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Guy Sorman
Capitalism and the Pope « Back to Story

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I'm not saying that Guy Sorman isn't making some good points here, but, when writing about the Pope and what he says, it's worth bearing in mind that the Pope speaks as a theologian, as the leader of the Church, a divinely ordained institution. He's talking about what needs to be done to serve Christ and get souls to heaven. I don't know that Pope Francis is so much advising nations as to what economic system they should follow as he is saying, follow Christ in whatever you do.
I love City Journal for its perspicacious articles, but here there is no sincere engagement with Pope Francis. Mr. Sorman argues that the Pope should praise capitalism for the results of a market economy. Yet the Pope never dismisses the market economy itself. He bemoans the influential actors ("the rich") within a market economy who turn a blind-eye to the famished. The good results of a market economy should not benefit the poor by mere chance. In other words, the aim of an economy should not be to maximize profits within supposedly amoral pursuits. Global actors ought assume their responsibilities to the destitute by responding joyfully to God's call to love their neighbor.
What the Pope doesnt seem to realize is that most Western nations dont have truly capitalist economies.
In the name of helping the poorer or less advantaged classes, theyve created ineffective, unaccountable, and very expensive bureaucracies that do little to raise living standards, while at the same time strangling business growth and wasting precious resources.
These practices HURT the poor. They strangle the very businesses that otherwise might employ people, and trade productive labor away for subsistence level squalor. Socialism, so called, only benefits a section of the political class.
Capitalism benefits anyone whos willing and able to innovate, create, and work.
To say otherwise denies basic logic, or even a superficial knowledge of modern history.
Its admirable that the new pontiff is more concerned with the needs of the poor than with the varied and undeniable practices in adults bedrooms.
But he should stick to matters spiritual, not economic. Neither state control of the economy nor a return to the days of kings and cathedrals could help the poor.
Only the freedom to build businesses, produce value, and support oneself and ones own family - through unencumbered private sector growth-can help the poor, as it would help us all.
What rubbish Victor.

Your ignorance surpasses your bigotry.
The Bishop of Rome no longer has any temporal power anywhere in the world save for his little enclave in Rome. He cannot burn us at the stake anymore. He cannot burn our books anymore. He cannot kidnap our children, sodomize our sons and rape our daughters with impunity anymore.
And that is why we here in the Western world live and enjoy the greatest personal and economic freedom, and live in the best conditions of any human population at any time in the millions of years of human history. We are free from the terror, superstition and ignorance that he and those like him represent.
Let him say whatever he wants. I for one feel neither animosity nor affinity for this dirty old man in a dress who presumes to speak for the Deity.
The Bishop of Rome no longer has any temporal power anywhere in the world save for his little enclave in Rome. He cannot burn us at the stake anymore. He cannot burn our books anymore. He cannot kidnap our children, sodomize our sons and rape our daughters with impunity anymore.
And that is why we here in the Western world live and enjoy the greatest personal and economic freedom, and live in the best conditions of any human population at any time in the millions of years of human history. We are free from the terror, superstition and ignorance that he and those like him represent.
Let him say whatever he wants. I for one feel neither animosity nor affinity for this dirty old man in a dress who presumes to speak for the Deity.
The principles of the free market system (as well as the monetary system) originated in 16th century Spain at Salamanca University and formulated by Dominican friars among other religious scholars. At the time the King of Spain, concerned with the high inflation brought about by the huge amounts of gold and silver being brought in from Peru and Mexico, asked the religious scholars of Salamanca to study the then phenomena. At the time Salamanca was the leading European University and most if not all scholars in Europe were religious. These scholars recommended open and free markets, lending with interest, private property and personal, as opposed to state, charity. They were opposed by wealthy nobles who preferred a controlled (mercantilist) market. The nobles won and Spain began its long decline.
I also disagree with the Pope, if his views are as they are described here. However, I strongly disagree also with the idea that the market is merely a "mechanism." In its ordinary workings, it may be amendable to analysis as a mechanism. In that sense, markets have existed and functioned since the hunter-gatherer phase. What makes the market of the modern era work its miracles are values that fuel and guide it, and sometimes even temper and reform it. Those values, I believe, have been best understood and thoroughly analyzed by Deirdre McCloskey in her books "The Bourgeois Virtues" and "Bourgeois Dignity." Liberty and dignity made the modern world, and they are not mere mechanisms.
There are some issues with basic definitions in many of the comments. For example, chattel slavery was a characteristic of the mercantile system, not capitalism. And the mercantile systems of Spain, England, France and other European powers were not "free" markets, they were rigidly protectionist and rejected free trade. Similarly, there is no way that China's economy is capitalist as it lacks the basic foundation, the rule of law. China is a government of men (the Party) not of laws. The Chinese people know it and the various corporations making tremendous profits realize it as well. The latter do not care as long as they are making money. Making money is not the same as capitalism. Lastly, Argentina is not a poor country. It is the wealthiest country in Latin America and has (historically) had a median income more similar to Italy and Spain than Bolivia and Colombia.
Excellent summary, Lake worth. I once was strongly in favor of NAFTA and other 'free trade' agreements. What we've seen is that elites do not compete on the basis of productivity or technology, but on the basis of who can pay their workers the least across the world.

