by Br. Alexis Bugnolo
The Profit Motive Defended
Dr. Thomas E. Woods, Jr., in this week's column at LewRockwell.com entitled, "Three Catholic Cheers for Capitalism," attempted to justify one central notion of the economic system, the "profit motive," by a bold novelty. He writes:
"The point is, since we know that man has perfectly valid reasons for seeking the highest return on his investment, or earning the highest wage, instead of wasting time on foolish and irrelevant lamentations regarding the greedy people in the world a matter of moral philosophy rather than economics we ought to employ human reason to learn how this perfectly moral desire for gain redounds to society's benefit by ensuring that people produce what society urgently needs rather than more of something that society already enjoys in abundance. Stated this way, the profit-and-loss system of an economy based on the division of labor, an indispensable institution of civilized society, suddenly appears not only profoundly moral but actually obligatory, which is probably why opponents of capitalism never do state it this way."
Dr. Woods, whose writings in Catholic publications in recent years I much admire, launches this thesis in reaction to what he terms an "assault of distributists" (meaning an assault on Capitalism by Distributists). Near the beginning of his recent column, he writes:
"Also coming under assault from distributists is the much-maligned 'profit motive,' a theme that has dominated many a sinister Hollywood film. 'If you think acting for the sake of profit is meritorious in Christ's eyes,' one critic wrote, 'you are sadly deceived.'"
I'll grant that someone probably has long ago said that, "If you think acting for the sake of profit is meritorious in Christ's eyes," but if Dr. Woods attributes a Distributist position to the recent author of this statement in a Letter to the Editor of the SeattleCatholic.com, then for the record, Dr. Woods, I am no Distributist. I had thought from my Letter to the Editor that was evident enough.
Some Catholic Principles
This article of mine, however, is no rebuttal of Dr. Woods, whom I too much admire to take his comment personally. However, I gather from his column that my own statement is ambiguous. What I meant to say is that "If you think acting for the sake of profit 'in itself' is meritorious in Christ's eyes, etc..."
I assume Dr. Woods and I agree on the principles and conditions of supernatural merit, and so I won't discuss those; but I do take issue with the implicit materialism of Dr. Woods' theory of the moral value of the "profit motive."
First, let me say I do recognize that the science of economics is a true science, whose object of study is the economic activity of mankind. But with St. Thomas and St. Bonaventure, I likewise recognize that every science does not study all truth under every aspect; and that furthermore, apart from theology, every science receives its principles from a higher science. Let me explain. Take physics, for example: ask a physicist if it is morally acceptable to smuggle narcotics, and he will tell you that if you wish an answer from the science of physics, you have asked the wrong man. But ask him of what quanta this apple is composed and he may very well launch into a long explanation which few of us could follow, even if we wanted. In this way, the science of physics, although it studies all created being under the notion of material particularity, does not study all truth, nor all being. Likewise, the science of physics is a tertiary science; that is, it depends upon other sciences for the principles under which it operates. It does not question whether 1 + 1 = 2; it accepts this truth without question from the science of mathematics. It does not question why it is better that a thing is rather than is not; it accepts this truth from the science of philosophy. It does not question whether the cosmos was created by God; it accepts that is was from the science of theology. When physics, as a science practiced by an individual scientist, no longer holds these bounds, it is no longer a science.
Economics is a science; but as it studies the economic activity of men, it must accept the principles of morality taught by the sciences of philosophy and theology. It is beyond the competency of economics to define the good of man, the nature of a moral act, and the hierarchy of charity that ought to be among men. If economics or an economic theory does this, then it is no longer a science; it is a philosophy or a religion.
This is why although Christ did not establish His Church to teach all natural truths, He did give the Magisterium of the Church authority to answer questions in the natural order that impinged upon truth of faith or morals. This is the reasoning behind Unam Sanctam: the Pope stands as a legitimate arbiter over all human affairs, in virtue of his office as Vicar of Christ who is the Author of Man and the Creator of the Universe. If you do not accept that, you are not a Christian.
What is Profitable to Man?
"Profit" in English is derived from the Latin verb "proficio, -ere, profeci, profectum," which means "to make on behalf of." Etymologically, "profit" means the resultant production of any given activity. We see this general sense of the word when Christ says, "What does it profit a man if he gain the whole word and suffer the loss of his own soul?" (Matthew 16:26), though here the Vulgate reads "prodest", and the Greek "ophelethesetai"; the meaning is the same.
