Originally posted Saturday, April 28, 2012
“In Latin, if you’re content and you have a long-term vision, you’re beatus. And if you’re happy in the short-term, well, you’re felix.” — Harold James
Princeton Professor Harold James was the lead co-author of an exceptionally lucid and intelligent 1990 paper, The Gold Standard, Deflation, and Financial Crisis in the Great Depression: An International Comparison. The paper’s junior author? Then-Princeton Prof. Ben Bernanke. Prof. James continues to write intelligently, and with nuance, on international monetary policy. Recently in Project Syndicate he presented Golden Rules for the Eurozone, observing: “But critics of the euro should take the gold-standard analogy more seriously. Like any system in the real world, it was more complex, more interesting, and also filled with more real policy possibilities than textbook caricatures suggest.”
James recently was interviewed for the Daily Princetonian by Professor Robert George, founder of the American Principles Project, on the subject of their mutual faith, Roman Catholicism. The questions did not address the gold standard, or even monetary policy, but this conversation makes some trenchant observations characteristic of, but by no means limited to, the Catholic faith. These principles are entirely consistent with the integrity, and appeal, of the gold standard. (Prof. James is said to have suggested, in International Monetary Cooperation, that the gold standard and the dollar standard have been replaced by a new “information standard.”)
RG: What do you make of the merits of the tradition of Catholic social thought, with its criticisms of both collectivist and pure laissez-faire doctrines?
HJ: It really is a significant attempt to overcome the polarization that you have between market economy views and socialist views. The tradition began in the late 19th century with the encyclical Rerum Novarum of Pope Leo XIII. He wrote during a moment of immense polarization and class conflict. The Industrial Revolution was producing an enormous amount of misery. Many people were being treated in degrading ways and lived in terrible circumstances.
RG: Understandably, economists are centrally concerned with efficiency, with production, with material well-being. But is there a problem, in your view, with a tendency toward materialism and utilitarianism in economics?
HJ: I think there has been this kind of discussion in economics itself. There’s recently, for instance, been an enormous amount of interest in how to measure happiness. Consider the short-term, euphoric sentiments that we get from, say, a purchase. It doesn’t make us happy for a very long time. You buy a new car, and you feel better for a bit. But quickly you’re bored with that, and you want some new stimulus. That, I think, is an interesting contribution to the debate. But it’s also helpful to try to think of the ways in which long-term contentment and well-being differ from short-term euphoria. In Latin, if you’re content and you have a long-term vision, you’re beatus. And if you’re happy in the short-term, well, you’re felix. …
RG: Early on, Catholicism incorporated aspects of the philosophical tradition of natural law theory, which began with Plato and Aristotle. You have written on natural law and economics. What led you to do so?
HJ: I wanted to explore this as an outcome of some thinking I was engaged in since the 1990s about whether different philosophies of economic life are compatible with each other. There was a big moment 15 years ago or so when people said that there’s a different kind of American economics from European economics from Asian economics. And I wanted to see whether there wasn’t something that really everyone had in common.
RG: Having done some of that work, do you conclude that there are aspects of the tradition of natural law theorizing that have something to contribute to economics?
HJ: I think it’s not really a contribution to technical economics. But it’s a contribution to the way that people think of political and social order.
The classical gold standard, too, stands apart both from “collectivist and pure laissez-faire doctrines.”
And … how discerning the distinction made by Prof. James between contentment in the long term, beatus, and happiness in the short term, felix.
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