Elites reap the rewards while working people across the world compete against each other to see who can work harder to enrich elites.

Socialism is a failure but it's no surprise to see the young, for the first time in generations, say that socialism is a viable alternative to capitalism. The capitalists have done this to themselves. They are reaping what they've sown.
Jack Brennan says the rich have earned what they have by hard work

Permit me to disagree. As Paul Volcker pointed out, studies have shown that when the financial sector's profits in a country reach 40% of all corporate profits, the economic system is unstable and often collapses due to concentration of resources. The US reached that point in 2007.

We had NO GDP growth. No job growth. We had economic stagnation, and the wealthiest 1% took 95% of all income growth in the last 3 years. The wealthiest 25 hedgefund managers, according to Robert Reich, make more than all 80,000 NYC school teachers, yet they add nothing to GDP.

And the right pretends that ANY criticism of supply side economics is equal to criticizing capitalism. That's simply wrong. In fact, one can make the argument SSE has little to do with capitalism

And lumping Obama and Marx in the same sentence is the equivalent of a Godwin's law violation. It's a cliche of the paranoid extreme right.
-----------

Bears repeating. And capitalism in China forces 350,000,000 people to leave their homes and go hundreds of miles to live in barracks. Similar to forced labor during WW II. And then there is Global Warming which cannot be addressed by capitalism in any way.

"Fair Trade" must be expanded on several fronts and be fully effective if we are to maintain civilization. Hooray for this pope!
"I know no one who considers the market `divine'—certainly neither economists nor entrepreneurs." You live in a closet, then, Sorman.

Maybe you are confusing "divine" with "good". Mankind has often worshiped evil gods, though, as well as amoral or even insane gods. But is the market worshiped? You bet it is! Are there people who set the good of the market above the good of wholes classes of people? Without a doubt. Are there people who think that "right" and "wrong", if they mean anything, mean only "supported by the market" and "not supported by the market"? Uh, yeah -- that was the whole argument in favor of ridiculous executive pay when the economy tanked a few years ago.
Hoss asserts SSE was a success. Kind of like the doctor who says the operation was a success though the patient died

What was a success? The destruction of the economy? The 30 years of wage stagnation for the middle class? The world busting inequality in the US? The unemployment? The TARP welfare bailout of the rich?

What, exactly, Hoss, was the success?
Katie you don't understand the value of contributions to GDP. I never said teachers were paid by hedgefund managers. Is a comparison too difficult for you?

And people don't 'choose' hedgefund managers because the middle class doesn't use them. We don't hold equities. We DO use teachers.

And letting Wall Street professionals off the hook for blowing up the CDS market is risible. Kind of like saying doctors are responsible for gunshot victims.

