What is wrong with capitalism?

[Abu]

Warrenton #60
This theory: Of course free enterprise was developed by Catholic monks from the ninth century and the principles enunciated by the great Catholic Late Scholastics.

I see. All those who don’t know the facts assume that it is a mere “theory”, so the facts:

“The fact that the Late Scholastics operated from a world view in which moral issues permeated every aspect of human life does not mean that their study lacked objectivity. They employed the tolls of reason and deduction to describe economic processes.

“Although economic analysis can influence ethical judgments, it cannot alter fundamental moral principles. For example, it may change the attitude people have toward inflation, but it cannot modify the principle that stealing is wrong.

"The Late Scholastics derived their ethical approach from the Thomist concept of the interrelatedness of natural law, ethics and economics.” (Christians For Freedom, Dr Alejandro Chafuen, Ignatius, 1986, p 36-37).

Free enterprise economic development started in the great Catholic monastic estates of the ninth century, and a solid basis of economic Catholic thought developed from the fourteenth century. In the fifteenth century the Late Scholastics who were Thomists (followers of St Thomas) “writing and teaching at the University of Salamanca in Spain, sought to explain the full range of human action and social; organization.” They “observed the existence of economic law, inexorable forces of cause and effect that operate very much as other natural laws. Over the course of several generations, they discovered and explained the laws of supply and demand, the cause of inflation, the operation of foreign exchange rates, and the subjective nature of economic value…” For these reasons Joseph Schumpeter applauded them as the first real economists. (Thomas E Woods Jr, The Church And The Market, Lexington Books, 2005, p 8).

Surely, the popes call on people to act morally for other reasons that what the schoolmen taught regarding economics?

Concerning the teaching re free enterprise in Centesimus Annus, Bl John Paul II, 1991:
‘42. Returning now to the initial question: can it perhaps be said that, after the failure of Communism, capitalism is the victorious social system, and that capitalism should be the goal of the countries now making efforts to rebuild their economy and society? Is this the model which ought to be proposed to the countries of the Third World which are searching for the path to true economic and civil progress?

‘If by “capitalism” is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a “business economy”, “market economy” or simply “free economy”.’

The crystal clear requirement concerning human activity in economics: “Society does not have to protect itself from the market, as if the development of the latter were ipso facto to entail the death of authentically human relations…Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.” (Caritas et Veritate, Benedict XVI, 2009, #36).

 

[Warrenton]

I see. All those who don’t know the facts assume that it is a mere “theory”, so the facts:

You called it a “mere” theory, not me. I did not disparage the idea, I just don’t agree with it because I happen to believe that antiquity practiced forms of capitalism we would recognize.

In fact, your own citation shows the late schoolmen were engaged in the observation of market forces, which indicates that secular economies were already re-establishing capitalistic tendencies. Otherwise, what would there have been for the schoolmen to observe?

I never questioned whether the schoolmen were the first to study economics comprehensively; I have read some of St. Thomas’s writings on economics. But that is not what you said.

Your other citiation, it seems, highlights the distinction between capitalism and free enterprise that we were discussing, and which you appeared to reject. You cited this:

“‘If by “capitalism” is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a “business economy”, “market economy” or simply “free economy”.’

Given the citation you selected, the nature of your disagreement with my qualification is hard to understand.

 

[Abu]

Warrenton, #62
You called it a “mere” theory, not me.

Warrenton #56: “I am familiar with the theory; I do not find it convincing.”
The error is to consider it a mere “theory” rather than the fact of the principles of cause and effect which they discovered and explained (post #61) and for which they are lauded as the first real economists.

the late schoolmen were engaged in the observation of market forces, which indicates that secular economies were already re-establishing capitalistic tendencies.

Factually they weren’t “re-establishing capitalist tendencies”. The Late Scholastics were observing and explaining the existing cause and effect relationships which had started in the great Catholic monastic estates of the ninth century (post #61).

Your other citiation, it seems, highlights the distinction between capitalism and free enterprise that we were discussing, and which you appeared to reject.

