The visitor to the Acton Institute’s offices in Grand Rapids may notice on one wall an iconic framed photo. It captures Acton founders Fr. Robert Sirico and Kris Mauren chatting with former president Ronald Reagan in his Los Angeles office, some four years or so after Reagan left the White House.

The photo of the jovial Reagan could be said to capture the afterglow of a time that has itself become symbolic—1989, the year the Berlin Wall came down. Indeed, Acton’s founding in 1990 caught a wave of sorts, as the largely non-violent collapse of the USSR’s Evil Empire was optimistically read by some as a providential endorsement of Our Way of Life—down to the policy level, you might say.

If further proof were needed of our exceptional status in history, Pope John Paul II seemed to supply it in 1991 with his encyclical Centesimus Annus—a document apparently most important, in Acton’s interpretation, not for its call to reflection on a century of Catholic social thought but for its tardy but welcome embrace of the free market as a matrix of human and social virtues. On this reading—one hotly disputed by other interpreters within the Church and without—the encyclical was a singular instance of Catholic social teachings underwriting a specific economic philosophy, despite the Church’s historic insistence that it makes no such endorsements.

Acton’s anointing of American capitalism was an attempt to identify the victory of liberal democracy with the victory of Catholic truth, an effort that has since been met with a good deal of protest from Catholics uncomfortable with this Panglossian—indeed unscriptural—view of our economic arrangements.

In his new book, one of Fr. Sirico’s themes is that of economic freedom as a determinant of all other freedoms. “Political and economic freedom,” he assures us at one point, “leads to an ownership society, as opposed to a rental society…” Ronald Reagan himself spoke about the importance of ownership in 1987:

Thomas Jefferson dreamed of a land of small farmers, of shop owners and merchants. Abraham Lincoln signed into law the “Homestead Act” that ensured that the great western prairies of America would be the realm of independent, property-owning citizens—a mightier guarantee of freedom is difficult to imagine…

In this century, the United States has evolved into a great industrial power. Even though they are now, by and large, employees, our working people still benefit from property ownership. Most of our citizens own the homes in which they reside. In the marketplace, they benefit from direct and indirect business ownership. There are currently close to 10 million self-employed workers in the U.S.—nearly 9 percent of total civilian employment. And, millions more hope to own a business some day. Furthermore, over 47 million individuals reap the rewards of free enterprise through stock ownership in the vast number of companies listed on U. S. stock exchanges.

I can’t help but believe that in the future we will see in the United States and throughout the western world an increasing trend toward the next logical step, employee ownership. It is a path that befits a free people.

A reader of Fr. Sirico’s book will naturally look for his explanation of how economic outcomes since Reagan spoke those words in 1987 could have gone so terribly wrong in this country. And why should the recent history of employee ownership in Germany, for example, be so different?

For Fr. Sirico, the root problem here is “the breakdown of trust, integrity, and responsible freedom that contributed mightily to the continuing financial crisis, which began in 2008.” What we have lost are “certain perennial truths about political, economic, and religious freedom.”

Those truths, it turns out, include such commonsense notions as “not killing the goose that lays the golden egg; not binding down your most creative talent in a regulatory spider’s web; and not teaching your citizens that they can all live at someone’s expense.” How exactly these golden eggs and spiders’ webs apply to the case of the 2008 recession goes unexplored.

But Fr. Sirico’s analysis is not only moral: there is a method—an Austrian one—at work here also. After a misspent education in the 1970s New Left movement (where he says he consorted happily for a time with Tom Hayden and Jane Fonda), he discovered the real truth about human choice and action in the pages of Ludwig von Mises and Friedrich Hayek. And the presidential election of 1980 saw these tenets of neoliberal thought translated into a program of tax cuts and deregulation, even as the size of the federal government grew rather than shrinking.

Culturally speaking, Fr. Sirico gradually became an adherent of the Reagan revolution, a movement that seemed to find its vindication in 1989, only to ossify intellectually in the years following. Even without an Evil Empire, the Reaganites seemed only able to think in a binary fashion: capitalism vs. socialism (or anything else). Even as supply-side economics became a matter of Republican institutional dogma, the historical record showed a growing government and increasing income inequality. Reagan’s vision of widespread employee ownership went unfulfilled, and for most members of the American middle class, the unintendended consequence of economically neoliberal policies was a road to serfdom that by 2008 felt more like a superhighway. Wage slavery, with no path to ownership, or welfare: take your pick.

Scarcely a shadow of this history passes over Fr. Sirico’s narrative, one part of which is devoted to celebrating the beneficent effects of markets while criticizing various collectivists and statists, recent and ancient. He observes, for example, that the commandment “thou shalt not steal” only makes sense if the Bible is presupposing the validity of private property. You cannot steal something, after all, if no one owns it. This comment, part of what he refers to as “the biblical case for private property,” may be the first example of capitalistic exegesis I’ve ever come across, unless I’m forgetting some earlier effort of Michael Novak’s.

At the Acton Institute, Fr. Sirico reports, discussions about how to help the poor don’t start with the question of what causes poverty. “Instead we ask, What causes wealth?” Fr. Sirico notes that the rise of capitalism between 1800 and 1950 resulted in the proportion of the world’s population living in dire poverty being reduced by half, and from 1950 to 1980 it halved again.

Given the scarcity of authentic socialists and convinced statists at this point in time, it’s hard to see precisely whom the author feels a need to convince by his historical overview. The real trouble with our current arrangements is that free enterprise, in the persons of our business leaders, has scarcely any tradition of virtuous practice within living memory. Otherwise, why would outsourcing or predatory lending, for example, have gone unquestioned or unchecked for so long?