And if you object to Rangel et al, then choose someone else. Excluding regulation as a matter of philosophy is a policy for failure.

The fact you don't know you can be fired for even mentioning unions tells me you don't know much about the workplace. Why is the comparison to Germany weak? You don't say. You simply assert it. And that's pretty much the conservative argument.
bpuharic -

Teachers in NY do not earn their wages based on a finite pie cooked up by hedgefund managers. The statistic you cite courtesy of Robert Reich is just silly. Teachers, by your narrow definition, don't contribute to GDP either. In a free society people can choose to be money managers or teachers - what is your beef?

The title uses the term "free enterprise' which I prefer to capitalism since it excludes crony capitalism. Sub prime mortgages did not cause the contraction but they certainly contributed to the desire for credit default swaps didn't they?

The well connected have the upper hand in our society - its a drag. But the remedies you seek will be imposed by other well connected people, think Dick Durbin and Charlie Rengel, who always manage to be the first to the trough. When the government seeks to regulate business they go into business picking winners and losers. This conservative thinks AIG should have had to eat their own cooking.

Your attachment to unions is antiquated and the comparison to Germany is weak. Unions in this country exist mostly as a fund raising arm for the Democratic party. Their decling numbers in the private sector tells me what I need to know. Hence they need card check to boost enrollment.
Wasn't a lot of job growth in 2007 since the unemployment rate was practically at what is considered full-employment. Remember, at the time the leftist narrative was that the low unemployment was no big deal because wages weren't increasing at a rate they found acceptable.

So, SSE gets blamed for everything related to the recession. Convenient, and so infantile it's hard to know where to start to refute it. And I have a feeling it would be falling on deaf ears anyway.
When the author alleges that "John Paul tried to prevent his country from slipping into capitalism," it confirms that he misunderstands both Pope Francis' and Pope John Paul's pronouncements then and now. John Paul condemned Poland's slide into materialism - he didn't specifically condemn capitalism. He condemned capitalism without a conscience. John Paul was making not a political argument but a moral one. Both John Paul and Francis strongly opposed communism and socialism, and their views were largely shaped by their own personal experiences - John Paul in communist Poland, and Francis in the socialist kleptocracy that is Argentina.
Jack Brennan says the rich have earned what they have by hard work

Permit me to disagree. As Paul Volcker pointed out, studies have shown that when the financial sector's profits in a country reach 40% of all corporate profits, the economic system is unstable and often collapses due to concentration of resources. The US reached that point in 2007.

We had NO GDP growth. No job growth. We had economic stagnation, and the wealthiest 1% took 95% of all income growth in the last 3 years. The wealthiest 25 hedgefund managers, according to Robert Reich, make more than all 80,000 NYC school teachers, yet they add nothing to GDP.

And the right pretends that ANY criticism of supply side economics is equal to criticizing capitalism. That's simply wrong. In fact, one can make the argument SSE has little to do with capitalism

And lumping Obama and Marx in the same sentence is the equivalent of a Godwin's law violation. It's a cliche of the paranoid extreme right.
Hoss, the US has virtually no unions and the unions had no role at all in the biggest financial debacle in 80 years. THAT was solely a creation of supply side economics.
Sanity inspector, much of the development of S America was done by the US in the 20's to the 70's. Not alot of communists here in the states. And, although I'm an atheist, I agree the pope is not a communist. It's only American supply side fundamentalists who think he is.
"we can only agree, while observing that the market never functions except in the service of human beings."
What an ideological statement. The slave trade was the market at work. It also generated great wealth. But it did not serve human beings.
The Sanity Inspector January 23, 2014 at 7:22 AM
Too much capitalism? As G. K. Chesterton said, that doesn't mean that there are too many capitalists. It means that there are too few.
The Sanity Inspector January 23, 2014 at 7:18 AM
I wonder if his outlook is colored by his Latin American heritage. Unlike anglo-protestant North America, Central and South America were founded by a thin layer of sleazed-out nobility, lording it over a vast sweated underclass, with not much in between. With a more populous, more enterprising and more resourceful middle class, the North out-prospered the South, even though the southern continent was superior in natural resources. The desperate circumstances of Latin America's poor through so much of their history has impressed itself on anyone with a living conscience. Perhaps it's only natural for the Argentinian Francis to project their plight onto the world at large.