There is no distinction since the Holy Father equates “capitalism”, which he dislikes as a term, to a “business economy”, “market economy” or simply “free economy”. (CA #42; post #61). Thus free enterprise, which he sees as enabling the ‘fundamental human “right to freedom of economic initiative.” ’ (Sollicitudo Rei Socialis (On Human Concerns), Encyclical, 1987, #42). [post #46].

 

[Warrenton]

Warrenton #56: “I am familiar with the theory; I do not find it convincing.”
The error is to consider it a mere “theory” rather than the fact of the principles of cause and effect which they discovered and explained (post #61) and for which they are lauded as the first real economists.

There is a distinction between cause and effect and observation and systemization.

The crusading orders and the Venetians were establishing rudimentary letters of credit in the 1100s and 1200s independent of the work of the schoolmen.

Obviously, the shipping corporations of ancient Rome did not rely on the work of the schoolmen, who would not be born until 1000 years had passed.

To establish cause and effect, you would need something like a letter from Lorenzo D’Medici saying"I read this tract from the University of Bologna, I think I’m going to get investors for a reinusurance company." Do any such documents exist?

Regarding what the pope wrote, he said it might be better to say free market than capitalism. He also qualified the definition of capitalism by saying “if by capitalism, we mean…” The reason he said that is because that is not necessarily what capitalism means. You may debate it either way whether the pope was referring to conceptual ideal capitalism or capitalism as practiced.

If, as you claim, there is nothing to discuss, there would have been no reason for the pope to say the free market is a preferable term for a just economy.

 

[Abu]

Warrenton
If, as you claim, there is nothing to discuss, there would have been no reason for the pope to say the free market is a preferable term for a just economy.

When facts are distorted there is every reason to restate facts.

Papal social teaching has developed, condemning Communism, Socialism and the Welfare State and affirming the right to freedom of economic initiative (which is enterprise), and free enterprise.

The Catholic way is free enterprise, and the people who cooperate in free enterprise are the ones to be called to account – their moral conscience and their personal and social responsibility, as Pope Benedict XVI has reaffirmed.
Thus prudence, justice, fortitude and temperance are necessary for the common good.

As the eminent Fr James Schall, S.J., points out this is how poverty in the world is alleviated:
“Since the Church wants poverty confronted, since She wants this confrontation to be done justly and with the interest and cooperation of the workers and the poor, She has had to acknowledge, as did the socialist systems themselves, that there are certain ways that must be employed if mankind is to meet its economic problems. These ways can be known and imitated, but they must include a juridical system, profit, enterprise, knowledge, exchange, a market, voluntary organisations, a relatively independent economy, private property, and respect for work and excellence.” (Fr James V Schall, S.J., in *Does Catholicism Still Exist?, *Alba House 1994, p 184-185).

Thus until people get to know the free enterprise laws discovered and developed by the Catholic Late Scholastics, and what they mean, the confusion will be endless. People can, and some do, undermine the common good, and the primary role of government is to support families in solidarity, and the role of the Church in subsidiarity, and that’s why we need laws to seek and punish those who steal, cheat, swindle, and against monopolies. Dr Alejandro Chafuen: Economics “is the study of the formal applications that can be deduced from the fact that human beings act purposefully. It does not consider whether these actions are good or bad (an ethical question). Economic science is value free. It analyses cause and effect relationships that, if true, are scientific….only human acts can be judged morally.” (Christians For Freedom, Ignatius, 1986, p 33).

 

[Warrenton]

When facts are distorted there is every reason to restate facts.

Thus until people get to know the free enterprise laws discovered and developed by the Catholic Late Scholastics, and what they mean, the confusion will be endless.

Thanks for the clarification - now I think I understand where you are going.

Tell me if I this is a fair restatement:

1. Marxists have lied about free enterprise in order to discredit freedom in general, in order to advance their oppressive, godless system.
2. Free enterprise has been studied by the Church, first by St. Thomas, then by the Scholastics, and more recently by Blessed Pope JP II and Benedict. The result of the Church’s studies is that free enterprise is good.
3. To the extent that capitalism conforms to the Church’s teachings on free enterprise, it is good.

 

[Abu]

Warrenton #66
Thanks for the clarification - now I think I understand where you are going.

Tell me if I this is a fair restatement:

1. Marxists have lied about free enterprise in order to discredit freedom in general, in order to advance their oppressive, godless system.

