The latest volley in war against free markets by clergymen continues with June 3rd’s speech by Cardinal Archbishop Maradiaga of Honduras.
I generally prefer to not get involved in disputes with clergy, but since the Pope and some of his Cardinals have decided to repeatedly declare war on the defenders of the Golden Rule and the exercise of free will known as libertarians, I have taken the time to fisk the Cardinal’s speech below.
Before we begin, let’s first define what libertarianism means. Historically known as classical liberalism, it is simply the position that it is immoral to employ violence to force one’s will on others. That is, it is immoral to steal and kill to obtain goods or services from other people. Libertarians also, to varying degrees, maintain that this same prohibition applies to states and that there is nothing magic that takes place when one becomes a government employee. Therefore, a government job does not give one a right to use violence against others whether it be theft in the form of taxation or murder in the form of war.
Thus, when we see people like Maradiaga criticize “free markets” what they are really criticizing is freedom itself. Markets, after all, are nothing more than the phenomenon of persons freely exchanging goods and services. Markets are not an ideology or a sentient being or some sort of planned phenomenon. They are simply what naturally arise in any society in which persons exercise their free will. Markets can exist at any time in any place where freedom is allowed. Markets are not a new invention, and they are not the product of any particular ideology. Unfortunately, the history of humanity is mostly the history of potentates crushing the exercise of free will, and thus throughout history, we see the suppression of markets everywhere we look.
My comments appear [in bold with brackets.]
Cardinal Oscar Andres Rodríguez Maradiaga SDB,Archbishop of Tegucigalpa
The Catholic Case Against Libertarianism, Keynote. June 3rd. 2014
I would like to start quoting Michael Sean Winters’s recent article in NCR [i.e., the hard-core leftist publication The National Catholic Reporter]:
“Last week, the Holy Father addressed leaders of United Nations who called on him in Rome. He gave a short talk, which included these words calling for ‘the legitimate redistribution of economic benefits by the State.’ Then, America’s conservative chattering classes went ballistic. John Moody, executive vice president at Fox News and a former Vatican correspondent, might be expected from his time covering the Holy See to have rendered a nuanced appraisal of what Pope Francis said. Nah. The title of the piece — and I know writers do not usually choose their own titles — is: ‘Pope Francis should stick to doctrine, stay away from economic ‘redistribution.’ Of course, Pope Francis was speaking from the social doctrine of the Church. The Church’s teachings on social justice are as firmly rooted in our theological doctrines as are the teachings on any other issues.” [Let us first define our terms here. When "social justice" advocates refer to "teachings on social justice" they mean something very specific. Namely, they are referring to a school of thought invented in the nineteenth century with the promulgation of Rerum Novarum (1891). RN was an encyclical by the politically centrist Pope Leo XIII that attempted (among other things) to repair some of the political and diplomatic damage done by arch-conservative authoritarian Pope Pius IX who had repeatedly come down on the side of the party of the rack and the thumbscrew. That is, Pius IX, with his Syllabus of Errors (1864) condemned everything and everyone who was not affiliated with the ideological cronies of Klemens von Metternich and the conservative authoritarians of Europe. The political economy of Pius IX certainly constituted a type of "social teaching," but of course, that is not the Catholic teaching that the modern Catholic left (Cardinal Maradiaga included) wishes to embrace. Instead, it chooses to embrace a social teaching invented in reaction to Pius IX's reign (and ignore previous social teachings once claimed as "firmly rooted" in doctrine). In this reaction against Pius IX, Leo XIII advocated for labor unions and the amorphous and never-defined concept of fair wages. Neither of these traditions is "firmly rooted" in the theological doctrines of the Church, since they most certainly do not go back even to the middle ages, let alone antiquity. How they can be seen as "doctrinal" when first taking shape 19th century strains the credibility of the claims. Moreover, once upon a time, clergymen claimed that their prohibition of "usury" (now universally ignored) was "firmly rooted" in doctrine, and they also once claimed that their opposition to religious freedom (now also universally ignored and contradictory to the practices of the early Church) was "firmly rooted" in doctrine. So, when one sees the capriciousness with which these political programs are embraced and discarded over time, it becomes quite difficult to take the latest socio-economic craze, termed "Catholic Social Teaching" very seriously. However, as with usury and other long-abandoned "doctrines," the claims of Catholic Social Teaching are related to something that is in fact rooted in sound doctrine. When writers like Winters refer to social teaching as "firmly rooted," what they are really referring to is the so-called "preferential option for the poor" which is the doctrine that a Christian must (voluntarily) give preferential treatment to the poor and powerless in society. This is only one aspect (a true and correct one) of Catholic Social Teaching, but Winters, Maradiaga, and Francis all take this one aspect of social teaching that is historically well-rooted, and then apply its legitimacy to all of the social teaching. Thus, they ignore the fact that Catholic Social Teaching--the modern doctrine that a bureaucratic state should redistribute political privilege and wealth--is quite distinct from doctrines commanding concern for the poor. When advocates claim no distinction between these two, they are in fact pulling a bait and switch.]
