A Catholic and a Misean Economist

por | Blog Fe y Libertad

Nov 11, 2018

Las opiniones expresadas en este espacio no necesariamente reflejan la postura del Instituto Fe y Libertad y son responsabilidad expresa del autor.
Tiempo de lectura:  16

Published in the book “Una vida santa dedicada a la libertad: Ensayos en honor de Joe Keckeissen (1925-2011), Biblioteca IAA 2012

“When Jesus saw Nathanael coming he said of him, ‘There, truly, is an Israelite in whom there is no deception.’” (John 1:47)

Joseph Keckeissen once taught a memorable class to professors of economics at Francisco Marroquín University. He drew a neat stick figure while stating that we must base our understanding of human action on sound anthropology. Some of us shifted in our seats uncomfortably: how is this going to help us be better teachers of economics? Keckeissen pressed on. He drew grass under his little man’s feet and an arrow pointing downward to illustrate that all of us relate to our environment or the material world. He drew another arrow pointing toward the sky and said people develop a relationship with the Creator; even non-believers ponder the supernatural. To the left of the figure he drew a boomerang shaped arrow and said we all have a sense of self: an interior life. Finally, on the right he drew an arrow pointing at imaginary others, because human beings relate to one another. We are social creatures. (See figure 1)

Ludwig von Mises, proceed Keckeissen, reminded us that economics is centered on the person. Every human being adjusts his behavior consciously “to the state of the universe that determines his life”.[1] Mises chose the term praxeology to define the particular methodology of the Austrian school, because his research project was an ambitious study of praxis, or human action. In addition, Mises and Friedrich A. Hayek both used the word catallaxy to signify the market. Derived from the Greek “katallasso”, it means “to exchange”, “to admit into the community” and even to convert enemy into friend, which is in fact an outcome of peaceful win-win exchanges.[2] The market is an order that emerges spontaneously from the voluntary interaction among individuals. Thus, Keckeissen stressed, economics as a science focuses on the arrows pointing east and south. Economists do not pretend to know what goes on inside a person’s heart and mind[3], nor do they opine about our relationship with God. Psychology and theology, respectively, explore these terrains. However, limiting the scope of economics does not negate the existence of the arrow pointing inwardly to the figure, nor the arrow pointing toward Heaven. Human action is the product of the whole being.

It was a straightforward lesson. Why is this introductory explanation so often neglected? In most cases, colleges convey a content that is numerical, thing-centered and equilibrium-obsessed–ceteris paribus. Keckeissen’s diagram cast economics in a new light. It contextualized the discipline and based it on an identifiable individual who is complex and three-dimensional.

Many of Keckeissen’s central themes are contained in his stick figure drawing. The purpose of this essay is to use both the Keckeissen diagram and an essay he published in 2005, titled “The Concern of the Church and the Unconcern of the Free Market”[4], to reflect on his approach to his two passions: Austrian economics and Catholicism. Of interest to people of faith is how he made both realms compatible. Ideological coherency and integrity were of utmost importance to Keckeissen. Not everyone understands this necessity to reconcile faith and ideology, either because they consider it impossible or deem it inconsequential, lacking convictions in one of the two arenas. The quest can be a lonely one. However, it is the key that unlocks Keckeissen’s repeated pleas to his free market friends and to fellow Catholics for a rapprochement or, at the very least, a more benign perception of one other.

Humane economics

Keckeissen suggested that Catholics in general, and the Church hierarchy specifically, are suspect of free market ideas because they deem the social and economic system to be populated by egotistical individuals willing to trample over others in order to advance their narrow interests. Keckeissen enumerates several explanations for these misgivings.

First is the tendency within the economics discipline to rely on an avaricious homo economicus. Economists either actually believe that humans are nothing more than machine-like, rational maximizers seeking profit, or they give the impression that this is the most relevant facet of human nature, or they turn profit-maximizing into a catch-all net that captures the most charitable and vile attitudes. For example, in some settings one may hear that Mother Theresa of Calcutta was a profit maximizer to the extent that she sought to go to Heaven, and assisted the poor as a means to this self-interested end.

