Catholic views on Economics

[goodcatholic]

Trickle up economics?

 

[LeafByNiggle]

I think the church needs to start taking the same approach to economic science as it does other sciences. Stick to the morality aspect and leave the mechanisms alone.

Does this mean you would like to see the Church’s explicit condemnation of Communism left out of the Catechism? After all, it is just another economic mechanism, and you said the Church should not comment on mechanisms.

 

[JanSobieskiIII]

Sure, as long as we leave in the bit about the natural right to private property then that alone would condemn communism in a catholic world view.

 

[LeafByNiggle]

Sure, as long as we leave in the bit about the natural right to private property then that alone would condemn communism in a catholic world view.

Oh, no. Now you are picking a choosing which economic mechanisms to uphold and which to condemn. It always amazes me how the laity in this forum speak with such authority about what the Church should or should not teach. It is as if the Church is our private club and we are all voting members with an equal say in how the club should be run. The next thing I suppose will be a popular election for the pope.

 

[exnihilo]

There are places in the third world where they still use child labor, and sweatshops, etc. That’s what I would call “unbridled capitalism.”

No, that is survival. Child labor is ancient. Working hard just to live is ancient. It is only in our modern time that so many have the luxury of educating children and taking so much leisure.

Might it be rather that the Pope is against the greed of Capitalism, and not the concept itself?

But greed isn’t specific to capitalism anymore than it is specific to the rich. The poor can be greedy and economic systems having nothing to do with whether an individual is greedy. Plenty of people are greedy socialists. They want your property after all.

 

[JanSobieskiIII]

That’s not picking and choosing. Private property is defended in scripture. Forced nationalization of the means of production isn’t.

 

[exnihilo]

Does this mean you would like to see the Church’s explicit condemnation of Communism left out of the Catechism? After all, it is just another economic mechanism, and you said the Church should not comment on mechanisms.

Communism is intrinsically evil because it denies private property which is a moral right. Communism isn’t an economic system so much as it is organized theft.

 

[Metis1]

Just a side observation on this topic. It is reported that Pope Francis is decidedly anti-capitalistic. Might it be rather that the Pope is against the greed of Capitalism, and not the concept itself?

You are correct.

In the excellent biography of him, “The Great Reformer”, Austen Ivereigh takes the reader through PF’s transition from being a politically and economically conservative to one who saw too much poverty and suffering in many of the cities in Argentina, whereas a minority others were getting wealthier and dominating the political scene, thus stacking the cards against all others.

When he reflected on these situations and rubbed them against what Jesus’ taught in the Sermon On the Mount and the Parable of the Sheep & Goats (Matthew 25), he couldn’t reconcile them. To him, between the accumulation of wealth v having a more equitable system, the latter has to be chosen

BTW, Alan Greenspan believes that the increasing disparity of wealth here in the States is the single greatest threat that we have here.

 

[LeafByNiggle]

LeafByNiggle:

Does this mean you would like to see the Church’s explicit condemnation of Communism left out of the Catechism? After all, it is just another economic mechanism, and you said the Church should not comment on mechanisms.

Communism is intrinsically evil because it denies private property which is a moral right. Communism isn’t an economic system so much as it is organized theft.

The term “intrinsic evil” is misused here. But the real issue is Jan’s suggestion that the Catechism be modified to delete admonitions against in the practice of “capitalism,” individualism and the absolute primacy of the law of the marketplace over human labor. as in paragraph 2425 which also condemns the totalitarian and atheistic ideologies associated in modem times with “communism” or "socialism." Do you also think the Catechism is wrong is this regard?

2425: The Church has rejected the totalitarian and atheistic ideologies associated in modem times with “communism” or “socialism.” She has likewise refused to accept, in the practice of “capitalism,” individualism and the absolute primacy of the law of the marketplace over human labor. Regulating the economy solely by centralized planning perverts the basis of social bonds; regulating it solely by the law of the marketplace fails social justice, for “there are many human needs which cannot be satisfied by the market.” Reasonable regulation of the marketplace and economic initiatives, in keeping with a just hierarchy of values and a view to the common good, is to be commended.

 

[exnihilo]

The term “intrinsic evil” is misused here.

I don’t think so. It is essential to communism that the state holds the property. Private property is a right the Church affirms. So communism contains within itself an evil.

Do you also think the Catechism is wrong is this regard?

I don’t think I have a problem with those statements. It mentions practices that could be in capitalism. They could be in other systems as well. I don’t really know what this means:

absolute primacy of the law of the marketplace over human labor

 

[phil19034]

phil19034:

There are places in the third world where they still use child labor, and sweatshops, etc. That’s what I would call “unbridled capitalism.”

No, that is survival. Child labor is ancient. Working hard just to live is ancient. It is only in our modern time that so many have the luxury of educating children and taking so much leisure.

