Consumerism and Christmas

You all may recall that after 9/11 Osama bin Laden explained his orchestration of the terrorist deed that murdered some 3000 innocent human beings as payback for America’s materialism. (His anti-materialist rant is routine – a good discussion of his views may be found here.)

Yet as the writer of the above piece notes, anti-materialism is a common theme among most religions. Sure, the idea that human life is about preparation for an after-life — a spiritual life superior to the mundane one we can lead here on Earth — is central to religions.

In the West, however, many religions have made peace with the mundane elements of human existence so there tends to be a less avid denunciation of materialism, which is how the idea of being seriously concerned with living prosperously here on Earth is usually designated. After all, the Christian God is both human and divine (in the person of Jesus).

Destruction of life is generally deemed to be a sin for Christians, whereas, as bin Laden has noted, the love of death is central in his version of Islam. As one account has it, “This originated at the Battle of Qadisiyya in the year 636, when the commander of the Muslim forces, Khalid ibn Al-Walid, sent an emissary with a message from Caliph Abu Bakr to the Persian commander, Khosru. The message stated: ‘You [Khosru and his people] should convert to Islam, and then you will be safe, for if you don’t, you should know that I have come to you with an army of men that love death, as you love life’.” This account is widely recited in contemporary Muslim literature.

Yet despite the Western theological tradition’s more friendly attitude toward the mundane, nearly every Christmas leaders of Christian denominations tend to revert to the original, anti-life doctrines by condemning commercialism. The latest Pope followed the previous one by lamenting the “materialist” approach to celebrating Christmas. They referred to “the dead-end streets of consumerism,” according to newspaper reports, chiding people everywhere for what the report calls “being caught up with consumerist pursuits.”

Ironically, the Pope issued his proclamations from St. Peter’s Square at the Vatican. If you have ever visited the Vatican, as I and millions of others have, you would know it to be one of the West’s, if not the world’s, most opulent places. And as to consumerism, the gift shop dominates the entrance to the Vatican, where one is invited to spend great sums of money on various small or sizable trinkets. Commerce flourishes there, believe me, as the Vatican cashes in on the desire of many of the visitors to take away some reminder of their having been to that historically and theologically significant place.

Of course, even apart from the Vatican, the Roman Catholic Church, as well as others within Christianity, often excel in ostentatious display of riches – one need but go to high mass on Christmas Eve to witness this.

And why not? That is how human beings tend to celebrate what they value highly, by honoring the occasion with gift-giving. And gift-giving necessarily involves commerce – most of us aren’t skilled at the crafts that it takes to create the various gifts we wish to bestow upon those we love and cherish. I personally bought airline tickets for some of my family members and a computer for another, in part because I have no airplane in which to fly them where they would like to go and no factory and expertise to make a modern, up-to-date computer. To obtain these gifts, I rely, as do billions of others, on commerce.

So why then would Popes besmirch consumerism and commerce? Beats me. (And remember, also, that “materialism” is ultimately a nonsense term – nothing we purchase is simply material but embodies the creative intelligence – indeed the creative spirit – of many human beings!)

So, I urge all Popes to change their message and to have a more generous understanding of all who make use of commerce in our celebration of Christmas!

The Pope, Capitalism, and los Yanqis

Below is a comment that seems to me to be missing about Pope Francis’ current grasping for the Nobel in Economics. It’s beyond the simple observation that what he said recently about capitalism re-affirms the simple fact that princes of the church want to do good but have not understood simple economics, ever. And, by the way, there is nothing new to what the Pope said. I heard the same when I was growing up in a progressive Catholic parish in Paris, a long, long time ago. (And no, I was not molested, except by that older girl-scout, another story obviously.)

The current pope is a member of the Jesuit order. In the Catholic world, the Jesuits enjoy a reputation for intellectualism. It’s true that almost all have advanced degrees. (This pope appears to be an exception.) It’s also probably true that the many schools the Jesuits run, including universities, are not allowed to fall below a certain minimum level of competence. Beyond this, 25 years of close observation tell me that their good reputation only holds in a relative sense. Only the widespread ignorance of the Catholic church and of its other religious orders makes the Jesuits look good. They are quite tightly wrapped in their prevailing ideology and largely blinded by it. That ideology happens to be left wing right now. (Jesuits used to be fierce right-wingers of the most ignorant, closed-minded kind.) I don’t expect any Jesuit to be an intellectual giant although a few are.

The Pope is also an Argentinean, a provincial Argentinean. He did not suddenly free himself from the associated intellectual burdens upon his election. Like many, nearly all (I have not done a count, I confess, Your Holiness) of his compatriots he has had to struggle all his life with the following question:

Why isn’t Argentina Canada, with a constant high level of prosperity and political institutions that guarantee stability and peaceful alternance in power?

A subsidiary question: Why does Argentina become rich every thirty years only to plunge back into poverty?

Confounded by the brutal reality of the fact that there is no response that does not point straight at themselves, Argentinean intellectuals have developed a short, undemanding answer and a long-winded complicated one, both of which hold them innocent of their plight.

The short answer is this: It’s because of los Yanqis.

Of course, there is a problem in the fact that Canada with many more and tighter economic and political links to the US performs splendidly on any measure of economic or social welfare.

I spent a good deal of my scintillating youth debunking the second, long answer to the query described above. They came out of Argentina in the late fifties as a narrative production called “Teoría de la dependencia.” It later morphed into something called “World System Theory” under the influence of an excellent book by an American.

To make a long story short the theories’ main allegations about Third World poverty were that the more economically tied poor countries were to major developed economies, (such as the American economy) the poorer they became. Those allegations finally did not hold up under the scrutiny permitted by computers handling large amounts of archival data. (See my own co-authored piece for example: Delacroix, Jacques and Charles Ragin. 1981. “Structural blockage: a cross-national study of economic dependence, state efficacy and under-development.” American Journal of Sociology. 86-6:1311-1347.) The modern empirical research performed in the US and other part of the English-speaking world utterly destroyed Latin fantasizing in that area.