Analogous to the mechanic actor is the perception of an automatic, well-oiled market in perfect competition. This image is opposed to a spontaneous order resulting from decisions made by imperfect human beings. Boettke, Coyne and Leeson put it this way:

Unfortunately, economics in the 20th century proceeded as though it didn’t matter that the central focus of the subject was human actors. Wasn’t it true that the physical sciences progressed when purposes and plans were stricken from the analysis? Lightening was not due to the anger of the gods, but was a result of physical properties. The purging of anthropomorphism was appropriate in the physical sciences. But the purging of man from the human sciences results in the abolition of its subject matter. The human element is eliminated and replaced with a utility machine. Economics developed a theory of the machine economy, but lost complete sight of the human economy.[5]

A clear deduction from the Keckeissen stick figure is that the subject matter of social science is not an economic calculator operating within a perfect environment. In fact, the narrow homo economicus stereotype is by no means essential to a workable market process. Rational behavior is not always and everywhere egotistical. People generally do not harbor despicable motivations when they exchange goods and services with each other. As Adam Smith comprehended, it is merely the case that we need not depend on the benevolence of the butcher to obtain our meat, because butchers will serve their customers while motivated by a wide range of interests, values and emotions, including in some instances benevolence.[6] Moreover, sometimes humans make uninformed decisions or act irrationally or impulsively, and markets work anyway.

Keckeissen started from a Christian reading of human nature. Man, in the Judeo-Christian tradition, is a rational animal, an individual, created by God. Of a fallible, imperfect nature, he has the capacity to develop and achieve greater perfection; he is made in the image of God, affirms the book of Genesis. Man is both body and soul. He is endowed with free will. He is a social being. In Keckeissen’s view, this person is at least as capable of free and deliberate action, and of social cooperation, as the homo economicus, if not more so.

Second, economists sometimes seem indifferent to the real world. The suffering of the poor, for instance, is practically passed over by the profession, even though poverty is an economic phenomenon. Only this science possesses valuable insights into wealth creation, but the useful knowledge is advanced in such a way that it remains obscured to or unheeded by those who are appalled by squalor. Keckeissen began his article with this pressing doubt: “Conscious that half the world lies in extreme poverty, recent Holy Fathers have been urging all Catholics and others to adopt whatever measures are necessary to eliminate this misery…Our question is why are not the free market people in accord with the pope in his great crusade.”[7] Keckeissen wondered why the measures to alleviate poverty promoted by Catholics leave out free market solutions. One answer would be the suspicion provoked by the self-interest maxim described above. Another partial answer is that defenders of freedom do not respond to the pope’s challenge, because we are myopically concentrated on “our pet themes, and not much more.”[8]
But it is more than that: “we free marketers seem to be all head and no heart.”[9]

Scientific exploration aims at developing provable and testable hypothesis where sentimentality has no place. While few accuse physicists or chemists of having no heart for employing the scientific method, economists, and social scientists generally, are not spared criticism. The French orator and statesman, Francois Guizot (1787-1874) coined the phrase which has been transformed many times: “Not to be a republican (or socialist) at twenty is proof of want of heart; to be one at thirty is proof of want of head.”[10] Advocates of free markets smile at this refrain, because it validates their preference for cerebral discussions. But the phrase also implies that coolheaded analysis is superior to emotional or empathic reactions. Feelings blur the hard facts upon which reasonable decisions are rooted. In other words, heart and mind are at odds with one another.

A Christian would not relish having to choose head over heart, or vice versa. Compassion is considered a virtue in most religions, and Catholics strive to emulate a God who is all merciful. The whole man should not be asked to negate a part of his nature. In the end, as we mature, we learn to temper both impetuous feelings and insensitive braininess. Keckeissen believed the best defense of free markets would fail miserably unless we are able to connect emotionally with those we hoped to persuade. That is why he insisted on a kinder portrayal of economic studies and philosophical convictions.

