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The Pope has criticized “unrestrained capitalism.” As if a system like that exits anywhere in the world today. What we need is real unrestrained capitalism. The Pope’s enmity towards free markets gets a few rebukes. David Harsanyi is first.
… For starters, it’s troubling that the Pope fails to make any genuine distinction between Western poverty (terrible) and the poverty of the Third World (unimaginably terrible). But is it really true that “absolute autonomy of markets and financial speculation” are the driving reasons for poverty and inequality? People in places like Congo, Burundi, Eritrea, Malawi, or Mozambique live under corrupt authoritarian regimes where crippling poverty has a thousand fathers — none of them named capitalism. The people of Togo do not suffer in destitution because of some derivative scheme on Wall Street or the fallout from a tech IPO.
“While the earnings of a minority are growing exponentially,” the Pope goes on to say, “so too is the gap separating the majority from the prosperity enjoyed by those happy few.”
In truth, global inequality has been dropping for years. The World Bank estimates global poverty was halved from 1990 to 2010. In fact, according to the World Bank, the United Nations’ “millennium development goal” of cutting world poverty in half by 2015 came in five years ahead of schedule despite a major global recession. The decline in poverty coincides, not coincidentally, with developing nations embracing more market-based systems.
Moreover, the Pope falls into the trap of conflating inequality and poverty. …
… Rather than credit those who do their best to balance this imperfect system that lifts millions out of impoverishment, the Pope attacks them for the prevalence of imaginary economic Darwinists who callously keep equality from blooming. “Consequently,” these people “reject the right of states, charged with vigilance for the common good, to exercise any form of control,” Pope Francis contends.
Any form of control? Really? The Federal Registry of the United States regularly comes in over 60,000 pages. Or, to put it another way, it’s longer than all 46 books of the Old Testament, the 27 books of the New Testament and every gospel the Council of Nicaea decided to toss, combined. And the United States, a place teeming with these economic Darwinists, also happens to be one of the most charitable places on the planet — even before we begin counting per capita spending on safety nets. …
… Finally, the Pope claims there is no evidence that a trickle down “theory” — by which we assumes he means market economies — works. Greg Mankiw, professor and chairman of the economics department at Harvard, points out on this blog, that “as far as I know, the pope did not address the tax-exempt status of the church. I would be eager to hear his views on that issue. Maybe he thinks the tax benefits the church receives do some good when they trickle down.”
Supposedly religious institutions get a $71 billion dollar tax break every year — far too little, in my estimation. I assume the Church believes it does an effective job helping the needy. The Pope doesn’t stash all his money in a Swiss bank account. It trickles downwards to the poor. The Apostolic Exhortation, in fact, calls for the decentralized Roman Catholic Church. Surely, Pope Francis can’t believe that the centralization of charity (or, in the government’s case, welfare) is a better idea than allowing locals to meet the needs of their communities?
Actually, he might. Because, as compelling and as charismatic as he is, if we, in The City of Man, took the Pope’s advice on economic issues, we’d end up with millions more living in poverty.
And James Pethokoukis has more.
Pope Francis has offered a sharp critique and challenge to market capitalism and its proponents, focusing on materialist consumerism and rising inequality within nations. While the pope’s comments are excellent cause for reflection, they should not obscure the reality that innovative free enterprise is the greatest wealth generator ever discovered and the economic system most supportive of human freedom and flourishing.
In a new research note, JP Morgan Chase economist James Glassman doesn’t mention Pope Francis by name, but clearly — at least to me — had his comments in mind as he addressed the record of market economies:
“Those concerned about global poverty have more to be thankful today than to complain about. The commonly-heard complaints that today’s economic systems fail to address the plight of the poor ignore several fundamental facts.
Poverty is not a modern phenomenon. Second, the developed economies are still recovering from deep recessions and in time will reach their full potential. That is, of course, why central bank policies remain so stimulative. Those hurt by the recession will be restored as the developed economies continue to recover. And third, despite the cyclical problems of the developed economies, the average global living standard is at a record high—the highest known in the records compiled by economists and still climbing, thanks to the support from the developed economies.
In other words, market-oriented economic systems are doing more to cure global poverty than any other effort in the past.” …
Another example of today’s cascading economic stupidity is the developing campaign to raise the minimum wage. John Steele Gordon posts;
Steve Coll has a comment in this week’s New Yorker calling for a higher federal minimum wage. He points out that it’s awfully hard for a family of four to live on the current minimum wage, which would produce a family income of about $15,000 a year. That is certainly true, but Mr. Coll leaves out a few things. A family of four with an annual income of $15,000 would be eligible for food stamps amounting to $7,584 and an earned income tax credit of $5,372. That raises the family income to $27,911, which is quite an improvement. The family would also be eligible for Medicaid, school lunch and breakfast programs, perhaps housing assistance and other forms of help. He also leaves out the fact that very, very few people earning the minimum wage are the sole breadwinners of a family of four. Most are entry-level employees, often teenagers, with no developed skills. Most people who take a job at the minimum wage are earning above that level within a year, having learned marketable skills.
