Pope Francis denounces ‘trickle-down’ economic theories in critique of inequality

[Darryl1958]

(I have read your full post and essentially agree)
My comment is addressed to this:

Y…The problem with the theocracies of history is that they tended to assume that those in power were morally superior to their subjects. …

Overall, I would say that popes and many ecclesiastical leaders have been morally superior to others. They have on the whole been fine and decent and well intentioned people.

That being said, the major problem with theocracy as it has existed in history is that it is based in absolutism. Only God himself can reign perfectly and with flawless justice and impartiality.

For everyone else, the only way so far discovered to keep our evil inclinations in check is a system of checks and balances where those evil inclinations are played off one against the other. Checks and balances do not mean that we compromise on the good, but that evil compromises with evil.
Checks and balances recognize that evil is inherent to our nature, and therefore does not assume, like Rousseau did, that our inherent goodness will be able to rise to the top if only the evils of society did not corrupt our the goodness of our inner child first.
Checks and balances do not believe that utopia is possible, but assume that evil must be fought in perpetuity.

Theocracies that existed rule from the top down. That is what the modern state of the left attempts to do as well. Their authority however is not from the black covers of the Bible , but from the white robes of the experts and those who do studies and experiments. “Thus saith the Lord” has become displaced by “Thus saith the scientist”, who not coincidentally is often funded by that same modern secular state that gains its legitimacy from that cabal of experts.

The system of checks and balances that honor the freedom of the individual, that have allowed for free enterprise and people rising according to the merits that they bring to the marketplace limits the power of the modern state.

There is a lot of merit in that kind of status quo, that has perpetually been under attack from those who want power for themselves. The existence of evil in the status quo therefore is not a reason to progress from that status quo, but precisely the reason why that status quo needs to be preserved and even strengthened.
All the great and saintly men of yore, from Abraham to Moses, and from Jacob to David, were morally compromised and subject to their own evil inclinations. Theocracies that would have God’s people ruled with even these giants and saints would not only be benefactors of the strengths of these people, but would ultimately be subjected to the yokes of their evils.

 

[Yeoman]

Change “economic” to “pro-life” and you will see Catholics on these forums regularly making that comment.

Ishii

I didn’t have these forums in mind, but that thought otherwise occurred to me. The thought that acting on moral principals is only an internal affair is particularly common.

 

[Yeoman]

I didn’t have these forums in mind, but that thought otherwise occurred to me. The thought that acting on moral principals is only an internal affair is particularly common.

Having said that I suppose that does raise the point that Catholic businessmen and employers need to act in accordance with moral principals, but we otherwise have the question as to whether there’s a moral requirement to work towards a just economy. Even though I’ve already had one debate elsewhere with a person who absolutely maintains that the Pope’s call here is merely directed to Christians and amounts to nothing more than to act in accordance with Christian principals, it seems pretty clear to me he’s stating that every society needs to have a just economic system (no matter what its religion may be) and this requires the application of Christian principals.

Assuming this is correct, does anyone believe that the US economic system, which is a modified free market system supporting the wide-scale use of corporations (a legal fiction given the same status as “persons” at law) to be as just as we can get, or are there other standing or theoretical systems that would better achieve a just distribution of income and employment?

 

[fnr]

You had number of good points in your post but I’d like to focus here as it includes several important elements. The one element that I think you neglected is subsidiarity.

I dunno… I think subsidiarity is often presumed to mean that there is an automatic presupposition against any government program. But it’s not just about government. It is meant to recognize the potential abuses that can take place when any power, private or public, takes over.

In this country, the overwhelming emphasis has historically been keeping the rich and powerful rich and powerful. And in many ways, that pattern persists. The capture of Highway Trust Fund dollars by generally wealthy suburban municipalities is one major example that has perpetuated urban and rural poverty. As is the massive overspending on the military and a farm policy that favors large landholders. And that’s just in terms if straight expenditures. “Tax expenditures” such as the mortgage interest deduction and tax loopholes like the carried interest exception result in gargantuan inequities that result from government.

All of these policies are backed by powerful private interests who have largely captured the policy agenda of economic decision making in this country. The governance structure of the Federal Reserve is another whopper of how national law favors the huge financial institutions. So look at the bailouts of Wall Street. In this country, private interests capture congress, governors, and even the White House on a pretty frequent basis.