The notion of profit then is inextricable, philosophically, from the Good. No one asks, expecting an affirmative answer, whether it is profitable to do harm to, to do evil to, or to destroy one's own good. "What is profitable?" then is a question akin to "What is good?" Thus Christ resolves the debate by declaring, "What shall be the profit for a man if he gain the whole universe and loses his own soul?" (my own translation of the Greek).
In economics, the notion of profit is a special case. Economics being restricted as a science to economic activity considers the good of man only in part; that is, only inasmuch as it is represented by material goods and what results from these. "Profit" in economics is always material, and is thus considered under the aspect of economic value, and hence money. When economists speak of the "profit motive," they are speaking therefore of a motive to obtain a resultant monetary value which is mathematically greater than all costs. Hence they are not speaking of the "good of man" in the general, philosophical sense.
This limit of economics must be remembered when speaking of the so called "profit motive." Clearly, Christ sanctions the "profit motive" in the theological sense of seeking one's own salvation: thus the import of his question in Matthew 16:24. But for Christ the resultant gain from human activity is ultimately the Beatific Vision: "Blessed are those cleansed in heart for they shall see God" (my own translation). So the proper understanding of the discussion of "profit motive" in economics is not a moral one per se. I say "per se", using the scholastic phrase, which means "considered by means of itself," that is, "considered in its own notion, apart from its relation to other notions." "Profit" in economics, pertaining to the economic activity of man reckoned in monetary terms, is a material aspect of a part of man's activity. It thus in no way represents the sum total of human good; nor does it enter into the formal consideration of the goodness of man. I say "formal consideration" using a scholastic term "formal", which refers to the essential determinative principle of a thing. The formal good of any man is the Supreme Good, obtained only through the Beatific Vision.
Likewise, "profit" in the economic sense does not pertain formally to the moral good of the human individual or of the human race as a whole, since formally speaking, the moral good of a man or of men consists in the possession of supernatural charity in the will. Considered in itself, that is considered by itself and in the notion of its own essence, the moral good of a man does not consist in the possession of created goods, but rather in the possession of God, wherein supernatural charity reaches its ultimate and supreme state.
If one considers the good of man as a wayfarer, that is, no longer considered in its ultimate goal the perfection of its formality but now in progress or digress from that goal, the good of man consists in grace, in which formally the perfection of the human individual consists. This is because being composed of body and soul, the soul being the formal principle of the human individual, the good of the human individual consists in the perfection of the formal principle of his being, his soul. Hence, what benefits his soul is his profit as a wayfarer.
But since man is also, materially speaking, a body, and since the soul and body cannot remain united unless the body enjoys some material things which are necessary, there is a necessary material aspect to the good of the human individual, considered now, not as a human in formality, that is as a rational being, but in his totality as a corporal-rational being. And since, as he passes through time, being a creature with a transient corporal nature, there are ongoing necessities of body, there must be activity of some kind, corporal or spiritual, to acquire the necessities of body. The nature of man therefore requires material acquisition. This is a law of anthropology.
The economic notion of "profit" therefore is a very restricted and restricting notion of the good. Naturally speaking, the notion of profit can be said to be derivative of agricultural production, since every season sees the additional production of material goods (crops) over and above the means of production (fields, plants, equipment etc.). But such a notion of profit is only good inasmuch as man's ultimate good, the acquisition of the Beatific Vision, requires it. Hence the superabundance of material goods is no way profitable to the individual, when "superabundance" is taken in the sense of excessive, and "superabundance of material goods" is considered apart from others' needs. Superabundance, taken in the sense of more than personal needs or the needs of one's dependents, but not more than what can be useful to the acquisition of moral good through charity towards one's neighbor, within the limits of one's own spiritual strengths (for the heart of man tends to make an idol of riches even in doing good with them, inasmuch as the greater good is that which can be done by virtue without the necessity of money, as Christ taught: Go sell everything you have and come and follow Me.) is, however, conducive to the good of man.
Since man is a moral being, and since his ultimate good requires a right ordering of his will, and hence moral good to the Supreme Good, even a will disordered to an otherwise proper acquisition of necessary material goods is an obstacle to his ultimate good. Hence the teaching of Scripture, "Do no set your heart on riches, even when they increase"
The Profit Motive is Excessively Restricted Consideration for Human Motivation
What I have said so far is merely a preamble, to avoid a misunderstanding. And so let me restate that remark of mine which Dr. Woods took exception to. If one thinks that acting for the sake of profit, understood in the economic sense, in se, that is apart from any other consideration, is meritorious in Christ's eyes, that is, is worthy of supernatural merit, then he is sadly deceived, that is, he has allowed his avarice to bewilder his intellect into considering a very small good as his ultimate good.