However, no pope is in danger of becoming very much of a socialist, I don't think. As much as the Catholics of the world have been brutalized by communists over this past century, in Spain, in Ukraine, in Poland, in Hungary, in China, in North Korea, etc., it would be very surprising.
Democrats poison the well and then complain that the water isn't fit to drink. As vacuous as complaining about middle-class taxpayer dollars being taken to support banks, but nary a word about taking middle-class dollars to support union cronies (campaign donors). Moral hazards is moral hazards.
"Capitalism and the Pope
----------------------------------------------

I was very disconcerted by Il Papa’s attack on Capitalism !

The Catholic Church of Rome, and all other Christian Believers, have raised the condition of humankind ex-potentially. Christ's Message, in my catholic opinion, has changed the world; It has done so thru Christ’s basic Message, “Do unto others, as, You would have others do unto You”. And also because of the Church's founding of the first Universities, schools for the Poor, the promotion of learning in the most historically backward places in the world; and is still doing so, in Asia, Africa, S. America!
Capitalism is the greatest non-religious Human invention since Adam/Eve.
The rise of free-Democratic Capitalism has raised most of Mankind out of an almost worldwide-state of Starvation, Penury, Savagery, and Hopelessness..
Il Papa attacks the Capitalists, and by inference, the Rich.
The Rich, (in general) in our Free Society, have earned what they have by hard intelligent work, investment, Invention, and wise decisions.
For example-Ford invented the Assembly Line, Goodyear invented Rubber,- Pasteur, Curie,- most Modern Medical Wonder Medicines came from Capitalist supported Science Programs, or in environments found in Free/Capitalist Societies. The earned Wealth of Capitalists is primarily invested in Capitalist-Productive Organizations that Produce Foods, Products, and Medicines, at affordable prices for the benefit of ALL Humankind! Capitalists are not Mankind’s Enemies; Capitalism is Humankind’s greatest Invention!
Capitalism is the greatest Motive Force in the History of Mankind for creating well-paying jobs; support of Health Science & Medical Research, Science & Technology-and on and on and on, and on, and on!
I worked for a very small NYC capitalist company, who with other small capitalists donated hundreds of thousands of dollars of Labor and Material to raise Money for a Catholic High School in the Bronx, to save it from going bust.
That School is 99% poor Minorities..EVERY YEAR, that School is named by a National Education Institution, in Washington, DC, as One of the TOP TEN “INNER CITY SCHOOLS” IN THE USA. Capitalists, and others, did that!
Capitalists create Jobs. Improve Education. And, Cease to exist when not profitable for Society.
The Pope should be attacking Communism and Socialism, and other, non-free Totalitarians, instead of Free Capitalism..
When He speaks against Capitalism, he speaks not for the Church, not for Christ, but for sad Sacks like Obama, and Lenin, and, Marx, and Castro ,et.al.
When thePope talks Political/Economic nonsense, he further distances people like me, who owe every thing they have to our Catholic Education, Catholic Religion, and the Economic opportunities in a Capitalist Free Society!. .Modern Capitalismt only fully functions fully in a Free Society!
My Mother and my Grandparents fled a society in the Old World that in many ways was worse than Slavery. As bad as Slavery is, the Owners of Slaves, have to feed the Slaves
Few people who fled old Europe or Asia or, Africa, for the USA, have ever regretted it! They added the genius captured in their Genes that helped Capitalism flourish.
With its many, correctible faults, Capitalism is for all Humankind, the best economic system ever developed in the last…………. 1,000,000 Years! Make it better! Don’t attack it
Sincerely,
JACK BRENNAN!
I sent this letter to Pope Francis, shortly after his attack on Capitalism.
----------------------------------------------

I was very disconcerted by Il Papa’s attack on Capitalism !

