President Obama took time out over the weekend to respond to this week’s PBR question: “Let me assure you in the days ahead my administration intends to do to every industry in this country exactly what we are doing to the automakers.”
In light of what is going on in the world’s economies, and in light of what will be increasing tension between secular governments and the Church, which has her body of teaching on social issues, it is a good idea to have a strong discussion about Acton and the Church’s social teachings.
Fr. Z, who joined us at Acton University as a blogger last year, started the Acton discussion to address comments that were being raised on another entry regarding Fr. Robert Sirico’s letter to Notre Dame President Rev. John Jenkins. Here’s Fr. Z’s summary:
Under that other entry, commenter Sarsfield opines:
Sirico is a dissenter from the social magisterium of the Church in favor of the decidedly un-Catholic philosophy of economic liberalism. The very purpose of his organization is to “correct” the “mistakes” of all the Popes who have spoken on the social question since Leo XIII. His choice of the organization’s name is telling if anyone bothers to read a little history. It was Acton, after all, who not only opposed Vatican I’s proposed definition of papal infallibility but tried to use his considerable influence with the British government to induce the anti-Catholic European powers to intervene militarily to prevent the Council from meeting.
Some responses were given to this:
* You may or may not agree with Fr. Sirico’s affinity for economic liberalism, but it is a gross overstatement to accuse him of dissenting from the Magisterium of the Church.
* You are incorrect to categorize Fr. Sirico as a dissenter from the Magisterium for his economics. Though, without more information, I’m not sure if it’s because you are wrong about the Acton Institute, or if it’s because you misunderstand Leo XIII.
* I think a better description of Fr. Sirico’s politics/economic theories rather than “economic liberalism,’ which is the term you use, would be “economic libertarianism.” Or “free market capitalism.” Excuse me for coining the first phrase, but certainly, as I read through the Acton maxim’s on their web site, they have much more to do philosophically with the right wing, or modern conservativism’s “less is more” view of the government’s involvement with all things that affect capitalistic economies. So it just as well could read, “economic conservatism,” for those listening with ears primed with the current left vs. right paradigm labeling conventions. So, while you may mean to convey exactly the same idea, the labeling must certainly give the opposite appearance to eyes and ears more conventionally tuned.
Join the discussion on WDTPRS. Come back here to link your remarks.
This past week, President Obama forced the CEO of General Motors to resign. The real significance of this may be lost on most people. Some might say, “Well, if General Motors is not doing well, the CEO should be replaced.” The major difficulty with this is that this is a special power of the GM Board of Directors, not the President of the United States. Effectively, this makes President Obama the Board of Directors of General Motors, and any other company he wants to control, and makes the Board a mere figurehead. Slowly but surely, this is moving us to a fascist form of government. In fascism, the companies still exist, but the government tells them what to do. This was similar to Mercantilism, which was the predominant economic system in Europe from about the 1600s until 1800, more or less. Mercantilism was the system of economics that Adam Smith wrote against in his famous An Inquiry into the Nature and Causes of the Wealth of Nations, which most people shorten to the cryptic Wealth of Nations. Smith was trying to show that government control of business impoverishes nations. Instead, he posited “a system of natural liberty,” which allowed people to follow their natural pursuits, take on the risk of doing so, and allow the market, that is, the countless decisions of people, to decide the outcome. It was the realization of the truth that Smith expressed in his work that subsequently brought prosperity to countless nations.
Now we are returning to the old system, under a new guise. Secretary of the Treasury Timothy Geithner recently asked Congress to grant him unprecedented power to shut down any company that, in his opinion, is dangerous to the overall economy. Note that there are no specifics to this power—it would be at his discretion. For those who have read my blog entries “The Economics of Politics,” you can see that all of this is a grab for what politicians live for—power, and power alone. Politics attracts those kinds of people. When asked by a Congresswoman where in the Constitution he went to get justification for this type of power, Geithner expressed incoherent babbling. It did not seem ever to cross his mind that he needed Constitutional justification for such an assumption of power. Again, this is typical of fascism. A crisis is, if not created, then hyped, panic flamed up, and people in this panic are willing to trade their freedom for security. Only too late will they realize that the situation was not as bad as the self-interested government officials portrayed it. The power will have been granted, and only a miracle will pry it away from the hands of the government. Once taken, government almost always keeps a power.