Thirdly, indifference to the real world can alternatively come from the tendency to become enamored with theoretical “untruths”, or tidy models tenuously linked to real life. Keckeissen wrote: “Each of us advances his stuff in discrete articles, sporadic laments, mathematical blah, or not much more than a feeble “I told you so”.”[11] For instance, Keckeissen may have deplored a study which, having established the number of fire engines present at each fire in San Francisco in a given time period, blamed the destruction on the fire engines. This is obviously an absurd conclusion distilled from accurate data.[12]

Keckeissen echoed P.T. Bauer’s complaint regarding the mathematization of economics. According to Bauer, the overdependence on quantitative methods “has brought with it a regrettable atrophy of close observation and simple reflection…[S]tudies based on direct observation or detailed examination of slices of history are apt to be dismissed as anecdotal, unscholarly or unscientific, even if they are informative.”[13] Catholics and all readers of economic studies would be justified in finding fault with fanciful and misleading modeling.
In sum, economists can make their métier seem less humane than it actually is, by 1) postulating a robotic economic actor or the automatization of the market; 2) seeming indifferent to real world suffering; and 3) becoming infatuated with narrow topics or quantitative methodologies that do not lead to a better comprehension of reality.

Truth and insufficient indignation

A few sentences after Keckeissen commented the tendency to disdain truth through overspecialization and mathematization, he wrote: “We expound marvelous theoretical truths, but when the world is not observing our dictums, we hardly shrug our shoulders.”[14] These rebukes seem contradictory. Are economists indifferent to the truth? Or are they otherwise capable of knowing and defending what is true?

Keckeissen did not presume that any one individual could possess perfect knowledge, but humans can apply reason to seek for truth. Socializing ideas through discussion helps reveal both errors and wisdom. Arrogance impedes learning; humility enables it. We are not and never will be omniscient. In Termes’ words, “objective truth exists…but in most of the issues that affect us…our knowledge is uncertain and it is precisely through critical discussion that we come close to the truth.”[15]

This view is consistent with Friedrich Hayek’s theories regarding knowledge in society. Knowledge is dispersed, especially that which is circumstantial to a given time and space. Hayek strongly rejected central planning because it can only occur if planners possess the pertinent information to arrange the lives of millions of diverse individuals. And this is improbable. Already Ludwig von Mises had warned that the economic calculation problem was the Achilles heel of socialism.

Likewise, the position stems from Keckeissen’s religious beliefs. Catholicism adds a layer to the knowledge humans can possess: revealed truth. God, who is omniscient and loving, reveals Himself to us, and communicates truths we could never grasp through mere intelligence. Jesus Christ is sometimes referred to as the Truth or the Word; Jesus told St. Thomas, “I am the way and the truth and the life”. (John 14:6) He meant that God is true and an objective measure of truth, whether or not we can comprehend everything He teaches us. For instance, human reason cannot apprehend the mystery of the Holy Trinity (God is one and three persons—Father, Son and Holy Spirit), but due to revelation we accept this is so. From this perspective, truth comes both from God, who never lies and is never wrong, and from a process of discovery that involves deductive reasoning, empirical observation, and logic and rhetoric.
Therefore Keckeissen agrees with Termes that scientific exploration could come very close to finding the truth. He believed that the economic science has uncovered insights into the workings of markets that are quite true. Economists may contravene said truths because they temporarily forgot the essential teachings or they became obsessed with details. Or perhaps they received misguided instruction (Marxist analysis, for example), or they pursued an agenda other than truth. The apparent contradiction is thus resolved.
Keckeissen wished economists would react with righteous ire whenever the true insights of the profession are overlooked. Of all people, economists know that wrongheaded policies make societies poorer than they otherwise should be. Keckeissen is direct: “We are passively morose in things human.”[16]

Economists are insufficiently indignant, Keckeissen argued, over 1) government intervention that distorts prices, particularly the prices of basic commodities and agricultural goods; 2) an “unbridled monetary system” that blunts growth and leads either to harmful inflation or deflation; 3) a misunderstanding of the economic cycle; 4) “uncontrolled” government deficits that essentially highjack credit markets; and 5) a protectionist view that fosters unemployment and reduces global market competitiveness.[17] Austrian economic theory informed his position on these topics. Keckeissen encouraged fellow free marketers to “perk up and whistle, shouting our time-honored convictions from the housetops, all of them, and at the same time show some open evidence of humanism…”.[18]


Keckeissen disliked consumerism or “unnecessary consumption” and claimed that the Keynesian paradigm, as opposed to the Austrian theory, “overplays consumption and the so-called marginal propensity to consume.”[19] He noted that the Catholic Church also deplored consumerism. Keckeissen clearly felt that the Austrian and the Church positions were compatible, although they were certainly not identical.

