Pope Francis, in an apostolic exhortation, has levied charges against free market capitalism.
He denied that "economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world" and concluded that "this opinion . .. has never been confirmed by the facts." He went on to label unfettered capitalism as "a new tyranny."
Let's look at the pope's tragic vision.
First, I acknowledge that capitalism fails miserably when compared with heaven or a utopia. Any earthly system is going to come up short in such a comparison.
However, mankind must make choices among alternative economic systems that actually exist on earth. For the common man, capitalism is superior to any system yet devised to deal with his everyday needs and desires.
Capitalism is relatively new in human history. Prior to capitalism, the way people amassed great wealth was by looting, plundering and enslaving their fellow man. With the rise of capitalism, it became possible to amass great wealth by serving and pleasing your fellow man.
Capitalists seek to discover what people want and produce and market it as efficiently as possible as a means to profit.
A couple of examples would be J.D. Rockefeller, whose successful marketing drove kerosene prices down from 58 cents a gallon in 1865 to 7 cents in 1900. Henry Ford became rich by producing cars for the common man. Both Ford's and Rockefeller's personal benefits pale in comparison with that received by the common man by having cheaper kerosene and cheaper transportation.
There are literally thousands of examples of how mankind's life has been made better by those in the pursuit of profits.
Here's my question to you: Are people who, by their actions, created unprecedented convenience, longer life expectancy and a more pleasant life for the ordinary person — and became wealthy in the process — deserving of all the scorn and ridicule heaped upon them by intellectuals, politicians and now the pope?
Let's examine the role of profits but first put it in perspective in terms of magnitude. Between 1960 and 2012, after-tax corporate profit averaged a bit over 6% of the gross domestic product, while wages averaged 47% of the GDP.
Far more important than simple statistics about the magnitude of profits is its role in guiding resources to their highest-valued uses and satisfying people.
Try polling people with a few questions. Ask them what services they are more satisfied with and what they are less satisfied with. On the "more satisfied" list would be profit-making enterprises, such as supermarkets, theaters, clothing stores and computer stores. They'd find less satisfaction with services provided by nonprofit government organizations, such as public schools, post offices and departments of motor vehicles.
Profits force entrepreneurs to find ways to please people in the most efficient ways or go out of business. Of course, they can mess up and stay in business if they can get government to bail them out or give them protection against competition.
Nonprofits have an easier time of it. Public schools, for example, continue to operate whether they do a good job or not and whether they please parents or not. That's because politicians provide their compensation through coercive property taxes.
I'm sure that we'd be less satisfied with supermarkets if they, too, had the power to take our money through taxes, as opposed to being forced to find ways to get us to voluntarily give them our earnings.
Arthur C. Brooks, president at the American Enterprise Institute and author of "Who Really Cares," shows that Americans are the most generous people on the face of the earth.
In fact, if you look for generosity around the world, you find virtually all of it in countries that are closer to the free market end of the economic spectrum than they are to the socialist or communist end.
Seeing as Pope Francis sees charity as a key part of godliness, he ought to stop demonizing capitalism.
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ReplyDeleteI can see the Pope's position. The Catholic religion works similar to socialism - if you don't join or are not born into it you are
ReplyDeletenot allowed to participate in some of the church rituals. Other churches I have been to do not give you a label. Only one they have in common (other churches) is you can't get into heaven unless you believe in Jesus as your Savior. That is it that I know of.
Dead on commentary. Unfortunately it appears the Pope is a member of the "Jesus was a Socialist" congregation which of course is absolute nonsense.
ReplyDeleteDoug - your arguments are strong for capitalism. Send this to the Vatican along with reference to Matthew 25:14-30, parable about how 3 men used their God given talents, with a lesson that one should develop these talents. then ask the Vatican to explain which system - socialism or true free market ( not corrupt crony ) capitalism would best apply to this parable. Surely the latter wins as it motivates one to further develop their talents. The former often leads to a growing lazy Dependency on Government class.
ReplyDeleteDoug - I usually send on your emails to a select group of friends. Art is a retired (he retired at 55 and is now 63 +/-) reconstructive Maxillofacial surgeon from NYC, and is now a Rabbi here. He is also one of the few Democrats in the area, although not too far out in left field. I thought you would find his reply interesting. I did.
ReplyDelete---Rabbi's Response---
THE POPE IS ACTUALLY JUST TEACHING PURE UNADULTERATED CHRISTIAN DOCTRINE .
WE DON'T HEAR IT OFTEN SO IT SOUNDS AS IF HIS RANT IS HIS AND NEW.
WHEN WE STUDY THE EARLY CHURCH OF PAUL, IN ROME, AND IN MANY OTHER TOWNS, THE CHRISTIAN COMMUNITY WERE, WHAT WE WOULD CALL TODAY, COMMUNISTIC. EVERYONE WOULD GIVE EVERY WORLDLY POSSESSION ONE HAD TO THE COMMUNE, AND IT WOULD BE REDISTRIBUTED ACCORDING TO NEED.
IN POINT OF FACT, IN AN ODE TO THE MEMORY OF THIS, CATHOLICS STILL PRACTICE RITUAL COMMUNION.
JUDAISM NEVER WENT SO FAR. THEY ACCEPTED THE FACT THAT THERE WILL ALWAYS BE RICH AND POOR, AND FOLKS IN BETWEEN. BUT, THEY LEGISLATED LAWS OF 10% TITHING (A FLAT TAX!!) FOR ALL, SO THAT THE POOR, WIDOWS, ORPHANS, COULD LIVE.
FARMERS COULD NOT HARVEST THE CORNERS OF THEIR FIELDS, SO THAT THE POOR COULD COME AND GLEAN FREE FOOD, BUT NOTE, USING THEIR LABOR TO GATHER THE CROPS.
AND THEY HAD MANY LAWS PROTECTING THE WORKER.
AS FAR AS CAPITALISM, A JEWISH MERCHANT COULD ONLY HAVE A SALES PRICE OF A PRODUCT OF NO MORE THAT ONE 6TH HIGHER [ 17%] OF WHAT HE PAID FOR IT, UNLESS HE AND THE 'MADE AWARE OF' BUYER, AGREED TO PAY MORE.
AND THEY HAD LAWS ON HOW CONSUMERS WERE TO BEHAVE ALSO.
SO WHILE THE EARLY CHURCH DID AWAY WITH CAPITALISM AND JUMPED INTO COMMUNAL COMMUNIST LIVING, JUDAISM PROMOTED CAPITALISM, BUT NOT 'UNFETTERED' CAPITALISM.
I WOULD SUGGEST THAT THE USA HAS TRIED TO PROMOTED 'FETTERED' CAPITALISM, SINCE THE SHERMAN ANTI- TRUST ACT OF 1890.
AND HAS TRIED TO CONTROL UNIONS SINCE THE TAFT-HARTLEY ACT OF 1947.
OF COURSE IT IS ALWAYS EASY TO DERIDE SMALL BUSINESSMEN LIKE OURSELVES, FROM A BALCONY, WEARING A GOLD CROSS, THAT IF MELTED INTO COINS, COULD FEED A SMALL AFRICAN NATION.
GREAT ARTICLE - Love the sentence "capitalism fails miserably when compared to heaven or utopia" !
ReplyDeleteIt bothers me that so many people assume that people or businesses that are successful and have amassed some wealth or a lot of wealth have done so by cheating or plundering other people. Congress passes laws that give tax breaks to businesses and it is perfectly lawful to take advantage of those tax breaks. Do people really think all of these business owners are cheats?
ReplyDelete