1. Free enterprise has been studied by the Church, first by St. Thomas, then by the Scholastics, and more recently by Blessed Pope JP II and Benedict. The result of the Church’s studies is that free enterprise is good.

1. To the extent that capitalism conforms to the Church’s teachings on free enterprise, it is good.

That is a useful summary.

Also, while the Sacred Scriptures condemn greed and wrong use of wealth, commerce or merchants are not condemned.

Christ shows the reality that wealth needs to be produced before it can be distributed.
In the parable of the talents, Jesus lauds the servant who has multiplied talents – “For to everyone who has, more will be given, and he will have abundance; but from him who does not have, even what he has will be taken away. And cast the unprofitable servant into the outer darkness. There will be weeping and gnashing of teeth.” (Mt 25: 14-30). Christ certainly praised the wise use of the fundamental right of economic initiative and prudence in this parable.

1. “There is the emphasis on the ‘talent’, which is a measure of value.
2. “The trading activity of the two stewards is important. Christ praises them for the energy, alertness, and perseverance they demonstrate in making a truly significant profit (they have doubled the original sum). There is a reference to accountability which is crucial to any business.
3. “Then the nuanced criticism of fear: ‘I was afraid, and I went off and hid your talent in the ground.’ This fear leads the lazy steward to avoid the risks and obstacles that are a key part of entrepreneurial work.
4. “There is the clear reference to the financial system. The lazy steward at least could have placed the ‘money with the bankers, and at my coming I should have received what was my own with interest.’ ”

“We can this affirm unambiguously that Jesus Christ ‘looks with love on upon human work’ and that the work of the merchant – the businessman or the entrepreneur – is one of the ‘different forms’ of work that is affirmed. The parable of the talents makes this clear by its reference to money, trading, risk taking and banking.”
Entrepreneurship in the Catholic Tradition, Fr Anthony G Percy, Lexington Books, 2010, p 48-49].

Christ’s parable of the Talents most strikingly acknowledges Christ’s respect for the work of business, as does the parable of the Dishonest Steward – the steward is dishonest, “but the nature of his work is not. In fact by praising his shrewdness, Christ admires his opportunism. While the steward abuses the trust his master extends to him, it must be recognised that the nature of the work that is entrusted to him is fundamentally good. The sin of the steward is his misuse of his master’s business, not the work of business itself.” [Fr Percy, op. cit. p 47].

Bl John Paul II affirmed: “As far as the Church is concerned, the social message of the Gospel must not be considered a theory, but above all else a basis and a motivation for action.” (Centesimus Annus, 57).

 

[carn]

The claim was that most people were starving most of the time. The claim is false.

As you said, most people probably experienced dearth twice in their lives.

Claim was not that people were starving most of the time.

Claim was that 95% liver in absolute poverty and that hunger was a usual problem.

Having a famine every 10-15 years makes in my eyes hunger a usual problem, because it is a problem one has to deal with on a regular basis and a risk that is in ones mind rather often. Furthermore having a famine every 10-15 years means that in many years food was not plentiful, so experiencing short food shortages was usual either.

(Yes, it depends on the definition of “usual problem”.)

And people who experience famine every 10-15 years would count as absolute poor today. Many poor african countries suffer famine less often than every 10-15 years and yet have miserable living conditions.

 

[SwissGuard25]

Whats Wrong with Capitalism?
You should ask a Communist this.

 

[carn]

Whats Wrong with Capitalism?
You should ask a Communist this.

Why he has an answer, i regard it to be of the same trustwortiness as a thieves opinion upon why stealing is not wrong.

Furthermore all communist reasoning i know in that regard was results based, so something like “look what capitalisms causes to the world, it must be wrong.”. That argument does not prove anything, as it relies on the corllary that there is some identifiable capitalism in the world, which is caused by capitalistic “laws”, which can be absent in case of different laws and which provably caused the named ill in the world.
There are so many assumptions necessary to prove that, that i do not think the argument has any strength left.

E.g. take the first tree-island post on page 1, i think, the writer claimed that capitalism has the result that with 10 persons on a 100 tree island, 2 will take and wall in 99 trees and the rest 8 persons will fight over the last. With that result of course capitalism would be bad, but how can one prove that that is the result except by saying something like “look at the world it is that way”?

