Catholic views on Economics

[Socrates92]

You could say it existed during the start of the industrial revolution, but that was completely uncharted territory and society did respond with changes to protect both worker and consumer. That era was very different in many ways. People were eager to work in the factories because sadly, it was still the best option available.

This necessarily implies that the factories were an improvement on what preceded them. In which case you can hardly claim that factory owners were harming their workers.

 

[Socrates92]

How do you distinguish a productive loan from an unproductive loan?

 

[Socrates92]

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

Myeh, even that blanket statement against monopolies is problematic. I’d distinguish private-sector monopolies which form (and sometimes have a limited lifespan) from monopolies by government fiat. This video gives an interesting, and plausible, viewpoint on the value of monopolies. Monopoly, Competition, and Antitrust | Thomas J. DiLorenzo - YouTube

Essentially you have to get away from looking at the economy as a static entity and look at it more as it actually functions, dynamically.

 

[Socrates92]

Edit: If we’re going to be completely technical about monopolies, as per exnihilo’s statement, then yes, monopolies are corrupt. However, “monopolies” as used in common parlance, as per my previous comment, are not necessarily. Clarity is important here.

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.

 

[Socrates92]

If an investment makes good business sense, it generally doesn’t need an individual to be personally on the hook for making sure a profit is returned.

What possible incentive would there be for the lending individual to do his due diligence to make sure it does make good business sense, if he’s not on the hook? What’s to stop people from borrowing just for the thrill and pretending to be part of the “good-business-sense” class? There is such a thing as information asymmetry - the borrower knows more about his own situation than the lender. Guaranteed payments of interest (assuming non-bankruptcy and continued liquidity) serves to bridge this gap. If someone does not feel safe pledging to interest payments, there is the option to incorporate and sell shares.

 

[Socrates92]

A person being able to effectively collateralize their own personal productivity (i.e. income that they’ll hopefully earn in the future), is an injustice because it gives the creditor a right to tax the future labor of the debtor in excess of what was actually loaned to the person.

No it is not. The creditor is simply demanding his share due to his capital investment (which is simply the saved fruits of his past labour). Without the infused capital, the fruits of labour would be smaller - Presuming the investment is successful, the net of profit-interest > what it would have been without the infusion of capital. Taxing the future labor of the debtor would the be case if he were charging a rate on profits/wages in which he had no productive part (aka income taxes).

 

[po18guy]

It was through him that I learned of the economic theory!

 

[Socrates92]

If the widespread practice of usury can “change the nature of money”, then the widespread practice of contraception can just as well “change the nature of sex”.

Did you read the article? If you had you should have read this. “Put simply, usury is charging someone for something that has no value, in short, for defrauding someone, especially the poor and dependent, in a financial transaction” The question is about what constitutes usury, not whether usury has suddenly become legitimate. The nature of money used by humans can, and has changed. Money is more valuable than before, and in justice can therefore command a higher price.

 

[Socrates92]

Contraception can also lead to increased material prosperity. A good result does not justify means that are bad in themselves.

Contraception is wrong because it subverts the nature of sex. Charging interest, if it were wrong, would be wrong because it subverted the nature of money. The sin of usury has always been condemned as a sin against justice. More specifically, justice as it pertains to material goods. It is wrong because it demands something material for which nothing material was given. A loan such as that mentioned by JanSobieskill does not fit this criteriae, and therefore does not fall under usury.

 

[godisgood77]

Distributism is the Catholic position. Look up and read Rerum Novarum and in it you find condemnations of both socialism and capitalism

 

[LeafByNiggle]

Even granting the implied assumption that education is the same as schooling…

I never made that assumption.

…why are you assuming that educating most/all people in a similar way to today (mandatory full-time Gr.1-12, plus postsecondary for most people) is a desirable goal.

I don’t have to argue for K-12 education for nearly everybody. No one seriously contests it. So I won’t take your challenge seriously either.

If fewer people were schooled before, perhaps that was a more desirable balance.

It was less of a detriment because most of the work was manual farm labor or trades that could be learned from family. Thanks to mechanization, farming does not require nearly as much manual labor, so people without a high school education will find it very hard to get married and raise a family. But sure, it would be nice to live like the Hobbits, provided you can find a hole somewhere in the Shire.

Just to illustrate, if 12 years of mandatory government-provided schooling is such a good idea, what is there even political support for min wage laws? You’d think after 12 years of “education” you’d be able to command a wage much higher than some arbitrarily set minimum. And yet, there is widespread support for these things like in the “Fight for 15” movement. This seems to imply the educational system has failed as many, or more, than it has helped.