I do not deny that in the science of economics the "profit motive," understood as the motive of human individuals acting for profit, considered in its material monetary aspect, is a proper consideration. By proper, I mean appropriate to the science of economics. However, the "profit motive," thus considered, is not a proper consideration for judging the value of human activity, since the good of man does not consist formally or principally in economic activity, as I have explained above. If one were to assert that the consideration of profit as is held in economics is sufficient for a human consideration or a moral consideration or a philosophical consideration or a theological consideration, then one would be replacing the science of anthropology, morals, philosophy and theology, respectively, with that of economics. In such a case you no longer would have a science, but a false dogmatism.
A Problem with Dr. Woods' Reckoning of the Good of the Profit Motive
Perhaps it is all too obvious to point out the fundamental inadequacy of Dr. Woods assertion that acting for the sake of profit is "morally obligatory." Let me argue ad absurdum: There is a great demand for pornography, thus making it economically profitable to publish and distribute pornography. Applying Dr. Wood's explanation that he who seeks the greatest profit, seeks to meet the greatest needs of his neighbor and thus fulfills the precept of charity, one concludes that the publisher of pornography is a holy man, full of supernatural charity. However, as must be obvious to Christians, the conclusion is false; indeed very false.
One cannot equate economic needs with moral needs or objectively good needs after the Fall of Adam, since there is another principle to be recognized, that of Original Sin: a principle which the science of economics cannot ignore and which it must accept from the science of theology, if it its to be a true science, that is, as the root of the word, scientia, means, a body of knowledge, and not of folly. Modern economic theory too often fails this litmus test, since from the time of the Reformation, the error of scientism has led to a revolt of each science from submission to those sciences to which it must remain dependent, philosophy and theology. (Throughout I mean by theology, that science of the divine which bases itself on Christ's teaching as understood by the Magisterium of the Church I exclude a priori false, fanciful, pagan or heretical theology.)
And since one cannot equate economic needs with the good of a man or of men, one cannot equate a "profit motive," in the sense economists use it, to the moral good. Hence Dr. Woods' opinion fails to distinguish the proper order of human goods, the formality of the moral act, and the materiality of human economic activity.
To make myself more clear: it is not immoral to seek to make a profit, so long as one's ultimate goal is the Supreme Good. For this it is necessary that the quantity of profit be proportioned to one's material needs and the needs of one's neighbor, understanding needs in a Christian upright sense. Hence he who seeks the greatest profit, is seeking an ideal which must be further specified, since he who seeks the greatest profit in time of a famine by food speculation, is always guilty of a mortal sin against the common good of his neighbor. Nor it is reasonable to oblige that anyone seek the greatest material profit since the greatest quantitative material profit may not be necessary for his bodily needs or those of his dependents. Nor it is reasonable to oblige everyone to seek a material profit: for otherwise such saints as St. Francis who forsook all property and even the use of money would be condemned; not to mention Christ who died without any material profit for His Sacrifice.
Hence the so-called "profit motive" as economists use the term is an incomplete consideration of the human good. If one were to accept the definition of this term as it is used in economics and impose it upon all other sciences and human endeavors, one would reduce the dignity of all men to that of an economic agent, which is not only a false concept of man but a perversion and inversion of the Gospel of Jesus Christ. The quest for and the degree of profit in the economic sense must always be tempered by one's own needs (dependents included), the needs of one's neighbors, one's spiritual welfare (ability to remain virtuous in prosperity, etc.) and that of one's neighbors, and ultimately all men, since in God charity obliges the love of all. The man who sets his heart on profit, however great or small, sins greatly; but the man who setting his heart on God, aims for a reasonable profit that harms no one and which he employs for his own ultimate good and that of others (especially as they may be needy) while avoiding spiritual danger to all, does not sin. However in such a case if he merits, it is not in virtue of the profit, but only inasmuch as he practices virtue, regardless of the circumstances. Ultimately, for the wayfarer, it is not money which purchases Heaven, but grace. It is grace and the desire for more of it, for one's self and one's neighbor, which is the true economic motive of mankind, of which Christ spoke: I have come to cast fire upon the Earth, and how I wish it were kindled up!