False Choices On Capitalism

By JAMES K. FITZPATRICK

In this space in the March 9 issue of The Wanderer, we featured a discussion of an article entitled “Confessions of a Capitalist Convert” by Arthur C. Brooks, the president of the American Enterprise Institute. Brooks’ article appeared in the February 20 edition of the Jesuits’ America magazine.
Brooks’ thesis was that the “modern miracle” of lifting the great mass of mankind “from starvation-level poverty” in the last fifty years can be attributed not to “the success of international organizations like the United Nations (as important as they are) nor benevolent foreign aid that pulled billions back from the brink of starvation. Rather, the responsibility lay with five interrelated forces that were in the midst of reshaping the worldwide economy: globalization, free trade, property rights, the rule of law, and the culture of entrepreneurship. In short, it was the American free enterprise system, spreading around the world, that had effected this anti-poverty miracle.”
I noted in the column that I was awaiting eagerly the response of America’s readers, who tend to be to the left of Brooks on economic matters. The copy of America that will carry letters-to-the editor in response to Brook’s column has not yet arrived in my mailbox. My hunch is that many of the letters will be critical of Brooks. I did receive a letter from a reader of The Wanderer, however. He disagreed with Brooks, but not from a liberal Democratic point of view. He analyzed Brooks’ position from the right, from what might be called a traditionalist Catholic perspective.
The correspondent is Robert Cavanaugh, author of the recently published book Christopher Bell, Professor Michael J. New, and the Catholic Vote November 2016. Cavanaugh’s position is that no reasonable person “disputes the broad outline of the positive effects of free enterprise expressed in Brooks’ essay. Since the historical record is beyond dispute, one wonders why conservatives and libertarians continue to trumpet it as if it were breaking news. No one questions the material improvements free trade and free market capitalism have wrought. So the only thing worth discussing is the excess and abuse that has been allowed to flourish alongside the many-splendored benefits we are routinely reminded of.”
Cavanaugh wonders why Brooks writes without “availing himself of the doctrinal wealth that is Catholic social teaching as it pertains specifically to economics.” Cavanaugh observes that Brooks, “like many academics, is so enamored of data regarding household consumption that he offers it as a positive indicator of human flourishing. Since even poor people now have an air-conditioner and a color television, all is right in the heartland, the economists confidently proclaim.”
Cavanaugh insists it is not that simple, noting that Brooks “credits free enterprise for eliminating starvation-level poverty for billions of people, highlighting the dramatic strides made by the poorest of the poor around the globe. Brooks informs us the percentage of the world’s population that survives on one dollar or less per day has shrunk by 80 percent since 1970. Impressive statistics, to be sure, but aren’t these what might be accurately described as first-stage developmental gains? In other words, the question that deserves further scrutiny is how well once-impoverished people continue their upward ascent, into a state of living any of us would describe as remotely acceptable. Not just materially speaking, but culturally and socially, as well.”
He argues that it can be demonstrated that capitalism historically has required “a disenfranchised population that can be readily manipulated for the direct financial benefit of those who own or manage the means of production. This fact hasn’t changed. As time passes, we just go further afield to find a new group we can take advantage of. That each destitute assemblage in turn accrues some meager benefit that lifts them off the floor of human existence hardly qualifies as a ringing endorsement of the present system as it is allowed to function.”
Cavanaugh points to what he calls the “familiar straw man argument that socialism is an unacceptable alternative to what we have now: that capitalism and free enterprise as they are currently practiced may be flawed, but that the socialist alternative is deplorable. Would that conservative-libertarian Catholics stop wasting their valuable time entertaining such an empty justification of the economic status quo! We learned from Pius XI and his encyclical Quadragesimo Anno (1931) that ‘No one can be at the same time a sincere Catholic and a true socialist.’ So please, enough already. No serious Catholic is arguing in favor of the totalitarian form of socialism that Pius XI was describing.
“Not even Pope Francis. The choice is not between ‘market forces’ and ‘more state control,’ as Brooks and many others would have us believe. The choice is between our present ‘content-neutral’ economic free-for-all, and a system that incorporates Christian principles that were set aside long ago. Here in the U.S., the Christian principles that should animate our economic behavior have been completely banished from the marketplace, through the separation of church and state that even docile Catholics now accept as inviolable. We don’t need a new system of economic exchange. We just need to demonstrate a measure of moral restraint, based on the recognition of an objective moral order, while participating in the system we already have.”
As an example, Cavanaugh asks us to ponder the impact of “the radical change in economic theory and the rollback of anti-trust legislation, both of which were formalized in the 1980s.These changes in business school curriculum and federal policy ushered in a new wave of mergers and acquisitions designed to minimize competition and stifle entrepreneurship at every turn. The official justification for this rapacious behavior is that prices to consumers will be lowered, thereby expanding ‘choice.’ But now, some thirty-odd years down the road, we see the excess profits enjoyed by the owners and managers of the means of production have come, as they always do, in direct proportion to the lowered/stagnating wages earned by the workers who provide the service or make the product.”
The bottom line: Life is about more than the bottom line. Cavanaugh: “If our ultimate objective is the Catholic ideal of a just society based on equitable distribution, it should be painfully obvious that ‘expanding consumer choice’ is not a reliable guideline for economic policy. Raising the idea of ‘equality of outcome’ in contrast to ‘equality of opportunity,’ is a red herring. Equitable distribution is all that human dignity and justice demand. No sincere Catholic is worrying about or arguing for ‘equal outcomes’ in the economic realm.”
Cavanaugh ends with the following: “One hopes The American Enterprise Institute, of which Arthur Brooks is the distinguished president, will one day choose to view the economic questions through a Catholic lens, when they finally get around to rendering their ‘honest accounting of market failures’.”