 

[Jonatello]

timely article with the same title as this thread:

cfmpl.org/blog/2011/11/14/wrong-capitalism/

What is Wrong with Capitalism?

by Thomas Storck

Since at least the first half of the nineteenth century one of the main causes of strife in our civilization has been our capitalist economic system. Capitalism has had many bitter opponents, socialists of all kinds, to be sure, but many also who while they disdained any affinity with socialism, nevertheless rejected capitalism or at least called for major reforms in its workings. Supporters of capitalism seem not to understand such criticism, sometimes even resorting to psychological explanations for hostility to capitalism, as if by positing a subjective reason for their hostility they could somehow dismiss their opponents’ arguments without refuting them. But why is capitalism so hated? What, if anything, is wrong with it that evokes such animosity?

Since it is important that disputes about ideas be separated from mere verbal quarrels, it is necessary to state exactly what capitalism is before a serious discussion of its merits or demerits can take place. I realize that there is no generally accepted definition of capitalism. Although most people would agree that our present economic system is capitalistic, few would agree about why this was so. Is it because of private property, because most economic decisions are made by non-state actors, because there is relative freedom of legal competition? Although all of these are likely to characterize a capitalist economy, I do not think that any of them gets to the essential note of capitalism. This essential note I put in the separation of capital from labor, the fact that in a capitalist economy the most usual situation is for those with capital to hire others to work for them, making use of the means of production owned by the employers.[1] Thus what I mean by capitalism is an economy whose distinguishing mark is the employer/employee divide, where the majority of economic activity is carried on not by owners of small property working for themselves, but by capitalists who employ others to work for them for wages.

Although such an economic arrangement is not in itself unjust, nevertheless it is nearly always productive of great mischief, injustices, evils whose consequences extend far beyond the economy itself. Why is this so? The shortest answer is one given by the English historian, social theorist, poet and novelist, Hilaire Belloc.

But wealth obtained indirectly as profit out of other men’s work, or by process of exchange, becomes a thing abstracted from the process of production. As the interest of a man in things diminishes, his interest in abstract wealth – money – increases. The man who makes a table or grows a crop makes the success of the crop or the table a test of excellence. The intermediary who buys and sells the crop or the table is not concerned with the goodness of table or crop, but with the profit he makes between their purchase and sale. In a productive society the superiority of the things produced is the measure of success: in a Commercial society the amount of wealth accumulated by the dealer is the measure of success.[2]

Let us look at this further. All proper human activity exists for an end. Eating, for example, has the primary end of sustaining human life and health, although it has several secondary ends, such as fostering fellowship. Now the production and use of all external goods also has its purpose, the sustaining of human life so that we can pursue what is most characteristic and most important for mankind, our family and social life, our intellectual life, our spiritual life. Economic activity of its nature is subordinated to those higher ends and when it forgets or rejects those ends, it begins to dominate and distort human society. This natural subordination is most easily perceived when economic activity is directly tied to production for use. In the past when craftsmen usually worked only because a customer had put in an order for an item, it was difficult to forget the essential orientation of economic activity to its end. The separation of ownership from work, however, meant that the owners of capital, in some degree at least, became removed from actual production for meeting mankind’s needs. As a result these capitalists tended to become preoccupied not in serving man’s needs for goods, but in simply amassing wealth itself. ”As the interest of a man in things diminishes, his interest in abstract wealth – money – increases.” And when goods began to be produced in mass, goods which then needed to be sold, buyers had to be found – or an artificial demand had to be created by advertising. Owners cared little if their products were well-made or useful, so long as they could be sold, often by making consumers think they needed the product to be happy.

But although this was evil enough, the logic of capitalism did not stop here. For if one’s interest is in wealth, why produce a product at all? Why not spend one’s time manipulating surrogates for real wealth, such as currencies, stocks and bonds, peddling junk securities, engineering mergers and buyouts? This was often an easier way to make money, and although it bore almost no relation to supplying mankind’s need for goods and services, it certainly served to make some people very rich. Nor did these capitalists hesitate to gain and use political power, when they could, to further their ends, using their money to buy politicians in order to make the legal system more favorable to their aims and remove whatever restraints on their activities existed in the law.

