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terça-feira, 3 de dezembro de 2013

Some Economic Applications of Evangelii Gaudium - by Wendy P. Warcholik

In Crisis

I am a Catholic and it is the very intellectual foundations of the Catholic Church that drew me back to my faith. I grew up admiring Pope John Paul II’s battle against communism—a battle that we now know he played an integral part in.

Pope Francis’s background is very different from his two most recent predecessors. Admittedly, I worried about his views coming out of the more liberal Jesuit order. Now his latest encyclical, Evangelii Gaudium, would seem to confirm some of my worst fears, especially as an economist. Samuel Gregg from the Acton Institute does an excellent of job here of pointing out those fears.

Here is the offending passage that has so many of my free-market friends in an uproar:
[S]ome people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting. To sustain a lifestyle which excludes others, or to sustain enthusiasm for that selfish ideal, a globalization of indifference has developed. Almost without being aware of it, we end up being incapable of feeling compassion at the outcry of the poor, weeping for other people’s pain, and feeling a need to help them, as though all this were someone else’s responsibility and not our own. The culture of prosperity deadens us; we are thrilled if the market offers us something new to purchase; and in the meantime all those lives stunted for lack of opportunity seem a mere spectacle; they fail to move us. (n. 54)
However, to me the answer to this is in the section just prior. In fact, paragraph 54 starts with the phrase “In this context,” which many seem to have ignored.
Just as the commandment “Thou shalt not kill” sets a clear limit in order to safeguard the value of human life, today we also have to say “thou shalt not” to an economy of exclusion and inequality. Such an economy kills. How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion. Can we continue to stand by when food is thrown away while people are starving? This is a case of inequality. Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.
Human beings are themselves considered consumer goods to be used and then discarded. We have created a “disposable” culture which is now spreading. It is no longer simply about exploitation and oppression, but something new. Exclusion ultimately has to do with what it means to be a part of the society in which we live; those excluded are no longer society’s underside or its fringes or its disenfranchised—they are no longer even a part of it. The excluded are not the ‘exploited’ but the outcast, the ‘leftovers’.
My reading of this conforms to a significant problem I have had with some free market, libertarian leaning economists which is that any monetary generating activity is of equal value to society. For instance, if I spend $1,000 on an abortion or $1,000 on a life-saving procedure, are the two activities really of the same value—one activity ends life while the other saves life?

Yet, according to our economic bean-counters, the two procedures go into our Gross Domestic Product (GDP) and America’s income goes up. If we suddenly decided to abort every baby in America, GDP would zoom, but within a few years it would become painfully obvious that a 100 percent abortion rate is also bad economics—which I recently pointed out in my blog “Demographic Winter Comes to America.”

And, abortions feed economic inequality since abortions are most prevalent among poor women with an abortion rate of 53 per 1,000 women representing 40 percent of all abortions. At the same time, well-heeled doctors and the health system pocket the abortion money, including government funded Medicaid dollars. Just look at Dr. Gosnell and how he enriched himself while inflicting physical and spiritual pain.

From abortions we move into chemical contraception, ie, the “pill,” which is an abortificant—meaning they cause abortions since it does not prevent the fertilization of an egg only the attachment to the mother. According to the Guttmacher Institute, 10.54 million women in 2010 used the pill. If you assume $100 per month per woman, that is $12.6 billion added to GDP every year. This does not include more expensive chemical contraception such as intrauterine devices or implants.

Another example is gambling. Living in Northern New England, I am surrounded by states that have legalized gambling. Gambling may be most representative of Pope Francis’s “human beings as consumer goods” where the industry is built on massive amounts of deception and exists solely to remove the money from your wallet as quickly as possible.

Studies have shown that casinos and other gambling venues are an economic blackhole for the communities that they are located in. The revenue generated from, mostly local, customers is wisked away never to return. Yet, economic theory says that this economic activity is just as valuable as any other—until it’s not.

Then there is the massive Hollywood-Entertainment complex whose shows and movies anymore are a cesspool of promiscuity, dysfunctional families, homosexuality, crude language, etc. that glorifies sin over virtue. It’s no surprise from the way mainstream American families are portrayed that traditional marriage has eroded and cohabitation has surged. And from the Pope’s perspective, this form of demonic communication is brought to you courtesy of America’s free market.