In addition to the rule of law, free markets need participants who value virtues such as contract-keeping, as Fr. Sirico points out, along with a number of other good habits. But the dynamics of the market itself do not somehow constitute, pace our author, a school of such virtue. (It should be said that Acton’s numerous ethics programs for business executives obviously recognize this lack and represent a laudable effort toward supplying it.)

Ethics aside, “Jobs are the world’s best anti-poverty program,” Fr. Sirico declares, as though wages—almost any typical worker’s wages these days—suffice to lift anyone out of economic want for long. It was one of Hilaire Belloc’s frequent complaints about British trade-union members that they could only think in terms of wage increases, never in terms of actual shared ownership, the true, historic path to self-sufficiency.

Admirable as Fr. Sirico’s emphasis on the moral dimensions may be, his Austrian lenses keep him from seeing the limits of an economic ideology that is not scientific but merely scientistic. Thus his title for Chapter 4: “Why the ‘Creative Destruction’ of Capitalism Is More Creative than Destructive.” I wonder if Fr. Sirico is aware that Schumpeter explicitly developed his notion of creative destruction based on a reading of Marx? The term referred to a process described by Marshall Berman as follows:

“All that is solid”—from the clothes on our backs to the looms and mills that weave them, to the men and women who work the machines, to the houses and neighborhoods the workers live in, to the firms and corporations that exploit the workers, to the towns and cities and whole regions and even nations that embrace them all—all these are made to be broken tomorrow, smashed or shredded or pulverized or dissolved, so they can be recycled or replaced next week, and the whole process can go on again and again, hopefully forever, in ever more profitable forms. The pathos of all bourgeois monuments is that their material strength and solidity actually count for nothing and carry no weight at all, that they are blown away like frail reeds by the very forces of capitalist development that they celebrate. Even the most beautiful and impressive bourgeois buildings and public works are disposable, capitalized for fast depreciation and planned to be obsolete, closer in their social functions to tents and encampments than to “Egyptian pyramids, Roman aqueducts, Gothic cathedrals.”

What would buffer or slow such a process? The existence of labor unions? “In a genuinely free economy, the typical relationship between employee and employer is not one of exploitation, as Marx would have it, but of mutual benefit. Free of coercion [such as that employed by unions, presumably] the two parties cooperate in the service of the customer, the employer and the employee,” Fr. Sirico states.

On this view, the continuing decline of labor unions in this country over the last two generations—that is, a subtracting of any coercion in labor-management dealings—should have meant a rise in cooperation and mutual benefit between employers and middle-class employees. Would any informed observer claim that has been the case? Would any Catholic familiar with our tradition of social justice and the dignity of the worker cheerfully accept the outcome we see before us as just?

One of Fr. Sirico’s more remarkable theological points here is his assertion that the process of globalization resembles Jesus’ Great Commission to make Christianity a global religion. “This increasing ability to share our God-given and complementary gifts with one another holds out the possibility of enlarging the scope of our communion and solidarity.” Let the circle of consumption be unbroken, so to speak.

Indeed, “there is a virtuous circle at work here. Christianity, a global religion, played a role in paving the way for economic globalization, and economic globalization then played a role in bringing more people in contact with other cultures and, with it, Christianity, which in turn brings more people into the fold of Christianity.”

I suppose one could argue that NAFTA worked to revitalize American Catholicism by spurring the arrival of millions of Mexican Catholic families with better values than most of us American-born Catholic citizens, but the economic displacement of so many Mexican farmers is surely not a consequence anyone would want.

At one point, Fr. Sirico speaks of the way contracts, markets, languages, trade, and exchange all are “forms of social engagement” and “hallmarks of the market economy.” He refers skeptically to European friends who try to envision a form of capitalism that would temper our individualism with a “social market”—a phrase the author, perhaps forgetting Wilhelm Roepke’s work on the social framework of a free economy, finds redundant.

“What market,” he asks, “is not social?”, going on to suggest that a free labor market, as we ostensibly have today in this country, “encourages employers to behave more sociably toward their employees—to treat them better—since they know that their workers have other opportunities.” To which the reader is tempted to respond, “Or at least they used to.”

One of the consequences of the 2008 crisis has been not only a reevaluation of economics itself but the rise of a new economics, including a resurgence in the field of political economy—the study of the process of wealth creation in societies. Two important strands of this new economics are based in natural law (see John Mueller’s Redeeming Economics) and in a neo-distributist approach (as in John Mèdaille’s Toward a Truly Free Market), while also putting new focus on cooperatives (Stefano Zamagni’s Cooperative Enterprises), on the commons (in the work of the late Nobel laureate Elinor Ostrom), and on the economy of communion and gratuitousness (Luigino Bruni). It is noteworthy that references to many of these new approaches can be found in Pope Benedict’s 2009 encyclical Caritas in Veritate.

An interest in all these hopeful developments would seem very much within the purview of the Acton Institute, as they represent a welcome return to the kind of personalistic economics Acton hopes to promote. Regrettably, none of them find a reference in Fr. Sirico’s book. Caritas in Veritate earns a single mention, for a small point that Fr. Sirico can only suggest is “worth a vigorous debate.”  Thus a gulf remains between Acton’s ostensible commitment toward developing personalistic, virtue-centered economic practices and the complacent neoliberalism into which it has lapsed.

Taking Fr. Sirico’s book and the career of the Acton Institute altogether, it’s a pity these culture warriors have mostly chosen to collaborate with neoliberalism, which is not just Lord Acton’s 19th-century liberalism but, as the crash of 2008 showed, something altogether more pernicious.

Elias Crim is at work on a new webzine to be called Solidarity Hall.