Pope John Paul II defined consumerism as a “threat to the freedom of the human person to live according to the higher demands of love rather than to the lower pull of material desires.”[20] According to Avela, empirical research tends to corroborate the idea that consumerism leaves people feeling unfulfilled and empty. In order to live in a free society, human beings must exercise responsibility and self-control, and this is impossible for those who are but slaves to their emotions and fancies. Being thirsty for God’s love is counter to being obsessed with riches and material goods. “The more we possess God, the more we know and love him; while the more we possess riches, the more we despise what we have and seek other things because when we possess them we realize their insufficiency.”[21]

Keckeissen preached this message by example: a lay brother in the Salesian order in his adult years, and a Salesian at heart from childhood, he lived with utmost frugality. He owned few possessions and at all times observed a detachment from material things. He praised the abundance created by market economies, but wished that people would exercise self-restraint, as he did, even if they were wealthy enough to satisfy their every whim. If people consumed less and saved more, the poor in the Third World would fare better, Keckeissen implied.
Confusion may arise because consumerism is not always understood in the way Keckeissen or the Church saw it. One definition dating back to 1915, according to the Oxford English Dictionary, is “advocacy of the rights and interests of consumers.”[22] Consumers are regarded as unthinking or ignorant and easily manipulated by the media. Therefore, illuminated activists must protect consumers from predatory producers. An acceptance of this definition is the reason for the foundation in 1971 of the nongovernmental organization Public Citizen (www.citizen.org). Co-founder Ralph Nader stated that consumers should be “protected at times from their own indiscretion and vanity”.[23]

Environmentalists have also appropriated the term. “The scale of the human enterprise is already much too large,” proclaimed entomologist Paul Ehrlich, author of The Population Bomb (1968). Businesses, corporations, and overpopulation have contributed to a consumerism or “growth mania” that is leading us toward the collapse of civilization, global warming, the depletion of natural resources and more.[24]

Both Nader and Ehrlich are evidently skeptical of free markets. Individuals cannot be trusted to make their own decisions, and must be led by a regulatory and paternalistic government that will, in their esteem, invariably choose correctly. Plainly, this approach to consumerism is anathema both to Austrian economics and Keckeissen’s position.
In fact, many Austrian economists have come to the defense of consumerism in reaction to Nader-Ehrlich style judgments. Llewellyn Rockwell put it this way:
“I’m beginning to think that the epithet “consumerism” is just another word for freedom in the marketplace…[T]he beauty of the market economy is that it gives everyone a choice. For those people who prefer outhouses to indoor plumbing, pulling their teeth to dentistry, and eating nuts from trees rather than buying a can of Planters at Wal-Mart, they too have the right to choose that way of life. But don’t let them say that they are against “consumerism.” To live at all requires that we buy and sell. To be against commerce is to attack life itself.”[25]

Mises himself exalted the role of the consumer in the market. “The consumers make poor people rich and rich people poor. They determine precisely what should be produced, in what quality, and in what quantities. They are merciless bosses, full of whims and fancies, changeable and unpredictable. They do not care one whit for past merit and vested interests,”[26] affirmed Mises. In order to accomplish such a feat, consumers have to act freely and in competition with one another.

