 Thank you all, and thanks to the Mises Institute, the scholars, the staff, and the Loo Church Foundation for sponsoring this lecture. I came here for the first time 20 years ago as a graduate student and I attended Ralph Raco's history of liberty seminar. It was a week-long event, very transformative experience for me. I met a lot of great scholars, exposed to powerful ideas that have changed the way I've looked at the world ever since. And I never would have guessed then that one day I'd be invited to come back here to deliver a lecture like this, so it's a it's a great honor. And I also would like to thank the scholars who have delivered this lecture, the Loo Church lecture, on religion and economics in past years for their contributions to my own understanding of the relationship between those two things, and I've planned to reference several of them in this lecture. I'm sure that many of you who are teachers, whether at the high school or the college level, have some especially vivid memories from your first year of teaching. And I have a memory like that I'd like to share with you. It came when I was teaching a history survey class my first year at Faulkner. So at the end of one class session the students were walking past me as they filed out of the room. The room was set up like this where the door was over here in the corner so they had to go past me to get out. And the last two students in the room to leave were named Jedediah and Lorianne. Now Faulkner is the university in the deep south if you haven't picked up on that. But Jedediah and Lorianne, Lorianne was an honor student. She was very well read for a college freshman, very sharp. Jedediah, maybe not so much, but he was a great kid with a big heart and you could tell that just by spending a few minutes with him. So anyway, Jed stops as he's about to walk past me. He said, Dr. Jewel, I really enjoy your class. You know, professors love to hear stuff like that, right? So I said, well, thanks, Jed. I'm glad you're getting something out of it. And he said, yeah, I'm not really sure why I like it so much, but I think it has something to do with your your free spirit and your hubris. And so, you know, the teacher in me, you know, wanted to kind of like enter into a Socratic dialogue with Jed to figure out what exactly he meant by using that term and maybe suggest a better word for, you know, but at the same time, I didn't want to seem pedantic, you know, by responding to his attempt at a compliment. So I just, I kind of looked at Lorianne, who was, you know, suppressing her laughter. And I said, I just looked back at you. I said, well, thanks, Jed. I really appreciate that about my hubris. So I tell you that to give you maybe a little bit of a sense of what I'm feeling as I stand up here in front of you because in comparison to so many of you who have spent decades teaching Austrian economics and advancing the scholarship in the field, I sort of feel like Jed, you know, the relative novice who has a great appreciation for the contribution of Austrian economics to our understanding of social life, but who maybe hasn't mastered the terminology, you know, perfectly or learned how to contribute to the field in an effective way just yet. So I hope that if I make any missteps in what I present to you today, you'll treat me gently as I tried to treat Jed gently all those years ago. Now my lecture is titled The Persistent Problem of Objective Value. And I realize that for this group, that might be a pretty provocative title. I mean, we heard our Rothbard lecturer yesterday say, oh, value is subjective. And when I was up at Sanford University a few weeks ago and talking to Art Cardin, I know a lot of you know Art. And I mentioned the title of my lecture to him. And he gave me this kind of looks like we can't be friends anymore. It was one of those kind of things. But I want to assure you upfront that I am not intending to attack the foundation of Austrian economics. I will not call the marginal revolution into question. I will not talk about money as a measure of value. I will not tell you that market price is ought to reflect the cost of production, or repeat canards about economists knowing the price of everything and the value of nothing. What I will do is talk about a problem that I've run into pretty consistently when talking about economics to non-economists who have serious religious commitments of various kinds. And I actually do this pretty often in my teaching, even though I don't teach courses in economics per se. Now, as some of you know, I direct doctoral and master's programs in the humanities. They are great books based curricula. So when I was in here yesterday morning and learned that Alex Pollock was a director of the Great Books Foundation, I was like, wow, the workings of Providence are strange. I don't know what that means that I'm a great books professor and here's a guy from the Great Books Foundation, but it was confirmation to me that I'm in the right place this weekend. So these programs that I direct are distance programs. I've got students from all over the country, all over the world. And they come from a lot of different backgrounds. Some of them are in their 20s. Some of them are in their 60s. Some of them are full-time instructors at community colleges or four-year colleges and universities. Others are involved in classical education in the K through 12 world. Some have full-time positions in ministry. Others are lawyers. Others are in business. But nearly all of them have a couple of things in common. They're serious about their Christian faith, Faulkner's Christian University. And these students love the Great Books and they love the great conversation. Now, a couple of times a year, I teach an interdisciplinary topical seminar. And I've taught seminars on happiness and justice and wealth and JRR Tolkien and all kinds of other things. And this semester, I'm teaching a seminar on virtues and markets. But no matter what the seminar topic happens to be, I try to make an effort to get the students to encounter the economic way of thinking. So, for example, in the justice seminar that I teach every two or three years, I have the students read Marx and then I follow that up immediately with Bumbawirk's answer to Marx's exploitation theory. So I joke that I'm the only humanities professor in the world who makes the students read Eugen von Bumbawirk. This semester, the students are reading several things, including McCloskey's bourgeois virtues. But they're also reading a lot of Great Books