Might it be rather that the Pope is against the greed of Capitalism, and not the concept itself?

But greed isn’t specific to capitalism anymore than it is specific to the rich. The poor can be greedy and economic systems having nothing to do with whether an individual is greedy. Plenty of people are greedy socialists. They want your property after all.

Look, I’m not anti-Capitalism. In general, I believe that in free, open markets - competition brings prices down, encourages innovation, and provides opportunities.

However, when markets are not transparent, when monopolies are allowed to exist, and when unethical practices are allowed to grow, they system needs adjustment.

A good Capitalist society can have laws that govern the market without having over regulation (which is equally as bad)

God bless.

 

[Bon_Croix]

But yet, they retain all of the risk as opposed to their employer retaining the risk.

the profit compensates for the risk. the equity capital on the balance sheet is there to compensate for current risk as well as any future risk as a result of business growth.

If the business is liquidated, and capital remains, it is distributed and is considered the gain from taking the risk… Obviously, management overcapitalized the business…

 

[JanSobieskiIII]

Correct, but one thing to keep in mind is a good OTR trucker, isn’t going to be home a lot. It doesn’t make sense for him to own a house that he’s rarely at, it’s an unnecessary expense if he doesn’t have a family at home.

 

[Bon_Croix]

Well, from tax perspective, if he purchases a home and holds it for two years, he can avoid paying capital gains tax on a sale.

If he keeps the capital tied to his business, he will have to pay capital gains when he liquidates or unwinds the business.

 

[LeafByNiggle]

phil19034:

There are places in the third world where they still use child labor, and sweatshops, etc. That’s what I would call “unbridled capitalism.”

No, that is survival. Child labor is ancient. Working hard just to live is ancient. It is only in our modern time that so many have the luxury of educating children and taking so much leisure.

We are not talking about ancient times. There is no excuse for exploiting child labor in a society that is not on the brink of starvation. To see what the Church says about it, see #296 inthis document. Also this. But unbridled capitalism can very well produce this immoral outcome, which is why it is condemned by the Church.

Might it be rather that the Pope is against the greed of Capitalism, and not the concept itself?

But greed isn’t specific to capitalism anymore than it is specific to the rich…

The pope did not claim that it was. But it is possible for greed to be expressed this way. And when it is, it is to be condemned.

 

[exnihilo]

However, when markets are not transparent, when monopolies are allowed to exist, and when unethical practices are allowed to grow, they system needs adjustment.

Monopolies are always the result of government. A monopoly in the true sense is an exclusive right. Even markets with little competition are almost always highly regulated markets. The regulation prevents competition.

I agree unethical practices shouldn’t be allowed, if fraudulent. I would also say that unethical practices aren’t limited to the free market. The biggest fraud is always the state.

 

[exnihilo]

We are not talking about ancient times. There is no excuse for exploiting child labor in a society that is not on the brink of starvation. To see what the Church says about it, see #296 inthis document. Also this. But unbridled capitalism can very well produce this immoral outcome, which is why it is condemned by the Church.

What is exploiting child labor? I had a job when I was young. I had chores too. We weren’t close to starving. Were my employer and parents exploiting me?

 

[Socrates92]

Whether they are capable of mobilizing as a group is immaterial. As individuals almost everyone (poor included) has the tendency towards selfishness. There are plenty of non-poor who are willing to use this fact to manipulate the poor as a group, especially to gain their votes. Phrasing the question of welfare programs in terms of a supposed religious duty is a useful tool.

 

[Socrates92]

Also, the Church historically has taught the money should not be the main goal in life and should, therefore, not be treated as an end in and of itself.

True. But this is doesn’t directly relate to the question of which economic system is most in line with Christian (Catholic) principles. Economics, in large part, addresses human action and the marketplaces of exchange which humans use to acquire material goods (a morally neutral in itself). It doesn’t really address the purpose of life. That’s more of a philosophical/religious question. Another way of putting it is that religion/philosophy addresses the final end of human action, whereas economics addresses the efficient end. Saying that money should not be the main goal sheds no light on whether capitalism, socialism, or something in between should be preferred.

 

[Socrates92]

Actually, some government projects contributed to economic growth. Our education system, even with its problems is vital to economic growth. Infrastructure projects such as the erie canal or the interstate highway system contributed to economic growth. Not all government programs are bad for growth, some are but some aren’t.

I disagree emphatically. The government system of education as it stands at the moment at best is an inefficient mechanism with perverse incentives to achieve the same ends a private system could obtain. At worst, it’s counterproductive, a tool of propaganda, and the cause of severe psychological and material and spiritual damage to many people. The only reason I can see to argue for government control of education is because of some dependence - kind of like Stockholm Syndrome.