts it in his subtitle. The three major schools of economics (Keynesian, Monetarist/Chicago, Austrian) and most of the minor ones (such as distributism, Georgism, social credit) are carefully and fairly examined by Mueller and found wanting.

According to Mueller, "The first revolution in economics had occurred five centuries before Adam Smith, when Thomas Aquinas offered a comprehensive view of human economic actions. All such actions fall into four categories: Humans produce, exchange, distribute and consume goods. Adam Smith eliminates the scholastic theories of consumption and final distribution." Mueller's hope and contribution is to reintegrate final distribution to make economics whole and healthy again.

He writes, "The stepping-stones of economics are the four essential facets of all economic decisions which were integrated at all three levels of human society: personal, domestic, and political. . . . These stepping-stones are the facts of human existence explained with elements originally derived from Greco-Roman philosophy, and the Bible."

Mueller is both practical and realistic. Perhaps his most interesting chapters are those on policy recommendations and implications, all of which are based on marriage being the first natural bond of Human Society and that the decision to have children boils down to two motives: People have children either because they love the children for their own sakes, or else because they love themselves, and expect some personal benefit from the children (or some combination of these motives).

Therefore, according to Mueller, both private savings and government insurance will reduce fertility. He also shows the connection between weekly worship and higher fertility. He analyzes marriage in this way: "In a certain sense the spouses are partners in a small business; and to make the most of their house resources, work out a coordination of economic roles." There is much more, including an empirical analysis showing that halting all abortion would almost immediately solve the problem of the bankruptcy of Social Security, but I will let you discover these fascinating insights on your own.

With 15 blurbs and endorsements from well-known economists, writers, and academicians, this book stands by itself as a resounding challenge to both the Right and the Left to study and answer (if they can) Mueller's recovery of the Missing Element. That element can make personalist economics a reality, ensuring a distribution of wealth that is both humane and just without the heavy hand of unnecessarily intrusive government attempting the impossible task of fine-tuning the trillions of economic decisions made daily.

Redeeming Economics may be ignored by the elitist enemies of true freedom for the moment, but it will have its just influence over time. "The love that moves the sun and stars" (in Dante's words) is that same Love that loves human persons; the only way toward a just economy must be based on the "sincere gift of self," which exalts God and His children.

Pope Benedict XVI's most recent encyclical on human development, "Charity in Truth," caused no little controversy both in secular and Catholic circles. Mueller's book is one well-documented way of making the encyclical understandable. As Pope Benedict put it:

The earthly city is promoted not merely by relationships of rights and duties, but to an even greater and more fundamental extent by relationships of gratuitousness, mercy and communion. Charity always manifests God's love in human relationships as well, it gives theological and salvific value to all commitment for justice in the world.

If policy makers were to read and put into effect some of Mueller's policy advice, and if every Catholic university in the country were to require the use of this book for Economics 101, we might be on our way toward a just and prosperous polity and culture where true freedom reigns and life is fully celebrated.