Academic journal article Review of Social Economy

The Danner Thesis and Public Choice Theory: A Review Essay

Academic journal article Review of Social Economy

The Danner Thesis and Public Choice Theory: A Review Essay

Article excerpt

Peter Danner's Getting and Spending (1944) is intended as a textbook for courses in economics/ethics. However, in the process of providing instruction for undergraduates, Danner expounds a deep level, original thesis concerning the nature and significance of economic activity and the moral legitimacy of a market economy. The purpose of this essay is, first, to provide a concise restatement of the Danner thesis and then to show how his justification for market institutions compares with that produced by public choice theory as the latter is set forth by Victor Vanberg (1994).

To begin with Danner means to bring his readers to the realization that there is a unique, foundational cognitive/causal force at work elusively but effectively in the mundane affairs to daily economic life. When you buy a loaf of bread, so he seeks to show, a fundamental, primal intuition stirs toward articulation in the depths of the human soul. An economic transaction allows the human person to experience and with reflection to acknowledge a unique dimension of the relationship with his Creator. Danner's core thesis has to do with understanding the ground and implication of this unique dimension.

The key decision making economic agent is identified as the human person. "Each the unique creation of a loving God" (p. 4), distinguished from the rest of nature by the capacity for self judgement, the human person encounters in the depth of his being a primal urge toward the transcendent - toward truth to be known, good to be done, beauty to be created. For such a creature, freedom - the ability to move one's self toward perfection by way of knowledge and choice - is understood as the "means required ... for human beings to realize their good and achieve their purposes" (p. 7).

Within a community of such free persons economic activity originates not in the pleasure-maximizing efforts of confirmed egotists (as in neoclassical economics) but rather in a much deeper primal cognitive event Danner refers to as the "Value experience" (p. 84). Such an experience registers in human consciousness the realization, the "immediate perception" that a potential action is Good, deserving of execution. Such perception triggers the interaction of knowledge and desire. However, for embodied human persons - angels don't have the problem - the "espousal" of cultural and moral values requires the use of scarce material resources. To fuel the thrust toward transcendence food is required for the body, stone and brass for the sculpture, wealth for the practice of liberality. Success in this grand communal endeavor requires not only that material resources be used in accord with the connection between cause and effect discerned by instrumental reason. To achieve the cosmic purpose of economic activity it is also necessary - and here is the core of the Danner thesis - that multiple purpose, fungible resources be used "efficiently" - so as to maximize the ratio of useful output to scarce input. The ineluctable fact of resource scarcity, so he affirms in summary statement, imposes "a mandate ... on every individual, family business, government agency and non-profit institution to strive for efficiency" (p. 212). Danner thus has a lesson for the social economist. In the preoccupation with efficiency in resource use neoclassical welfare economics is right, but in its reliance on utilitarianism and assumptions of egoism, for the wrong reasons.

As an economic agent the human person is bound by a special ethical imperative - the moral obligation to avoid waste, to contribute to communal efficiency in the use of resources. The significance of the efficiency imperative is reinforced as Danner invokes a line of psychological/moral analysis that recalls Aristotle on ethics, Aquinas on natural law. In determined rejection of all forms of ethical relativism, he stoutly insists that the human value experience - the realization that there is good out there to be affirmed by human free choice - "mirrors" but does not "establish the object's Goodness. …

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