The Catholic Church of Rome, and all other Christian Believers, have raised the condition of humankind ex-potentially. Christ's Message, in my catholic opinion, has changed the world; It has done so thru Christ’s basic Message, “Do unto others, as, You would have others do unto You”. And also because of the Church's founding of the first Universities, schools for the Poor, the promotion of learning in the most historically backward places in the world; and is still doing so, in Asia, Africa, S. America!
Capitalism is the greatest non-religious Human invention since Adam/Eve.
The rise of free-Democratic Capitalism has raised most of Mankind out of an almost worldwide-state of Starvation, Penury, Savagery, and Hopelessness..
Il Papa attacks the Capitalists, and by inference, the Rich.
The Rich, (in general) in our Free Society, have earned what they have by hard intelligent work, investment, Invention, and wise decisions.
For example-Ford invented the Assembly Line, Goodyear invented Rubber,- Pasteur, Curie,- most Modern Medical Wonder Medicines came from Capitalist supported Science Programs, or in environments found in Free/Capitalist Societies. The earned Wealth of Capitalists is primarily invested in Capitalist-Productive Organizations that Produce Foods, Products, and Medicines, at affordable prices for the benefit of ALL Humankind! Capitalists are not Mankind’s Enemies; Capitalism is Humankind’s greatest Invention!
Capitalism is the greatest Motive Force in the History of Mankind for creating well-paying jobs; support of Health Science & Medical Research, Science & Technology-and on and on and on, and on, and on!
I worked for a very small NYC capitalist company, who with other small capitalists donated hundreds of thousands of dollars of Labor and Material to raise Money for a Catholic High School in the Bronx, to save it from going bust.
That School is 99% poor Minorities..EVERY YEAR, that School is named by a National Education Institution, in Washington, DC, as One of the TOP TEN “INNER CITY SCHOOLS” IN THE USA. Capitalists, and others, did that!
Capitalists create Jobs. Improve Education. And, Cease to exist when not profitable for Society.
The Pope should be attacking Communism and Socialism, and other, non-free Totalitarians, instead of Free Capitalism..
When He speaks against Capitalism, he speaks not for the Church, not for Christ, but for sad Sacks like Obama, and Lenin, and, Marx, and Castro ,et.al.
When thePope talks Political/Economic nonsense, he further distances people like me, who owe every thing they have to our Catholic Education, Catholic Religion, and the Economic opportunities in a Capitalist Free Society!. .Modern Capitalismt only fully functions fully in a Free Society!
My Mother and my Grandparents fled a society in the Old World that in many ways was worse than Slavery. As bad as Slavery is, the Owners of Slaves, have to feed the Slaves
Few people who fled old Europe or Asia or, Africa, for the USA, have ever regretted it! They added the genius captured in their Genes that helped Capitalism flourish.
With its many, correctible faults, Capitalism is for all Humankind, the best economic system ever developed in the last…………. 1,000,000 Years! Make it better! Don’t attack it
Sincerely,
JACK BRENNAN!
Katie, Right to work laws destroy labor unions. The right, RIGHT NOW is arguing before the SCOTUS that the 'agency' provision of labor laws is illegal.

And what regulation of the economy has the right supported? Breaking up banks? Nope. Re regulating capital requirements? Nope. The CFPB? Nope. Law against proprietary trading? Nope.

You tell us labor unions add cost due to higher wages. Yep. That happens in 1st world countries like Germany...which out exports us. In 3rd world counties, owners of capital compete by a race to the bottom....who can destroy the lifestyles of the middle class quickest. And the US is becoming much like a 3rd world country

My argument about the 2008 recession is that capital accumulation so beloved of right wing supply siders is a failure. It does not create jobs. It does not 'raise all boats'. It leads to inequality and stagnation for the middle class.