(continued in next reply)

 

[Jonatello]

(…article continued)

Capitalism, however, has done more than pervert the purpose of economic activity. It has turned our society into a commercial society, a society inclined to measure everything by a money standard. Thus education is valued chiefly as the ticket to a better job, the number of those studying the liberal arts declines, and business professors generally command much higher salaries than philosophy professors.[3]

Moreover, since under capitalism the economy is no longer tied to a fulfillment of man’s real needs, but rather to what can be sold, it no longer has any natural limit. As St. Thomas Aquinas wrote, “…the appetite of natural riches is not infinite, because according to a set measure they satisfy nature; but the appetite of artificial riches * is infinite, because it serves inordinate concupiscence….”[4] Under capitalism the economy has become unhinged, as it were, disconnected from its purpose, a purpose which both limits it and gives it direction. As a result, a corporation is not satisfied if its sales remain stable, they must increase from quarter to quarter. This attitude has infected society as a whole, so that few are happy unless they acquire newer and better gadgets, regardless of whether these serve human life as a whole. Although we are not determined by our economic relations, as Marx erroneously believed, society can be influenced by how it conducts economic activity, and when such activity is disoriented from any rational goal, it tends to disorient all of society.

Probably all religions and all serious philosophies have recognized that human life is not about the mere acquisition of wealth. Indeed, they have often warned of the dangers that riches pose to cultivation of human virtue. Our modern world, and especially the United States, has elevated the acquisition of wealth to such a point that it tends to distort almost all social relations. Capitalism, the separation of ownership from work, of economic activity from serving man’s needs, is at the root of this. It is true that not all critics of capitalism have a vision of man that corresponds to truth in all respects. But nearly all of them, even those most confused, sense something fundamentally wrong with a system in which “the appetite of artificial riches” and “inordinate concupiscence” reign supreme and almost unhindered.

There is a better way. Our ancestors understood the need for curbing and guiding our powerful appetite for gain, just as we must curb and guide our appetite for sexual pleasure. Opposition to capitalism does not equate with socialism. We need to recover the approaches to economics represented by distributism, by solidarism, by the whole tradition of Catholic social thought as well as that of many other religious traditions. Otherwise we will continue to destroy our social order, deform our environment, both within and outside us, and spend our time on earth in pursuit of things unworthy of human persons who are destined to live forever.

Thomas Storck is the author of three books relating Catholic social teaching and political principles. His work has appeared in numerous publications, including Caelum et Terra, the New Oxford Review, and The Chesterton Review, where he sits on the editorial board.*

 

[Abu]

Jonatello #71
Since at least the first half of the nineteenth century one of the main causes of strife in our civilization has been our capitalist economic system. (Storck)

What a clanger! The Communist and Nazi tyrannies with the multitudes of millions killed in gulags and concentration camps and that’s the best he can do? The blind leading the blind.

It is only the development of the economic laws of cause and effect by the Catholic Late Scholastics based on faith and reason which enabled the enrichment of untold millions from the poverty before the enterprises that came with the “Industrial Revolution”. As with any new developments, unfortunately laws can be slow to follow, especially where reason and faith are confused or lacking.

Wealth can be distributed only after it is produced.

Catholics follow the wise teaching of the Church such as Bl John Paul II, Centesimus Annus, 42, 1991:
‘If by “capitalism” is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a “business economy”, “market economy” or simply “free economy”.’

The crystal clear requirement concerning human activity and responsibility in economics: “Society does not have to protect itself from the market, as if the development of the latter were ipso facto to entail the death of authentically human relations…Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.” (Caritas in Veritate, Benedict XVI, 2009, #36).

 

[carn]

What is Wrong with Capitalism?

by Thomas Storck

Since at least the first half of the nineteenth century one of the main causes of strife in our civilization has been our capitalist economic system.

Thats quite a claim. Its finding the accused guilty right at the start. Through the entire article no evidence is provided that this claim is true.

