Thoughts on charity, socialism, and the market

[Black_Rose]

Well, I hope this could generate some responses despite it being difficult to read. It took awhile to write. Just tell me if you disagree or agree with anything in it.

Conservatives tend to advocate voluntary remedies to combat poverty without invoking the political power of the state since it did not conflict the bourgeois principles of liberty and sanctity of property. This did not encroach on the perceived right for people to enjoy their wealth since one would not be compelled to contribute through state-enforced taxation. But it is hard to see how a political environment extolling the pursuit of economic self-interest be conducive to that expression of virtue. The materialist economic legacy of the European enlightenment) tends to associate virtue with economic success much like Confucianist culture in China associates it with power to instill obedience to authority. This legacy, however, has been replaced in Western Europe with the spirit of social democracy which promoted the use of private wealth to be used for the benefit of public welfare to ensure social solidarity. Economic accomplishment and financial security were viewed as outward markers of individual virtue, perseverance, hard work, thrift, and God’s favor. Since the free market supposedly apportions resources based on “value”, the insufficient remuneration of one’s labor reflects the lack of individual value because of personal vice such as imprudence, lack of conscientiousness, and God’s disapproval. A corollary is that the poor lack dignity because they are unable to finance a decent standard of living through undignified work.

Because economic success is necessary to provide the means for significant financial contributions to charity and such success is inherently virtuous, the wealthy donating their money to charity may not be perceived as an act of love but as an act of condescension showing their superiority. Such charity may be concatenated with mean-spirit judgment and contempt for the poor. While such aid provided material sustenance, the bitter reminder of the poor’s inferiority attached to aid left their spirit malnourished depriving them of any sense of dignity.

One interpretation of “social justice” associated not with statist intervention, but with local efforts aimed at alleviating the symptoms of poverty such as homelessness with shelters and the hungry with soup kitchens and food banks. Such activities are best associated with the Catholic Worker Movement founded in 1933 during the “trough” of the Great Depression when unemployment was 25%. While the Catholic Worker Movement’s voluntarism is compatible with the conservative view of charity, the movement was considered left-wing due to their devotion to the welfare of the poor. Despite their “left-wing” views, they did not fervently advocate the expansion of the welfare state or use the rhetoric of the “class struggle” because they did not seek to establish a heaven on earth of material prosperity. Day herself pejoratively referred to the welfare state as “holy mother state” since it denied citizens the opportunity to help and express love for their neighbor. Unlike conservatives, she did not revere the free market and capitalism as a means of justly allocating resources through supply and demand. The members of the Catholic Worker Movement gave without any hint of pretension and contributed in the spirit of humility eager to serve from their love of God not from attrition (motivation by fear of punishment in the afterlife) or to conduct displays of self-aggrandizement. The main advantage of this approach is the personal contact and empathy one experiences with the poor. This does not only satisfy their physical and financial needs but also their emotional and spiritual needs. Unlike impersonal bureaucratic programs, this exemplifies the principle of subsidiary.

Socialists see poverty, not as the result of individual failure, but injustices caused by social and economic phenomenon amendable to amelioration through state intervention. Socialists seek to govern by the principle salus populi suprema lex esto (the welfare of the people is the supreme law) by identifying with interests of the massive proletariat who can be rural peasants, urban factory workers, or, in the case of the developed economics in the modern age of globalization, workers in the service sector. The justification for abandoning the spirit of voluntarism is one of pragmatism and utilitarianism since one cannot realistically expect most people to selflessly surrender their economic surplus to serve the needs of the poor. While humble and sincere voluntarism are morally commendable, it is unrealistic to expect that these means can provide satisfactory funding for social agendas even if it is assumed that voluntarism is more efficient than state programs.

 

[Black_Rose]

In order to grant the right of a decent and secure standard of living for its citizens, a regime of redistributive taxation is necessary. This right would not be contingent on the condition of the labor market or the availability of generous charitable contributions. Since this becomes a right, it therefore removes the stigma of accepting aid as it is acknowledged as an entitlement not the consequences of personal inferiority and inadequacy. Government-financed programs providing “a decent and secure standard of living” include universal health care, social security, free education, and unemployment insurance. Therefore, successful governance will be defined by using the public largess to efficiently provide public goods efficiently and justly because the incentives of the free market do not provide adequate motivation for one to do so. The availability of social capital may limit this approach since it is only successful in countries with a common culture and a homogenous ethnic group such as the Scandinavian welfare states.

