Public Theology & Christian Living

(First published in Areopagus Journal Vol. 10 No. 4 – Christian Economics)

by Paul A. Cleveland

In the seventeenth century, as a result of the English struggle against the arbitrary whims of the monarch and the presumed divine right of the king that was so prevalent at the time, a compelling case for natural human rights was made. One of the best arguments against the absolutism of that age was penned by John Locke in his Two Treatises of Government. In the eighteenth century the concept that all human beings possess natural rights based on this natural law argument spread, leading to the highest expression of restrained government the world has ever known. This idea was fundamental in the establishment of the United States of America. However, in the nineteenth century, scholars attempting to free themselves from the confines of theistic reasoning propose that there is no such thing as natural law and began to promote the concept that positive laws are all that exist and that these should be enacted for the promotion of the common good. The spread of legal positivism led to new forms of tyranny and arbitrary despotism in the twentieth century such as the world had never known before. Could it be the case that the natural law argument is more important in the establishment and preservation of liberty than the nineteenth century intellectuals recognized?

In this paper I will examine this question and take the position that the natural law position provides an intellectually satisfying and compelling case for individual liberty and the free market. I will also take the position that our failure to defend this position has led to new forms of tyranny and despotism that have proven to be more destructive than any known before and that the newer kinds of government malfeasance have been a plague on humanity. I will do this by tracing the history and development of certain ideas and identifying the consequences of their spread. I take this approach in recognition of the validity of the title of Richard Weaver’s book, Ideas Have Consequences.¹ By tracing the development and spread of certain fundamental notions of the purpose of law and the purpose of economic freedom, we can then examine why certain results followed the adoption of certain ideas.

The Struggle Against Absolutism and Tyranny

The struggle for individual liberty took place against the backdrop of absolutism during the rise of nation-states in the modern era. Moreover, it was the natural law conception of morality that served as an important tool in the development and spread of the argument for liberty against the dogmatic pronouncements of the rulers of that age. The case for absolutism relied on the notion that the king ruled by divine fiat and that his laws should be obeyed whether or not they made sense rationally speaking. As a result, the people were instructed to obey the arbitrary whims of the monarch as an act of Christian faith.

However, in England a long tradition of limitations upon monarchial authority had developed. In particular, the ongoing seventeenth century political struggles between the crown and Parliament set the stage for the articulation of the natural theory of individual human rights. The early part of that century witnessed the death of Queen Elizabeth and the rise to power of the Stuart house. Throughout their tenure in the seat of power, the Stuarts presumed the divine right of kings which often led to conflict between them and Parliament. The strife resulted in the execution of Charles I and the exile of the Stuart house following the Civil War, their reinstatement to power following Cromwell’s death and the collapse of Parliamentarian rule, and their final ouster with the Glorious Revolution. It was in connection to this latter event that John Locke penned his famous Two Treatises of Government in which the natural law case for individual liberty was so clearly made. Locke, building on the work of other writers, made a twofold case in the two essays. First, he destroyed the supposed biblical argument in favor of absolutism and second, he argued for individual freedom and liberty and for civil resistance against tyrants.

In this latter effort, Locke’s position was put forth in chapter two of his Second Treatise of Government where he wrote,

The state of nature has a law of nature to govern it, which obliges everyone: and reason, which is that law, teaches all mankind, who will but consult it, that being all equal and independent; no one ought to harm another in his life, health, liberty, or possessions. For men being all the workmanship of one omnipotent, and infinitely wise Maker; all the servants of one sovereign master, sent into the world by his order and about his business, they are his property, whose workmanship they are, made to last during his, not one another’s pleasure.”²

In Locke’s terms, the natural law is a pre-established order that sustains and directs nature towards its ultimate purpose. Furthermore, he asserted that order is rooted in the divine Mind and that men’s laws have no authority unless they are founded on this moral order.³

The proposition that laws have no authority unless they are grounded in morality served as the reason for resistance to governors who ruled as despots and tyrants. Quite simply, such rulers were not to be seen ruling by a divine mandate, but as usurpers of God’s authority. As such, any immoral law was to be seen as an affront to God himself. The argument was thus made that it was the duty of the citizenry to consider such rulers as illegitimate.