I realize that there is no generally accepted definition of capitalism. Although most people would agree that our present economic system is capitalistic, few would agree about why this was so. Is it because of private property, because most economic decisions are made by non-state actors, because there is relative freedom of legal competition? Although all of these are likely to characterize a capitalist economy, I do not think that any of them gets to the essential note of capitalism. This essential note I put in the separation of capital from labor, the fact that in a capitalist economy the most usual situation is for those with capital to hire others to work for them, making use of the means of production owned by the employers.[1] Thus what I mean by capitalism is an economy whose distinguishing mark is the employer/employee divide, where the majority of economic activity is carried on not by owners of small property working for themselves, but by capitalists who employ others to work for them for wages.

An error of thinking, a society in which private property is allowed, the separation of capital from labor will take place.
Furthermore the separation of capital from labor has been with us at least since 3000 years. Slaves provided the labor and the capital, e.g. land or mines, were owned by the slave owner. And many farmers of the middle ages did not own the land they worked on, but it was owned by some lord.

Although such an economic arrangement is not in itself unjust, nevertheless it is nearly always productive of great mischief, injustices, evils whose consequences extend far beyond the economy itself.

At least here the article is honest, there is nothing directly wrong with capitalism,its the consequence that are deemed to be a problem.

The intermediary who buys and sells the crop or the table is not concerned with the goodness of table or crop, but with the profit he makes between their purchase and sale. In a productive society the superiority of the things produced is the measure of success: in a Commercial society the amount of wealth accumulated by the dealer is the measure of success.[2]

The inteermediary is not concerned with the quality of the product he sells or buys?
Nonesense, if the quality is bad, his only hope of not making loses is that he can deceive the next buyer. Such ponzi model works for some time and it can be a problem for society, but most of what happens in economics has nothing to do with such ponzi models. Nearly all products i buy i buy from intermediaries and nearly all are of acceptable quality and nearly all intermediaries i buy from seem to be concerned about the quality of the products they sell.

And the measure of sucess for a farmer or carpenter is not tied to whether and how much his customers pay for his products?
Quite unlikely.

And when goods began to be produced in mass, goods which then needed to be sold, buyers had to be found – or an artificial demand had to be created by advertising. Owners cared little if their products were well-made or useful, so long as they could be sold, often by making consumers think they needed the product to be happy.

Nor did these capitalists hesitate to gain and use political power, when they could, to further their ends, using their money to buy politicians in order to make the legal system more favorable to their aims and remove whatever restraints on their activities existed in the law.

So thats the core of the arguments against capitalism:

-Consumers are too stupid to notice how much **** they are enticed to buy
-Politicians are bribed

But these are not specific capitalistic problems, they are general problems of human nature and will exist under any system.E.g. up to 19 th century or so, people paid “doctors” for bloodletting. Same problem, consumers deceived into thinking they needed a product/service, which actually they did not need or in that case was even harmful.

This problem cannot be solved by having a different system, but only limited by laws against fraud, enough competition, information for consumers and moral education for everyone.

And about bribing politicians, politicians are bribed because they have to decide important things. The less they have to decide, the less bribery will happen, reduced power for the state could help there. The bribing for example probably increased a lot when politics decided 2008/2009 it has to change the regulations of wall street - no capitalist would bribe politicians if their decisions did not influence him.

 

[Aboveallbereal]

The evils we associate with capitalism are often nothing to do with capitaliam andare rooted rather in statist intrusions into the market.

EG the federal Reserve is a Central Bank. Since its founding the dollar has lost 96% of its value. This statist instrument regularly debauches currency and rewards moral hazard by “printing money” and thus disadvantaging thrift.

The Fed has done more damage than any private Corporation ever could.

 

[Dirt]

Just my uneducated .02

When discussing economic theory, especially our current system, it is quite dificult for western mindsets to get past the “Us versus Them” mentality that exists in the US. I read quite a bit on this argument and find all systems lacking. Keynes vs Mises vs Hayek. All center on wealth and wealth creation. None are centered on The one, foremost economic truth that needs to guide all economies:
"[36] Master, which is the greatest commandment in the law? [37] Jesus said to him: Thou shalt love the Lord thy God with thy whole heart, and with thy whole soul, and with thy whole mind. [Matthew 22:37] [Latin] [38] This is the greatest and the first commandment. [39] And the second is like to this: Thou shalt love thy neighbour as thyself. [40] On these two commandments dependeth the whole law and the prophets. "

This is what Christ Jesus taught us. This should be the beginning and ending of every decision made regarding the creation and implementation of any economy. If our leaders focused on God first and foremost, everything else would fall into place.