Prudence and subsidiarity lead almost directly to free market capitalism. Only free market capitalism aspires to integrate the prudential judgement of everyone. Only free market capitalism respects subsidiarity to its fullest. Every non-charity “fix” to free market capitalism entails the violation of either prudence or subsidiarity or both.

And as I hope my writing thus far illustrates how I think it’s imprudent to simply assume that the “free” market will lead to a just outcome is unlikely. History gets in the way.

The church is the only entity on earth that can hold the powerful accountable. Whether that’s government or private market is irrelevant. Without the Holy Spirit’s action in the world, borne by the people of God in concert with the apostolic church, any human institution will fall into corruption and immorality. So I’m not sold on the free-marketeer paradise that is always just one election away.

An ideal Catholic theocracy is not a dictatorship of clerics, it is a free market of brothers and sisters each pursuing the fulfillment of their respective gifts.

Well, I would disagree here that the ideal theocracy is bound to any particular form of government (or economic system). Fundamentally, society requires the instruction and evangelism of the church if it is to have any sense of rightness. That can be a monarchy or a democracy. It’s my belief that democracy is really the worst form of government except for all the others. And by that I do mean worst.

 

[Bubba_Switzler]

Overall, I would say that popes and many ecclesiastical leaders have been morally superior to others. They have on the whole been fine and decent and well intentioned people.

That being said, the major problem with theocracy as it has existed in history is that it is based in absolutism. Only God himself can reign perfectly and with flawless justice and impartiality.

You make a worthy distinction. I think we are at risk of hijaking this thread so let me offer a very brief point here.

Why does not the moraly superior person rule the lives of less moral persons? Why does not the morally superior person substitute his morally superior judgement for that of the less moral person? Why is that a bad idea? Why is that immoral?

Aside from the problem of subsidiarity and prudence (the above obviously violates the first but also tends to violate the second since even the most moral person cannot know as much about a situation as the person in the situation), people robbed of choice in their own lives do not get better at making choices in their own lives. They don’t become better people.

The morally superior person recognizes this and focuses not on forcing others to make the right choice but leading them to see the right choice to make.

In short words, morally superior people teach.

 

[shockerfan]

Having said that I suppose that does raise the point that Catholic businessmen and employers need to act in accordance with moral principals, but we otherwise have the question as to whether there’s a moral requirement to work towards a just economy. Even though I’ve already had one debate elsewhere with a person who absolutely maintains that the Pope’s call here is merely directed to Christians and amounts to nothing more than to act in accordance with Christian principals, it seems pretty clear to me he’s stating that every society needs to have a just economic system (no matter what its religion may be) and this requires the application of Christian principals.

Assuming this is correct, does anyone believe that the US economic system, which is a modified free market system supporting the wide-scale use of corporations (a legal fiction given the same status as “persons” at law) to be as just as we can get, or are there other standing or theoretical systems that would better achieve a just distribution of income and employment?

The best way to get a just distribution of income is to have a growing economy that creates more jobs. This is not done by implementing policies and regulations that encourage businesses to outsource or reduce employment. When we look at the widening gap between rich and poor, one need look no further than the fact that participation in the workforce is at a 35 year low. People with no jobs have no income, thus the gap widens. If you want a just distribution of income and employment, then don’t vote for politicians who view business as the enemy. We, as consumers, should also patronize those businesses with just employment / wage policies (Costco comes to mind).

 

[Bubba_Switzler]

I dunno… I think subsidiarity is often presumed to mean that there is an automatic presupposition against any government program. But it’s not just about government. It is meant to recognize the potential abuses that can take place when any power, private or public, takes over.

Government is certainly a big part of it but more importantly, government is the locus of modern society. Subsidiarity applies also to the organization of work within a corporation but that simply does not attract the interest of the general public.

In this country, the overwhelming emphasis has historically been keeping the rich and powerful rich and powerful. And in many ways, that pattern persists. The capture of Highway Trust Fund dollars by generally wealthy suburban municipalities is one major example that has perpetuated urban and rural poverty. As is the massive overspending on the military and a farm policy that favors large landholders. And that’s just in terms if straight expenditures. “Tax expenditures” such as the mortgage interest deduction and tax loopholes like the carried interest exception result in gargantuan inequities that result from government.