This concept of the inherent natural rights of all people spread, especially in England and her colonies. The embracing of this concept is what essentially led to the American Revolution, as is clear from the Declaration of Independence, which reads:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness—That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or abolish it, and to institute new Government, laying its foundations on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

While the Declaration goes on to recognize that some injustices will likely always prevail, it also states emphatically that a long and continued list of abuses provides sound reason for revolt.

As a result of the establishment of the united States, coupled with a push for greater free enterprise in England, freedom, liberty, and market exchange spread around the world and government rule was significantly limited. In turn, the Industrial Revolution was spawned because the freedoms gained allowed inventors to develop and employ new methods of large-scale production that produced goods cheaply. Competition among these producers vying for customers also led to rising product quality even as prices continued to fall.

Karl Marx
Karl Heinrich Marx (1818 – 1883) is considered, along with Friedrich Engels, the father of communism. Together they authored The Communist Manifesto, which described communist political and economic theory and provided a critique of capitalism. They argued that in capitalist societies, two groups of people involved in a class struggle. The bourgeois are the wealthy minority who own property such as kings or freemen. On Marx’s view, this group of people is considered oppressors. Proletarians are the poorer majority of peasants, slaves and other workers that are oppressed by the bourgeois. The wealthy upper class pays workers a portion of money to produce goods, which will in turn bring them—the bourgeois—a greater profit. This process continually keeps the proletariat dependent on the bourgeois and in a position to profit the bourgeois instead of themselves. People make and create value and the bourgeois exploit that value. Marx also criticized the capitalist notion that the interest of the bourgeois was also the interest of the proletariat.

Marx’s economic theory promoted the idea that the government be run by the proletarian class of people, which make up the majority of people on earth. With a proletarian government in place, reforms will be mandated, which would benefit everyone instead of a private minority. Private property would cease to exist, and with it the class struggles created by capitalism.

Source: http://en.wikipedia.org/wiki/Karl_marx

Adam Smith
Adam Smith (1723 – 1790), known as the father of modern economics, was the first person to realize that when countries trade both sides could benefit. Before then it was widely thought that in order to for one person (or country) to achieve economic prosperity someone else had to become worse off.

Smith recognized the benefit of free trade apart from government control. Allowing people to enter into free exchange without stringent government regulation was the best way for individuals and nations to become prosperous. In the modern world, no one person makes everything he might need to produce a product. In the division of labor there are specialist tasks that culminate in the production of goods. One person may specialize in making one thing and yet remain inadequate in making another. This is not a problem per se, since a group of people is often skilled in the relevant specialist tasks. Such tasks in turn lead to the production of goods in an economy. This process implies trade since one person relies on the other’s skill or product. The division of labor is especially important for productivity and this process of trade allows for the building of wealth.

Smith is adamant that this economic system requires autonomy from government direction. However, in order for this economy to function properly it will need rules of law. Protection of private property is required. There must be principles of justice in place. Infrastructure must also exist in order to help this economy move along. The above theory is fleshed out in Smith’s work, The Wealth of Nations.

Sources:
Butler, Eamonn. 2007. Adam Smith: A Primer. London: Inst. of Economic Affairs. http://www.iea.org.uk/ sites/default/files/publications/files/upldbook414pdf.pdf (accessed March 27, 2011) Butler, Eamonn. 2009. Adam Smith – A Primer (part 1). YouTube.
http://www.youtube.com/watch?v=5WMMqAVzZBk (accessed March 27, 2011)

The Naturalist Attack on Natural Law and Theory

Despite the spreading freedoms that individuals enjoyed and the better living conditions that resulted from the new liberty, naturalists began to attack the concept of natural law. The philosophical foundations for this attack had been laid by the empiricism of David Hume and the assault on objective reality waged by Immanuel Kant.⁴ At the heart of much of their efforts was an attempt to cut philosophy loose from natural theology and to advance the notion that all inquiry was to be rooted fundamentally in the employment of the scientific method. However, the essential problem with the assertion that the only kind of knowledge that is legitimate is that which can be empirically verified is that the assertion itself is not empirically verifiable. That is, the proposition refutes itself because it is metaphysical.⁵

Nevertheless, the naturalism founded on this assertion spread throughout the academy and slowly filtered down through society. However, naturalism likewise suffers from an inherent philosophic flaw. In his book Miracles, C. S. Lewis accurately explains why naturalism refutes itself on its own terms. He points out that naturalists are ultimately arguing that nature is all there is and that any particular event that happens can be explained within the context of nature itself. In short, for the naturalist, nature is a closed system and everything can potentially be explained in terms of something else in the system of nature. But the question arises, what are we to make of human reason and human knowledge? Are these things real? At this point, Lewis goes to the heart of the problem of naturalism when he writes:

If the feeling of certainty which we express by words like must be and therefore and since is a real perception of how things outside our own minds really ‘must’ be, well and good. But if this certainty is merely a feeling in our own minds and not a genuine insight into realities beyond them—if it merely represents the way our minds happen to work—then we can have no knowledge. unless human reasoning is valid no science can be true. It follows that no account of the universe can be true unless that account leaves it possible for our thinking to be real insight. A theory which explained everything else in the whole universe but which made it impossible to believe that our thinking was valid, would be utterly out of court. For that theory would itself have been reached by thinking, and if thinking is not valid that theory would, of course, be itself demolished. It would have destroyed its own credentials… Naturalism, as commonly held, is precisely a theory of this sort.⁶

Despite this truth, the die was cast by Hume and Kant and other religious skeptics of the age. As a result, the vast majority of scholars chose to ignore the problem, and virtually every discipline at the academy was shaped more or less by naturalism. This includes the study of political economy. Jeremy Bentham was largely responsible for promoting naturalism in political philosophy with his rejection of natural law thought in favor of the hedonistic calculus of utilitarianism (the view that what is right is determined by whether or not happiness is produced for the greatest number of people). The adoption of this political philosophy in economics was expanded upon by the work of J. S. Mill and his influence on students.

The problems associated with Bentham and Mill’s utilitarianism are well-known. Chief among these problems is the fact that it is impossible to accurately measure utility (i.e., quantities and qualities of pleasure or happiness), and the best that can be done is merely to rank one’s preferences. Nevertheless, large numbers of welfare economists continue to construct cost/ benefit analyses of many policies in an effort to square the circle, so to speak. These efforts open the door for researchers of various stripes to point in every possible direction concerning policy proposals. These range from affirming free market institutional structures to advocating full blown socialism. In such a world, it is doubtful that the average individual will actually be able to accurately assess which scholar’s work is closer to representing sound economic thought, since principles are relegated to an afterthought in order to establish economics as an empirical science.

Beyond this problem is the reaction among positivist scholars when others point back to the superiority of the natural law tradition and to fixed principles that they see as providing a certain framework for the study of economics. As Murray Rothbard observed, “The believer in a rationally established natural law must, then, face the hostility of both [fideists and religious skeptics]: the one group sensing in this position an antagonism toward religion; and the other group suspecting that God and mysticism are being slipped in by the back door.”⁷ But as Rothbard goes on to argue, the beauty of the natural law tradition, as developed by Thomas Aquinas and other Scholastics, is that it bridges the ground between divergent religious beliefs. In fact, without that common ground it is doubtful that the American Founders could have agreed on its form of limited government, which ultimately rests on the natural law theory.

The Spread of Positive Legalism and the New Tyranny

Notwithstanding the inherent problems associated with naturalism and its associated positivism, the widespread adoption of these views has spawned a new form of tyranny and despotism which already appears far worse than any that has been witnessed in human history. Millions of people were annihilated during the twentieth century as despots and tyrants developed various notions of the best way to usher in utopia on planet earth. Throughout history people had built walls to keep others out and to help protect themselves against the aggression of outsiders. However, during the twentieth century, countries began to build walls to keep people in since they would flee en masse otherwise. The way has been paved for this largely by the adoption of legal positivism which supplanted the natural law perspective.

Legal positivism asserts that the basis of law is essentially that which has been adopted by legislatures. In this view, it is human governments that create and impose laws, which are established to achieve some temporal purposes which are thought to be good for society. There is no inherent or necessary connection between law and morality. This kind of political thinking was clearly an extension of the moral relativism of George W. F. Hegel and others. In fact, Hegel wrote, “The universal is to be found in the state. . . . The state is the Divine Idea as it exists on earth. . . . We must therefore worship the state as the manifestation of the Divine on earth.”⁸ Once one has decided in his mind that there is no fixed truth, then such pronouncements attempt to fill the void that has been created. But one wonders, are there any limits to state action once this view has been affirmed?