Yes, i am naieve enough to believe this. I have to. That is our Faith. We get to caught up in discussing this world rather than discussing what really matters for our Salvation and Eternity.

 

[Abu]

Dirt #76
I read quite a bit on this argument and find all systems lacking. Keynes vs Mises vs Hayek. All center on wealth and wealth creation. None are centered on The one, foremost economic truth that needs to guide all economies:
If our leaders focused on God first and foremost, everything else would fall into place.

Leaders don’t make an economy, but they can break it, and the government finagling with the economy is the greatest hindrance to a sound economy.

Wealth has to be produced (created) before it can be distributed. Confusing contrasting economic theories with the cause and effect principles developed by the Catholic Late Scholastics fudges the issue.

Economics “is the study of the formal applications that can be deduced from the fact that human beings act purposefully. It does not consider whether these actions are good or bad (an ethical question). Economic science is value free. It analyses cause and effect relationships that, if true, are scientific….only human acts can be judged morally.” (Dr Alejandro Chafuen, Christians For Freedom, Ignatius, 1986, p 33). [Post #65]

Confusing Godliness with economic principles helps no one as Pope Benedict XVI has emphasised:
“Society does not have to protect itself from the market, as if the development of the latter were ipso facto to entail the death of authentically human relations…Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.” (Caritas in Veritate, Benedict XVI, 2009, #36). [Post #73]

So what really matters is FAITH and REASON.

 

[Dirt]

Leaders don’t make an economy, but they can break it, and the government finagling with the economy is the greatest hindrance to a sound economy.

Wealth has to be produced (created) before it can be distributed. Confusing contrasting economic theories with the cause and effect principles developed by the Catholic Late Scholastics fudges the issue.

Economics “is the study of the formal applications that can be deduced from the fact that human beings act purposefully. It does not consider whether these actions are good or bad (an ethical question). Economic science is value free. It analyses cause and effect relationships that, if true, are scientific….only human acts can be judged morally.” (Dr Alejandro Chafuen, Christians For Freedom, Ignatius, 1986, p 33). [Post #65]

Confusing Godliness with economic principles helps no one as Pope Benedict XVI has emphasised:
“Society does not have to protect itself from the market, as if the development of the latter were ipso facto to entail the death of authentically human relations…Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.” (Caritas in Veritate, Benedict XVI, 2009, #36). [Post #73]

So what really matters is FAITH and REASON.

“The principal new feature has been the explosion of worldwide interdependence, commonly known as globalization. Paul VI had partially foreseen it, but the ferocious pace at which it has evolved could not have been anticipated. Originating within economically developed countries, this process by its nature has spread to include all economies. It has been the principal driving force behind the emergence from underdevelopment of whole regions, and in itself it represents a great opportunity. Nevertheless, without the guidance of charity in truth, this global force could cause unprecedented damage and create new divisions within the human family. Hence charity and truth confront us with an altogether new and creative challenge, one that is certainly vast and complex. It is about broadening the scope of reason and making it capable of knowing and directing these powerful new forces, animating them within the perspective of that “civilization of love” whose seed God has planted in every people, in every culture.” Pope Benedict XVI; Caritatis in Veritate

This is a very long and engaging document that would be well worth everyone’s time to read. A couple of sentences pasted into a response do not do justice to the entire document. Read it yourself here:
vatican.va/holy_father/benedict_xvi/encyclicals/documents/hf_ben-xvi_enc_20090629_caritas-in-veritate_en.html

 

[sw85]

Before trying to answer the thread question, please take a look at the following “code of conduct” for a government:

Protect the rights of everybody and respect the rule of law with basic human rights forming the foundation of the law. This includes property rights and therefore any interference into property rights is like the interference into any other human right (e.g. life,liberty) is only possible according to laws and such laws are only valid and may be passed if there is sufficient reason for the interference, which can only arise from the protection of human rights (e.g. poor people should not starve, so non-poor may be forced to provide the food/means for food if a voluntary solution does not work, voluntary solution preferable because then no interference into rights necessary).