And you believe in a myth. The subprime market had little to do with the financial crisis, in spite of the fact THAT market happen under conservatives 2001 2007. What DID cause the market failure was deregulation that let credit default swaps balloon by 20,000% between 1997 2007. THAT destroyed our economy; Proof was the AIG bailout because of default swaps.

And what did the right do? They protected the rich. They took middle class dollars and gave them to the rich in the form of TARP, thus ensuring the next banking crisis.
Relentless growth of more money for those with money.
bpuharic -

You don't seem to see distinctions among the people of the right and as such your sweeping assessment of the "right" and markets is very wide off the mark.

First - as a very conservative person I have never advocated unregulated markets. The US has never had an unregulated economy and never will. So I agree - there is little resemblance between the two. What did the right do to destroy labor unions? Private sector participation in labor markets fell on its on and where unions still exist - auto industry - they add only costs and not value further cementing their decline. There is no relationship to unions and capital gains triggering the decline of 2008. You are correct that the banking industry helped fuel the bubble that triggered the recession but only to the extent that the government advocated for sub-prime loans.
The very worst sort of capitalism is that designed by the left in this country - corporate capitalism. Just watch as the insurance companies - compelled byregulations of the ACA - lose money on the very sick and are bailed out by the taxpayers.

Blindness is the defect of the left as they believe, and I include you among them, that they can regulate away defects of moral character. When banks realized they could write bad loans, bundle them and sell them to the buyer of last resort, Fanny and Freddie, they did so with gusto and the American taxpayers got reamed. The market is a means of allocating resources. It is not a substitute for morality but where it has existed, even in China which has relatively fewer political freedoms, poverty declines. Do some people prosper who are not morally sound? Yes. But it takes only one swipe at history to conclude the immorality of crushing regulations on economic development to declare capitalism the winner.
"I know no one who considers the market “divine”—certainly neither economists nor entrepreneurs."
Uhhh, maybe Goldman Sachs Chairman Lloyd Blankfein "doing God's work" is then just more a violation of union rules put in papal terms.
The right is overrun by fundamentalists. The US right doesn't accept evolution. And it doesn't accept criticism of laissez faire capitalism.

No one considers the market 'divine'? Certainly the right comes close, with Paul Ryan's recommendation we 'valorize' (sic) the rich.

But the larger problem is the fact the right has confused capitalism with unregulated free market economics. There is no relation at all. Over the last 30 years we gave the right every single thing they wanted in economics. We destroyed the labor unions. We deregulated banks. We cut capital gains taxes to the lowest rate in 60 years.

We got the deepest recession in 80 years. We got 8M unemployed. We got 30 years of wage stagnation for the middle class while the 1% tripled their income.

The right is blind. No matter what the evidence shows, they have their fundamentalist beliefs and they will not change. The fact we need a REGULATED market is ignored. The right's only measure of market success is not how it builds a strong middle class, but how rich it makes the rich

And that is a recipe for disaster. No society can survive without a strong middle class. And supply side economics is destroying ours
Someone needs to give the Pope a copy of "The Noblest Triumph - Property and Prosperity Through the Ages," by Tom Bethell. The best historical and theoretical, but easy lay reading, discussion of private property rights I've seen. The countries the Pope is concerned about do not have good property rights laws. That's where he needs to work.
Your comments regarding the Swiss on the their referendum are a little unclear. Did they maybe think that the factor of 12 was a little high and should in fact be less than 10?. If the conditions in Poland are so rosy , why did all the Plumbers and Builders come over to the UK ?
"The market" is a mechanism for the creation of wealth among a people in which the rule of law, widespread literacy, and a degree of trust and disposition to honest reciprocity even among strangers prevail.

There are all too many societies in which these prerequisites are not much in evidence. And even where they are, this market will fail to address the needs of those who are not in a position to contribute even a pittance to the economy, and who have no family willing and able to carry them. This is where private charity, charitable institutions, and laws that establish a safety net of sorts come in. The proper balance of who gets carried, and who, limitations notwithstanding, is expected to manage more or less on their own, is a very difficult one and people of good will can go round and round on the topic.