The Moral Authoritarianism Behind Austerity Jurisprudence

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Martha T. McCluskey

Nov. 9, 2010

Most Americans deserve a good economic spanking, says one commentary in a contemporary campaign to explicitly ground free market economics in religious morality (The Impending Economic Spanking).   Paul Krugman recently warned that the bipartisan embrace of austerity politics reflects a morality of self-flagellation more than economic logic (Mugged by the Moralizers).

In legal academia, “social justice” tends to be discussed as a question of morals over economics.  Some advocates of Law and Economics have explained its value as a rigorous approach to the policy implications of law, turning debates about justice from abstract and subjective normative principles to more practical prediction and measurement of consequences. (Ulen 1992).   Going further, Kaplow and Shavell’s now-classic Fairness versus Welfare (2001) argues that individual well-being, based on empirically measurable and self-defined tastes and preferences, should be the sole measure of justice.  As law professor Oren Kerr remarked (in a 2008 posting to the Volokh Conspiracy blog), “’social justice’” is a keyword for the point of view that it is more important to work towards an equitable distribution of wealth than it is to foster maximum growth of wealth. Any mature person realizes that those are both laudable goals that cannot, unfortunately, be simultaneously realized.”

Advocates of “social justice” tend to accept this framework, while defending the morality of equity over the individualistic and consequentialist goal of economic wealth-maximizing.

Or they may attempt to carve out exceptions to this general dichotomy – invoking, for example, Keynesian economics defense of growth through supporting policies promoting consumer demand.

But evidence now abounds that the supposed policies most associated with promoting hard-nosed “market growth” over equity are likely to bring consequences of austerity and instability, along with plenty of increased inequality.  True believers can always explain outcomes of increased economic grimness as indications of increased growth, on the theory that a system of crisis and massive insecurity and poverty is the best of all possible worlds, at least in some imagined long run, or on the theory that market-oriented policy changes were not quite pure enough to produce their predicted outcomes.

But the lack of measurable evidence that growth results from supposedly growth-maximizing market policies seems to be pushing Law and Economics in two directions.  One is a more narrowly technical scientism, with economics-oriented law faculty safely turning away from normative or predictive questions of justice and public policy to highly abstract laboratory experiments, mathematics, and theoretical puzzles agnostic to real-world consequences.  (See The Future of Law and Economics, a 2008 posting by Josh Wright on Truth on the Markets blog).  My focus here is a second trend toward justifying free-market economics with overt religious morality rather than practical evidence – a trend more visible now outside law schools, but which reveals the moral core of policy-oriented Law and Economics.

Economic spankings, in this view, bring spiritual or moral uplift by teaching us to replace individual gratification with submission to superior authority.  The invisible hand’s beauty and justice comes not from allowing individuals to be sovereign and satisfied while advancing the good of all.  Instead, the invisible hand delivers a “well-deserved whack in the trousers” (see The Impending Economic Spanking) to those too immature to realize that a collectivist market requires most of us to sacrifice and serve others rather than to expect individual gain.

The American Enterprise Institute (AEI) – typically known among legal scholars for its focus on regulatory “freedom” – has launched the Project on American Values and Capitalism to enlist evangelical Christian students  and academics in defense of “free-market” policies.  A recent event in this series, titled Grieving the Good of Others, focused on envy as a moral sin that detracts us from appreciating the virtues of growing economic inequality.   Affirming the earlier work of AEI scholar Michael Novak, who warned that envy lurks in concepts like justice and fairness, the featured speaker explained that social democratic policies departing from free-market principles are dangerous not primarily for their consequences to aggregate social welfare or individual self-interest.  Instead, policies softening the harsh blows of the market are dangerous because they legitimate and encourage individual feelings of envy of those on whom the market’s omniscient authority reveals are more deserving due to superior talent and effort, or at least more blessed through luck or divine grace.  Indeed, this moralism suggests that the very fact of undeserved consequences represents not unfairness but proof of an ultimate goodness that transcends individual understanding and power.

Market austerity, in this view, is ultimately not about real-world resource-maximizing but of faith in a hierarchical transcendent moral order.   We must not assume that free-market legal economics stands for enlightened rationality against outdated moralism.  But we must also avoid disparaging morality and religion in favor of pretensions to a scientific view of law disengaged from social justice questions.  We need to further develop and articulate an economics and a morality that imagines a more effective and legitimate authority than that achieved through unequal and arbitrary whippings.


Thomas S. Ulen, The Lessons of Law and Economics, J. of Legal Economics 103 (Dec. 1992).

Louis Kaplow and Steven Shavell, Fairness versus Welfare, 114 Harvard L. Rev. 961 (2001).

Photo from Wiki Commons, (Elizabeth Brownrigg flogging her apprentice |Source=Newgate Calender |Date=1776 |Author= Newgate publishers |Permission={{PD-1923}}