Friedrich von Hayek gloomily predicted the resurgence of serfdom as an undesirable consequence of an expanded state because it violated the liberty of its citizens by extracting resources through taxation. But unlike feudal lords of medieval times who used their economic surplus for conspicuous consumption while neglecting the needs of their serfs, the state would spend the money in the interest of public welfare.

In order for socialism to be successful, a culture of secular bureaucracy is needed where administrative competence and technical aptitude is highly valued since these are necessary to manage the complex affairs of the state in order to satisfy the people’s desires. The members of this bureaucracy are distinguished by their intellectual work in contrast to the masses earn their living through manual labor. The members of this bureaucracy are not motivated by private economic gain, a desire to generate an ostentatious display of “charity”, or from a humble, selfless love of their neighbor, but from the self-gratification they derive from exercising their technical competence to achieve the end of administering a prosperous state. This division of labor is even legitimized and acknowledged; for instance, the German Democratic Republic’s Coat of Arms features compass, a hammer, and a grains of wheat respectively symbolizing the union of the intelligentsia, the factory workers, and farmers providing for the common welfare. But this detachment would acceptable since it would be narrower than the wealth inequality inherent in capitalism and free market caused by an asymmetry of market power by those owning capital and possessing highly-demanded skills. This culture diverges from the American perception of government and bureaucracy as a cumbersome, inefficient manifestation of “big government” that unjustly trifles with the liberty of its citizens. One advantage this approach is that is able to effectively raise funds through taxation or by issuing sovereign debt as it credit worthy entity although the latter can be undermined by a history of default resulting in the bond market requiring a higher premium in the form of high interest rates. In addition, because of its emphasis on bureaucratic and technical competence, the state has an ability process and assimilates information enabling it to understand the current circumstances and intervene effectively. This gives the state the unprecedented ability to coordinate resources on a scale that would be impossible through the free market or private charity.

But the bureaucratic state might not be able to allocate resources or respond to its environment effectively. Friedrich von Hayek viewed the exogenous interference of government on the endogenous spontaneous order of the market as undesirable. This process of spontaneous order in the free market utilizes the self-interest and competition among economic agents for the constructive ends of wealth creation through capital formation. In the marketplace, competition occurs among many businesses competing for market share for products with consumers “selecting” based on the traits of price and quality. In addition, businesses must compete against each other for the supply of capital provided by savers and investors in order to finance their investments. Laborers also compete amongst themselves for employment and wages differentiated themselves by their skills and willingness to work. He argued that market participants using the signals of price to determine supply and demand can allocate resources efficiently contributing to the overall welfare of society even though they pursued differing individual interests. Price signals allow entrepreneurs to undertake appropriate anticipatory investment based on their predictions future consumer preferences. Profit-seeking entrepreneurs have a financial incentive to use this information to satisfy consumer preferences. This provides a disincentive for squandering investor capital on unprofitably ventures that do not provide utility to consumers. The entrepreneur and investor profit because of their ability to satisfy consumer preferences while simultaneously efficiently allocating scarce capital to increase societal welfare. A centralized planned economy, however, would not be capable of processing complex economic information distributed among the diffuse interests of consumers without the activity of consumers differentiating among products by acting on price signals.

The Bible does not explicit prohibit socialism nor does it endorse it. It is neither a treatise of governance nor an elaborate code of conduct for society (like the Confucian Code of Rites) although it may apply to individuals.

 

[St_Francis]

You’ve made a lot of interesting points, and have shown me why Hayek thought the way he did about some issues.

 

[markomalley]

Bottom line for me are statements made by our Popes of the past hundred fifty years or so, including:

On Socialism
34. Pope Pius XI further emphasized the fundamental opposition between Communism and Christianity, and made it clear that no Catholic could subscribe even to moderate Socialism. The reason is that Socialism is founded on a doctrine of human society which is bounded by time and takes no account of any objective other than that of material well-being. Since, therefore, it proposes a form of social organization which aims solely at production, it places too severe a restraint on human liberty, at the same time flouting the true notion of social authority.