And the following day he wrote: “Here comes Father Zuhlsdorf, [who is decidedly not libertarian, but a mainstream political neoconservative in his thinking. We see right off the bat that Maradiaga is being sloppy in choosing his targets and examples.] who runs a popular conservative blog. ‘I wonder how many people are still listening to him seriously on this issue,’ opines Reverend Father. Not content to take a swipe at the Pope, he goes after a few cardinals, adding, ‘I suspect other people might have the same reaction that I have when hearing/reading this stuff. It comes across as naive, out of step with history. Has any nation successfully dealt with poverty through redistribution? [This is a good question, to be sure.] I don’t think so. Moreover, who would supervise this process of global redistribution? Angels? EU bureaucrats? The UN? Card. Rodriguez Maradiaga? Card. Kasper?’.”
As you see, the theme of today is very actual.
But instead of trying to quote all what we know about the Social Doctrine of the Church, [Here the Cardinal is attempting to erase any distinction between Catholic doctrines commanding charity, and the modern phenomenon of Catholic Social Teaching.] I would like to make an analysis of the Pastoral Exhortation “Evangelii Gaudium” [a 2013 Apostolic Exhortation by Francis.] regarding our subject, because as it happens frequently, many people do not read the original texts and react from comments by others or fragments out of the context. [Fair enough. We can safely bet that Rush Limbaugh, who threw a fit about the document, has never read it.]
Very much in the spirit of the developments of the Church in Latin America after the Second Vatican Council, the Holy Father underlines the preferential option for the poor. [which is something distinct from Catholic Social Teaching] “The poor are the privileged recipients of the Gospel”(48). Already at the 5thGeneral Conference of the Latin American Bishops’ Conferences in Aparecida, Brazil, where Cardinal Bergoglio was the President of the editorial committee, he said that the poor in the dominating neo- liberal economic system were superfluous, mere waste and rubbish. This statement of Cardinal Bergoglio was written down in the final document of Aparecida in 2007: “A globalization without solidarity has a negative impact on the poorest groups.” It shows something quite new: social exclusion. [Social exclusion is something quite new? When he wrote this, was Cardinal Bergoglio at all familiar with the economic systems of the middle ages and the early modern period? Prior to the free-market reforms of the 18th and 19th centuries, the economic system of Europe was characterized by an economy based on exclusion. The guilds, the special favors from the crown, the system of granting titles of nobility and royal lands, the mercantilism, and the state-sponsored monopolies directed wealth to the upper classes as everyone else languished in grinding poverty. It was only with the rise of the bourgeoisie and the industrial revolution that, for the first time in human history, common people were actually included in a system that allowed them to build wealth. Exclusion is not new at all, but was the norm through most of the history of the world. One might also add that it is no accident that the widespread abolition of slavery followed closely on the heels of industrialization and these free-market reforms.] This undermines the very root of “belonging to the society” when people are no longer only at the underclass, marginalized or without influence, but are cast out. These “outcasts” are not merely “exploited”, they are considered “superfluous” and “human waste” (AP 65). [It is difficult to see how any serious economic historian could claim that modern workers are more exploited than workers of, say, the 17th century.]
Quoting this seems important to me in order to understand the background of Pope Francis’s view on the situation of the poor in today’s asymmetric, distorted global economy.