To be polite, Mr. Coll is being tendentious. To be less polite he is being grossly intellectually dishonest.
The minimum wage is a favorite liberal hobbyhorse, heavily promoted by labor unions. It is typical progressivism: a liberal politician (or journalist) says, in effect, “See that man over there? He needs help.” Then he points to an employer and says, “You, help him.” Finally, he points to himself and, addressing the man needing help, says, “Don’t forget where the help came from.” …
In Barron’s Paul Theroux, travel writer and novelist, who first went to Africa in 1963 as a Peace Corp volunteer, writes about the damage done there by philanthropy.
The desire of distant outsiders to fix Africa may be heartfelt, but it is also age-old and even quaint. Curiously repetitive in nature, renewed and revised every decade or so, it is an impulse Charles Dickens described, in a wickedly accurate phrase, as “telescopic philanthropy.” That is, a focus from afar to uplift the continent: New York squinting compassionately at Nairobi.
Never have so many people, so many agencies, so many stratagems, so much money been deployed to improve Africa — and yet the majority of the movers are part-timers, merely dropping in, setting up a scheme in the much-mocked “the-safari-that-does-good” manner, then returning to their real lives, as hard-charging businessmen, Hollywood actors, benevolent billionaires, atoning ex-politicians, MacArthur geniuses, or rock stars in funny hats. …
… In its naked reality, Africa, the greenest continent, is still the most beautiful, the least developed, the wildest on earth. Vast plains, big animals, hospitable people, who have been enslaved, sidelined, colonized, and converted willy-nilly either to Christianity or Islam. This receptive amphitheater of goodwill and big game, inspires megalomania among its foreign visitors who strut upon it — it has always done so, for those who seek the singularity of a little excitement and glory. I sometimes think that if the poorer counties of America’s Deep South had rhinos and elephants, instead of raccoons and possums, the philanthropists might direct their attentions to those parts, too.
A rich white donor in black Africa is a study in high contrast that puts one in mind of the gallery of role models: Tarzan, Mr. Kurtz, King Leopold, Cecil Rhodes, Livingstone, Mrs. Jellyby, Albert Schweitzer, Hemingway, Henderson the Rain King: the overlords, the opportunists, the exploiters, the visionaries, the hunters, the care-givers, the baptizers, the saviors, all of them preaching the gospel of reform and seeking a kingdom of their own, if not an empire.
Henry David Thoreau, the 19th-century American author, believed that all such outgoing people had something discreditable in their past that through giving they aimed to expiate.
And all are characterized by the rather touching innocence of a billionaire faced with the brutal truth that the relative simplicity of acquiring wealth is nothing compared to the extreme difficulty of giving money away, for the common good.
The real helpers are not the schemers and grandstanders of the eponymous family foundations or charities; they are nameless ill-paid volunteers who spend years in the bush, learning the language and helping in small-scale manageable projects, digging wells, training mid-wives, teaching villagers that unprotected sex spreads HIV; and among these stalwarts are the long-serving teachers who have liberated Africans by simply teaching them English, and are still doing so, even as they make the local governments lazier.
The so-called White Fathers (the Society of Missionaries of Africa) I met in Malawi who ran upcountry clinics used to say, “I guess I’ll be buried here.”
No one ever says that now, and significantly none of the people I spoke with for this piece ever expressed a wish to spend any serious length of time in Africa. None speaks an African language. To the detriment of their aims, they are on better terms with the African politicians than the common ruck of African people.
Years living simply on the ground in Africa convinced me that there was more for me to learn from Africans than to teach. I saw there were many satisfactions in the lives of people who were apparently poor; many deficits in the lives of the very wealthy. I saw that African families were large and complex and interdependent; that old age was revered, that Africa’s link to the distant past — to the dawn of the world — was something marvelous and still intact in many places.
Most of all, I was impressed by the self-sufficiency of ordinary people. Without much in the way of outside help, the people in the countries I knew managed to endure, usually through the simplest traditional means, and finally to prevail. Africa has the schools, the money and the resources to fix its own problems; it’s appalling to think of donors telling them otherwise, of the whole continent terminally indebted and living on handouts.