Pope Francis did not get the news apparently. Few Latin Americans did. Proudly innocent of any understanding of statistics, they cling to their beloved narrative as tightly as they did in 1965. They may cling to it even more tightly than they did then since they tasted the dust of South Korea’s and even of India’s economic development. (I am deliberately not mentioning China’s real development and its fake relationship to “socialism” because I don’t want to have to write another ten pages.) It’s not my fault; the Pope is older than me. He never sat in my classroom or in any of my former students’ classrooms. We never got a chance to straighten him out.

You have to think of every one of Pope Francis’ economic pronouncement with the understanding that he would probably not receive a B in the Econ. 101 class of a good public university. (In a good private university, in a Jesuit university for example, there is a good chance he would be made to achieve a B by any means necessary, including legitimate means.)

I don’t blame the Pope or the Catholic Church much. The old Adam Smith’s The Wealth of Nations (1776) is still esoteric reading to many of our contemporaries, including college graduates, including most college professors, I would guess, including many who tango on in the media. (Just listen to National Public Radio.)

Pope Francis on Economics

by Fred E. Foldvary

Any statements which deplore “trickle down” economics reveal that the author has not quite yet grasped the heart of economics.

On November 26, 2013, The Vatican press published the apostolic exhortation, “The Joy of the Gospel.” The text was written in Spanish, and its full title in the English translation (converted here from upper case to initial capitals) is “Evangelii Gaudium of the Holy Father Francis to the Bishops, Clergy, Consecrated Persons and the Lay Faithful on the Proclamation of the Gospel in Today’s World.” Besides its religious calls, Pope Francis makes statements about today’s economic problems, and calls for greater economic justice.

One of the aims of this proclamation is to point out “new paths for the Church’s journey in years to come.” One of the questions the Pope seeks to discuss is “the inclusion of the poor in society.” Chapter Two is entitled, “Amid the Crisis of Communal Commitment.” In paragraph 52, Francis writes that “today we also have to say ‘thou shalt not’ to an economy of exclusion and inequality. Such an economy kills… Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless.”

The Pope is wise and correct in seeing the harm done by inequality, but I urge him to see past the appearances to study the underlying reality. What provides the powerful with their might? The state has the ultimate power of force, and by its power to tax, to restrict, to mandate, and to subsidize, the state endows the powerful with the means to feed on the powerless. Market competition as such cannot impose force, and it does not create poverty. In a free society, each person has the power to be employed and pursue happiness. In a truly free market, all are fit to survive, because workers have access to natural opportunities. It is government intervention that stops this access.

Paragraph 54 is the key, widely cited, economic passage. We need to be sure that the English version is true to the original Spanish. In Spanish, Francis wrote, “algunos todavía defienden las teorías del « derrame », que suponen que todo crecimiento económico, favorecido por la libertad de mercado, logra provocar por sí mismo mayor equidad e inclusión social en el mundo.”

The Vatican’s English translation says, “some 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.”

The English-edition term “trickle-down theories” is translated from the Spanish, “teoria del derrame.” “Derrame” means a slow leak, hence a trickle, and so the English translation is accurate. The translated term “free market” is more literally “the liberty of the market” in the original Spanish, but the meaning is the same.

As noted by Harvard professor Greg Mankiw in his blog, critics of markets often use the term “trickle down” as a pejorative for the effects of a market economy. There is indeed a trickle down effect, for example, when a tourist resort is built in a location with many poor people, where a few get hired to work to clean rooms and wash dishes. A bit of the wealth of the resort trickles to the local population. But this situation does not confront the issue of why the poverty exists in the first place.

The theory of the free market is not one of “trickle down.” A truly free market is a fountain that gushes up wealth for all. Moreover, economic growth in market economies has indeed raised millions of persons up from poverty. However, the theory of market-driven growth does not claim that growth brings justice. The causation is the opposite: economic justice promotes growth. Moreover, justice and liberty are two faces of the same coin, so if a market has liberty, it must also provide justice.

The Pope continues: “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.”

But the proposition that free markets provide growth that benefits all is not a mere opinion. The proposition is a theory of growth that was first analyzed by the French economists of the 1700s, who concluded that the unhampered market, with free trade, would provide the greatest prosperity for all.

The prescription of the French economists was to abolish taxes on labor and trade, and instead use the surplus of the economy, which is land rent, for public revenue. Adam Smith in his Wealth of Nations brought this theory into classical economics. The American economist Henry George a century later explained in detail how land rent captures the gains from economic progress, and how growth generates inequality and poverty if that rent is not equally shared.

Markets have had various degrees of freedom, but there is no truly free market in the world today. Those who advocate a pure free market do not defend the “prevailing economic system,” but rather, they seek to stop the state’s subsidy of economic powers. The greatest subsidy and economic power is the land rent generated by the public goods provided by government.

The Pope is correct in decrying “the denial of the primacy of the human person” (paragraph 55) and that “Behind this attitude lurks a rejection of ethics” (57). Ethics and the primacy of the human person requires the equal right of each person to pursue happiness without harming others and to keep the earnings of his labor, as recognized by the commandment, “Thou shalt not steal.” Ethics must also respect the equal sharing of the benefits of nature and community, as stated in Ecclesiastes 5:9, “the profit of the earth is for all.”

The heart of economics is the understanding of the root cause of poverty: the forced redistribution of wealth from the working poor to the landed rich. This is caused not by markets but from state policy. It is good that Pope Francis seeks to remedy poverty. His “new path” should be to go more deeply into the economics and politics of maldistribution.