Getting back to General Motors, its problems go all the way back to government-imposed protective tariffs, which are a remnant of Mercantilism. Corporations seek to be protected from foreign competition so they do not have to work to keep up. The government, bowing to pressure and false economic theories, puts tariffs and quotas on imports to raise their prices higher than those of the domestic product; in this case, cars. The car makers then can do whatever they want because consumers face a choice of either us or nothing. In the 1970s, when we began allowing imports, the American car companies were caught, and almost went out of business. They finally got their act together when a new wave of government regulation on cars was imposed, thus raising the cost of domestic cars. To boot, the latest situation is that the Federal government is dictating to the car companies what types of cars to make, all in an effort to be “green.” The problem is that the market does not want these cars, so the company is forced to spend millions on cars they cannot sell. Then the government says, “Oh, it would be terrible if the companies failed; so many would be put out of work. So we have to bail them out again, and since we are ponying up the money, we now have a controlling interest in them, we can call the shots, we can tell the company what to produce, we can fire the executives, and when the company comes in with a loss, we blame the company again, bail them out again . . . .” And the circle continues. Remember, this government is the same one that has brought us the Post Office, the Department of Motor Vehicles and the public school system. All those who believe that the government can bring us out of a recession should remember that it was the government that caused it in the first place. Remember the housing bubble?
What a racket!
Read more from Dr. Luckey at “Catholic Truths on Economics.”
It made headlines last week when General Motors CEO Rick Wagoner was asked to resign by representatives of President Obama. Fritz Henderson, G.M. President, was announced as Wagoner’s successor to the top spot in the troubled car-manufacturer.
Henderson faces a series of directives from the Obama administration intended to retool G.M. As New York Times reporter Bill Vlasic notes, “The government has mandated that at least two-thirds of the debt of bondholders be swapped for G.M. stock, and that half of the retiree trust obligation also be financed with company stock.” If Henderson is unable to meet these demands, then the Obama administration has made it clear that bankruptcy is the alternative.
“We will either do it out of court or we will do it in court,” Mr. Henderson said. “But we will get the job done in terms of recreating and reinventing General Motors as a competitive enterprise.” In the sacking of Wagoner and the hands-on approach to forming G.M.’s future the federal government has flexed its muscles, refusing to be a passive partner following the extension of bailout funds to a host of corporations.
Given the precedent this might set, this week’s PBR question is: “Should the government control bailed-out companies?”
In the new book The Rebellion of Ronald Reagan, James Mann wants you to meet Reagan as the rebel who parted ways from cold war hawks in his own administration and foreign policy “realists” who were loyal to containment. It could be argued that Reagan was the atypical conservative dove in Mann’s view.The author does provide a relatively fresh thesis on Reagan’s role in ending the Cold War, which reinforces his rejection of what he calls “both left wing and right wing extremes.” Mann believes conservatives who champion Reagan as the president who had a well formulated economic and military plan to execute the end of the Soviet Union, and left wing critics who saw Reagan as lucky, overly simplistic and vapid, were both wrong.
When it comes to Soviet diplomacy, Mann’s account is highly praiseworthy of Reagan and his Secretary of State George Schultz. He sees the end of the Cold War as a result of both of men’s instincts and creativity in dealing with Mikhail Gorbachev, rather than the heavy arms build up, resistance to détente, and “saber-rattling” of Reagan’s first term. Critics of Reagan from the right, “failed to see the dynamics that were propelling change [in the Soviet Union]. Reagan would come to grasp the situation better and more quickly than they did,” says Mann. (more…)
When Sen. Arlen Specter announced last week that he opposed the Employee Free Choice Act (legislation permitting union organizing by card check rather than secret ballot), it appeared to diminish chances of the bill’s passage for the time being.
But the idea will no doubt be back, so it might be worthwhile to reflect for a moment on how this particular proposal comports with Catholic social teaching (CST). Opponents of card check argue that it will open workers to union pressure tactics. Advocates argue that employers already use pressure tactics and card check makes it easier for unions to form, which is in the best interest of the workers. (See both sides articulated in this LA Times debate.)
The proposal involves other issues as well, but I think it is correct to focus on the question of coercion. In the social encyclical tradition, beginning with Leo XIII in Rerum Novarum (1891), the popes speak positively about labor unions but not unequivocally so. They praise unions insofar as they are ordered to the common good, do not act contrary to the faith (e.g., by disseminating atheist or anti-Catholic opinions), and serve the genuine welfare of workers.
Intrinsic to this papal understanding of beneficial unionism is the right of free association. The union, in this understanding, is simply one of many associations in which people participate in pursuit of individual goods and in service of the common good. If there is coercion—for or against union organizing—then the moral validity of the labor system is compromised.
The question, then, is whether card check legislation would enhance or detract from the goal of free association of workers. It is hard to see how it would enhance it. James Sherk has documented instances of coercion where card check has been in place. In response, advocates point to instances of dubious employer tactics on the other side.