Whereas the poorest 600 million of the world’s population have to make a living with an average of 300 euros per annum, the other 600 million well-off people each on an average dispose of an annual income of 27,000 Euros. What a discrepancy and what great injustice ! [Inequality is far less today than it was before industrialization and the rise of bourgeois liberalism (aka, libertarianism.) If we were to compare the incomes of the ruling class in Spain, for example, in the 16th century, with the incomes of the average peasant, we would quickly find that the modern era looks like a utopia by comparison. Moreover, the poor of an industrialized, globalized, and relatively free market country today have access to better health care, housing, and food than even the nobility of old. In modern comparisons among free and unfree economies, we also find that the poor are better off in more free economies.] And, not to forget what livelihood for the hungry, especially the children, is actually concealed behind those figures. Meanwhile in Germany e.g. there is one doctor for 266 persons, in Liberia for example there is one for 82,000. Notwithstanding the Millennium Development Goals the international community formulated with a view to 2015, the fact is that today still about 870 million people go hungry. Two billion of the world’s population does not have access to life’s essential medicine and one billion do not have sufficient and clean drinking water. [Maradiaga is simply proving my point here. Modern Germany, a globalized, industrialized, relatively free-market country has more and better health care than a country like Liberia that shuns free markets.]
Generally, there is a growing inequality and polarization between the rich and the poor in many countries today. [There really isn't if we don't just cherry-pick certain time periods and places. Inequality today is far less than in centuries past when being poor might mean starving to death even in wealthier countries. Prior to industrialization and establishment of relatively free markets in agriculture, famines were common. On the other hand, famines never occur in free industrialized economies. These are simply historical facts and not exactly subject to ecclesiastical veto. The Cardinal's mere assertion that inequality is greater today (compared to what period is unclear) is simply not generally so, not matter how badly he might wish it. I have no doubt that he has managed to find some dubious statistical analyses forwarded by people like Thomas Piketty (see here and here to note the poor quality of Piketty's math), but Maradiaga appears to be acting like his position has been established to a point of metaphysical certitude when in fact, his historical claims are iffy at best.] This holds true for developing countries, emerging countries as well as industrialized countries. It also goes for the United States and China. The gap between incomes today in the US is wider than 100 years ago. 0.01% of the richest in the US have an income as 50% of the poorest of the population. [The Western economies of today are less free than they were 100 years ago, so the Cardinal is simply supporting the free market position here. Moreover, the economy is also less free today in much of the Western world than it was 30 years ago, and if we accept the data that inequality has risen over the past 30 years, this simply supports the free-market position as well.] During the last 20 years the 5% richest in the US made a progress in their possessions like the 50% of the whole population (cf. Thomas Pogge, Yale University). The rich can, unlike the poor, profit from globalization. [The Cardinal appears to know precious little about the history of globalization. Just one example: Chinese peasants, who in ages past would have been consigned to scratching out a subsidence existence in a rice paddy today can earn more than ten times as much in a bicycle factory, live in a cleaner environment with better medical care, and and still have money left over to send home. There is a reason tens of millions of workers have fled the countryside for the cities. Higher wages and higher standards of living have been made possible by globalization.] Increasing competition on the world market encourages this dynamic entailing a reduction of wages. The libertarianism de-regulation of the markets and financial market is much to the disadvantage of the poor (cf. Francois Bourguignon “Globalization of Inequality”). [The widespread de-regulation of the markets during the 19th century led to massive gains for the poor, just as the deregulation of markets throughout Asia (think India during the 1990s) and Latin America (think Chile during the 80s and 90s, and Colombia during the 90s and after) led to massive gains in standards of living in both continents. Historically, we see this in the rise of the middle class, which never existed prior to the the modern era. In the days of yore, you were either a nobleman or a dirt-poor peasant, serf, or slave.]