Pope John XXIII, Mater et Magistra
​

While you see the “social justice types” (who advocate socialism as the methodology for achieving social justice) quote John XXIII extensively…to the point of praying for another John XXIII after our current Holy Father…you never, ever, ever see them quote that one line. (For example, you could take a look at the site of the Office of Social Justice of the Archdiocese of St Paul and Minneapolis…in their list of “notable quotes” from Mater et Magistra,no mention of this important paragraph at all)

I wonder why that is (well, no I don’t, but it would still make for interesting discussion)

 

[Black_Rose]

Bottom line for me are statements made by our Popes of the past hundred fifty years or so, including:

On Socialism
34. Pope Pius XI further emphasized the fundamental opposition between Communism and Christianity, and made it clear that no Catholic could subscribe even to moderate Socialism. The reason is that Socialism is founded on a doctrine of human society which is bounded by time and takes no account of any objective other than that of material well-being. Since, therefore, it proposes a form of social organization which aims solely at production, it places too severe a restraint on human liberty, at the same time flouting the true notion of social authority.

Pope John XXIII, Mater et Magistra
​

While you see the “social justice types” (who advocate socialism as the methodology for achieving social justice) quote John XXIII extensively…to the point of praying for another John XXIII after our current Holy Father…you never, ever, ever see them quote that one line. (For example, you could take a look at the site of the Office of Social Justice of the Archdiocese of St Paul and Minneapolis…in their list of “notable quotes” from Mater et Magistra,no mention of this important paragraph at all)

I wonder why that is (well, no I don’t, but it would still make for interesting discussion)

The term “socialism” will always have an ambiguous meaning unless defined rigorously for the sake of discussion since it can also be an emotional term used to denigrate one’s opponent views. I do not know what is “moderate socialism” and your quotation unfortunately is too short for me to infer the context of Pius VI’s definition of “socialism”. In its pure form, it would mean the abolition of private property with the exception of personal possessions. But many pragmatic forms of socialism are not inherently opposed to private property and would respect it, but unlike a staunchly right-wing perspective, it would not be considered sacrosanct or an inherent right. Socialists violate a libertarian purist’s view of private property by suggesting that it should be used for the benefit of public welfare. While this does not mean explicit expropriation of property by the state, one mild method for making property subservient to the public interest is to collect taxes from its appreciation and income flows in order to fund social programs. Would Pius’ definition of “moderate socialism” include Western European social democracy?

As for me, I am pragmatic because as I journey through the road of faith, I have no intention gaining an in-depth knowledge of the Magisterium’s social teaching. This not because I find it irrelevant, bereft of information and knowledge, or lacking moral authority, but because such an activity has a high opportunity cost. In other words, a moment used for that activity cannot be used for acquiring information about the global economy, achieving a relatively sophisticated understanding of modern politics, or accumulating a large reservoir of historical knowledge. (I have a strong admiration for Henry C.K. Liu for achieving this even though he is Mao apologist and possesses contempt for Christianity.) Of course, a basic understanding is indeed needed, but beyond that understanding the marginal utility of that activity would fall. Immersing myself in secular politics and events is necessary for me to be as wise as a serpent, but as gentle as a dove (Matthew 10:16).

But even as a skeptical agnostic, I believe that it was my moral duty to respect those who are suffering yet cannot articulate their own interests. (My previous secular morality did not apply to the vulnerable babies in their mother’s womb that could be denied their right to live.) To me, the right to private property does not permit one to believe that some people have a right to enjoy caviar while other people should starve.

 

[markomalley]

The term “socialism” will always have an ambiguous meaning unless defined rigorously for the sake of discussion since it can also be an emotional term used to denigrate one’s opponent views. I do not know what is “moderate socialism” and your quotation unfortunately is too short for me to infer the context of Pius VI’s definition of “socialism”. In its pure form, it would mean the abolition of private property with the exception of personal possessions. But many pragmatic forms of socialism are not inherently opposed to private property and would respect it, but unlike a staunchly right-wing perspective, it would not be considered sacrosanct or an inherent right. Socialists violate a libertarian purist’s view of private property by suggesting that it should be used for the benefit of public welfare. While this does not mean explicit expropriation of property by the state, one mild method for making property subservient to the public interest is to collect taxes from its appreciation and income flows in order to fund social programs. Would Pius’ definition of “moderate socialism” include Western European social democracy?