If by “this country” you mean the USA, you could not be more mistaken. Here is an article comparing the US (and the anglosphere generally) to Latin America:

nationalreview.com/article/365720/agreeing-pope-francis-michael-novak

All of these policies are backed by powerful private interests who have largely captured the policy agenda of economic decision making in this country. The governance structure of the Federal Reserve is another whopper of how national law favors the huge financial institutions. So look at the bailouts of Wall Street. In this country, private interests capture congress, governors, and even the White House on a pretty frequent basis.

It’s hard to make sense of the above other than to note that you are trying desperately to attribute the injustice of government policy to “private interests”. Let us first recognize the injustice of government policy and then discuss what is the cause of it and the solution to it.

And as I hope my writing thus far illustrates how I think it’s imprudent to simply assume that the “free” market will lead to a just outcome is unlikely. History gets in the way.

Good for you. Unfortnately you are, like Pope Francis, attacking a straw man. I have previously explained why this is such an absurd claim but if you like I can repeat it again.

The church is the only entity on earth that can hold the powerful accountable. Whether that’s government or private market is irrelevant. Without the Holy Spirit’s action in the world, borne by the people of God in concert with the apostolic church, any human institution will fall into corruption and immorality. So I’m not sold on the free-marketeer paradise that is always just one election away.

Well, I would disagree here that the ideal theocracy is bound to any particular form of government (or economic system). Fundamentally, society requires the instruction and evangelism of the church if it is to have any sense of rightness. That can be a monarchy or a democracy. It’s my belief that democracy is really the worst form of government except for all the others. And by that I do mean worst.

Free market capitalism is not a form of government. You can have free market democracy or free market constitutional republic or even free market monarchy. Nothing about free market capitalism contradicts the teaching role of the Church. Free markets capitalism only arose in Christiandom and can only be sustained by a Christian society as India and China will discover.

 

[Bubba_Switzler]

The best way to get a just distribution of income is to have a growing economy that creates more jobs. This is not done by implementing policies and regulations that encourage businesses to outsource or reduce employment. When we look at the widening gap between rich and poor, one need look no further than the fact that participation in the workforce is at a 35 year low. People with no jobs have no income, thus the gap widens. If you want a just distribution of income and employment, then don’t vote for politicians who view business as the enemy. We, as consumers, should also patronize those businesses with just employment / wage policies (Costco comes to mind).

This is a big part of it but let’s also talk about the role of charity.

I am beginning to suspect that Pope Francis represents a faction of Chatholicism that confuses income and consumption as well as income and wealth.

If I earn like a banker but live like Pope Francis what happens to the difference? It’s either reinvested in capital or it’s given away as charity. If I give away all that charity that does not increase the income of the poor or decrease my income. But it does decrease my consumption and increase the consumption of the poor.

It’s still the case that it’s better that the poor should be gainfully employed to earn their own living and, thus, as you say, a growing economy is ideal. But there will always be a role for charity even within the most dynamic and growing economy.

 

[shockerfan]

This is a big part of it but let’s also talk about the role of charity.

I am beginning to suspect that Pope Francis represents a faction of Chatholicism that confuses income and consumption as well as income and wealth.

If I earn like a banker but live like Pope Francis what happens to the difference? It’s either reinvested in capital or it’s given away as charity. If I give away all that charity that does not increase the income of the poor or decrease my income. But it does decrease my consumption and increase the consumption of the poor.

It’s still the case that it’s better that the poor should be gainfully employed to earn their own living and, thus, as you say, a growing economy is ideal. But there will always be a role for charity even within the most dynamic and growing economy.

I agree with you 100% about Charity. However, Charity might come in the form of direct donation of treasure, or it might come in the form of time and talent. Many people who are poor don’t necessarily need direct cash, as they might have very poor habits and addictions that will cause them to waste it. I lot of people who are poor, are not only poor in a financial sense, but many times they are poor decision makers (perhaps due to lack of good parents). We should consider all of the gifts God gave us and how we can use them in a charitable way.

