Q&A - January AD 2009

Paul Craig Roberts & Lawrence M. Stratton, The Tyranny of Good Intentions, New York: Three Rivers Press, Revised 2008, xxiii+264 pages, paperbound, U.S. $14.95 (discounts available).

It seems that the longer one looks the more one finds evils that sprung from the so-called “Progressive” movement. Roberts and Stratton make a very convincing case that law in these United States is one more casualty of that ideology among many. As with so many of these things, it is necessary to understand the underlying philosophy. Most of us are unfamiliar with any sort of philosophy of law, so the first few chapters of the book are devoted to correcting that omission.

Roberts and Stratton trace the development of British law from King Alfred in the ninth century, through the signing of Magna Carta in 1215, to the revolution at the end of the seventeenth century, culminating in the writings of the famed jurist, William Blackstone. The law was conceived as a “shield” that would protect people from arbitrary power, including that of the ruler. All men were subject to the same laws, without regard to wealth or social class. The law was “a means of pursuing justice by finding truth.” It was grounded in the natural law, which tells us that individuals have natural rights—that in the law of “nature’s God” it is wrong to steal from a man, to injure him physically, to lie to him, to defraud him of his wages, to estrange him from his wife and family, and so on. It is the function of society to see that these natural rights are not infringed for any subject of the realm. Roberts and Stratton repeatedly refer to “the Rights of Englishmen,” and it may take a little getting used to that Americans are “Englishmen” as inheritors of the British legal system, and as inhabitants of a Republic based on that system.

The legal philosophy of William Blackstone came under fire with the Utilitarianism of Jeremy Bentham (1748-1832). For Bentham there were no natural rights, and society did not exist to protect individuals—rather, for Bentham, society existed in order “to achieve the greatest good for the greatest number of people.” Rather than having a nation of self responsible citizens, a governing elite would determine through a “hedonistic calculus” what would make the majority most happy, and bring about this happiness by force of law. Roberts and Stratton go on to make the case that American law has been so corrupted by Bentham that little of Blackstone can be found in the operation of our modern legal system, even though many of Blackstone’s concepts of natural law remain in our Constitution, where they are ignored. Hopefully, a few quotes will whet the reader’s appetite for reading The Tyranny of Good Intentions.

“Foremost among the Rights of Englishmen is the requirement that no one can be prosecuted for a crime without evidence that a crime has occurred and evidence that links the accused to the crime.... Punishment implies moral blameworthiness, and the stigma of a criminal conviction is undercut when no distinction is made between intended and unintended behavior.... In contemporary America crimes no longer require intent. Prosecutors have invented new felonies to fit those who have been targeted. Accidents have become criminalized, and it has even become a crime to make a mistake when filling out regulatory forms required by government.” (43-47)

“The mens rea requirement [requirement of criminal intent] rules out ex post facto laws because if an act was legal when it took place, the actor could not have intentionally engaged in illegal conduct.... Even before the addition of the Bill of Rights, the U.S. Constitution forbade both Congress (Article I, Section 9) and the states (Article I, Section 10) to enact ex post facto laws.” (65-66) Roberts and Stratton go on to trace the history of ex post facto law in the U.S.

“Plea bargaining has ominous implications for the Rights of Englishmen.... ‘The parallels between the modern American plea bargaining system and the ancient system of judicial torture are many and chilling.’ Defendants who insist upon exercising their constitutional right to a jury trial risk a substantially increased sentence if they are convicted, and this sentencing differential alone is enough to make plea bargaining coercive.... According to Justice Department statistics, 90 to 95 percent of all federal, state, and local criminal cases are settled by plea bargains.” (82)

“When Berkeley, California residents ... learned that a taxpayer funded homeless shelter was to be located in their neighborhood, they exercised their First Amendment rights of free speech to inform their neighbors and organize a protest. They soon found HUD investigators ... threatening them with jail terms and $50,000 fines unless they turned over to HUD documents that HUD could allege to be evidence that the Berkeley residents had violated the Fair Housing Act by opposing the homeless shelter.” (109-110)