However i look at this, i cannot see any evil in this, except that maybe having a government at all is risky because governments are powerful and power can corrupt.

The problem is, if a government would act accordingly, its country would be what a lot of people would name wild-west capitalism because people would mostly be free to use their property as they want to. And such a country would probably be far more capitalistic than nearly any country today and the ones today are deemed to be far too capitalistic by many.

So how does the wrongness get into capitalism, if even a moral government would have capitalism all over the place, and what exactly is wrong about capitalism?

Greed is of course a problem, but greed is a problem for any system just like other vices.

As a strategy for organization of the means of production, not much except to the extent that it does not care at all for the well-being of workers.

As a philosophical system, lots. It is based on a false conception of rights and human nature and improperly gives money a life of its own.

The problem with capitalism – and communism – and really all the philosophical movements of the last several centuries, including the movement for mass democracy/republicanism (please no comments on my improper use of either term, it’s pointless and irritating and we all know what I’m talking about), is that they all depend on virtues which those systems do not cultivate – indeed, actively undermine.

Democracy, for instance, like any political system, only works as long as people have a healthy respect for authority; yet democracy itself is based on a subversive and suspicious attitude toward authority, one which compounds over time.

Likewise capitalism only functions when people are virtuous, yet capitalism undermines virtue by fetishizing the pursuit of money, and the only safeguards that can protect against this are those that are imposed from outside capitalism.

Anyone who thinks communism can be reconciled with Church teachings is either unfortunately deluded (probably by years of leftist propaganda) or just ill-read. As an ideology it formally repudiates organized religion and the principles that structure Catholic life, including a healthy respect for authority. This is why there has never, to my knowledge, been a communist society that did not grossly persecute and suppress the Church and her children.

 

[Abu]

sw85
Likewise capitalism only functions when people are virtuous, yet capitalism undermines virtue by fetishizing the pursuit of money,

Well welcome to the fallen human race!

Of course free enterprise does not make a fetish of the pursuit of money.
Christ’s parable of the Talents most strikingly acknowledges Christ’s respect for the work of business, as does the parable of the Dishonest Steward – the steward is dishonest, “but the nature of his work is not. In fact by praising his shrewdness, Christ admires his opportunism. While the steward abuses the trust his master extends to him, it must be recognised that the nature of the work that is entrusted to him is fundamentally good. The sin of the steward is his misuse of his master’s business, not the work of business itself.” Entrepreneurship in the Catholic Tradition, Fr Anthony G Percy, Lexington Books, 2010, p 47].

Dr Woods puts it simply:
“Profit informs the firm that it has employed resources in conformity with consumer desires, taking raw materials valued less and transforming them into finished products that consumers value more – and which they value more than the use of those raw materials in alternative production processes.” (Thomas E Woods, The Church and the Market, Lexington Books, 2005, p 21).

“Profit signals, then, make for peaceful social cooperation and the most efficient use of resources….to acknowledge a ‘profit motive’ is not to say that people should think only about money, or that money is more important than God, or any other such nonsense.”. (Thomas E Woods, The Church and the Market, Lexington Books, 2005, p 203).

and the only safeguards that can protect against this are those that are imposed from outside capitalism.

As with any human endeavour, the State is there to make just laws for commerce and until people get to know the free enterprise laws discovered and developed by the Catholic Late Scholastics, and what they mean, the confusion will be endless.

People can, and some do, undermine the common good, and the primary role of government is to support families in solidarity, and the role of the Church in subsidiarity, and that’s why we need laws to seek and punish those who steal, cheat, swindle, and against monopolies. Dr Alejandro Chafuen: Economics “is the study of the formal applications that can be deduced from the fact that human beings act purposefully. It does not consider whether these actions are good or bad (an ethical question). Economic science is value free. It analyses cause and effect relationships that, if true, are scientific….only human acts can be judged morally.” (Christians For Freedom, Ignatius, 1986, p 33).

No wonder Pope Benedict XVI felt it necessary to teach that “Society does not have to protect itself from the market, as if the development of the latter were ipso facto to entail the death of authentically human relations…Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.” (Caritas in Veritate, Benedict XVI, 2009, #36).