Nevertheless, according to legal positivism, laws should be established on the basis of the practical consequences that result from them. Oliver Wendell Holmes took the idea that the criterion for the law is social utility, as measured by the social sciences. In his words, the law should be established “upon accurately measured social desires.” This is the source of one of Holmes’s famous aphorisms: “The man of the future is the man of statistics and the master of economics.”. . . Law is reduced to a tool for social engineering. The justification for any given law, Holmes wrote, is “not that it represents an eternal principle” such as Justice, but “that it helps bring out a social end which we desire.”⁹

In this framework of understanding, the idea that we ought to discover absolute moral truths and test human laws against those truths is rejected. Rather, it is assumed that a good law is one that promotes a good purpose. But this raises a question. How can you tell whether or not a law actually promotes a good purpose? Moreover, whose definition of “good” serves as the objective one that should be embraced? Is it merely a matter of majority rule? If so, on what grounds do we form our of past practices such as slavery in the united States or the mass extermination of people in Nazi Germany or Soviet Russia? These questions cannot be adequately answered on the basis of legal positivism.

C.S. Lewis rightly said in this regard,

If your moral ideas can be truer, and those of the Nazis less true, there must be something—some Real Morality—for them to be true about. . . . If the Rule of Decent Behavior meant simply “whatever each nation happens to approve,” there would be no sense in saying that any one nation had ever been more correct in its approval than any other; no sense in saying that the world could ever grow morally better or morally worse.¹⁰

These fundamental problems associated with legal positivism are resulting in some serious adverse consequences for societies around the world. The political landscape in most Western societies has become especially polarized as various special interests vie for political power in order to impose their conception of the “good” on others. Such politicization of the many issues of life is serving to undermine and destroy the foundations upon which Western civilization rests. Chief among the institutions being assaulted is private property. More and more, people have come to the conclusion that the political redistribution of property is just when it is carried on by some form of governmental power. Such arbitrary use of collective power necessarily undercuts free enterprise. In such an environment, making a case for the free market on the basis that it tends to promote the general good makes little headway when political interests know full well that they can achieve their purposes by effectively lobbying the government. For this reason, a new form of mercantilism in trade is on the rise in the form of corporatism (a system in which economic exchange takes place between distinct interest groups rather than individuals). As such, it is increasingly difficult for people around the world to even understand what the free market really is. This is especially true in countries where the local heads of state are nothing more than cleptocrats who use their power to steal property and to promote the interests of their friends. It is for this reason that the natural law case for the free market is much in need, for it remains persuasive while any form of legal positivism can be turned in any number of different directions.

On the other hand, the natural law case cannot be turned to tyranny and despotism because its central tenet is the establishment and protection of private property rights which are the essential element of free enterprise.

Paul A. Cleveland is Professor of Economics at Birmingham Southern College Birmingham, Alabama. He is the author of Basic Economics (Boundary Stone).

notes
¹Richard M. Weaver, Ideas Have Consequences (Chicago: The University of Chicago Press, 1948).
²John Locke, Two Treatises of Government (London: The Everyman Library, edited by Mark Goldie), 117. 
³ Hodge, Charles, Systematic Theology, vol. 3 (Grand Rapids, MI: Eerdmans Publishing), 260.
⁴ See Clarence B. Carson, The Flight From Reality (Irvington, NY: Foundation for Economic Education, 1969).
⁵See Norman Geisler and Peter Bochinno, unshakable Foundations (Minneapolis: Bethany House, 2000). ⁶Lewis, C. S., Miracles, (New York: The Macmillan Company, 1953), 11-28.
⁷Murray N. Rothbard, “Introduction to Natural Law,” excerpted from The Ethics of Liberty (accessed at www. mises.org/story/2426).
⁸Georg W. F. Hegel, as quoted in Schlossberg, Herbert, Idols for Destruction, (Nashville: Thomas Nelson Publishers, 1983), 178.
⁹ Nancy Pearcey, Total Truth: Liberating Christianity from Its Cultural Captivity (Wheaton, IL: Crossway, 2004), 237.
¹⁰C. S. Lewis, Mere Christianity (New York: The Macmillan Company, 1952), 25.

Questions for Cleveland’s “The Compelling Natural Law Case for the Free Market”
1. What is the natural law? How did it play a role in the overthrowing of absolutism and tyranny in the modern era?
2. What is the connection between natural law and the free market?
3. How does naturalism undermine natural law theory? What is the flaw in naturalism?
4. What is legal positivism? What consequences does it have? What are the problems with legal positivism?