Commentary Magazine


Topic: capitalism

Opposition to Capitalism, Even From a Pope, Hurts the Poor

While Pope Francis’ upcoming visit to the United States will be seized upon as an opportunity to critique capitalism, it would be far better if it were used to show how opposition to economic freedom does the poor great harm.

Read More

While Pope Francis’ upcoming visit to the United States will be seized upon as an opportunity to critique capitalism, it would be far better if it were used to show how opposition to economic freedom does the poor great harm.

Emphases vary from pope to pope. Pope John XXIII (r. 1958-1963) wrote the Pacem in Terris, an encyclical seeking nuclear non-proliferation. Pope Paul VI (r. 1963-1978) is perhaps best known for his condemnation of “artificial” birth control. And Pope John Paul II (1978-2005) is known best for his subtle role in eroding the grip of communism and totalitarianism in the Eastern Bloc.

Pope Francis, the first pope born outside of Europe since the eight century, has made rectifying poverty and the fight against climate change his two major issues. Let’s put climate change aside for the time being, and focus on poverty eradication.

Francis seems to believe that the cause of poverty and inequity is capitalism. As Kevin Clarke, a senior editor and chief correspondent at America magazine wrote in the Washington Post:

Those whose hearts beat a little faster during bedtime stories of 19th century laissez faire capitalism should buckle up when Francis comes to Washington. “An unfettered pursuit of money rules,” he said in Bolivia, leading to a benighted planet, poisoned with the “dung of the devil.” Not exactly subtle. But sometimes Pope Francis has to play prophet and say the hard things that might awaken first world consciences… He has come not to profess socialism, but to proclaim a social moral principle: that a just economic order—one well within our reach—is one that serves people and protects the earth, not one that exhausts people and creation as disposable economic inputs.

And here is The New Yorker on the pope’s economic philosophy:

…[He] has a vision of the Church as an institution that acts for, and on behalf of, the dispossessed—a vision that owes a lot to Saint Francis of Assisi, the thirteenth-century Italian who renounced his inheritance to tend to the poor. In Buenos Aires, Bergoglio’s latest biographer, Paul Vallely, reminds us in his new book about the Pope, he was known as “Bishop of the Slums.” On taking Francis’s name and entering the Vatican, he said he wanted “a poor Church, and for the poor.” Of course, the poor have long been with us, and Catholic priests and lay workers the world over have long made great exertions on their behalf. All too often, though, this charitable work has coexisted with a Church hierarchy that studiously avoided critiquing the political and economic system that generates poverty and inequality. And when such a critique did emerge from within the Church, during the nineteen-sixties and nineteen-seventies, in the form of “liberation theology”—a doctrine that placed helping the poor and oppressed front and center—the Vatican stamped down on it, with Cardinal Joseph Ratzinger, who eventually became Pope Benedict XVI, playing a prominent role. Pope Francis seems intent on revisiting this debate. In the part of the exhortation devoted to economic matters, which runs to about twenty pages, he resurrects, and appears to endorse, many of the themes of liberation theology.

When the pope appears to exhort governments reduce poverty by increasing safety nets and other big-government solutions, what he actually proposes might be hemlock for poverty reduction. After all, wealth—across the board—has increased tremendously in proportion to free market reforms. Between 2001 and 2011, upwards of 700 million people escaped deep poverty, most of which live in Africa. Indeed, nine of the world’s 20 fastest growing economies are in sub-Saharan Africa. If the time period considered is increased by a decade, than capitalism has empowered well over a billion, as China and other countries in East Asia rode a capitalist wave to relative prosperity.

In contrast, countries like Pope Francis’ birthplace of Argentina, Cuba, and Venezuela increasingly condemn their population to greater poverty as they punish initiative and constrain economic freedom. These may be extreme examples, but remember that until the 1970s, the North Korean economy was arguably as strong if not stronger than South Korea’s, but now has fallen exponentially behind. Poland has emerged from decades of socialist repression to become a growing powerhouse: drive across the border into Belarus, and the juxtaposition could not be greater. Talk of social justice is too often rhetorical crack. It may make proponents feel good and it can be addictive to the self-righteous and those genuinely seeking to do good, but it can be very corrosive to health, happiness, and holistic prosperity.

Will gaps between rich and poor exist? Certainly. And do many persons who consider themselves poor resent those who have more? Absolutely. But recent history shows that those who generate wealth—even if they make far more than the mean—often repair economies and reduce poverty in ways that decades and centuries of well-meaning rhetoric and talk of social justice have not. Pope Francis and his supporters most certainly would not consider themselves as ‘hating’ the poor, but if they did, they could do nothing better than embrace the sort of liberation theology that retarded economic growth in some Latin American countries, as others prospered and grew their middle class. Conversely, if Pope Francis wants to help the poor, let’s hope he’ll delve more deeply into economics and history to separate fact from fiction, and use his soap box to encourage more capitalist investment and less state intervention. That is the key to poverty reduction, and it deserves holy support.

Read Less

Capitalism at Work

The secret of capitalism is free entry to the marketplace. In theory in a capitalist economy, if you have an idea for a product that you think you can sell at a profit, you need merely produce it and take it to market. If you are right, you create wealth for yourself and others. If you’re wrong, you lose money. (In the real world, of course, government often restricts access to the marketplace, requiring licenses and certificates of need for all sorts of goods and services.) Read More

The secret of capitalism is free entry to the marketplace. In theory in a capitalist economy, if you have an idea for a product that you think you can sell at a profit, you need merely produce it and take it to market. If you are right, you create wealth for yourself and others. If you’re wrong, you lose money. (In the real world, of course, government often restricts access to the marketplace, requiring licenses and certificates of need for all sorts of goods and services.)

There have been some spectacular miscalculations, such as New Coke and the Edsel, but also equally spectacular home runs, such as the iPhone and, in the 1980’s, the video cassette recorder (VCR).

There have also been no shortage of silly, but fleetingly profitable, ideas such as the Pet Rock introduced in 1975. And, of course, many a profit has been made off human gullibility and ignorance. It is an abiding characteristic of free markets that fools and their money are soon parted.

Yesterday I ran across a great example of this. At my local supermarket, you can now buy water for $2.50 a quart. Milk at this supermarket costs $1.48 a quart, $2.44 a half gallon.

Water

The market (DeCicco’s) is, admittedly, a rather upscale one, with lots of fancy cheeses, pâtés, microbrewery beers, and organic and gluten-free everything. They even have gluten-free ice cream, which is interesting as ice cream doesn’t have gluten in it to begin with. Gluten is a protein found only in wheat, barley, and rye products. But DeCicco’s also has everything from Wheaties to Hamburger Helper.

The marketing gimmick here is that a box made from recycled whatever is more eco-friendly than the ubiquitous plastic bottles supermarket water usually comes in. The water itself is merely an afterthought. It doesn’t come from some secret spring in the Austrian Alps known only to yodeling goatherds. Indeed, there is no indication where the water comes from, which means it comes from the tap at the factory.

So the business plan for “Boxed Water” is that there are people out there so anxious to save the planet that they will fork over $2.50 for a quart of tap water.

I admit to having a double dose of the Scottish frugality gene, but really. Who would be that stupid (and affluent) to pay $2.50 a quart for tap water? Apparently quite a few as, according to the check-out girl, it is selling quite briskly. P. T. Barnum, call your office.

Perhaps the next attempt to capture the damn-fools-with-too-much-money market will be organic, gluten-free air, packaged in recyclable balloons, $2.50 a lungful.

Read Less




Pin It on Pinterest