content, Aristotle, Aristophanes, Thomas Aquinas, you know, the usual suspects. Now, almost every time I have students read an economic selection that incorporates, you know, modern subjectivist utility theory, I run into resistance from the students who typically have backgrounds in philosophy, theology, literature or history. Now, my friend Sam Greg at the Acton Institute says it's easier to get economists to think about ethics than it is to get philosophers and theologians to think about economics. So maybe that's not entirely surprising. But after several years of this happening, you know, repeatedly and a number of conversations with students, I think I'm starting to get a handle on what's going on. It's not simply that my students who are classical educators that they've read, you know, Aristotle's musings on the barrenness of money and the illicit nature of interest. I can tell them about time preference and kind of talk them out of that in three or four minutes. There's something else going on. And I finally concluded that there is a specter haunting my students, the specter of C.S. Lewis. Now, it's almost impossible to overstate the esteem in which small Orthodox Christians hold C.S. Lewis today. But maybe one example will give you some idea of its extent. The late reform theologian R.C. Sprule once told a story about a conference on ecumenical dialogue that he had attended with Roman Catholic Eastern Orthodox and other reformed and evangelical clergy. And although at the end of the conference, there were still many differences in their respective views. They decided that they would affirm a resolution about what they all endorsed. And here what here was what the resolution that they all endorsed. Number one, the inspiration of the Bible. Number two, the cannons of the first six ecumenical councils. And number three, the writings of C.S. Lewis. It sounds crazy, but that's the story that he told. Now, although Lewis is best known today to the general public as the author of the Chronicles of Narnia and the Screwtape Letters, his other works of both fiction and nonfiction have had a far-reaching influence on Christians of the baby boom and subsequent generations. On the fiction side to give just a couple of examples, I know some of you probably read these books, the Pilgrims Regress, an allegorical account of Lewis's own conversion to Christianity helped Christians make sense of some of the shortcomings of influential secular philosophies, both ancient and modern. The great divorce provides an imaginative description of heaven and hell that resonates with Christians who struggle with the fire and brimstone rhetoric of an earlier era. On the nonfiction side, Lewis's the problem of pain and a grief observed have helped many to cope with heartbreaking loss. His mere Christianity provides accessible, non-dogmatic arguments for the reasonableness of Christian belief. And in fact, these arguments converted one of my students to Christianity when I was teaching in mainland China in the late 1990s. So it's almost certainly the most influential of Lewis's nonfiction works in the broader culture. But among those who already embraced Christianity, Lewis has probably made the biggest impression with the abolition of man, which was originally a series of lectures that he delivered in 1943 and then published in book form a year later. And just in the two or three weeks leading up to this event, when I had already decided I was going to talk about the abolition of man, I was at two different events completely unrelated where people brought up the abolition of man as this really foundational and pivotal work that everybody needs to read. So its influence is very widespread. It's one of the best known modern defenses of natural law. And I want to focus here on Lewis's comments on subjectivism that occur early in that book, because it's here that the popular reading of Lewis I think can create some problems for economists. Oh, by the way, just in the last few days I discovered an article on Mises.org by Daniel Ajamean who delivered the Lew church lecture a few years ago. And that article works to harmonize Lewis's writings on natural law with Rothbard's treatment of natural law. So I recommend that you check that out. So Lewis opens the first chapter of the abolition of man with a discussion of a grade school English textbook that he calls the green book. He doesn't give you the book's real title, he doesn't name the book's author because he's trying to be polite but subsequent scholars have actually come in and positively identified this what this book was. But the authors of the green book reference an early 19th century account by Dorothy Wordsworth about her 1803 visit to a waterfall near New Lanark in Scotland along with her brother, the poet William Wordsworth and Samuel Taylor Coleridge. Now remember that New Lanark was the model factory town built by the utopian socialist Robert Owen in the in the early 19th century. So Coleridge engages in conversation with some of the tourists who are there and the tourists use various adjectives like majestic and sublime to describe the waterfall. Now the authors of the green book comment on this scene. Here's a quote. When the man says this is sublime, he appeared to be making a remark about the waterfall. Actually, he was not making a remark about the waterfall, but a remark about his own feelings. What he was saying was really, I have feelings associated in my mind with the word sublime. Or shortly, I have sublime feelings. And Lewis then in his own voice comments, here are a good many deep questions settled in a pretty summary fashion. But he's not finished quoting the green book, its authors go on to write the following quote, this confusion is continually present in language as we use it. We appear to be saying something very important about something. And actually, we are only saying something about our own feelings. Now in Lewis's view, the schoolboy who reads this passage from the green book is being invited to believe two things. Number one, all sentences containing a predicate of value are statements about the emotional state of the speaker. And number two, all such statements are unimportant. So he goes on to level a lengthy critique of these two propositions, which I'll attempt to summarize very briefly. When Coleridge approves of certain adjectives like majestic to describe the waterfall, he's expressing the belief in Lewis's words that, quote, certain responses could be more just or ordinate or appropriate than others to inanimate