Speaking of the breakdown in traditional marriage, proponents of same-sex marriage talk about the economic benefits that would accrue to a state that allowed for it. According to an article in the Huffington Post titled “Gay Marriage And The Economy: Same-Sex Unions Will Boost Economy By $166 Million, Study Finds”:
The Williams Institute at UCLA Law reported Monday that wedding spending by same-sex couples in the three newest states to approve gay marriage may generate more than $166 million over the next three years. The Institute estimates that same-sex couples in Maine will collectively spend $15.5 million, Maryland couples will spend $62.6 million and Washingtonians will spend $88.5 million on weddings.
Finally, one last example is the growing movement toward drug legalization. Just down the road Portland, Maine became the latest city to legalize marijuana. Surely, moving illicit drug sales into the open will be a boost to GDP. And, so will all of the growth in the drug rehab business, bankruptcy and divorce courts, and counseling services.

Abortion, contraception, gambling, same-sex marriage, and drug legalization are all examples of a free market at work that will not bring “greater justice and inclusiveness in the world” from an economic or, more importantly, spiritual standpoint. Yet, when Pope Francis looks at an economic powerhouse like the United States, he must wonder how much of our income and wealth, or more technically measured by GDP, is predicated on this “economy of exclusion and inequality.”

On the flip side, GDP undervalues activities that often have a high spiritual component. For instance, in large part because of my faith, I stay at home and homeschool my four children. According to Salary.com, the work of a stay-at-home mother is worth at least $113,599. When accounting for in GDP, am I not at least worth the pay of a casino dealer?

Overall, why wouldn’t Pope Francis be a bit unimpressed by America’s economic prowess and the workings of the free market in promoting sin and under-promoting virtue? A free market needs boundaries in order to operate efficiently, such as some government regulation. A free market also needs boundaries to operate spiritually and, in my opinion, that is the Christian faith.

Overall, I can’t help but think that Pope Francis really isn’t criticizing America’s free market so much as he is criticizing America’s waning Christian faith. I think economists have forgotten that the Catholic Church is, first and foremost, in the business of saving souls. If we want the Pope to take the free market seriously it is up to all of us to show that economic growth helps, not hinders, salvation.

quarta-feira, 29 de agosto de 2012

Five Pillars of a Decent and Dynamic Society - by Robert P. George

In jp2alf

John Paul II Australian Leaders Forum

Sydney

11 August 2012



Any healthy society, any decent society, will rest upon three pillars. The first is respect for the human person—the individual human being and his dignity. Where this pillar is in place, the formal and informal institutions of society, and the beliefs and practices of the people, will be such that every member of the human family—irrespective of race, sex, or ethnicity, to be sure, but also and equally irrespective of age, size, stage of development, or condition of dependency—is treated as a person—that is, as a subject bearing profound, inherent, and equal worth and dignity.

A society that does not nurture respect the human person—beginning with the child in the womb, and including the mentally and physically impaired and the frail elderly—will sooner or later (probably sooner, rather than later) come to regard human beings as mere cogs in the larger social wheel whose dignity and well-being may legitimately be sacrificed for the sake of the collectivity. Some members of the community—those in certain development stages, for example— will come to be regarded as disposable, and others—those in certain conditions of dependency, for example, will come to be viewed as intolerably burdensome, as "useless eaters, as "better off dead," as Lebensunwerten lebens.

In its most extreme modern forms, totalitarian regimes reduce the individual to the status of an instrument to serve the ends of the fascist state or the future communist utopia. When liberal democratic regimes go awry, it is often because a utilitarian ethic reduces the human person to a means rather than an end to which other things including the systems and institutions of law, education, and the economy are means. The abortion license against which we struggle today is dressed up by its defenders in the language of individual and even natural rights—and there can be no doubt that the acceptance of abortion is partly the fruit of me-generation liberal ideology—a corruption (and burlesque) of liberal political philosophy in its classical form; but more fundamentally it is underwritten by a utilitarian ethic that, in the end, vaporizes the very idea of natural rights, treating the idea (in Jeremy Bentham's famously dismissive words) as "nonsense on stilts."

In cultures in which religious fanaticism has taken hold, the dignity of the individual is typically sacrificed for the sake of tragically misbegotten theological ideas and goals. By contrast, a liberal democratic ethos, where it is uncorrupted by utilitarianism or me-generation expressive individualism, supports the dignity of the human person by giving witness to basic human rights and liberties. Where a healthy religious life flourishes, faith in God provides a grounding for the dignity and inviolability of the human person by, for example, proposing an understanding of each and every member of the human family, even those of different faiths or professing no particular faith, as persons made in the image and likeness of the divine Author of our lives and liberties.