“This economy kills” (53) [It kills more than the shortage economies of those parts of the words with the least free economies? I'm skeptical.] This in fact is the most provocative economy- critical statement of Pope Francis in Evangelii Gaudium. Certain economic circles in industrialized countries thereupon criticized in turn the Pope saying, “The Church despises the Rich.” And they argue: Already from the Gospel and from the Acts of the Apostles, Christian Faith does not at all promote a positive attitude towards the market, towards competition, towards riches and luxury. The goods gathered on earth by the Christians meet with reservation. Wherever property is suspect, entrepreneurship and profit maximization cannot flourish. [No serious Catholic libertarian offers "profit maximization" as an end in itself. This is a straw man set up by the Cardinal.] In this connection the Catholic Social Teaching and the social encyclicals of the late Popes were attacked. They would show a problematic concept of private property. Francis’s view would be shaped by the difficult economic history in Argentina [Argentina's "difficult" history was made difficult by the abandonment of relatively free markets in Argentina. Argentina was once the world's second-richest nation, and in the 19th century, European emigres had to make the hard choice between moving to California and moving to Argentina. Both were wealthy economies that were quickly expanding. They were places of opportunity where even the poor and powerless could move to greatly improve their situations. Both locales had relatively free economies. However, in the 20th century, Argentina abandoned that road and embraced a controlled economy instead. As a result, Argentina has become a low-middle-income country where the poor have a much lower standard of living than the poor of California.] the past and by the post-Marxist theology of liberation. Francis would not recognize that poverty and inequality have been reduced thanks to market economy reforms [Francis is free to not recognize this just as he is free to not recognize that gravity exists, or that mammals are vertebrates, or that water is composed of hydrogen and oxygen.] He would furthermore ignore that today, thanks to the successful growth of a capitalist economy, the number of people suffering from hunger and thirst is far smaller than some twenty years ago. [This also is demonstrably true, but also a fact that Francis appears to think unimportant.] The Pope would be naïve and unable to see that to overcome poverty, market economy and capitalism were absolute indispensable. [I don't know that they're indispensible. But they do have a much better track record than the system the Cardinal appears to favor.]
These are some of the essential arguments which libertarianism economic circles raised against EG of the Pope.
But let us ask what is Francis’s concern in EG? Let us look at the text itself: In the numbers 52-59 he characterizes some of the challenges in today’s world. An “Evangelization of joy” cannot just light-heartedly close its eyes to reality. In that case it would remain illusionary and would hardly benefit people in difficult situations. Evangelization in the meaning of the Pope therefore always asks for an analysis of the situation based on the Gospel; Francis does not ask for a neutral sociological analysis, but for an evangelical discernment: Discipleship and evangelization according to Francis means, taking the point of view of Jesus Christ and looking at the people’s and the world’s reality with His eyes. This goes for all areas of human day-to-day life and for all dimensions of evangelization. [The Cardinal is setting up a false dichotomy if he thinks that any of this is in opposition to a free economy.]
Let us now take a closer look at how Francis views the present economic situation from the perspective of the Gospel. In the numbers 182-216 he details the practical consequences of the challenges.
“No to an economy of exclusion” [See above] (53). With this title Pope Francis already denotes the essential characteristic of today’s economy, which he rejects. He ties in with the Ten Commandments. The commandment “You shall not kill” (Ex 20,13) defines a limit aimed at securing the value of human life. From this biblical view he says “no to an economy of exclusion and to inequality in income” (53) [Again, free economies have done more to reduce inequality in income than any other system. See here. Does the Cardinal or Francis suggest that the economy of Soviet Russia (think politburo member vs. peasant) had less inequality? Did the highly-regulated economy of 17th-century France have less inequality?]. And Francis describes this in concrete terms very clearly: “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.” And I think each and any of you may know of similar fates from people in your country. [Is Francis aware of the fact that many elderly people have their retirements invested in stock markets? And certainly not just wealthy ones. The stock market represents the wealth and property of real people who can suffer real hardship if the market collapses. It's not a plaything of the super-rich as Francis seems to think. ]
As a pastor in a very poor country [Honduras, a country kept poor by its unfree economy] I know how much of daily insecurity is connected with this situation of poverty- insecurity for the children in particular, but also big worries for mothers and fathers that do not know how to get drinking water, food, medical care or school education for their children. [Children are far better fed in rich free countries than in the unfree countries that Francis is intent on romanticizing.] Global economy under the conditions of libertarianism excludes such people. [Again, it is libertarianism (aka, classical liberalism) that seeks to open up economies, as it did in the 19th century, while the economies supported by the despot-friends of Pius IX, sought to control and exclude the common people from the levers of economic power.] Since their point of view a human being is a consumer. [Another straw man. No serious Catholic libertarian views people as "consumers" or as anything other than persons with human dignity who are ends in themselves.] If she or he is incapable of consuming this type of economy does not need her of him, can do away with her or him. From this, Francis concludes: “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 underclass or its fringes or its disenfranchised- they are no longer even a part of it. The excluded are not the “exploited” but waste, “rubbish” (53).
This diagnosis Cardinal Bergoglio already made in 2007 in Aparecida and he still considers it crucial for today so that he- as Pope- restates it in EG. Yes he even finds a stronger wording, because he sees that in this libertarian global economy, not the human being is at the center but profit and money. He speaks out a sharp prophetic verdict: “This economy kills” (53).