“At 8:36 A.M. on October 2, 1992, thirty armed members of an ‘entry team’ led by Los Angles deputy sheriffs John Cater and Gary Spencer broke down the front door of multimillionaire Donald Scott’s home on his 200 acre estate in Malibu, California, and shot him dead. Mr. Scott was not on the FBI’s most wanted list. He was holding no one hostage. He had committed no crime, and he had defied no summons. He was shot dead because Mr. Spencer had targeted Scott’s estate for asset forfeiture on trumped-up drug charges.” (117)

The Tyranny of Good Intentions has a chapter on prosecutors building reputations on false convictions, and another on how Congress routinely and illegally delegates its legislative powers to agencies of the Administration, thereby expanding the number of federal crimes from three (piracy, treason, counterfeiting) in 1787 to 3,000 derived from statutes and 10,000 created by agency regulations! You can read about the folks who went to federal jail by filling in their own land while holding a state permit to do so. (163) Roberts and Stratton are certainly not “bleeding heart liberals,” but they do lament the way the law has been manipulated, and how many Americans are in jail for no good reason.

The Tyranny of Good Intentions is must reading for Catholics concerned with legal morality in our modern society.

Question: The newspaper says that a local Novus Ordo church is selling rose oil into which has been dipped a relic of Saint Thérèse of Lisieux as it was blessed by the priest.[1] Isn’t the sale of blessed objects sinful?

Answer: Newspapers are notoriously bad about getting the details of such things wrong, but the Church usually tries to avoid even the appearance of trading in blessed things. It would not be wrong to accept a free-will donation from someone who receives the object, and it would seem permissible to let people know what the object cost to begin with so that they can make a realistic donation (e.g. “the plastic rosaries cost us $2.25 each.”). It would certainly be sinful to demand a donation above the material cost, as though the blessing added some number of dollars to the value of the object. Generally, the objects blessed by the Church are inexpensive enough to be just given away without any expectation of profit—holy water, palms, ashes, plastic rosaries, and such things certainly fit into this category. Beeswax candles are getting pricey, and it might be prudent for people to know the material value of what they are receiving. If someone wants to have a more expensive religious object, he should purchase it for himself and ask the priest to bless it thereafter. Religious objects in the parish gift shop should not be blessed before sale. Under the 1917 Code of Canon Law, objects to which an indulgence is attached lose that indulgence if sold (c.924) and objects lose their blessing or consecration if exposed for public sale (c.1305).

The newspaper article mentioned “a $5 donation” for an ounce of blessed oil—probably reasonable if the donation remains one of free will and doesn’t become the “price,” as we usually use that word. Presumably, a poor person would not be refused a bottle without a donation, and perhaps the wealthy give more than the five dollars mentioned.

At Our Lady of the Rosary we occasionally mark things—principally books—with a “suggested donation,” so our people will know how much it cost the parish, and will, if able, make an appropriate donation so the parish doesn’t lose money.

Question: Were there moral aspects of the Great Depression? A lot of people suffered for well over a decade. Shouldn’t someone be held responsible?

The term “capitalism” comes to us from the pen of Karl Marx, and tends to be ambiguous in describing the free enterprise system. Economists speak of “the four factors of production,” which include land, labor, capital, and entrepreneurial ability. “Land” refers to the surface of the earth as well as to the materials beneath it. “Labor” refers to the productive efforts of human beings, mental as well as physical. “Entrepreneurial ability” speaks to the organizing activities of those who bring a productive enterprise into being and keep it running. “Capital” refers to the physical things which make production possible or efficient. In the modern firm, capital generally refers to heavy machinery or an assembly line. But in a more general sense the instruments of production can be quite simple. The fellow who rents a shop, builds a workbench, and acquires the tools needed to do his work efficiently is a “capitalist”—at least relative to the fellow who works outside, on the ground, with just his fingers and fingernails.

We often equate “capital” with “money,” but it should be obvious that money can be used to acquire any of the four factors of production. The organizer of a productive activity—a business—may finance it with his own money, or recruit partners or stockholders with money to invest, or may borrow it from someone who is able to loan it for a period of time, or do all of the above.

The organizers and partners may directly contribute their land, labor, capital goods, and entrepreneurial ability or hire these factors with the money provided by the investors. Morally and legally, the hired help have the first claim to be paid for their efforts, followed by those who have made loans to the business. The partners or stockholders—the “investors” being reimbursed with whatever is left after the firm retains enough to continue in existence. The investors expect to receive enough return on their investment to make up for the risk of loss and for the “opportunity cost” of not having done something else with their money. The investors may be willing to trade future reward (their share of the business growing and becoming worth more) for current dividends. Often the hired help must be paid immediately, with possible long delays before the product is sold and paid for.