The second pillar of any decent society is the institution of the family. It is indispensable. The family, based on the marital commitment of husband and wife, is the original and best ministry of health, education, and welfare. Although no family is perfect, no institution matches the healthy family in its capacity to transmit to each new generation the understandings and traits of character — the values and virtues — upon which the success of every other institution of society, from law and government to educational institutions and business firms, vitally depends.

Where families fail to form, or too many break down, the effective transmission of the virtues of honesty, civility, self-restraint, concern for the welfare of others, justice, compassion, and personal responsibility is imperiled. Without these virtues, respect for the dignity of the human person, the first pillar

of a decent society, will be undermined and sooner or later lost—for even the most laudable formal institutions cannot uphold respect for human dignity where people do not have the virtues that make that respect a reality and give it vitality in actual social practices.

Respect for the dignity of the human being requires more than formally sound institutions; it requires a cultural ethos in which people act from conviction to treat each other as human beings should be treated: with respect, civility, justice, compassion. The best legal and political institutions ever devised are of little value where selfishness, contempt for others, dishonesty, injustice, and other types of immorality and irresponsibility flourish. Indeed, the effective working of governmental institutions themselves depends upon most people most of the time obeying the law out of a sense of moral obligation, and not merely out of fear of detection and punishment for law-breaking. And perhaps it goes without saying that the success of business and a market-based economic system depends on there being reasonably virtuous, trustworthy, law-abiding, promise-keeping people to serve as workers and managers, lenders, regulators, and payers of bills for goods and services.

The third pillar of any decent society is a fair and effective system of law and government. This is necessary because none of us is perfectly virtuous all the time, and some people will be deterred from wrongdoing only by the threat of punishment. More importantly, contemporary philosophers of law tell us the law coordinates human behavior for the sake of achieving common goals — thecommon good — especially in dealing with the complexities of modern life. Even if all of us were perfectly virtuous all of the time, we would still need a system of laws (considered as a scheme of authoritatively stipulated coordination norms) to accomplish many of our common ends (safely transporting ourselves on the streets, to take a simple and obvious example).

The success of business firms and the economy as a whole depends vitally on a fair and effective system and set of institutions for the administration of justice. We need judges skilled in the craft of law and free of corruption. We need to be able to rely on courts to settle disputes, including disputes between parties who are both in good faith, and to enforce contracts and other agreements and enforce them in a timely manner. Indeed, the knowledge that contracts will be enforced is usually sufficient to ensure that courts will not actually be called on to enforce them. A sociological fact of which we can be certain is this: Where there is no reliable system of the administration of justice— no confidence that the courts will hold people to their obligations under the law
— business will not flourish and everyone in the society will suffer.

A society can, in my opinion, be a decent one even if it is not a dynamic one, if the three pillars are healthy and functioning in a mutually supportive way (as they will do if each is healthy). Now, conservatives of a certain stripe believe that a truly decent society cannot be a dynamic one. Dynamism, they believe, causes instability that undermines the pillars of a decent society. So some conservatives in old Europe and even the United States opposed not onlyindustrialism but the very idea of a commercial society, fearing that commercial economies inevitably produce consumerist and acquisitive materialist attitudes that corrode the foundations of decency. And some, such as some Amish communities in the U.S., reject education for their children beyond what is necessary to master reading, writing, and arithmetic, on the ground that higher education leads to worldliness and apostasy and undermines religious faith and moral virtue.

Although a decent society need not be a dynamic one (as the Amish example shows) dynamism need not erode decency. A dynamic society need not be one in which consumerism and materialism become rife and in which moral and spiritual values disappear. Indeed, dynamism can play a positive moral role and, I would venture to say, almost certainly will play such a role where what makes it possible is sufficient to sustain it over the long term.

That is, I realize, a rather cryptic comment, so let me explain what I mean. To do that, I will have to offer some thoughts on what in fact makes social dynamism possible.

The two pillars of social dynamism are, first, institutions of research and education in which the frontiers of knowledge across in the humanities, social sciences, and natural sciences are pushed back, and through which knowledge is transmitted to students and disseminated to the public at large; and, second, business firms and associated institutions supporting them or managed in ways that are at least in some respects patterned on their principles, by which wealth is generated, widely distributed, and preserved.