 

[Bubba_Switzler]

I agree with you 100% about Charity. However, Charity might come in the form of direct donation of treasure, or it might come in the form of time and talent. Many people who are poor don’t necessarily need direct cash, as they might have very poor habits and addictions that will cause them to waste it. I lot of people who are poor, are not only poor in a financial sense, but many times they are poor decision makers (perhaps due to lack of good parents). We should consider all of the gifts God gave us and how we can use them in a charitable way.

Yes, precisely. There are many forms of charity including time and good will.

More important is the aim of charity. Charity should aim to do the minimum and empower the recipient to realize his own gifts.

The whole issue of poor decision making is why teaching is the highest form of morality and charity. By contrast, government is very good at creating dependency and doesn’t even deserve to be considered charity.

 

[fnr]

Government is certainly a big part of it but more importantly, government is the locus of modern society.

And here is a major problem. Every interest group seeks to use government to enforce its interests upon every other group. There are examples of liberals using government to enforce their ideas on the public, such as a progressive income tax or Social Security. There are examples of conservatives using government to enforce their ideas as well, including “right to work” legislation and restrictions on abortion. The problem is that everyone is quick to say that their top issues are ones that require government intervention, while the others are lesser issues.

I’ve written other posts on some of the utterly inefficient strategies employed by the pro-life movement to reduce abortion (i.e., legal restriction, electoral politics), while ignoring “kingdom building” strategies like youth mentoring and NFP evangelism in locations with high abortion rates and/or at-risk populations (e.g., women’s prisons). In this case, the pro-life movement opines that government outlawing abortion will reduce its incidence (which no evidence supports), and that giving up on their electoral/regulatory strategy will be simply giving in to the attempt by abortion rights advocates to undercut their movement. Subsidiarity doesn’t seem to enter into their thinking. It’s government – from the top down – as the solution to the evil of abortion.

Instead, on these kinds of issues a political theology of the Catholic Church can and should emphasize the missionary responsibility of the Church – not to politics, but to the poor. Being there at the points of pain is NOT the same as electoral politics.

Subsidiarity applies also to the organization of work within a corporation but that simply does not attract the interest of the general public.

And that’s a bad thing. When there is a lack of public attention (i.e. press coverage), a greater degree of corruption takes place.

If by “this country” you mean the USA, you could not be more mistaken. Here is an article comparing the US (and the anglosphere generally) to Latin America:
nationalreview.com/article/365720/agreeing-pope-francis-michael-novak

While Mr. Novak writes well, comparing the US with Poland and Argentina, both of which had major dictatorial regimes, is hardly a defense of the U.S. as global leader in care for the poor. In fact, objective statistical evaluations comparing the U.S. to other countries have shown that in the U.S., sons’ earnings are more tightly tied to father’s earnings than in most other industrialized countries. See this study for an example (Table 1 and Figure 2).

Our history is replete with accommodation by the government to massive private power. The Constitutional Convention itself enshrined the 3/5 Compromise and developed the federal-state balance as a means of ensuring that slavery remained economically viable and that slave owners remained politically powerful. Andrew Jackson trampled on treaties with independent native nations (e.g., the Cherokee) to facilitate the westward expansion of the southern agrarian economy (which had high demands for land). Throughout the 19th century, the military was called out to put down strikes by labor unions (e.g., the Homestead strike). The U.S. invaded and occupied Haiti at the behest of the banana industry in the early 20th century after seeking to stomp it out of existence as a freed slave nation and successful example of slave insurrection. Under Eisenhower, the Dulles Brothers targeted the private “bete noirs” of their former legal clients, such as United Fruit and the Anglo-Iranian Oil Company, in identifying the foreign heads of state that they subjectively determined to be most adverse to U.S. interests (i.e., Mossadegh in Iran, Arbenz in Guatemala)… funny how their officially sanctioned overthrows of foreign governments matched their client list! I could go on, from the rise of capital on Wall Street attributable to the milling of slave cotton to the preference in international trade negotiations to allowing free flow of capital across borders but not labor… all of this points to a deep-seated tendency for the U.S. government to enforce private power with public coercion.

Similarly, the political economy of trade has been largely a function of capital accumulation. Early in the 19th Century, large-scale protectionism favored the development of industry in the U.S., while 20th century trade policy (since WW2) has favored reductions of barriers to trade… unless there’s a powerful interest in Washington that opposes it (e.g., the sugar beet industry).

