These are pure redistribution (often with destruction of value)?
Dear Friend,
Thank you, most gratefully, for this very thoughtful and interesting compilation of readings (in Catholic Economic Teaching, below).
It seems to me that there is still dispute about fundamental requirements in: - family & virtue - redistribution - needs
And, how the state can do, in these, is disputed. Acton (along with the Koran) argue it should be left to charity. And there is on the other side much, naive, talk of prosocial (read, in my view, "in-group" and "virtue-signalling" or "warm-glow") community action. Which, as far as I have been able to tell, evaporates utterly and completely once family or personal habits are threatened. (In any change..?: but "the cows will stop milking", "I HAVE to drive my child to the swimming pool..", etc)
But, there is little argument or disagreement about wealth creation (or the incentives - in the market system - for frugality and productivity).
While muddling along, with slogans daubed on walls, has got us by up to now, it would appear to me that there are forces who are determined to see a return to regressive models. Both on the so-called "libertarian" side and among the "socialists" also. Principally so as to foster civil strife and impoverishment (or civil war, preferably) in the Empire and among the Colonists.
Also, there is no mention of limits. And the, excruciating (but PC'ly unpublishable), statistics on inequity in consumption: 17 kilograms of OilEq / Capita / day in the USA and Australia (or the 11 kgOilEq/p/d in Europe) - versus 1.4 kgOeq/Cap/Day in Kerala and Sri Lanka with very good (/comparable?) health and wellbeing.
Or any conception of the future that beckons - to me #Walkable + #NoOneLeftBehind. Or the Scorched Earth (climate war) #EdenIsBurning, actually, Eden HasBurnt (!??), that seems inevitable. Given the failure to look into the consequences of the AutoMobile (FreeWays and the AeroPlane) as the pinnacle of human civilisation.
Which is, notably, left out of all of these readings. As is the possibility, or objective, to TEST which theories work, and what their practical consequences are.
Economics in the Catholic World | Acton Institute | Erik von Kuehnelt-Leddihn https://acton.org/pub/religion-liberty/volume-4-number-4/economics-catholic-world - wealth creation is all important/ trickle down works/ but "morally motivated unions can be a pillar".
Catholic social teaching must confront the regulatory state | Acton Institute | Philip Booth https://acton.org/publications/transatlantic/2017/10/24/catholic-social-teaching-must-confront-regulatory-state - the importance of "unintended consequences" and "dead weight" (both of which can be huge) of regulations and "institutions" ( a la Douglass North).
Who are the Catholic economists? | Marginal REVOLUTION https://marginalrevolution.com/marginalrevolution/2010/05/who-are-the-catholic-economists.html - Catholic thinking, in Economics, down the ages. (Pretty limited, but a few more helpful readings).
A Catholic Framework for Economic Life http://www.usccb.org/issues-and-action/human-life-and-dignity/economic-justice-economy/catholic-framework-for-economic-life.cfm - US Convention of Catholic Bishops: Official statement (waffley and unfocused), but "many people are being forced to choose between basic necessities like food, shelter, and health care. How can you - and how can our society as a whole - help to provide for [their] needs?" (doesn't answer this question).
Why the wealth gap is bad for everyone | USCatholic.org https://www.uscatholic.org/articles/201306/economics-inequality-why-wealth-gap-bad-everyone-27421 - community action + status quo will solve all the problems.
Catholic Economics: Alternatives to the Jungle | by Angus Sibley https://blackwells.co.uk/bookshop/product/Catholic-Economics-by-Angus-Sibley-author/9780814648681
========================================Redeeming Capitalism | by Kenneth J. Barnes https://www.eerdmans.com/Products/7557/redeeming-capitalism.aspx - a "call to reform capitalism as a moral enterprise so it can become a morally steered servant rather than a cruel, amoral master" - very valuable, grounded, and insightful (imho) - not a polemic.
The recent paper of Philip Vergragt is extremely timely and helpful, in my view.
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2018-05-10 1:44 PM (2 hours ago)
to SCORAI
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We are proud to present a new paper, written by members of the KAN SSCP Working group on Political Economy, criticizing the dominant message that technology and renewable energy will be sufficient to resolve the climate crisis:
www.tandfonline.com/doi/full/10.1080/15487733.2018.1458815
"Why achieving the Paris Agreement requires reduced overall consumption and production"
Philip
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The need is pretty clear?
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Global production =
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224 kg of steel/capita/year,
and
13 imp. cwt. (>650kg) of farm produce /capita/year (ex livestock)
and
580 kg of cement/capita/year
...
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Real wealth consists of tangibles, like cars, food and commodities, as well as of services like social care (of which we can only provide so much). This real wealth can only be consumed if its creation is adequate. We can't consume wealth that has not been created. So wealth creation really matters.
People's needs, however, are unrelated to the levels of wealth created in the economy. These needs are finite. Being physiological, social and intellectual (ie identity/spiritual). However as primates of 60-90kg we tend to be rather limited in perspective and so can be greedy, self-seeking, narcissistic and often inconsiderate. Especially when confronted with a choice of placing a small burden on many others and extracting a large personal benefit. Or, particularly, in avoiding a large perceived personal loss.
Thus, when confronted with a choice of paying the full cost, or of placing a burden on society, students in South Africa felt that education should be seen as a low cost "right" (#FeesMustFall). However, there are very real direct costs and great opportunity costs in providing education. An excessive education sector will reduce wealth creation - and so, necessarily, will deprive other people of the fruits of the economy - and make most people poorer.
Similarly in the outsourcing dispute in South Africa (#OutsourcingMustFall), which was framed as black workers getting their rights - but, actually, doing away with outsourcing just redistributes money (ie tokens or promises to pay) (and the consequent consumption) without any compensating increase in wealth creation. And, in practical experience, will lead to losses of efficiency. It was a dispute about pure economic rents - in other words about capturing a surplus - pitted against efficiency savings and so consequently against wealth creation.
This socially engendered sense of entitlement to rights, and of passive expectations, may be the fundamental defect in the South African economy.
Fortunately markets (which arise legally or otherwise for scarce resources or real wealth) give incentives to be: i) productive (with rewards for efficiency and wealth creation); and to be ii) frugal (being able to access more resources or real wealth, by spending less). And the scarcity of resources usually leads to crisis, so that pure rents tend to be swept away in history.
What South Africa, and perhaps the whole world, needs is some way to reward virtue (or "being good") rather than the narrow perspective of the market (just productive and selfish). The students and strikers lose nothing by disrupting exams and lessons - but destroy much real wealth. As well as do damage to norms and values, that maintain a just society.
Tax - a fraction of the flow of money (promises to pay) in the economy - seems to be an inadequate source of financing redistribution by the state (which is absolutely fundamental to just society). So we see addictions to growth through deficit financing - with all of the undesired incentives for excessive consumption and obscene waste. For this, there are likely better types of economy (allocation system), beyond capitalism and socialism.
And the appeal of rents - pure redistribution or capture of surplus - leads to imposing short-sighted burdens on the rest of society (like "cheap education" and "ineffective services"). In this situation it is the poor and truly deprived who suffer most, because education is underprovided and less wealth is created.
As the elite of the next generation, and leaders, one would hope that students and activists can see the full cost of these short-sighted actions. And be insightful and considered, rather than follow the examples of obscene rent capture we see by financial and political elites.
But appeals of seemingly simple matters of "rights" often obscure the bigger picture of norms, wealth-creation and redistribution.
