Archived Posts June 2008 - Page 4 of 4 | Acton PowerBlog

Blog author: berndbergmann
posted by on Tuesday, June 3, 2008

While we await Pope Benedict’s first social encyclical, it has been interesting to note what he has been saying on globalization and other socio-economic issues affecting the world today. None of these amounts to a magisterial statement but there are nonetheless clues to his social thought.

So that makes his address to the Centesimus Annus pro Pontifice Foundation noteworthy. The Pope spoke about the current state of globalization, reminding the audience that the aim of economic development must serve the progress of man.

Benedict stressed that commercial interests must never become so exclusive that they damage human dignity. He expressed the hope that the process of globalization which has so far affected finance, culture and politics should in the future also lead to a “globalization of solidarity” and respect for all parts of society. This would be necessary in order to make sure that economic growth is never cut off from the search for the comprehensive development of man and society. The Pope pointed out that the principle of subsidiarity is vital in guiding globalization:

“In this respect, the social doctrine of the Church stresses the importance of intermediate bodies in accordance with the principle of solidarity. It allows people to freely contribute to give meaning to cultural and social changes and direct them towards the authentic progress of man and the community.”

The conference was entitled “Social Capital and Human Development” and the foundation’s name recalls John Paul II’s 1991 social encyclical of the same name, which drew together 100 years of history of the Church’s social doctrine.

What Benedict has said on globalization is very much in line with what John Paul II said before him. This may not seem like much, but when one considers the technical nature of economics and finance today, it is a humane and necessary message that supports the positive aspects of market economics.

UPDATE:

The journalist and author Will Hutton (described in his Wikipedia entry as “Britain’s foremost critic of capitalism”) was invited by the Centesimus Annus Pro Pontifice Foundation to address the conference. In an article for the Observer he shared his impressions. Interpreting Benedict within the framework of his own left-leaning ideas he failed to understand what the pontiff actually said.

According to Hutton, “the Catholic church is again alarmed by the way capitalism is developing” and has attacked “sweatshop call centres, declining trade unions” and “directors paid tens of millions”.

The Pope mentioned none of this and Hutton offers no evidence of why that should be Church teaching. Nor did John Paul II in his encyclical demand “stakeholder capitalism” as Hutton claims. Besides raising the obvious question why Hutton was invited to speak on a subject that he knows little about, this is a worrying example of how a defense of an ethical grounding of economics is misinterpreted as a call for socialistic solutions.

Blog author: jballor
posted by on Tuesday, June 3, 2008

Is this supposed to be capitalism?

Geoff Colvin writes that a motivating factor in the recent crash in corporate profits, as well as the sharp decline in home values, was the phenomenon that “people began to believe that the more they borrowed, the better off they would be. Their thinking went like this: With the cost of capital so low and asset prices rising steadily, risk was evaporating.”

The precipitating cause of the downturn was that consumers “began to live within their means, shutting down the profit-growth machine.”

Any business or industry profit model that depends on consumers driving themselves deeper and deeper in debt is morally flawed and economically unsustainable. That’s not capitalism, that’s consumerism.

Compare the latter with the former, represented by this statement of a first principle of capitalism, “Thrift the First Duty”:

…thrift is mainly at the bottom of all improvement. Without it no railroads, no canals, no ships, no telegraphs, no churches, no universities, no schools, no newspapers, nothing great or costly could we have. Man must exercise thrift and save before he can produce anything material of great value. There was nothing built, no great progress made, as long as man remained a thriftless savage. The civilized man has no clearer duty than from early life to keep steadily in view the necessity of providing for the future of himself and those dependent on upon him. There are few rules more salutary than that which has been followed by most wise and good men, namely, “that expenses should be less than income.” In other words, one should be a civilized man, saving something, and not a savage, consuming every day all that which he has earned.

You don’t need to agree with Andrew Carnegie about everything to recognize the truth of these statements. Thrift is one of the things that separates civilized capitalism from savage consumerism.

Blog author: kschmiesing
posted by on Monday, June 2, 2008

Sometime Acton publications contributor and adjunct scholar Thomas Sieger Derr posts on the First Things blog under the title, “The End of the Global Warming Scare?” Derr identifies a trend that has not been ignored on this blog: increasingly vocal and widespread skepticism toward at least the most dire predictions emanating from the climate change disaster crowd. I would add to Derr’s observations that consternation over oil prices is likely to encourage reluctance to implement any costly programs that have only debatably positive environmental results (e.g., Kyoto). Instead, folks will be more supportive of sensible moves that fuel the economy and cause little environmental harm (e.g., Arctic drilling), meanwhile making similarly sensible efforts to increase efficiency (car pooling is surging), which is always good for both economy and environment.

Still, Derr is right to punctuate his post title with a question mark. There’s a lot of hot air left in the global warming baloon.

Here’s the key assumption in Michael Gerson’s piece from last week, “The Libertarian Jesus”:

Private compassion cannot replace Medicaid or provide AIDS drugs to millions of people in Africa for the rest of their lives. In these cases, a role for government is necessary and compassionate — the expression of conservative commitments to the general welfare and the value of every human life.

Private compassion certainly could do this, and much more. Private giving generally dwarfs government programs in both real dollars and effectiveness.

Does this mean that there is no role or never a role for government? No. But that role is one of last and temporary resort. The dichotomy that Gerson draws from one side (and many libertarians draw from another) is false.

Gerson also misunderstands the import of Coburn’s claims that compassion cannot be coerced, “that true giving and compassion require sacrifice by the giver.” The divide between government programs and individual charity isn’t a public/private distinction, but rather a political/moral distinction, where the moral element may sometimes but not always necessitate political action. Poverty is simply not morally equatable with slavery or abortion.

Abraham Kuyper makes the point pretty well in his treatise on The Problem of Poverty. Read these two quotes in juxtaposition and you can see where Gerson’s errors reside.

First, from the main text, “The holy art of ‘giving for Jesus’ sake’ ought to be much more strongly developed among us Christians. Never forget that all state relief for the poor is a blot on the honor of your Savior.”

And second, from a footnote, “It is perfectly true that if no help is forthcoming from elsewhere the state must help. We may let no one starve from hunger as long as bread lies molding in so many cupboards. And when the state intervenes, it must do so quickly and sufficiently.”

With whom does the primary responsibility for care for the poor reside? Answer that question, and you can properly relate the political and moral claims regarding poverty.