We can think of universities and business firms, together with respect for the dignity of the human person, the institution of the family, and the system of law and government, as the five pillars of decent and dynamic societies. The university and the business firm depend in various ways for their well-being on the well-being of the others, and they can help to support the others in turn. At the same time, of course, ideologies and practices hostile to the pillars of a decent society can manifest themselves in higher education and in business and these institutions can erode the social values on which they themselves depend not only for their own integrity, but for their long-term survival.

It is all too easy to take the pillars for granted. So it is important to remember that each of them has come under attack from different angles and forces. Operating from within universities, persons and movements hostile to one or the other of these pillars, usually preaching or acting in the name of high ideals of one sort or another, have gone on the attack.

Attacks on business and the very idea of the market economy and economic freedom coming from the academic world are, of course, well known. Students are sometimes taught to hold business, and especially businessmen, in contempt as heartless exploiters driven by greed. In my own days as a student, these attacks were often made explicitly in the name of Marxism. One notices less of that after the collapse of the Soviet empire, but the attacks themselves have abated little. Needless to say, where businesses behave unethically they play into the stereotypes of the enemies of the market system and facilitate their effort to smear business and the free market for the sake of transferring greater control of the economy to government.

Similarly, attacks on the family, and particularly on the institution of marriage on which the family is built, are common in the academy. The line here is that the family, at least as traditionally constituted and understood, is a patriarchal and exploitative institution that oppresses women and imposes on people forms of sexual restraint that are psychologically damaging and inhibiting of the free expression of their personality. As has become clear in the past decade and a half, there is a profound threat to the family here, one against which we must fight with all our energy and will. It is difficult to think of any item on the domestic agenda that is more critical today than the defense of marriage as the union of husband and wife and the effort to renew and rebuild the marriage culture.

What has also become clear is that the threats to the family (and to the sanctity of human life) are at the same time and necessarily threats to religious freedom and to religion itself—at least where the religions in question stand up and speak out for conjugal marriage and the rights of the child in the womb. From the point of view of those seeking to re-define marriage and to protect and advance what they regard as the right to abortion the taming of religion, and the stigmatization and marginalization of religions that refuse to be tamed, is a moral imperative. It is therefore not surprising to see that they are increasingly open in saying that they do not see disputes about sex and marriage and abortion and euthanasia as honest disagreements among reasonable people of goodwill. They are, rather, battles between the forces of "reason" and "enlightenment," on one side, and those of "ignorance" and "bigotry," on the other. Their opponents are to be treated just as racists are treated—since they are the equivalent of racists. That doesn't necessarily mean imprisoning them or fining them for expressing unacceptable opinions—though "hate crimes" laws in certain jurisdictions raise the specter of precisely such abuses; but it does mean using antidiscrimination laws and other legal instruments to stigmatize them, marginalize them, and impose upon them and their institutions various forms of social and even civil disability—with few if any meaningful protections for religious liberty and the rights of conscience.

Some will counsel that commercial businesses and business people "have no horse in this race." They will say that these are moral, cultural, and religious disputes about which business people and people concerned with economic freedom need not concern themselves. The reality is that the ideological movements that today seek, for example, to redefine marriage and abolish its normativity for romantic relations and the rearing of children are the same movements that seek to undermine the market-based economic system and replace it with statist control of vast areas of economic life. Moreover, the rise of ideologies hostile to marriage and the family has had a measurable social impact, and its costs are counted in ruined relationships, damaged lives, and all that follows in the social sphere from these personal catastrophes. In many poorer places in the United States, and I believe this is true in many other countries, families are simply failing to form and marriage is disappearing or coming to be regarded as an optional "life-style choice"—one among various optional ways of conducting relationships and having and rearing children. Out of wedlock birthrates are very high, with the negative consequences being borne less by the affluent than by those in the poorest and most vulnerable sectors of society.

In 1965, Daniel Patrick Moynihan, a Harvard professor who was then working in the administration of President Lyndon Johnson, shocked Americans by reporting findings that the out-of-wedlock birth rate among African-Americans in the United States had reached nearly 25%. He warned that the phenomenon of boys and girls being raised without fathers in poorer communities would result in social pathologies that would severely harm those most in need of the supports of solid family life. His predictions were all too quickly verified. The widespread failure of family formation portended disastrous social consequences of delinquency, despair, violence, drug abuse, and crime and incarceration. A snowball effect resulted in the further growth of the out-of-wedlock birth rate. It is now over 70% among African-Americans. It is worth noting that at the time of Moynihan's report, the out-of-wedlock birth rate for the population as a whole was almost 6%. Today, that rate is over 40%.