I’m sure that in unionization disputes there are all sorts of pressures brought to bear on all sides. Some degree of pressure will be unavoidable—it is a heated issue about which people who spend many hours a day, every day, with each other differ. The goal, however, should be to reduce the opportunities for outright coercion, not to increase them. I cannot see, then, how the opportunity to sign a union card in front of one’s peers is an improvement over a ballot that is secret.
CST supports the formation of voluntary associations, including labor unions. Card check is a step away from rather than toward the ideal of an economy composed of men and women acting freely and without compulsion.
For a broader treatment of related matters, see CSTS volume 5, Charles Baird’s Liberating Labor.
I was late in receiving my Richard John Neuhaus tribute issue from First Things, so forgive my mentioning it after many have long read it.
Going through, one thing that stands out is that Richard John Neuhaus was so influential not only because of his tremendous proficiency and prolificity with words, but also because of his gift of friendship. When great groups of friends stay together for a long time, it is often because there is one person standing at the center doing the work and exerting an almost magnetic attraction. Neuhaus stood at the center of an incredible network of brilliant people. That becomes clear as you read the tributes.
I had a friend like that in high school. He made the friendships work. We didn’t have a lot without him. We got together recently in Chicago after twenty years apart. The same dynamic was in place.
Stephen Barr’s tribute underlines the point:
[Neuhaus] also created a particular part of the public square that hadn’t existed before. He created a place where a great throng of religious intellectuals, hitherto isolated from one another and often unaware of one another’s existence, could meet to share their thoughts and pool their intellectual resources.
Quite right. And one man was brilliant at linking those people together in a culturally important way. Who will be next? Robert George? Father Sirico? I wonder . . .
Both of those gentlemen will be at the next Acton University.
Sports are still able to foster human virtues, especially classical virtues like courage and fortitude. Like any good thing, sport all too often risks becoming an idol, not because of any fault within the institution itself so much as the fault lying within each human participant.
If there’s anything that distinguishes modern sports from classical antecedents, I suppose it would be the wealth that is often attached to high-profile sports today. You might call it the professionalization of sport. Yesterday’s cover story in USA Today examined the extent to which nominally non-professional sports, like college basketball, have become major industries. This is even more the case with overtly professional sports. It seems to me that in the ancient world, there was a great deal of glory or prestige that was associated with victory. But in addition to that aspect of sporting endeavors, we have the added prospect of great wealth for those who excel at golf, tennis, basketball, or football.
Glory may have been an appropriate motivation for pursuing sports in the ancient world, although there’s no doubt that this kind of fame-seeking can become idolatry in its own way. But I’m sympathetic to the view that sports’ ability to foster human virtue is at least potentially compromised by the additional motivation of wealth-seeking. For every athlete that excels today from a deep “love of the game,” there are a dozen others who are in it just for the paycheck.
I’ve posted a reflection on the future of higher education, with a particular emphasis on the Christian universities, over at the Touchstone Magazine Mere Comments blog. Catch it here.
Here’s a clip:
The economic downturn has had a substantial impact on colleges and universities.
The first shoe dropped when endowments everywhere took big hits from a rapidly falling market. When endowments go underwater, they produce no income and generally can’t be touched.
The other shoe will drop when we see how private colleges and universities do in terms of their student numbers for the fall. My casual conversations with peers indicates that the private schools are running behind in terms of student deposits. The buyers are not feeling flush.
The public universities, on the other hand, have their own problems. The ones that have endowments are down. They also rely on tax subsidies in a time when tax revenues are diminished. The trend of the last several years has been for states to offer less and less financial support. In-state tuition has risen substantially. Where they do not suffer is in terms of student numbers. They will be overwhelmed by bargain seekers in tough economic times. The question is whether they will have state funds to backfill the subsidized education they offer and how many they can admit. As it stands now, their facilities are often severely strained, teaching assistants do an awful lot of the instruction, and there are a large number of cattle call style courses.
“Power permits people to do enormous good,” Lord Acton once said, “and absolute power enables them to do even more.”
This wisdom from the nineteenth-century’s champion of state prerogative applies as well today. Politicians are crippled by the lack of the one thing they need to yank our hobbled economy out of the mire of recession: adequate power. It is our duty to grant it to them.
Yes, from time to time this commentary space has been critical of government meddling in economic affairs, surmising, for example, that trying to cure poverty by funneling more money through Washington would do less to assist the poor than to pad the salaries of middle-class bureaucrats. We have emphasized the effectiveness of private and faith-based charity, of its capacity at once to use resources efficiently and to respect the individual’s dignity. We have argued that persons, morally formed, acting freely, and operating within the context of a rule of law, will generate a bountiful and equitable economic environment without counterproductive interference by the state. We have posited that our current difficulties derive from a combination of moral turpitude and government bumbling.
We were mistaken. (more…)