nature. The man who called the cataract sublime was not intending simply to describe his own emotions about it. He was also claiming that the object was one which merited those emotions. But for this claim, there would be nothing to agree or disagree about. End quote. So over the following pages, Lewis shows that this conception of a fitting response to the world is found in every great religion and philosophical tradition. And he refers to it as the Tao throughout the rest of the book. Now what all these traditions have in common, he says, is the doctrine of objective value, which he defines as the belief that certain attitudes are really true and others are really false to the kind of thing the universe is and the kind of things we are. Now I think the remainder of this paragraph is really helpful and important for clarifying what Lewis means so forgive me for quoting it at length. Those who know the Tao can hold that to call children delightful or old men venerable is not simply to record a psychological fact about our own parental or filial emotions at the moment, but to recognize a quality that demands a certain response from us whether we make it or not. I myself do not enjoy the society of small children because I speak from within the Tao. I recognize this as a defect within myself, just as a man may have to recognize that he is tone deaf or color blind. And because our approvals and disapprovals are thus recognitions of objective value or responses to an objective order, therefore emotional states can be in harmony with reason when we feel liking for what ought to be approved or out of harmony with reason when we perceive that liking is due but cannot feel it. No emotion is in itself a judgment in that sense. All emotions and sentiments are a logical, but they can be reasonable or unreasonable as they conform to reason or fail to conform. The heart never takes the place of the head, but it can and should obey it. End quote. Now, of course, I should note that nothing in Lewis's discussion has anything directly to do with economics. The objective value to which he refers is not economic or exchange value. Rather, it's the inherent qualities of other people and things to which we can respond appropriately or inappropriately. So when Coleridge's conversation partner says the waterfall is sublime, he's actually saying that his feeling of humility in the presence of the waterfall is appropriate to the reality. And thus he's referring to something beyond his feeling. Now, Jews and Christians who believe in the inspiration of the Bible can point to the creation account in the Book of Genesis as a paradigmatic example of objective value in this sense. God creates the earth and the seas and saw that it was good. The earth brought forth grass and trees and God saw that it was good. God creates the sun and the moon and saw that it was good. This declaration occurs five times in Genesis chapter one. And then at the conclusion of the six days of creation, quote, God saw everything that he had made and behold, it was very good. Now, of course, this idea of objective value has ethical application as well. So leaving aside the euthyphro dilemma, if you know the dilemma of does God command things because they're good or are they good because God commands them? Just leave that aside for a second. Human obedience to divine commands is objectively appropriate. As Saint Paul writes in the Epistle to the Romans, even the Gentiles who had not received the law of Moses could know and obey those divine commands, thus becoming a law unto themselves. Again, nothing directly having to do with economics just yet. Nevertheless, Lewis' howl does have implications for things that economics attempts to analyze, such as market participants' ordinal preferences as revealed in economic transactions. And here's, I think, is where the economists can run into problems when attempting to explain market processes to those who have been influenced by Lewis' writings. Now, I happen to believe that Lewis is correct in this defense of the doctrine of objective value, and most of my students do as well. But the moment I start talking about economic values being subjective, they start looking at me funny. But it usually doesn't take me that long to distinguish economic valuation from the objective ontological value that Lewis describes, but this distinction generally gives rise to more questions on their part, such as to what extent should objective value inform or dictate one's subjective ordinal rankings of goods that then manifest in market prices. And sooner or later, the discussion usually turns to whether state action is necessary or desirable to move markets to be more in line with objective value. Now, the economist might answer that we've now left the domain of economics and have entered the realm of ethics or political philosophy, but not all great economic thinkers have held that view. I know that many of you are familiar with the name Kondiak, Etienne Bonot, the Abbey de Kondiak was a contemporary of Adam Smith. And he's known in the history of thought primarily as a philosopher in the Lockean empiricist tradition. However, his 1776 treatise, commerce and government considered in their mutual relationship, has earned him a place in the history of economic thought as well. I'm going to give a shout out to Patrick Newman for putting me onto Kondiak as a research possibility. In his Austrian perspective on the history of economic thought, Murray Rothbard lavishes praise on Kondiak, arguing that his treatise was superior to Smith's wealth of nations. And the primary reason of Rothbard's preferring Kondiak to Smith is Kondiak's identification of subjective valuation as the source of market prices. According to Rothbard, Kondiak, quote, set forth and defended a sophisticated subjective utility of value, in quote, in which the utility of goods increases with their scarcity and decreases with their abundance. Exchange arises as a result of market participants differing perception of the utility and value of the good being exchanged. Kondiak refutes the Aristotelian notion of equality in exchange, later adopted by some of the British classical economists, by pointing out that, in a market transaction, parties give up a lesser value for a greater. And Rothbard laments that this rebuttal, quote, was promptly lost for 100 years, in quote, before Karl Minger and other marginalists recovered it. Now, despite his importance as an empiricist philosopher, Kondiak also helped pioneer a deductivist methodology for