But Keckeissen did not explicitly contradict Mises, his NYU mentor. He was not denying our freedom to buy and sell, nor the importance of consumers. His was a nuanced critique. Production comes from true savings. The more we spend, the less we have to save and invest. “Consumption is but a waste of capital. And it has a huge opportunity cost,” Keckeissen reflected. If we spend more than we have, if we incur in debt, then the consequences are even worse. And this is precisely what Keynes recommended: debt creation to stimulate consumption. “We cannot continue consuming more than we produce,” Keckeissen warned. This attitude is reckless and “gluttonous”. Spending beyond one’s means did not only go against the grain of Keckeissen’s religious convictions, it also clashed with his sense of sound economics, particularly if these attitudes were instigated by government interventions, such as inflationary monetary policies. “The Austrians…consider unnecessary consumption an obstacle to progress. There, though on different logical paths, the two sources converge.”[27]


The Church’s concern for the wellbeing of every member of society manifests itself in the concept of solidarity. According to Catholic social teaching, solidarity is both a principle and a moral virtue. Essentially, we are “all responsible for all”, and ought to serve one another.[28] Some Austrian economists shy away from the term because they fear that solidarity is equal to coercive redistribution.

Not so, clarified Keckeissen: cooperation in the market is solidarity. Curtailing undue privilege and protectionism, moving toward lower prices and giving everyone “a fair shake” are the “just” results of free markets. These results are in fact more consonant with solidarity than measures such as forcing wealthier countries to condone poor countries’ debt, or cajoling rich countries into transferring money to potentially corrupt governments.[29]

Solidarity as a virtue must be separated from solidarity as a sentiment, explained Termes, because confusing virtue with sentiment is “a form of moral suicide”. Organizing solidarity through the government budgets and bureaucratic structures of the Welfare State is based on sentiment, not virtue. Virtuous solidarity, on the other had, is voluntary, generous and self-sacrificing. Bureaucratic solidarity can, in the worst-case scenario, displace or kill virtuous solidarity.[30] “In the strict sense of the term, the most genuine and meritorious solidarity is not coerced,” added Sirico. “ One cannot force, through political means, the acceptance of our shared responsibilities to one another in love.”[31]

In sum, solidarity properly understood is respectful of freedom. Economists need not shun the concept but embrace it. “Poverty and proletarianization” are senseless when free markets could alleviate such conditions. “We might beget a healthful feeling for the plight of the undernourished other half,” Keckeissen concluded.


Keckeissen ends his essay on the same playful, unorthodox tone with which he began. It almost sounds like a catchy rap tune: “Oh, Free Market, get with it. Push for your stuff with all your might, and you’ll see that you and the See of Peter are close allies, as they should be, in the fight for a more prosperous world.”[32] Throughout the paper he sought to persuade free marketers that we should be as concerned as the Church about poverty and suffering, wastefulness and corruption, truth and social wellbeing. He also encouraged Catholics to embrace free markets, not only because they produce desired results, but because they can be home to virtuous, generous and humane actors.
Keckeissen’s personal journey to reconcile faith and economic convictions was successful. A true gentleman (gentle man), circumspect and stoic, he was both delicately respectful of each person’s freedom and committed to coherence and unity of purpose in his own life. No two people travel the same path, and some never embark on the adventure. Nonetheless, Keckeissen chartered a route that can serve as a model for fellow Catholics and freedom lovers.

