Pope Francis
http://www.theguardian.com/world/pope-francis
Pope Francis understands economics better than most
politicians
http://www.theguardian.com/commentisfree/belief/2013/nov/27/pope-francis-inequality-biggest-issue-our-time
Pope Francis is a pontiff who has constructively broken all
the rules of popery – so far to widespread acclaim. He's faulted the Catholic
church for its negative obsession with gays and birth control, and now he has
expanded his mandate to economics with a groundbreaking screed denouncing
"the new idolatry of money".
As the Pope wrote in his "apostolic exhortation":
The worship of the ancient golden calf has returned in a new
and ruthless guise in the idolatry of money and the dictatorship of an impersonal
economy lacking a truly human purpose. The worldwide crisis affecting finance
and the economy lays bare their imbalances and, above all, their lack of real
concern for human beings.
His thoughts on income inequality are searing:
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.
The pope's screed on "the economy of exclusion and
inequality" will disappoint those who considers themselves free-market
capitalists, but they would do well to listen to the message. Francis gives
form to the emotion and injustice of post-financial-crisis outrage in a way
that has been rare since Occupy
Wall Street disbanded. There has been a growing
chorus of financial insiders – from the late Merrill Lynch executive Herb
Allison to organizations like Better Markets – it's time for a change in how we
approach capitalism. It's not about discarding capitalism, or hating money or
profit; it's about pursuing profits ethically, and rejecting the premise that
exploitation is at the center of profit. When 53% of financial executives say
they can't get ahead without some cheating, even though they want to work for
ethical organizations, there's a real problem.
Unlike Occupy, which turned its rage outward, Pope Francis
bolstered his anger with two inward-facing emotions familiar to any
Catholic-school graduate: shame and guilt, to make the economy a matter of
personal responsibility.
This is important. Income inequality is not someone else's
problem. Nearly all of us are likely to experience it. Inequality has been
growing in the US
since the 1970s. Economist Emmanuel Saez found that the incomes of the top 1%
grew by 31.4% in the three years after the financial crisis, while the majority
of people struggled with a disappointing economy. The other 99% of the
population grew their incomes 0.4% during the same period.
As a result, federal and state spending on social welfare
programs has been forced to grow to $1tn just to handle the volume of US
households in trouble. Yet income inequality has been locked out of of the
mainstream economic conversation, where it is seen largely as a sideshow for
progressive bleeding hearts.
In the discussions of why the US is not recovering, economists
often mention metrics like economic growth and housing. They rarely mention the
metrics that directly tell us we are failing our economic goals, like poverty
and starvation. Those metrics of income inequality tell an accurate story of
the depth of our economic malaise that new-home sales can't. One-fifth of
Americans, or 47 million people, are on food stamps; 50% of children born to
single mothers live in poverty; and over 13 million people are out of work.
Children are now not likely to do as well as their parents did as downward
mobility takes hold for the first time in generations.
The bottom line, which Pope Francis correctly identifies, is
that inequality is the biggest economic issue of our time – for everyone, not
just the poor. Nearly any major economic metric – unemployment, growth,
consumer confidence – comes down to the fact that the vast majority of
Americans are struggling in some way. You don't have to begrudge the rich their
fortunes or ask for redistribution. It's just hard to justify ignoring the
financial problems of 47 million people who don't have enough to eat. Until
they have enough money to fill their pantries, we won't have a widespread
economic recovery. You can't have a recovery if one-sixth of the world's
economically leading country is eating on $1.50 a day.
It's only surprising that it took so long for anyone – in
this case, Pope Francis – to become the first globally prominent figure to
figure this out and bring attention to income inequality.
Income inequality is the issue that will govern whether we
ever emerge from the struggling economy recovery and it determine elections in
2014. The support for Elizabeth Warren to rise above her seat in the US Senate,
for instance, largely centers on her crusade against inequality. The White
House's chirpy protestations that the economy is improving are not fooling
anyone.
Into this morass of economic confusion steps Francis with
clarifying force:
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. 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.
It's a historic and bold statement, mainly because it's
rarely heard from clergy. Money has always been at odds with religion, going
back to the times when God had a fighting chance against Mammon. Moses grew
enraged by the golden calf, Jesus by moneychangers in the temple, Muhammad by
lending money at interest, or usury. It is easier for a camel to pass through
the eye of a needle than for a rich man to go to heaven, the Bible tells us.
There have been criticisms from prominent men of religion
before, but they didn't stick. in 2008, the Archbishop of Canterbury endorsed
Marx against the forces of "unbridled capitalism", and the Archbishop
of York disdained traders as "bank robbers and asset strippers", but
those cries went unheeded in the subsequent flood of corporate profits.
At the time, those criticisms seemed extreme, throwing
pitchforks into frozen ground. Francis is speaking at a when the ground has
been thawed. Outrage against the financial sector is lurking so close to the
surface that the US
government can extract a $13bn fine from the nation's largest bank, throwing it
into its first financial loss in nine years, and find significant approval.
Still, popes have been largely content to leave these
particular issues of economic inequality behind in favor of focusing on social
issues. There was, after all, a problem of throwing stones. The church's rich
trappings and vast wealth, as well as its scandal-plagued Vatican
bank, made an ill fit to preach too loudly about austerity.
Pope Francis, in his simple black shoes and unassuming car
and house, is the first pontiff in a long time to reject flashy shows of power
and live by the principle of simplicity. That makes him uniquely qualified to
make the Vatican
an outpost of Occupy Wall Street.
His message about spiritual salvation applies mainly to Catholics but it would
be sensible for economists and lawmakers to recognize his core message about
the importance of income inequality applies to those even those who have no
belief in religion.
Capitalism has always seen itself as an amoral pursuit,
where the guiding stars were not "good" or "bad", but only
"profit" and "loss". It's going to be harder to sustain
that belief over the next few years.