There is no indication that skipping school is going to help you command a higher wage than those who finish. The issue of the minimum wage does not support your point at all.

 

[Socrates92]

exnihilo:

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.

I hate it when people use sloppy-defined terms in controversial topics. The Compendium which you linked uses “child labour” simply to refer children working, which it does not give a blanket condemnation for, and distinguishes it from “child labour, in its intolerable forms”, which it does condemn. So far so good. The second, poorly written, article you linked does not draw this distinction. It instead sloppily calls child labour as a “bad thing” in the “opinion” of the Church, and goes on to some babble about playing outside. It’s sloppy thinking like this which leads many honest people to think they disagree with the Church when they’re really just unclear about what the teachings actually are.

 

[exnihilo]

Then why hadn’t such a private system developed prior to that, huh? It is easy now to say they would have done it if the public system was not established, but the fact that such a system has not emerged anywhere else in the world is conclusive. It would never have happened. Ever.

Because only the state can coerce people to go to school and pay for it. Also, the modern nation states wanted to create compliant citizens who obey corporate business and state authority. That is why they were established in the first place.

 

[exnihilo]

I don’t have to argue for K-12 education for nearly everybody. No one seriously contests it. So I won’t take your challenge seriously either.

You don’t have to argue for it, but plenty of serious people, myself included, do contest it.

 

[JanSobieskiIII]

Then why hadn’t such a private system developed prior to that, huh?

They had. The Catholic Church handles education exclusively for a very long time before the concept of public schools arose.

 

[Socrates92]

Even granting the implied assumption that education is the same as schooling…

I never made that assumption.

I don’t even think a private school system has ever educated most of the people

This above statement implies that you do. You are drawing a connection between schooling and education, apparently implying that schooling is a superior means to education than others methods, such as apprenticeships, on-the-job-training, running a startup business, etc. You’ll either have to back this up, or clarify if you meant something different.

…why are you assuming that educating most/all people in a similar way to today (mandatory full-time Gr.1-12, plus postsecondary for most people) is a desirable goal.

I don’t have to argue for K-12 education for nearly everybody. No one seriously contests it. So I won’t take your challenge seriously either.

I meant to specify “government K-12” education, although that is generally implied because that is what most people do. I seriously contest it. You’re stuck thinking in the framework of the current system. Why 12 years? Other than government fiat, what inherent reason is there for that number? It used to be K-13. No reason why it can’t be K-10 or K-9. Why not make it common practise to base it on the competence and interest of the individual? I’d seriously question the wisdom of starting kids full time at Kindergarten ages. That’s one step away from full-time pre-school/daycare (Fun fact: Most mass murderers are similar in that they spent their childhood in daycare).

If fewer people were schooled before, perhaps that was a more desirable balance.

It was less of a detriment because most of the work was manual farm labor or trades that could be learned from family. Thanks to mechanization, farming does not require nearly as much manual labor, so people without a high school education will find it very hard to get married and raise a family. But sure, it would be nice to live like the Hobbits, provided you can find a hole somewhere in the Shire.

Here I was referring more to post-secondary, which is not nearly as clear cut as most assume. It may be the case that a degree is necessary in the same way that jumping through hoops and getting $1000s in permits is required to open many businesses. But this is more a product of the political environment at the present time, and not due to the intrinsic nature of running a business. Since it is precisely the current environment which I am criticizing, my objection still stands. In my opinion, the college empire will eventually crumble, just like every other economic bubble, and the job market will adapt. And there are still a lot of trades. A serious glut in many Canadian locations. No reason why many shouldn’t start training and working full time instead of going into Gr. 11. Yes, I would love to live as a Hobbit as well… Oh well, future project I suppose.

 

[Socrates92]

Just to illustrate, if 12 years of mandatory government-provided schooling is such a good idea, what is there even political support for min wage laws? You’d think after 12 years of “education” you’d be able to command a wage much higher than some arbitrarily set minimum. And yet, there is widespread support for these things like in the “Fight for 15” movement. This seems to imply the educational system has failed as many, or more, than it has helped.

There is no indication that skipping school is going to help you command a higher wage than those who finish. The issue of the minimum wage does not support your point at all.