[1] Ludwig von Mises, Human Action: A Treatise on Economics, Liberty Fund Library of Economics and Liberty, 1.1.1, http://www.econlib.org/library/Mises/HmA/msHmA1.html
[2] Morley Leonard Evans, “Wordplay: Man, markets and language”, St. Lawrence Institute for the Advancement of Learning, recovered in November 2012 from http://www.stlawrenceinstitute.org/vol12eva.html
[3] Behavioral or psychological economics has more recently undertaken an interdisciplinary exploration of rationality, exploring how human action is sometimes influenced by culture, emotion and other factors.
[4] Joseph Keckeissen, “The Concern of the Church and the Unconcern of the Free Market”, Business and Religion, A Clash of Civilizations?, Edited by Nicholas Capaldi. MA: M & M Scrivener Press, 2005.
[5] Peter Boettke, Chris Coyne, Robert Leeson, “Man as Machine: The Plight of 20th Century Economics”, George Mason University Papers, recovered in November 2012 from econfaculty.gmu.edu/pboettke/…/Man%20and%20Machine_. Also found as a Mercatus Center publication. Undated.
[6] This very famous quote from the Wealth of Nations can be found in “Adam Smith (1723-1790)”, The Concise Encyclopedia of Economics, Liberty Fund, http://www.econlib.org/library/Enc/bios/Smith.html
[7] Keckeissen, ibid., pg. 154
[8] Keckeissen, ibid., p. 155
[9] Keckeissen, ibid., p. 155
[10] The word republican can be substituted for liberal as currently understood in the United States. According to Fred Shapiro, John Adams expressed this idea years before Francois Guizot. It is also attributed to George Clemenceau. See “John Adams said it first”, at http://www.freakonomics.com/2011/08/25/john-adams-said-it-first/
[11] Keckeissen, ibid., p. 155
[12] William C. Burns, “Spurious Correlations”, 1996-7. Recovered in November, 2012 from http://www.burns.com/wcbspurcorl.htm
[13] P.T.Bauer, “The Disregard of Reality”, The Cato Journal 7, Spring/Summer 1987, p. 34
[14] Keckeissen, Op.cit., p. 155
[15] Rafael Termes, Antropología del Capitalismo, Un debate abierto, Barcelona: Printer Industria Gráfica, S.A., 1992, p. 17
[16] Keckeissen, Op. cit., p. 155
[17] Keckeissen, ibid., p. 155-160
[18] Keckeissen, ibid., p. 155
[19] Keckeissen, ibid., p. 160
[20] Raymond J. De Souza, “John Paul II and the problem of consumerism”, Religion and Liberty, The Acton Institute, Volume 9, Number 5, 1999. Recovered in November, 2012 from http://www.acton.org/pub/religion-liberty/volume-9-number-5/john-paul-ii-and-problem-consumerism
[21] Andrew Abela, “Is Consumerism Harmful?”, Acton Commentary, The Acton Institute, November 7, 2007. Recovered in November, 2012 from http://www.acton.org/pub/commentary/2007/11/07/consumerism-harmful
[22] This definition is quoted in the Adam Smith Institute blog by Whig, “In Praise of Consumerism”, June 22, 2012, recovered in November, 2012 from http://www.adamsmith.org/research/articles/in-praise-of-consumerism
[23] Cited by Thomas Sowell, “Nader’s Glitter”, Jewish World Review, March 3, 2004, recovered in November, 2012 from http://www.jewishworldreview.com/cols/sowell030304.asp
[24] Paul J. Erlich, “Perils of population growth, economic progress and consumerism”, Public Service Europe, June 12, 2012. Recovered in November, 2012 from http://www.publicserviceeurope.com/article/2059/perils-of-population-growth-economic-progress-and-consumerism#ixzz2CzgL0cGP
[25] Llewellyn H. Rockwell Jr., “In Defense of Consumerism”, Mises Daily, May 18, 2006, recovered in November, 2012 from http://mises.org/daily/2178
[26] Ludwig von Mises, “Ludwig von Mises: Economist, Philosopher, Prophet”, The Freeman, undated. Recovered in November, 2012 from http://www.fee.org/the_freeman/detail/ludwig-von-mises-economist-philosopher-prophet/#ixzz2CzlKWX61.
[27] He meant the Austrian school and the Church converge on this path despite their parallel reasoning against consumerism. Keckeissen, op. cit., pg. 160
[28] Pontifical Council for Justice and Peace, Compendium of the Social Doctrine of the Church, No. 193, recovered in November, 2012 from http://www.vatican.va/roman_curia/pontifical_councils/justpeace/documents/rc_pc_justpeace_doc_20060526_compendio-dott-soc_en.html
[29] Keckeissen, Op. cit., p. 161
[30] Termes, Op. cit., p.209
[31] Rev. Robert A. Sirico, “Solidarity: The Fundamental Social Virtue”, Religion and LIberty, The Acton Institute, Volume 11, No. 5. Recovered in November, 2012 from http://www.acton.org/pub/religion-liberty/volume-11-number-5/solidarity-fundamental-social-virtue
[32] Keckeissen, Op.cit., p.162


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