In order for the business to survive, it must make adequate profit. The goods that are produced and sold must bring enough to pay all the expenses of the business: taxes, wages and benefits, raw material costs, utility bills, sales and advertising costs, loan payments, building and equipment rentals, allowances for repair or future replacement of buildings and equipment, and so forth. Only after all of the expenses are paid can we speak of “profit”—and even then there are decisions to be made about retaining some of the profits for future growth or internal financing.

Every once in a while, the folks on TV will report that this or that company made a “huge profit.” They have to talk about something, and many viewers are dazzled by big numbers. An $11,680,000,000 quarterly profit just has to be evil and immoral, and call out for someone to put a stop to it.[2] But it is absolutely impossible to make a moral judgment on the size of a profit without knowing what went into making it. How many dollars in assets were required to make that profit? How many shares were owned? What did a share cost? Is the business cyclical or risky, with far smaller profits made is some quarters or likely to be made in the future? If the business had 5.3 billion shares outstanding, that profit amounts to about $2.08 per share, only some of which (say 40¢) can be distributed to the investors. If a share sells for $80, that is only about a 2% annual return—not very competitive with something risk-free like a bank CD—but, apparently the shareholders believe that the value of their shares will go up over the years, repaying them in the long term rather than the short term.

Big numbers don’t tell the whole story, but our business with the $11+ billion profit paid $32+ billion in taxes (49%), which presumably contribute to the public well-being. The business employed 80,800 employees. Daily it provided the world with 2.4 million barrels of petroleum products, 8.5 billion cubic feet of natural gas, and 75 thousand metric tons of chemical products

Again, the investors expect to receive a return on their investment to cover risk and opportunity cost. The rational investor will consider the risk he is taking, his opportunity for the investment to grow, and the periodic return of cash dividends. The business that cannot continue to attract investment will fail, leaving people unemployed, loans defaulted on, and no product produced for the consumers.

Businesses do fail. That can be a gut-wrenching experience for those trying to keep them going, possibly facing loss of their own personal investment. But business failure is a natural mechanism for insuring that resources are used efficiently, and that the public receives goods at the best possible prices. A business that makes widgets and has to sell them for $7 will not last long if the others in the widget industry are selling at around $5.50. The land, labor, capital and entrepreneurial ability employed by that firm will be put to better use elsewhere.

The price people are willing to pay and the amount of a product they are willing to buy tells producers what and how much to produce, and gives them guidelines as to desired quality. This is a significant advantage of the free market economy. A controlled economy in which government planners determine price, quantity, and quality will almost always be wrong in its predictions, leading to perpetual waste or scarcity. The free market reduces both waste and scarcity by demanding satisfaction from those producers who want to remain in business.

If there is any doubt, consider New York City. Any fair sized city will do, but the “Big Apple” probably makes the point best. There are 15 million people jammed into the lower end of Manhattan on a business day. Somehow they all get modern communications services and electricity. When it is time to eat, they can get most anything they want, from a hot dog to pheasant under glass; they can wash it down with their favorite brand of soda, water, beer, wine, whiskey, coffee, tea, or milk. If they have a headache, back-pain, a cold, or an itch, a nearby pharmacy will have their choice of remedies. They can buy a pair of denim jeans or a fine wool suit; a cotton dress or a gown of silk. There are newspapers and magazines, candy bars, chewing gum, cigars, and cigarettes. With all of this ability to get what one wants, there is little waste and rarely a shortage. How did it all get to the right place, at the right time, in the right quantities? Does the Mayor of New York plan all of this? the Governor? the Cardinal-Archbishop? God help New Yorkers if they did! The free market puts those things there.

By the way, you won't be able to get a cab, and parts of the Subway smell like sewers in the ninth circle of Hell—but that is not because of any failure of free enterprise—it is because of the limited number and high cost of taxi medallions issued by the city government—it is because when everybody owns something like the Subway, nobody owns it, and no one cares what happens to it.

NOTES:

[1] Sun Sentinel, 11 December 2008, pg. 9B

[2] All figures relate to Exxon-Mobil second quarter 2008.