economics that has proved very congenial for the Austrian school, of course. Now, what might surprise you about Kondiak is that he held to a doctrine of objective value that was rooted in his theology. For Kondiak, all knowledge is analytic and part of an integrated structure that might even be seen as one great tautology. To God, all things are immediately and intimately known. As Kondiak puts it, quote, each truth is for him like two and two make four. He sees them all in a single truth and doubtless nothing is so frivolous in his eyes as this science with which we inflate our pride, end quote. Now, this truth includes knowledge of the ontological value of every part of the creation, of course. Obviously, the human mind lacks this capacity and Kondiak approaches economic value with this limitation in mind. Now, in a 1985 article, Daniel Klein states that Kondiak quotes unravels a logical sequence when explaining how value arises for each individual. Sensation is the starting point. Some sensations are agreeable, others are disagreeable, and this relationship between the subject and the object gives rise to need. Some needs follow from our makeup or constitution. For example, we need food to survive. Other artificial needs follow from custom and Kondiak says are sometimes as necessary as if we had been constituted to need it. And the example he gives here is a tribe's need for agricultural implements once it has grown too large to live a nomadic existence. Kondiak then moves from need to utility. A thing is useful when it supplies some of our needs. It's useless when it meets none of them or when we can do nothing about it. And then finally, we make a judgment or estimation of a good's utility. Quote, to say that a thing has value is to say that it is or that we think it is good for some purpose. End quote. So you'll notice that in this sequence from sensation to need to utility to value, there are some links that economists would call objective like the way Kondiak defines usefulness and others that they would normally call subjective such as the final estimation of the individual about a good's usefulness. But Kondiak holds that to God there's no distinction between the two. It's all one kind of knowledge. Now, if you're familiar with the continental tradition of the economic thought in the generations following Kondiak, you might know that JB say was critical of Kondiak and his deductivist methodology, but that destitute to Tracy considered it foundational to sound economic reasoning. Now, like Kondiak, Tracy was first and foremost a philosopher and only secondarily an economist. He's the author who gave us the words ideology and ideologue for better or worse. And he largely adopted Kondiak's framework but with one significant difference. Going back to Daniel Klein, Klein writes, although Tracy saw a necessity in nature, he did not envision an immaculate all-encompassing tautological structure of knowledge. For Kondiak, this fluid comprehension resided in God's mind. But Tracy was probably an atheist. Kondiak conceived of all reasoning, which is ultimately situated in a frictionless context as synonymous with calculation or algebraic expression. All the apparent snags and obstacles wash away when we discover the ideal mathematical form of the knowledge we hold. For Tracy, however, the complications and qualifications involved in non-mathematical reasoning are real and constitute a definite difference between the two sorts of propositions." So what's going on here is, first of all, Kondiak conceives of God's perfect knowledge in mathematical terms. It's all calculation. Tracy doesn't like this. He instead says that not all reasoning is calculation. Reasoning is the genus. Calculation is just one species of reasoning. OK, fine. But along the way, Tracy tables the question of God's knowledge altogether and proceeds as though it doesn't have any bearing on economic science. And Klein approves of this. Klein says that Tracy relieved much of Kondiak's thought of a persistent remnant of scholasticism, while salvaging and modernizing many valuable elements." So for example, where Kondiak writes about needs, Tracy writes about wants. And here's how Klein describes this development. This is a significant improvement because it is a step toward the modern language of subjectivist economics. The need of Kondiak is an element from scholastic thought. The normative and theological connotations of the term go hand in hand with the Aristotelian ethic of man fulfilling his potential, which was prevalent in scholastic thought. Such improvements on Kondiak show that differences between Tracy and Kondiak on philosophical matters were important in the historical development of economic thought." And I'll note in this connection that in his philosophical writings, Tracy also offered a redefinition of freedom away from the classical view of willing what one ought to one of the ability to will and do what one pleases. So that's a significant difference. Perhaps ironically, even though he moved away from Kondiak's mathematical conception of reasoning as necessarily calculation, Tracy held on to an idea of subjective value, objective economic value, writing of a natural and necessary value derived from cost of production to which he thought the market price would tend. Now, whether that theoretical conception on net represents a step forward for economics from Kondiak, I'll leave you to judge. Now, several historians of economic thought, including Joseph Schumpeter and the Mises Institute's own Murray Rothbard and Joe Salerno, have written of the importance of the French liberal school as a preserver of the laissez-faire tradition on a sounder philosophical basis than that of the British classical economists in the 19th century. One historian asked, quote, is there not between Kondiak and Jevons or Bombavirk an uninterrupted connection of economists who found value on desire? We know that all these men were familiar with Kondiak, whose philosophy was prevailing during their youth, end quote. So we can recognize and appreciate the accomplishments of this tradition in keeping alive ideas that would feed the marginal revolution of the 1870s. But we can also point to the potentially negative consequences of the aggressively secularizing nature of the majority of continental liberals in the early and mid-19th century. And I'm aware that Ralph Raco produced some valuable scholarship on religious liberals, such as Benjamin Konstant and Alexis de Tocqueville. But I think the generalization about their