“People often think that capitalism is all about ‘oh, you’re only looking at the numbers, and all about profit,’ but no — the markets include charity, and it includes generosity and community and all that.”

Tuur Demeester, What Bitcoin Did

Professor Guido Hülsmann of the University of Angers, France, was early to the modern study of the social impacts of monetary interventions; if anything, his The Ethics of Money Production is more relevant today and rings truer than when published fifteen years ago. Moreso, his German-only Krise der Inflationskultur (Eng.: “Inflation Culture in Crisis”) and 2014 lecture “The Cultural Consequences of Fiat Money” remain obligatory for anyone interested in these topics.

In his new treatise, Abundance, Generosity, and the State: An Inquiry Into Economic Principles, he takes on the idea of gratuitous goods — goods that go beyond the standard obligations of members in a commercial society. He doesn’t narrowly target tips, though they certainly count, but everything from gifts and grants to externalities and the moral implications of a capitalist, commercial order. 

At first, the attempt seems to be a wholly unrelated and strange exercise in academic intellectualizing. To carve out donations and gifts from other economic activities feels odd and contrived. But about halfway through the dense, 400-page work, it’s all coming together; Hülsmann just needed a long, very serious, and very careful lay-up. If you stick with it, you’ll be rewarded handsomely.

The catalyst and starting point for Hülsmann’s investigation into what’s more philosophy and theology than economics is the Papal encyclical “Caritas in Veritate” issued in 2009 by Pope Benedict. The idea of encyclicals is for faithful Catholics — of which Hülsmann is one — to carefully consider the themes that the Pope draws to your attention. While he admits that he was a decade or so late to the “Caritas in Veritate” party, Hülsmann has been on this beat for a long time; if anybody could write a combination of these widespread topics (theology, moral implications of government interventions, virtues of social market order), it would be him. 

It is his explicit purpose to “show how the narrow economic point of view may fit within the broader conceptions of Christian theology and philosophy,” but readers certainly don’t have to profess any specific faith to gain from this complicated and serious work. Indeed, by the middle of the book those topics have largely faded to the background and been replaced by what seems like more conventional political economy considerations. 

Where Hülsmann really shines is his treatment of welfare without the welfare state. His summary of education, health, and social security before the ages of government-provided versions of those services (and how they could once more be provided without the edifice of a government) is masterful and would well have fit the ideological void left by my heavily pro-government Public Policy101 class at university. “Private charity and the welfare state,” explains Hülsmann, “have completely dissimilar consequences in practice. The reason is that private charity preserves the direct and voluntary bond between donors and donees.”

These considerations, a good few hundred pages into the treatise, really tie the book together. His foundational critique against welfarism justifies the entire investigation: goods and services received gratuitously are not the same as those obtained as a right, especially when governments have extorted tax-“payers” at the point of a gun: “Tax receivers do not have legitimate claims to receive taxes. Taxpayers are not morally obliged to pay taxes. Paying and receiving taxes are [therefore not] gratuitous acts.”

What’s so fascinating — and in hindsight, so obvious — in that framing is that genuine gifts improve the welfare of both giver and recipient, and are more likely to be effective than centralized, state-provided welfare. Genuine gifts cannot be expected to be permanently renewed, unlike the rights-based, bureaucratic, and legalistic demands underpinning a welfare state. As a citizen in “need” you may be entitled to this or that clearly (not that clearly, if we’re being honest) specified benefit, but as a recipient of your fellow humans’ genuine gifts you are not. 

A welfare state produces a “loss of genuine community,” its services thus “perpetuate the problem they are supposed to mend. They do not build but destroy.”

We shouldn’t be surprised, since all that a government wages war on makes it worse — which is why the drugs are winning the war on drugs, terrorists are mostly winning the war on terror, and poverty is winning the war on poverty. 

Hülsmann disassembles the theoretical underpinnings for many other standard political-economy talking points such as (positive) externalities and public goods. He explains why property rights exist and what they do for social harmony in a commercial social order, investigates the financial and welfare implications of monetary orders, and what the true role that nonprofits play in civic society. 

Abundance is an exercise in theology, in economic philosophy, and a thorough venture into the history of economic thought. But it’s also a social history, a serious attack on the many moral and philosophical ideas that underpin most public policies. It can readily serve as a verbal (non-mathematical) and well-argued textbook in broad courses on economic philosophy or the morality of a market-based social order. 

I highly recommend it if you’re up for the challenge of sifting through hundreds of pages of serious and careful academic prose. (If not, there’s a one-hour episode with Austrian economist and Bitcoin educator Stephan Livera that covers much of the crucial ground.) The AIER August Harwood Graduate Colloquium with Dr. Pete Earle and Prof. Hülsmann himself should be immensely valuable for those lucky enough to attend. The rest of us will FOMO and from a distance marvel at this work so sorely needed for an intellectual movement of liberty that often brushes over these more ephemeral, moral, and social themes.