 

[fnr]

BubbaSwitzer:

It’s hard to make sense of the above other than to note that you are trying desperately to attribute the injustice of government policy to “private interests”. Let us first recognize the injustice of government policy and then discuss what is the cause of it and the solution to it.

But not all government policy is unjust!

Good for you. Unfortnately you are, like Pope Francis, attacking a straw man. I have previously explained why this is such an absurd claim but if you like I can repeat it again.

And I have tried to explain from historical reasons why I believe that your claim that a free market results in a just solution is flawed. But to put it in philosophical terms: for a free market to result in a just solution:

1. 
   *]All agents in an exchange must have clear title to their property. My historical arguments are intended to show that private parties often employ the government to gain title and have it declared legally “clear,” but this is immoral.
   *]The price of negative externalities should be reflected in the terms of the contract, or the contract unjustly imposes burdens on nonparticipants in the contract. I’m referring to air pollution, climate change, noise, or other impacts of our own activity on the health and lifestyle of others.
   

   Free market capitalism is not a form of government. You can have free market democracy or free market constitutional republic or even free market monarchy. Nothing about free market capitalism contradicts the teaching role of the Church. Free markets capitalism only arose in Christiandom and can only be sustained by a Christian society as India and China will discover.

   I’ll say that “free market capitalism” is only free in as much as one defines what’s free and what’s not. “Free marketeers” often represent anarcho-capitalists, while others tend to reflect “minarchists” who prefer minimal states focused on protection of private property. In that regard, “free market” economic policies can be a political philosophy that places authority on the limits of government. At its most extreme, libertarianism allows no role for government at all.
   
   Nothing about the free market contradicts the role of the Church, if it’s done right! As to India and China, we’ll see. I tend to think their problems to be more a function of demographics, which in the case of China, is clearly a violation of Christian norms on welcoming children.

 

[Bubba_Switzler]

But not all government policy is unjust!

In theory, no, but in practice, it’s hard to find examples of government policies that result in greater justice. Even when politicians mean well, and that is seldom the case as you nicely illustrated, they tend to cause more problems than they solve.

And I have tried to explain from historical reasons why I believe that your claim that a free market results in a just solution is flawed.

The question is: who is claiming this? This question has been posed repeatedly in this thread without answer. I have not claimed it. I have never read anyone who has claimed it. It is a straw man position, especially as Pope Francis framed it.

I have claimed that free markets result in a higher standard of living for the poor. And I have claimed that the destruction of free markets has created misery.

I’ll say that “free market capitalism” is only free in as much as one defines what’s free and what’s not. “Free marketeers” often represent anarcho-capitalists, while others tend to reflect “minarchists” who prefer minimal states focused on protection of private property. In that regard, “free market” economic policies can be a political philosophy that places authority on the limits of government. At its most extreme, libertarianism allows no role for government at all.

As I pointed out previously, “anarcho-capitalism” is a negligable sliver of advocates of free market capitalism and even they do not make the claim you attribute to them. It is absolutely false that libertarians represent the extreme. Libertarians are not opposed to any role for government; most favor the constitutional government of the US with the limited powers of Article 1 and the 10th amendment. Given that libertarians represent the most popular advocates of free market capitalism this is a major error in your understanding.

Nothing about the free market contradicts the role of the Church, if it’s done right! As to India and China, we’ll see. I tend to think their problems to be more a function of demographics, which in the case of China, is clearly a violation of Christian norms on welcoming children.

China has a demographic problem to be sure but they have deeper problems as well. What they have is crony capitalism and serious problems with fraud.

 

[Darryl1958]

One example of crony capitalism is Solyndra.

Another example of crony capitalism is an environmental policy that opposes the building of pipelines(Keystone), resulting in oil being shipped by rail. Jimmy Buffet, heavily invested in rail stock, is involved in this kind of crony capitalism. and is a big, big supporter of the current administration.

Here, it is government that skews the relationship between modes of competitive businesses, to the benefit of some very rich people, who in turn give the politicians some very valuable support.
The more powerful and centralized the government, the more that the most powerful cronies are able to benefit from having that government in their back pocket.
And here it is not greed, but the best of intentions that leads people to support what government is doing, even if rail traffic is a dirty, dangerous, and destructive mode of moving oil from point A to point B, compared to the pipeline alternative.

 

[Morwenna]

One example of crony capitalism is Solyndra.

