Redeeming Economics (10) Personalism

In his book called Redeeming Economics, John D Mueller explains the difference between individualism and personalism.

The scholastics (and “neoscholastics” like Wicksteed) adopted Augustine’s method of personalism, which recognizes the moral freedom and responsibility of each person to make free choices about both the ends and means of economic activity. The fact of personal interdependence is expressed above all by the fact that every person, like every community, has a distribution function. Utilitarian philosophy adopts a method of individualism, largely ignoring the fact of relationships among different persons and assuming that everyone has the peculiar kind of distribution function in which all goods are distributed to the self. For the same reason, Utilitarianism can treat a household or larger community only as if it were a single organism— not a “unity of order” arising from, and explainable by, the choices freely made by persons who recognize and act upon their interdependence. The modern Utilitarians have therefore missed—as Philip Wicksteed did not—the most important lesson that the mother has to teach: All human action, including economic activity, is done by persons and for persons. Human economic activity is not ultimately done by “individuals” for “utility.”

Let’s pause and summarize what we learned from observing the mother. The first thing to observe is that we are not dealing with an individual, but with a person—that is, (whatever else this term might mean) someone with a number of relationships to others. She is somebody’s wife (offstage at the moment), the mother of at least three other somebodies, and the mistress of a cat. She is someone’s daughter, someone else’s granddaughter (perhaps deceased but not forgotten), and possibly also someone’s sister, aunt, cousin, or niece. She is someone’s friend, and someone’s neighbor. Part of the time, she is also someone’s employee or manager or co-worker. She may be a room mother at her child’s school, or manager of her child’s soccer team. She is the customer of many businesses. Since she considers volunteer work, she may have some role in another community organization. Since she belongs to a church or other religious community, she presumably considers herself a daughter of God, but also may find herself on the education committee. The list, though perhaps exhausting, is far from exhaustive. Considering one woman, therefore, has uncovered a complex web of personal, social, and cultural relationships. And these in turn revealed a definite organization of the society in which she lives: a neighborhood of similar households, voluntary organizations and religious institutions, public or private schools, and presumably one or more levels of government, though we have not glimpsed them directly.

The chief fact of economic organization is that the woman lives with her husband and their children in a household. We note that the ownership of resources is mostly private: the mother and father presumably legally own all the property of the household, as well as their own human resources. But this ownership involves two distinct aspects: its disposition and its use. The parents own and dispose of all the property, but they themselves do not use all the property. Beyond their own use, they allocate a large part of the household’s resources for the use of their children, each of whom has his or her own scale of preferences for goods, but does not yet contribute (much) to acquiring them.

In addition, we saw that the couple chooses to contribute some part of their resources to persons or organizations outside the household. And we assume that they are required to pay taxes, which will be used either to purchase some public goods or transferred to members of some other household. Her husband brings home a money income, probably by working for a business firm (though possibly for a non-profit organization or government), and she also spends some time in the labor market, though usually not as much as her husband. Mostly with the proceeds from such employment (along with any property income or gifts received), they purchase things that have been produced and distributed by such business firms. She and her husband then combine these purchases with their own services for ultimate distribution and use by the various members of the family. And this final use, so far as we can tell by observation, is the ultimate purpose of their economic activity: it is last in the sequence of time, but first in the sense that everything has been planned and executed with this goal in mind. We have thus reached the “end of economics.”