Saturday, January 29, 2011

Paul Krugman Agrees with Reich that Morality Has a Place in Economic Analysis

How does Quadragesimo Anno Compare?

Krugman noted that President Obama called on Americans to “expand our moral imaginations, to listen to each other more carefully, to sharpen our instincts for empathy, and remind ourselves of all the ways our hopes and dreams are bound together.” Krugman agrees, but claims that in the U.S. there is a great moral – ideological divide over what constitutes justice. One side believes in a “private-enterprise economy, but one in which society’s winners are taxed to pay for a social safety net-morally superior to the capitalism red in tooth and claw before we had the New Deal. The other side believes that people have the right to keep what they earn, and that taxing them to support others no matter how needy amounts to theft." (N.Y. Times, January 14, 2011) In my opinion this is a simplistic, but useful distinction. The breakthrough here is that professional economists, Robert Reich and Paul Krugman, are not opposed to economic analysis in a moral context. These two economists, well recognized in their profession, oppose the ‘enlightenment view’ that economics is a study of given phenomona like chemistry, biology, or physics. Reich and Krugman are saying that the focus of economics is on analyzing and creating a socially made system for the purpose of promoting human well being. They are in conformity with Pius XI who stated in Q.A. and was noted in the previous posting of this blog, “Even though economics and moral science employs each its own principles in its own sphere, it is nevertheless, an error to say that the economic and moral orders are so distinct from and alien to each other that the former depends in no way on the latter.” (Q.A. Para. 42)

Roman Catholic Social Teaching has evolved since the 1891 Rerum Novarum and the 1931 Q.A., but it has consistently attempted moral analysis based on reason. Currently what is presented as Catholic Social Teaching is based on hierarchical authority focusing on: abortion, gay rights, and stem cell research. This puts the hierarchy on the side of those reluctant to help the poor by government regulation and spending. Roman Catholic liberal opposition is concerned with showing that the position of the hierarchy is absurd, but neglects Catholic Social Teaching that insists on labor unions as essential. Both liberal and conservative Roman Catholics on either side of Krugman’s moral spectrum have dismissed and or forgotten that the seminal writing of Catholic Social Teaching, Rerum Novarum was entitled ‘On the Condition of Workers.’ Middle class morality, including that of Reich and Krugman, does not focus on – ‘the condition of workers.’

This puts Reich and Krugman in the discussion of the moral aspects of economic analysis and leaves the current church, liberal and conservative, out in a sea tempest debating church issues fundamentally resolved in the past.

Even though Rerum Novarum and Q.A. were written over one-hundred years ago, Reich and Krugman could benefit from considering them. Important for them to consider would be the emphasis on “the condition of the working class” and the principle of ‘subsidiarity’ established in Q.A.

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