secularism stands with some qualifications. Now, once the tradition of Austrian economics proper began with Karl Menger and continued with Bombavirk and Ludwig von Mises, there appeared to be no need to appeal to anything beyond the imputation of value by individual economic actors to explain market processes. And this can be fine as far as it goes, but as so often happens in the social sciences after theology and normative considerations were pushed out in the name of achieving objectivity, the temptation to smuggle them back in through the back door can be very powerful. And by the time he wrote theory and history in the 1950s, Mises himself was taking such a tack. In the chapter titled The Quest for Absolute Values, he explicitly states that economic science cannot say anything about the truth or falsity of judgments of value. It can only inquire into the effects of actions guided by those judgments. Quote, any step beyond these limits is tantamount to substituting a personal judgment of value for knowledge of reality, end quote. Now the reader who makes his way through this chapter will find Mises' dismissal as relevant for economic theory, the dogmas of the creation, the incarnation, and the trinity on the grounds that they have, quote, no direct bearing on the problems of inter-human relations, end quote. He will read about the deficiencies and contradictions of natural law theory with its heap of illusions and quite arbitrary prepossessions. But by the time he makes it to the end of that same chapter, he'll see Mises call economics the product of utilitarianism and claim that social utility, as defined by utilitarianism, must be the sole criterion for legislation and justice. So it sounds as though Mises is coming very close to conceiving social utility as an absolute value. Now he tries to get around this by claiming that utilitarianism is only about means and not ends and that social cooperation is the thing that allows everyone, the maximum capability, to pursue and achieve his ends. But if this is true, we still have the presumably objective value behind utilitarianism that enabling as many people as possible to pursue and achieve their ends is good. So there's a tension between the attempt to make economics value free and the contention that it is the product of a social philosophy utilitarianism with a prescriptive view of what constitutes the good. Now don't get me wrong here. Don't think I don't like theory and history. I think it's an incredible book. I have vivid memories of sitting on the third floor of Strozier Library at Florida State University as a graduate student reading theory and history was the first of Mises' of treatises that I took a look at because I was trained as a historian. And I remember just being blown away on page after page by these incredible insights. It's my first time to really encounter Mises in depth. So I have great veneration for Mises and that book in particular. But I think this is a potential problem for Mises. Now some others of the most prominent authors in the Austrian tradition either omit any mention of the relationship of objective ontological value to economic value or deny that such a relationship exists. Now I know that most of you probably heard the quote by Hayek in the Counter-Revolution of Science which he wrote in the 50s. It is probably no exaggeration to say that every important advance in economic theory during the last 100 years was a further step in the consistent application of subjectivism. But again, radical subjectivism eventually runs into difficulties in its assessment of utility. Gary North who's a great friend of the Mises Institute and who passed away just a few weeks ago and about whom I'll have more to say in a moment was an attendee at the South Royalton Conference in 1974. Now I realized yesterday we got a lot of young people here, a lot of teenagers who may not know anything about the South Royalton Conference. So for those of you younger folks this was the conference in 1974 that would sort of dates the, today we date like the rebirth of the Austrian school in some sense to that conference because in 1974 Mises had just died and Hayek had moved on to other things besides economics and there wasn't really an Austrian presence in the academy but there were a lot of people who were still interested in Austrian economics that got together in South Royalton, Vermont in 1974 and had this conference and that kind of kickstarted the modern Austrian movement. So Gary North was an attendee at that conference and in later years he recalled a debate that illustrates this tension about radical subjectivism. So he says that Murray Rothbard believed that Israel Kersner and Ludwig Lachmann wanted to take subjectivism too far and so he attempted to put Kersner on the spot with the following question. You ready? Some of you may have an answer. If a wine-loving Frenchman survived a nuclear war in a bomb shelter and came out of it as the sole survivor and therefore the owner of all the wine of France is he richer than a nation that had not been at war? Kersner refused to answer the question. On the grounds that the economists cannot make interpersonal comparisons of subjective utility or use statistical aggregates to compare the wealth of nations because this one surviving guy is the French nation now, right? So we can't use statistical aggregates to compare the wealth of nations. Now Kersner's reply was in line with the fully consistent application of subjective value theory. Rothbard, on the other hand, thought the answer to the question should have been obvious. The nation that avoided war is clearly wealthier than the wine-soaked Frenchman. Now I suspect Rothbard's reluctance to go down this radical subjectivist road or rabbit hole if you prefer had something to do with his affinity for Aristotle and the natural law tradition which those scholastic philosophers and Kondiak also valued, right? Rothbard's recognition of the existence of an objective ethic suited to man's rational nature not only guided him toward a political philosophy of non-coercion as laid out in works like the Ethics of Liberty, but probably also put the brakes on some of the tendencies of radical subjectivism for him. Now I mentioned Gary North. I think one of the writers in the Austrian tradition who does devote attention to this question of objective value is North. And after he passed away a few weeks ago, I reworked my talk to talk about North more just sort of as a way of kind of paying tribute to his contributions. Now as many of you