Francis analyzes the economy from the point of view of the poor which is in line with Jesus’s perspective. [This is not in conflict with libertarianism.] He does not let himself be deceived by the trickle-down theory, [this is a political term, not an economic one, and it shows that the Cardinal is not engaged in serious economics, but is interested in scoring cheap political points in a manner consistent with the vulgar politics of talk radio.] which is based on the conviction that if the market is allowed to freely unfold itself this would favor general economic growth which at length is the way out of misery. As someone who lived with the poor, Francis rejects such theory, since facts speak another language and never ever have confirmed this [Thousands of pages of economic history do in fact confirm this (see some of the links above). But Maradiaga, whose academic expertise is in music, physics, and chemistry, can be forgiven for being ignorant of this scholarship, I suppose.] (cf. 54). Taking the financial crisis of 2008 and the following years as an example, Francis points to the deep anthropological crisis which characterizes our time in that it “denies the pre-eminence of human beings.”[Which aspect of financial crisis was due to "free markets" exactly? Was it Fannie Mae and Freddie Mac? The easy-money policies of central banks? Widespread regulation of the financial system? Fiat currency? Inflation of the money supply? Perhaps the Pope and Maradiaga could explain which of these they mean. Oh wait, all those things, none of which have anything to do with free markets, are the real causes of poverty and inequality.]
The worship of the golden calf (Ex 32, 1-15) today is demonstrated by the idolatry of money and the dictatorship of an economy [The economy is not a coercive force or singular institution that dictates anything. Economic systems simply arise out of the actions of individual persons making voluntary choices.] without a human face, lacking a real human purpose (cf.55). He denounces the unbridled greed for power and property as well as “ideologies that defend the absolute autonomy of the market and financial speculation” [Which ideology is this exactly? Because it certainly isn't the ideology of any ruling elite in any country on earth.] (cf. 56). This denies the state’s right of control, whose intrinsic task is to protect the common good. The idolatry around the market concentrating on the increase of profit, disregards all that is weak and equally disregards environment (cf. 56). Money must serve, not rule (cf.58). [Yet another strawman. Libertarians, and especially Catholic libertarians, do not think that money should "rule" anything. This statement is in fact devoid of meaning and is mere sloganeering worthy of a bumper sticker. Money is for buying things, either now, or at some delayed time in the future depending on one's time preference. Only a deranged person thinks money is an end in itself, and libertarianism certainly does not dictate that money should be viewed as an end in itself or as a value superior to any other value.]
The Pope calls for ethics based on God and cares for a more humane social order. [Catholic libertarians call for that also.] He quotes an old saying from Saint John Chrysostom: “Not to share one’s own wealth with the poor is to steal from them and to take away their livelihood. It is not our own goods which we hold, but theirs” (57).[No Catholic libertarian objects to voluntary charity. But again, saying that one, to be a good Christian, must share his wealth with the poor, is completely different from saying that the state must employ violence to redistribute wealth at the point of gun and then allocate the money based on the whims of government officials.]
[Read the rest of the speech here.
In summary, we can learn a few things from this speech.
One is that Maradiaga's view of markets is that they are some sort of unified system that dictates human behavior. He is apparently confusing markets with the state. Markets naturally arise anywhere humans have freedom to exchange with each other. They do not dictate anything, but are passive systems that reflect the decisions of individuals. They do not have a "purpose" or a goal. It is the individuals who have purposes and goals. The market does not in any way tell people what to value. On the contrary, the market simply delivers what people value. In real life, however, states constantly distort and restrict markets in ways to prevent the market from delivering what many people need.
Another lesson to be learned here is that Maradiaga's knowledge of what libertarianism is is woefully inadequate. furthermore, Maradiaga's speech indicates that he adheres to a number of myths. Examples include:
1. Libertarians subscribe to various theories of "survival of the the fittest" in which poor people "deserve" to be poor.
2. Libertarians think that voluntary charity is bad.
3. Libertarians view "profit" as an end in itself, and should be valued more than the exercise of charity.
I have no doubt that some libertarians believe these things, but they believe these things not because they are libertarians, but because they are people who happen to not value charity and who think that profit is the most important thing in the world. Such beliefs are independent of libertarianism.
Ultimately, it appears that Maradiaga's speech was delivered for political purposes in which his center-left faction is attempting to use commentary by the Pope to get the upper hand on a center-right faction that competes with them in the political sphere. Such behavior is unfortunate.]