As for me, I am pragmatic because as I journey through the road of faith, I have no intention gaining an in-depth knowledge of the Magisterium’s social teaching. This not because I find it irrelevant, bereft of information and knowledge, or lacking moral authority, but because such an activity has a high opportunity cost. In other words, a moment used for that activity cannot be used for acquiring information about the global economy, achieving a relatively sophisticated understanding of modern politics, or accumulating a large reservoir of historical knowledge. (I have a strong admiration for Henry C.K. Liu for achieving this even though he is Mao apologist and possesses contempt for Christianity.) Of course, a basic understanding is indeed needed, but beyond that understanding the marginal utility of that activity would fall. Immersing myself in secular politics and events is necessary for me to be as wise as a serpent, but as gentle as a dove (Matthew 10:16).

But even as a skeptical agnostic, I believe that it was my moral duty to respect those who are suffering yet cannot articulate their own interests. (My previous secular morality did not apply to the vulnerable babies in their mother’s womb that could be denied their right to live.) To me, the right to private property does not permit one to believe that some people have a right to enjoy caviar while other people should starve.

Some good observations.

I would suggest, however, as a tentative Catholic, that you re-think your position of having no intention gaining an in-depth knowledge of the Magisterium’s social teaching. As Catholics, it is incumbent on us to form our consciences according to the teachings of the Church. While there is a considerable latitude of prudential judgment allowed in the area of social doctrine, understanding the principles can help one form that prudential judgment so that it is not offensive to the ordinary Magesterium.

Why it becomes important is in distinguishing the rights and duties of individuals, of society, and of the State. They are distinct. If you listen to ultra-right wing knuckle draggers like myself, you would tend to believe that the State has absolutely no role, while if you listen to left-wingers, you would believe that the role of society is absolutely synonymous with the role of the State. (nota bene: my position is not a radical libertarian view of an utterly laissez-faire State, but I realize that it is likely that one could take that view from my posts that are as often as not made in reaction to those with the latter view)

Having said that, though, I think one of the most important concepts in social doctrine was recently defined by the Holy Father in his most recent encyclical, Caritas in Veritate: the concept of gratuitousness – doing something as a “gift” rather than as a matter of “justice.” That converts the action from being one of “duty” to being one of true charity (i.e., love). Adaptation of such a principle within society, even an adaptation limited in scope, would revolutionize it. But the important thing to recognize is that such a principle could never be legislated. The minute it is legislated, it ceases being gratuitous.

 

[Black_Rose]

Some good observations.

I would suggest, however, as a tentative Catholic, that you re-think your position of having no intention gaining an in-depth knowledge of the Magisterium’s social teaching. As Catholics, it is incumbent on us to form our consciences according to the teachings of the Church. While there is a considerable latitude of prudential judgment allowed in the area of social doctrine, understanding the principles can help one form that prudential judgment so that it is not offensive to the ordinary Magesterium.

I would not totally eschew exposure to the Church teaching but I do not consider it wise to employ a huge investment (position) on it since I want to also a diverse array of secular ideas at my disposal too. This much like financial portfolio that has numerous (uncorrelated) positions for diversification purposes which reduces the volatility of the portfolio (and its downside potential) as opposed to a concentrated portfolio with only a few positions rendering the portfolio vulnerable to a large negative move in a position. Certainly Church teaching should influence are consciences, but it is impossible for it solely influence our consciences because it would also be inevitable impacted by secular values and philosophies. My own conscience is still has the impressions of secular philosophy and ethics, but I suppose most of these values are compatible with Church teaching. It is not possible for me to construct a new system of ethics de novo based on Church teaching, but it will be built based on a foundation of my previous secular ethics. It is much more productive when dealing with Machiavellian world to phrase one’s ethical concerns in a secular, universal language as oppose to the sectarian perspective of the Church.