know, North believed his calling was to write a multi-volume economic commentary on the Bible and he devoted many thousands of hours over several decades to accomplishing that task. But one of his first products as part of that effort was the 1981 book, The Dominion Covenant which focuses on the book of Genesis. And the fourth chapter of that work is titled Economic Value, Objective and Subjective. Before going further, I'll just mention that Timothy Terrell and Glenn Moots have a co-authored article in the Journal of Markets and Morality back in 2006 that discusses some of these ideas. So I encourage you to take a look at that. Of course, Timothy is a past Lou Church Memorial Lecturer. Now, North agrees with Hayek and Mises and other Austrians that the marginalist revolution of the late 19th century buried the argument that cost of production or other calculations of objective value furnish a benchmark for market prices. However, he maintains that this is not the end of the story. Even though human beings have the power to impute economic value, this activity goes on within divinely established parameters. As North puts it, quote, all human imputation goes on within a framework of God's absolute objective standards, end quote. And North calls attention to the problem of our inability to measure pleasure and pain as a major problem for utilitarianism. And this problem applies not only to situations where one person gains pleasure from inflicting pain on others. Remember when Richard Posner wrote that the real reason rape is wrong is that the rapist inflicts quantitatively more harm on the victim than the amount of pleasure that he receives in return from the ag. Okay, so this is not only a problem in those situations, but also when some economists tell policymakers that taking the millionaires last $10,000 to divide between a poor person and the bureaucracy results in a net gain to society. Now, of course, Lionel Robbins established this way back in the 1930s with his book, The Nature and Significance of Economic Science, but as you probably know, Robbins later backtracked under pressure and said that it was fine for economists to make those kinds of recommendations as economists, even though those recommendations can't be derived from economics. That's just the thing we do, right? That's what economists do. Now, North goes on to write that even economists who recognize our inability to make interpersonal comparisons of subjective utility nearly always end up falling back on statistical aggregates in certain situations. Now, Mises himself did this when attempting to demonstrate the superiority of capitalist economies to socialist economies. He pointed to numbers like capital goods per capita. Rothbard did it in his exchange with Kersner at South Royalton. The Fraser Institute's Human Freedom Index, to which our own Walter Block has contributed, uses GDP as part of its calculations. But if the individual is the only source of economic value, then all of these great economists are caught in a contradiction. Now, North says it's common sense to do this kind of thing and it's appropriate. Mises and Rothbard were obviously correct in their conclusions. They're not caught in a contradiction because they operate within the framework of God's objective standards. So here's how North threads this needle. Quote, there is an overall economic plan in God's mind. North is Calvinist, of course, he's gonna say God has a plan, but you don't have to be a Calvinist to say that God has a plan, right? There's an overall economic plan in God's mind. This forces men to some degree to conform themselves to this plan and to adjust their plans in terms of it. We can therefore say, along with Kersner, that in order to make assessments of comparative wealth, there must be a single integrated plan. Furthermore, unlike Kersner, we can say that such a plan exists. As creatures made in God's image, we can make at least reasonable, useful estimations of the value of capital or other goods. Even though we could not do so legitimately if all value were exclusively subjective, as if there were no overall plan of God. Now importantly, North does not claim to know what God's overall economic plan is. We could think through what would have to be true in order for us to know that divine plan. So imagine a person whose piety and devotion have led him to a state of enlightenment such that his ordinal ranking of ends is perfect from a religious point of view. St. Thoe, right? Or maybe St. Larry. Maybe St. Larry is more plausible over here. I don't know. In other words, St. Larry has flawlessly discerned God's will for his life and understands precisely how to allocate his time, energy, and material resources in pursuit of that will. He is, quote, thinking God's thoughts after him. You've probably heard that phrase before. How would this affect his economic behavior? Now I think it's fair to say that his ordering of ends would remove many things from the category of exchange relationships entirely. E. F. Schumacher once wrote that there can be nothing sacred in something that has a price. And I think there's an element of truth there that more economists ought to recognize. Now I think Peter Jaworski and Jason Brennan are smart guys. I like a lot of what they have to say, but when they start talking about markets without limits, you all know the book, I remember Jaworski saying at an API conference one year that it would be fine for money transactions to enter into some, let's just say, pretty intimate family interactions. And when I start hearing things like that, I think maybe maybe it's time to put on the brakes a little bit, but. That's a particular brand of philosophy talking, not economics, right? When Jesus drove the money changers from the temple, I think he was saying at a minimum that it's not appropriate for market transactions to be everywhere, right? Now I love this quote from Mises's essay in economic calculation in the socialist Commonwealth. Quote, in any place where men regard as significant, the beauty of a neighborhood or of a building, the health, happiness and contentment of mankind, the honor of individuals or nations, they are just as much motive forces of rational conduct as are economic factors in the proper sense of the word. Even where they are not substitutable against each other on the market and therefore do not enter into exchange relationships. That's the quote I always trot out when people tell me economists know the price of everything and the value of nothing, right? But unless