Another example of crony capitalism is an environmental policy that opposes the building of pipelines(Keystone), resulting in oil being shipped by rail. **Jimmy Buffet, **heavily invested in rail stock, is involved in this kind of crony capitalism. and is a big, big supporter of the current administration.

Jimmy or Warren?

 

[ishii]

While Mr. Novak writes well, comparing the US with Poland and Argentina, both of which had major dictatorial regimes, is hardly a defense of the U.S. as global leader in care for the poor. In fact, objective statistical evaluations comparing the U.S. to other countries have shown that in the U.S., sons’ earnings are more tightly tied to father’s earnings than in most other industrialized countries. See this study for an example (Table 1 and Figure 2).
.

Your criticism of the US as not living up to its duty as global leader in care for the poor reminds me that some countries are left off the hook for creating the poor. For example, Mexico is corrupt and its refusal to reform itself results in all the poor in that country trying to emigrate into the US. Yet, the debate on immigration almost never involves the responsibility or culpability of countries like Mexico - with all sorts of wealth and natural resources - that does not work to provide its people with more opportunities so that they don’t have to run across the border. Instead, the Church focusses primarily on the responsibilities of Americans and how they treat the illegals, etc.

Ishii

 

[ishii]

Jimmy or Warren?

I would think Jimmy would invest in the Tequila industry - for higher margarita consumption.

Ishii

 

[Darryl1958]

Jimmy or Warren?

 

[epan]

Your criticism of the US as not living up to its duty as global leader in care for the poor reminds me that some countries are left off the hook for creating the poor. For example, Mexico is corrupt and its refusal to reform itself results in all the poor in that country trying to emigrate into the US. Yet, the debate on immigration almost never involves the responsibility or culpability of countries like Mexico - with all sorts of wealth and natural resources - that does not work to provide its people with more opportunities so that they don’t have to run across the border. Instead, the Church focusses primarily on the responsibilities of Americans and how they treat the illegals, etc.

Ishii

As borders are breached with technology (ie. the techno and white collar work force is nearly borderless), it seems to me that the need for international standards for labor practices become more important to “level the playing field.”

The excessive greed and corruption in places like Mexico are a worldwide problem. In the US, it is more discrete and hidden. The standard of living (while declining in many ways) is quite high. But the ratio of ownership for the super wealthy in nearly every country is about the same, give or take a few percentage points.

The basic truth, when it comes to wealth, is that a few people acquire the kind of wealth I am talking about, but the very large majority are born into it. Then there is an upper class who tends to think they are rich, but aren’t really compared to the super rich. The super rich own more, by multiples, than everyone else combined, while typically comprising 1-2% of the population.

This may be what Francis is referring to. These fortunes are in the 10’s and 100’s of billions now, perhaps licking at the heels of the trillion dollar range, when you add up entire families. Meanwhile, real wages are flat for decades in many places. It is hard to imagine what a trillion dollars might do to alleviate poverty, if used wisely. Personally, I think that would be a better use of such wealth than buying tropical islands, or large boats and planes, or collecting works of art for 10’s of millions per painting.

 

[shockerfan]

As borders are breached with technology (ie. the techno and white collar work force is nearly borderless), it seems to me that the need for international standards for labor practices become more important to “level the playing field.”

The excessive greed and corruption in places like Mexico are a worldwide problem. In the US, it is more discrete and hidden. The standard of living (while declining in many ways) is quite high. But the ratio of ownership for the super wealthy in nearly every country is about the same, give or take a few percentage points.

The basic truth, when it comes to wealth, is that a few people acquire the kind of wealth I am talking about, but the very large majority are born into it. Then there is an upper class who tends to think they are rich, but aren’t really compared to the super rich. The super rich own more, by multiples, than everyone else combined, while typically comprising 1-2% of the population.

This may be what Francis is referring to. These fortunes are in the 10’s and 100’s of billions now, perhaps licking at the heels of the trillion dollar range, when you add up entire families. Meanwhile, real wages are flat for decades in many places. It is hard to imagine what a trillion dollars might do to alleviate poverty, if used wisely. Personally, I think that would be a better use of such wealth than buying tropical islands, or large boats and planes, or collecting works of art for 10’s of millions per painting.

What would your solution be?