Saul Alinsky in Rules for Radicals wrote:

“You don’t communicate with anyone purely on the rational facts or ethics of an issue… It is only when the other party is concerned or feels threatened that he will listen—in the arena of action, a threat or a crisis becomes almost a precondition to communication… No one can negotiate without the power to compel negotiation… To attempt to operate on a good-will basis rather than on a power basis would be to attempt something that the world has not yet experienced.”

I believe Alinsky has a realistic interpretation of human nature regardless of his political goals. Alinsky is best considered to be a tactician who developed a theory of community organizing not as a strategist or ideologue. He was interested more in generating discord, conflict, and rebellion against the economic and political elite than using political power for any constructive end or rectifying any injustice.

Regarding abortion, I do not believe it will be a profitable investment of time trying to convince the other side using recourse to reason and morality. Furthermore, one should be cognizant of conniving and scurrilous politicians using religion as means to secure power.

For example, Henry IV of France converted to Catholicism before securing the throne in 1593 (in Catholic France while the aristocracy were Protestant Huguenots) is alleged to remark “Paris is well worth a Mass”. In addition, religious concerns may not be a primary motivating force in practical politics. A notable example is Cardinal Richelieu (1585-1642) who directed the foreign affairs of France during the Thirty Years’ Wars (1618-1648) a multidimensional conflict among competing religious and national (secular) influences. Despite being bedecked in the regalia of a Cardinal, he was not concerned about spiritual affairs but with secular nationalistic politics. Richelieu was concerned about the Habsburg dynasty’s threat to French interests and geographic proximity to Franch since Spain and the Holy Roman Empire were controlled by the Habsburgs. He allied himself with Lutheran Sweden in 1631 agreeing to fund the Swedish army in exchange for them conducting campaigns in (modern day) Germany against the Habsburgs. France itself directly entered the conflict in 1635 when it became doubtful that the Swedes were able to deal with the Habsburg threat themselves. France was huge winner from the denouement of the War because the Peace of Westphalia resulted in the de facto dissolution of the Holy Roman Empire by dividing Germany into sovereign principalities rendering Germany as an uncohesive political entity posing no threat to France.

 

[Black_Rose]

Why it becomes important is in distinguishing the rights and duties of individuals, of society, and of the State. They are distinct. If you listen to ultra-right wing knuckle draggers like myself, you would tend to believe that the State has absolutely no role, while if you listen to left-wingers, you would believe that the role of society is absolutely synonymous with the role of the State. (nota bene: my position is not a radical libertarian view of an utterly laissez-faire State, but I realize that it is likely that one could take that view from my posts that are as often as not made in reaction to those with the latter view)

Having said that, though, I think one of the most important concepts in social doctrine was recently defined by the Holy Father in his most recent encyclical, Caritas in Veritate: the concept of gratuitousness – doing something as a “gift” rather than as a matter of “justice.” That converts the action from being one of “duty” to being one of true charity (i.e., love). Adaptation of such a principle within society, even an adaptation limited in scope, would revolutionize it. But the important thing to recognize is that such a principle could never be legislated. The minute it is legislated, it ceases being gratuitous.

My original post provides a cynical perspective of “charity” although it does cite Dorothy Day as an counterexample because her charity was based on love:

Because economic success is necessary to provide the means for significant financial contributions to charity and such success is inherently virtuous, the wealthy donating their money to charity may not be perceived as an act of love but as an act of condescension showing their superiority. Such charity may be concatenated with mean-spirit judgment and contempt for the poor. While such aid provided material sustenance, the bitter reminder of the poor’s inferiority attached to aid left their spirit malnourished depriving them of any sense of dignity.

The members of the Catholic Worker Movement gave without any hint of pretension and contributed in the spirit of humility eager to serve from their love of God not from attrition (motivation by fear of punishment in the afterlife) or to conduct displays of self-aggrandizement. The main advantage of this approach is the personal contact and empathy one experiences with the poor. This does not only satisfy their physical and financial needs but also their emotional and spiritual needs.

The justification for abandoning the spirit of voluntarism is one of pragmatism and utilitarianism since one cannot realistically expect most people to selflessly surrender their economic surplus to serve the needs of the poor. While humble and sincere voluntarism are morally commendable, it is unrealistic to expect that these means can provide satisfactory funding for social agendas even if it is assumed that voluntarism is more efficient than state programs.