St. Larry experienced a divine call to the aromitical life, that's life as a hermit, for those of you who don't know, he will still be involved in exchange. This is true of those, even of those who live communally such as the members of various monastic orders in the Roman Catholic and Eastern Orthodox churches or the Anabaptist Christians in the Hutterite traditions who have established colonies on several continents. Although members of these groups own no personal property and do not engage in buying and selling within their communities, they still make decisions about the allocation of time, energy and the community's resources. And there's often significant trade between those entities and the outside world. But let's leave those folks aside for the moment and focus on the individual saint operating within the mainstream economy, if you will. His supply of and demand or lack of demand for particular goods and services will affect their distribution in the manner described by Austrian economics. And if we extend this thought experiment to include all economic actors having this perfect discernment and perfectly ordered ends, we would then have a situation in which there would be a divinely approved distribution of all goods and services. Just go with me here. If Mises can use the evenly rotating economy as a construct, I can use the divinely ordered economy, okay? Each person would have the correct amount of everything given the current productivity of the economy. Presumably the demand for many goods and services would disappear completely. Weapons of war, prostitution and the like. Demand for other goods and services might increase dramatically. Church construction, pilgrimages to the Holy Land and so on. Charitable giving and the services that it finances might also skyrocket. Note that each person's perfect ordering of ends in this scenario does not imply that each person has the same ordering of ends. The diversity of talents, circumstances and callings within this divine economy would imply a different ordinal ranking of preferences by each person. Just as St. Paul uses the analogy of parts of the body to illustrate the division of labor within the church in the first epistle to the Corinthians, we would imagine a division of labor within the economy writ large in this ideal society. Some are called to life in the monastery and have no need for houses or professional attire. Others are called to marry and have children. They need diapers and school supplies. The elderly need more healthcare than those who are young as do those with rare medical conditions. Practitioners of different trades need different tools. Now we could multiply these examples ad infinitum to show that there would be no uniformity among people's rankings of ends in this society apart from the supreme end of discerning and following God's will. Now in this scenario in which all desires and ends are correctly ordered in an objective sense and market activity reflects this perfect ordering we would have just prices, right? Market clearing prices would be discovered in the manner described by economic science and all the goods and services would go toward their most highly valued uses. So in this very narrow and idealized way we can speak of such a thing as a just price that satisfies both the rational conclusion of late scholastic writers such as Luis de Molina who said that the just price is the freely negotiated market price and also those who claim that prices ought to reflect some value beyond the desires of the parties to the exchange. So let's add a wrinkle to this scenario in which the saints perfect discernment of God's will for their lives does not result in a precise ordinal ranking of all possible ends but that God grants his people who are made in his image perfect freedom within certain limits to exercise their own preferences. Now whether this freedom might be exercised merely in matters of taste, you know a ketchup or mustard on your hamburger or whether it might extend to more substantive questions such as the selection of one's profession or number of working hours in the week, it's irrelevant for the purposes of this thought experiment but in this situation we would expect there to be more variation in the range of possible quantities supplied and demanded of various goods and services. Yet presumably the resulting market clearing prices would be in accordance with the divine will and considered just. Okay, perhaps I'm describing what things will look like in the new heavens and the new earth described in the book of Revelation, right? But it's important to note that even if a growing number of people around the world today suddenly had this sort of conversion experience and perfect discernment and started to order their preferences in this objectively correct way it does not necessarily follow that the overall market would inevitably move in the right direction. So for example, in the economy full of disordered people all of us, one person might have a greater demand for a particular good or service than he ought to. Another person might have a lesser demand than she ought to and those two errors could conceivably balance out making the total demand objectively correct. So if one of these market participants aligns his ends perfectly the total demand could move away from its divine equilibrium so that balance is eliminated. So in principle, I think obviously it's impossible for us to know the particulars of this divine economic plan or what prices ought to be or any of that sort of thing. And so we're correct to say that, look the freely negotiated market price is the best we've got, let's just go with that. So I think we're correct in saying that in the here and now just envisioning this ideal scenario. But again, that doesn't mean we can't affirm the existence of a divine plan even a divine economic plan. So I think the classical theism or really any other form of theism that affirms the existence of a personal God offers us a way out of the dilemma of radical subjectivism. And we can recover insights from the late scholastics, Kondiak and more recent authors like Gary North to help us to a coherent account of subject evaluation within a divinely established objective framework. I can tell my students that Austrian economics is consistent with the truths CS Lewis explains in the abolition of man. And on the question of radical subjectivism, I'll keep taking the side of Mises and Rothbard against Kersner. Thank you. Okay, I think we've got time for a few questions. So, yes sir. Thank