David F. Ruccio — Does capitalism cause poverty? Let us count the ways

Clearly, Pope Francis’s criticisms of capitalism (as I have discussed here and here) have touched a nerve. They certainly have in the case of Harvard’s Ricardo Hausmann, who attempts to argue both that capitalism is not responsible for causing poverty and that more capitalism will eventually eliminate poverty.

Hausmann’s story is a very familiar one. What it comes down to is the idea that the majority of people before capitalism arrived one the scene were poor and as capitalism develops and more and more people became wage-laborers with rising real wages. But areas of the world still remain outside of capitalism and those people will remain poor unless and until capitalism is allowed to fully develop.

It’s a story that is as old as Adam Smith’s Wealth of Nations, and it’s been told and retold by generations of classical and neoclassical economists ever since.
Their story is certainly right about one thing: capitalism does create the promise of ending poverty.

The problem is, their story conveniently overlooks important aspects of the development of capitalism—all the ways capitalism has over the course of its history created more, not less, poverty. I’m thinking of four instances in particular.…

Occasional Links & Commentary
Does capitalism cause poverty? Let us count the ways
David F. Ruccio | Professor of Economics University of Notre Dame Notre Dame

Maximilian Auffhammer — Why the Pope is wrong on markets

Should be "Why I think the Pope is wrong on markets." Is the reason for that type of thinking ideologically and cognitively biased. Pope Francis's economic advisors have convinced him it is, and that's my view, too. The neoliberal bias is over-reliance on markets. How has that worked out?  Why would it change suddenly enough to make the needed difference?

In may view, markets could be one of the tools employed but relying completely on markets seems to me to be unrealistic in that there are so many and diverse vested interests in preserving market imperfections already created and culturally accepted. 

Radical action is required to shift energy sources away from carbon-based sources to clean renewable sources. This will require both institutional change that only governments can mandate quickly. It will also require public investment in clean renewable energy as a public utility. 

This means recognizing and acknowledging that a healthy and sustainable environment is a public good and that living in a healthy sustainable environment is a natural right included in the right to life. This falls to government to ensure as the guarantor of good order and security in a society. The rule of law must be used toward this end rather reliance on market forces by attempting to reduce or eliminate market imperfections.

Economists who assume that market forces are the solution to all social, political, and economic problems are just blinkered by ideology.  

The Berkeley Blog
Why the Pope is wrong on markets
Maximilian Auffhammer | George Pardee Jr. Professor of International Sustainable Development at UC Berkeley

ht Mark Thoma at Economist's View

Peter Singer — Reconsidering Man’s Dominion

A few Christian thinkers have sought to reinterpret “dominion” as “stewardship,” suggesting that God entrusted humanity to care for his creation. But it remained a minority view, favored by environmentalists and animal protectionists, and Aquinas’s interpretation remained the prevailing Catholic doctrine until the late twentieth century. 

Francis has now come down decisively against the mainstream view, saying that Christians “have at times incorrectly interpreted the Scriptures,” and insisting that “we must forcefully reject the notion that our being created in God’s image and given dominion over the earth justifies absolute domination over other creatures.” Our “dominion” over the universe, he declares, should be understood “in the sense of responsible stewardship.” 

Against the background of nearly 2,000 years of Catholic thinking about “man’s dominion,” this is a revolutionary change. But the encyclical includes another statement that could have even more far-reaching implications. That statement, which originally appeared in the Catechism of the Catholic Church issued by Pope John Paul II in 1992, calls it “contrary to human dignity to cause animals to suffer or die needlessly.” To ensure that the sentiment would be noticed, Francis tweeted it. (Yes, Francis tweets, using the Twitter handle @Pontifex.)

Project Syndicate
Reconsidering Man’s Dominion

Peter Singer | Professor of Bioethics at Princeton University and Laureate Professor at the University of Melbourne

Ellen Brown — A Revolutionary Pope Calls for Rethinking the Outdated Criteria That Rule the World

Pope Francis’ revolutionary encyclical addresses not just climate change but the banking crisis. Interestingly, the solution to that crisis may have been modeled in the Middle Ages by Franciscan monks following the Saint from whom the Pope took his name.

Pope Francis has been called “the revolutionary Pope.” Before he became Pope Francis, he was a Jesuit Cardinal in Argentina named Jorge Mario Bergoglio, the son of a rail worker. Moments after his election, he made history by taking on the name Francis, after Saint Francis of Assisi, the leader of a rival order known to have shunned wealth to live in poverty.

Pope Francis’ June 2015 encyclical is called “Praised Be,” a title based on an ancient song attributed to St. Francis. Most papal encyclicals are addressed only to Roman Catholics, but this one is addressed to the world. And while its main focus is considered to be climate change, its 184 pages cover much more than that. Among other sweeping reforms, it calls for a radical overhaul of the banking system.

Laudato Si' calls for a new approach to economics and public policy globally.

The financial crisis of 2007-08 provided an opportunity to develop a new economy, more attentive to ethical principles, and new ways of regulating speculative financial practices and virtual wealth. But the response to the crisis did not include rethinking the outdated criteria which continue to rule the world.

. . . A strategy for real change calls for rethinking processes in their entirety, for it is not enough to include a few superficial ecological considerations while failing to question the logic which underlies present-day culture.

Web of Debt
A Revolutionary Pope Calls for Rethinking the Outdated Criteria That Rule the World
Ellen Brown

Sandwichman — The globalization of the technocratic paradigm

Quotes from Laudato Si'. The pope and his posse are on the case.

Econospeak
The globalization of the technocratic paradigm

Sandwichman

David F. Ruccio — Economics of Laudato Si’

Not just about climate change but also a condemnation of neoliberal capitalism and market fundamentalism, and social and political theory based on propertarianism, especially one advocating for a market state.

The principle of the subordination of private property to the universal destination of goods, and thus the right of everyone to their use, is a golden rule of social conduct and “the first principle of the whole ethical and social order”. The Christian tradition has never recognized the right to private property as absolute or inviolable, and has stressed the social purpose of all forms of private property. (69)

Occasional Links & Commentary
Economics of Laudato Si’David F. Ruccio | Professor of Economics University of Notre Dame Notre Dame

Pope Francis — Laudato Si'

ENCYCLICAL LETTER

LAUDATO SI’

OF THE HOLY FATHER

FRANCIS

ON CARE FOR OUR COMMON HOME

“The 21st century, while maintaining systems of governance inherited from the past, is witnessing a weakening of the power of nation states, chiefly because the economic and financial sectors, being transnational, tend to prevail over the political.” (p. 128)

ht/ Bill Moyers & Co.