Well, some college dropouts were spectacularly successful. But that wasn’t really the point I was addressing. I was criticizing the system in general, and by extension the average person who emerges. You essentially make a statistical argument backed up by current averages. Yes, the average person who attends the currently crappy system will do better than someone who attends nothing. On the other hand, the average homeschool kid does quite well compared to the former. Kill some of the soul-destroying fluff and harmful propaganda taught in modern classes, and replace it with some hands-on trade experience or specialized exposure to some field of interest, and you’re golden. The current school system does little to cater to this vision. There is a serious argument to be made that if we adopted this model as a society, we would indeed an improvement across the board.

The hype behind the min wage does indeed support my point. People are insecure in their own ability to earn their keep and thus campaign to have it provided by force.

 

[LeafByNiggle]

I hate it when people use sloppy-defined terms in controversial topics. The Compendium which you linked uses “child labour” simply to refer children working, which it does not give a blanket condemnation for, and distinguishes it from “child labour, in its intolerable forms”, which it does condemn.

Of course. The Church does not condemn an after school paper route. But it does condemn labor that keeps a child from going to school at all. That is unbridled capitalism.

You are drawing a connection between schooling and education, apparently implying that schooling is a superior means to education than others methods, such as apprenticeships, on-the-job-training, running a startup business, etc.

You won’t be running any startup business if you don’t know how to read. Same thing with apprenticeships. They are for people who already have a primary education. This isn’t the Shire.

I meant to specify “government K-12” education, although that is generally implied because that is what most people do. I seriously contest it. You’re stuck thinking in the framework of the current system. Why 12 years? Other than government fiat, what inherent reason is there for that number? It used to be K-13. No reason why it can’t be K-10 or K-9.

A private education system hasn’t even accomplished K-9 for more than a small fraction of a nation. There is every reason to suspect that if we relied totally on private schools, we would have an illiteracy rate in this country similar to Uganda.

I’d seriously question the wisdom of starting kids full time at Kindergarten ages.

Red herring. Remember, we were only talking about education as it relates to unbridled capitalism.

If fewer people were schooled before, perhaps that was a more desirable balance.
. . . .
Here I was referring more to post-secondary, which is not nearly as clear cut as most assume.

Another Red Herring. What does this have to do with unbridled capitalism?

LeafByNiggle:

Then why hadn’t such a private system developed prior to that, huh? It is easy now to say they would have done it if the public system was not established, but the fact that such a system has not emerged anywhere else in the world is conclusive. It would never have happened. Ever.

Because only the state can coerce people to go to school and pay for it.

Therefore if all schools were private, many more people would not go at all. Without universal primary education it will be Americans that are trying to sneak over the wall as illegal immigrants into Mexico, and not the other way around.

Also, the modern nation states wanted to create compliant citizens who obey corporate business and state authority. That is why they were established in the first place.

Bring out the tin hats.

 

[LeafByNiggle]

LeafByNiggle:

Then why hadn’t such a private system developed prior to that, huh?

They had. The Catholic Church handles education exclusively for a very long time before the concept of public schools arose.

Yes, and only a small fraction of the population was educated. Church-sponsored education was never anywhere near universal.

 

[Arkansan]

If the only way someone can get by is to borrow money at interest, would you actually advocate outlawing such a thing, with the possible consequence that no one will choose to lend to him?

This argument could just as well be used to justify slavery.

“If the only way someone can get by is sell himself into slavery, would you actually advocate outlawing such a thing, with the possible consequence that no one will give him support.”

Or are you arguing that such a person is entitled to the other person’s money, with no obligation to share any of the risks?

He’s not entitled to the other person’s money. What he’s entitled to is not to have more of his money taken from him than he actually owes.

If I’m not mistaken, the Church’s teaching on usury has a principle on being “made whole”. Basically the loanee is obligated to return the value of the loan to the lender. In the present economic environment, there is such a thing as a “time-value” of money. If I lend you $1000 for a year interest free, I am missing out on all the returns I could have made on that in a year. (For arguments sake, I’ll even assume that all my alternative investments for that $1000 were capital business investments instead of loan contracts.)

[The following proposition is condemned as erroneous:] Since ready cash is more valuable than that to be paid, and since there is no one who does not consider ready cash of greater worth than future cash, a creditor can demand something beyond the principal from the borrower, and for this reason be excused from usury. – Various Errors on Moral Subjects (II), Pope Innocent XI by decree of the Holy Office, March 4, 1679 (Denzinger)

In case anyone cares, talked to the priest today and he said usury only applies to excessive interest.

“One cannot condone the sin of usury by arguing that the gain is not great or excessive, but rather moderate or small” - Vix Pervenit

What possible incentive would there be for the lending individual to do his due diligence to make sure it does make good business sense, if he’s not on the hook?

Not losing the collateral he put up?