The economic consequences of these developments are evident. Consider the need of business to have available to it a responsible and capable work force. Business cannot manufacture honest, hard working people to employ. Nor can government create them by law. Businesses and governments depend on there being many such people, but they must rely on the family, assisted by religious communities and other institutions of civil society, to produce them. So business has a stake—a massive stake—in the long-term health of the family. It should avoid doing anything to undermine the family, and it should do what it can where it can to strengthen the institution.

As an advocate of dynamic societies, I believe in the market economy and the free enterprise system. I particularly value the social mobility that economic dynamism makes possible. Indeed, I am a beneficiary of that social mobility. A bit over a hundred years ago, my immigrant grandfathers—one from southern Italy, the other from Syria—were coal miners. Neither had so much as remotely considered the possibility of attending a university—as a practical economic matter, such a thing was simply out of the question. At that time, Woodrow Wilson, the future President of the United States, was the McCormick Professor of Jurisprudence at Princeton. Today, just two generations forward, I, the grandson of those immigrant coal miners, am the McCormick Professor of Jurisprudence at Princeton. And what is truly remarkable, is that my story is completely unremarkable. Something like it is the story of millions of Americans. I daresay it is the story of many, many Australians. Perhaps it goes without saying that this kind of upward mobility is not common in corporatist or socialist economic systems; but it is very common in market-based free enterprise economies.

Having said that, I should note that I am not a supporter of the laissez-faire doctrine embraced by strict libertarians. I believe that law and government do have important and, indeed, indispensable roles to play in regulating enterprises for the sake of protecting public health, safety, and morals, preventing exploitation and abuse, and promoting fair competitive circumstances of exchange. But these roles are compatible, I would insist, with the ideal of limited government and the principle of subsidiarity according to which government must respect individual initiative to the extent reasonably possible and avoid violating the autonomy and usurping the authority of families, religious communities, and other institutions of civil society that play the primary role in building character and transmitting virtues.

But having said that, I would warn that limited government — considered as an ideal as vital to business as to the family — cannot be maintained where the marriage culture collapses and families fail to form or easily dissolve. Where these things happen, the health, education, and welfare functions of the family will have to be undertaken by someone, or some institution, and that will sooner or later be the government. To deal with pressing social problems,bureaucracies will grow, and with them the tax burden. Moreover, the growth of crime and other pathologies where family breakdown is rampant will result in the need for more extensive policing and incarceration and, again, increased taxes to pay for these government services. If we want limited government, as we should, and a level of taxation that is not unduly burdensome, we need healthy institutions of civil society, beginning with a flourishing marriage culture supporting family formation and preservation.

Advocates of the market economy, and supporters of marriage and the family, have common opponents in hard-left socialism, the entitlement mentality, and the statist ideologies that provide their intellectual underpinnings. But the marriage of advocates of limited government and economic freedom, on the one hand, and the supporters of marriage and the family, on the other, is not, and must not be regarded as, a mere marriage of convenience. The reason they have common enemies is that they have common principles: namely, respect for the human person, which grounds our commitment to individual liberty and the right to economic freedom and other essential civil liberties; belief in personal responsibility, which is a pre-condition of the possibility and moral desirability of individual liberty in any domain; recognition of subsidiarity as the basis for effective but truly limited government and for the integrity of the institutions of civil society that mediate between the individual and the centralized power of the state; respect for the rule of law; and recognition of the vital role played by the family and by religious institutions that support the character-forming functions of the family in the flourishing of any decent and dynamic society.

The point was made well by a man who will, I predict, in a few hours be one of the most famous people in the world, U.S. Congressman Paul Ryan, chairman of the budget committee in the United States House of Representatives. He recently observed that a "libertarian" who wants limited government should embrace the means to his freedom: thriving mediating institutions that create the moral preconditions for economic markets and choice. A "social issues" conservative with a zeal for righteousness should insist on a free market economy to supply the material needs for families, schools, and churches that inspire moral and spiritual life. In a nutshell, the notion of separating the social from the economic issues is a false choice. They stem from the same root . . . . They complement and complete each other. A prosperous moral community is a prerequisite for a just and ordered society and the idea that either side of this current divide can exist independently is a mirage.

The two greatest institutions ever devised for lifting people out of poverty and enabling them to live in dignity are the market economy and the institution of marriage. These institutions will, in the end, stand or fall together. Contemporary statist ideologues have contempt for both of these institutions, and they fully understand the connection between them. We who believe in the market and in the family should see the connection no less clearly.