you very much for this great talk. It seems that even the radical subjectivist still use the phrase like valuing goods which would seem redundant because you could value things without saying valuing a good. And maybe the term good is just a remnant of scholastic notions. On the other hand, it may speak precisely to a distinction between goodness and value or valuation. So you might say that there's objective goodness and subjective valuation. And that would sort of speak to the metaphysical notions of the transcendental goodness of things. If you know what I mean. So that we could, in other ways, we could resolve this by making a distinction between the valuation, which is a ranking or a choice and the goodness, which is actually objective. And one would value goods as opposed to valuing evils. Yeah, and I don't know all of the history here but my impression is that when the radical subjectivist says valuing goods that his understanding of goods is simply something that somebody values, right? So that is a kind of redundancy. I don't think there's necessarily a contradiction in what the radical subjectivist is saying there. But that's an interesting point that you bring out. I had not thought about that actually. Thank you. I think there have been some people in the Austrian school since this is kind of a contentious issue among some have preferred the term like personal value given that whenever there's a valuation, there's a value or an object that they value. And some thought rather than getting into this fight that has theological implications, maybe just using personal value might actually be a more descriptive and better way around this. Do you have any thoughts on that? Yeah, I think that if you say that, you still run into the problem of, can this radical subjectivism sort of survive even on its own terms? Like this question of making comparisons among aggregates I think you run into that problem. So you'd still have to come up with some kind of solution to that. And certainly in everyday conversation, if I'm Christian, if I'm talking to somebody who's not a Christian, I'm not gonna beat him over the head saying, I'm objectively correct and you're objectively, that's not the way. Well, that's kind of where I was going. So rather than have this be a point of conflict with Christians. Yeah, I understand. Yeah, and I appreciate that. I'm thinking more of the terms of, in terms of trying to get at this problem of how far can we take subjective valuation? And is there, does it eventually run into a barrier? I think that's the problem that Rothbard is sort of pointing to in that exchange with Kirchner. Okay, thank you. If you had to recommend like a single text or resource to someone who's interested in exploring this dialogue between Christian ethics or theology and economics, what would you recommend? A single text, yeah, it's difficult actually. Of course, there are a lot of really sound authors in the Austrian tradition who have this orientation. I don't know of any treatises that like systematically kind of work through this, so that's a tough question. I'll have to think about that when I get with you later, maybe come up with some answer. But obviously, I think you ought to read Lewis's Abolition of Man to get more of an idea of this objective ontological value and then maybe start thinking about how that relates to the economics like we've been talking about. Thanks. Got a question up here? Since I'm an atheist, my comment might be rather inappropriate because I'm gonna make a statement about Christianity. But as an atheist, I definitely support free will. So to me, Calvinism is absurd. That's why I sort of like Catholics, for example, you know. If you accept a doctrine of free will, man can make wrong choices. I mean, that's what free will means. If God denies to man that ability, then that man now is not functioning within the parameters of a creature with certain particular properties the way that God designed them. God designed man with free will. If that's the case, why is it relevant for a Christian to consider whether a person makes a right choice or a wrong choice? That is the choice, that question is settled between that man and God. A man makes wrong choices, well, he'll go to hell. Why is subjective valuation such a problem for a Christian? That's what I'm trying to understand. Well, I don't think it's a problem for Christians. You know, the questions that you're asking, you know, kind of open up a big can of worms of social ethics and everything else that go kind of beyond the scope of this talk. But within the parameters of what I'm talking about, I'm talking about the limitations of the radical subjectivism. And if we want to say something like socialist economies do better than capitalist economies, what's our basis for doing that if the valuing individual is the only source of economic value? How can we say, unless we just say, well, it's my personal belief that capitalist economies are better, how persuasive is that gonna be to people? So I think that's, I understand the point that you're making and I think that you're correct to an extent, but it's, I don't think that that question quite gets at the point that I'm trying to address here with the radical subject. Well, I was addressing the original point. You said that there are certain Christians who have difficulty with subjective value because they have, they attach importance to their objective value. Why do my students initially have problems with the idea of subjective value? Well, yeah, okay, that's a good question. Yeah, I think what's going on there is that when they first hear the idea before they have kind of it fully explained to them, they immediately think that it's a sort of moral relativism. And what I have to do is say like, well, no, economics as a descriptive science is just telling us how we get to these market outcomes to these prices, how these processes work in the market. And economics as such doesn't tell us about the normative quality of those people's preferences and all of that. So once that distinction is made, then I think almost all of them are fine with it. But then, like I said, they do want to kind of go beyond that and say, well, if they do believe in objective value, to what extent ought that to inform? Like even just in their own lives, it's like how should that inform my own preferences when I go to be a participant in the marketplace and that sort of thing. So sorry if I didn't understand the question at first, but thank you. All right, thank you again.