Sunday, June 3, 2012


AUSTERITY FOR WHOM – Just the Greeks?

   According to Catholic Social Teaching (C.S.T.), - but still, the emphasis is on pre Vatican II documents – e.g. Pius XII and John XXIII. (Mater et Magistra–1961, Pacem in Terris–1963 with a sneak look at a statement by a regional bishops’ conference, encouraged by Vatican II and a comment by Pope John Paul II)
   The U.S. is a wealthy nation.  Are the wealthy responsible to pay in to resolve the looming debt crisis in the U.S.? (A resounding yes from C.S.T.)
   Are the wealthy in the U.S. in Europe & Asia responsible to save the Greek economy? (A resounding yes from C.S.T.)
   Are the relatively wealthy world-wide responsible for the world’s poor?                                      (A resounding yes from C.S.T.)
   AND – What about the environment?  It’s daunting – OK, forget about C.S.T., read the last book of the Christian Bible, The Book of the Apocalypse, and get ready.


   Is a move to the “simple” life by industrialized nations a choice or a must?  Three factors to consider, first, the collapse of the environment as we know it:
 “In the spring of 2009, researchers arriving in Bolivia found that the eighteen-thousand year old Chacaltaya Glacier is ‘gone, completely melted away as of some sad, undetermined moment early this year.’ These glaciers are the reservoirs for entire continents, watering the billions of people who have settled down stream precisely because they guaranteed a steady supply.” (Bill McKibben, earth, Times Books 2010, p. 7)
   Second, the end of work as we know it: “We are entering a new age of global markets and automated production. The road to a near–workerless economy is within sight.” (Jeremy Rifkin, End of Work, G.P. Putman’s Sons, N.Y. 1996, p. 292)  Where do we, the middle class and the poor, get purchasing power?
   Third, the devastating poverty in many regions of the world: “The 2010 estimate, the most recent, (U.N.) says that 925 million people were undernourished in 2010.” (

   A strength of Catholic Social Teaching is that it is formed by designating a purpose for the economy.  This would be called the final cause dictated by nature itself.  Pius XII said, “the end of public economy, which end is to insure a stable sufficiency of goods and of material services, directed in turn towards improving moral, cultural and religious conditions.”  He also insisted the principle of solidarity dictated that ALL have the right to decent living and concern should be national and internationally.

    “Solidarity demands that the excessive and provocative inequalities in living standard among different groups in a nation be eliminated.”  “Let every nation develop its own potentialities with regard to living standards and employment and let it contribute to the corresponding progress of less fortunate nations.” (Pius XII, Christmas Message 1952)

  This very strength is also a weakness in that people of good will disagree about the purpose of the economy and the means to achieve the goal.  The goal of the economy in a democracy and how this goal is to be pursued are determined politically.  Both the goal and the “how” are moral decisions.  The choice to proceed democratically is also a moral choice.  The Church, the church hierarchy with their wealthy allies, need to be involved in the discussion with an openness that at present is not there.  Successful conclusions cannot be forced without dialogue.

  Post enlightenment science gave up on causes and relies on correlations and testing to achieve conclusions.  Conclusions are always open to revision or rejection. What works is “truth.” The success of this method cannot be argued.    The science of economics does not consider the purpose of the economy as one of the factors, let alone a cause of production, as land – labor – and capital, because of the diversity of goals.  But it does emerge that GROWTH is the driving force.  Translated into Catholic Social Teaching categories, GROWTH would be – the final cause.  Contrast GROWTH with Pius XII statements and John XXIII.  For example:
 “What the Catholic Church teaches and declares regarding the social life and relationships of men is beyond question for all time valid.  The cardinal point of this teaching is that individual men are necessarily the foundation, cause, and end of all social institutions.  We are referring to human beings in so far as they are social by nature …” (Mater et Magistra, 1961, para. 218 -219.)  The first part of Mater et Magistra is a positive review of the teachings of Pius XII.


   Growth is the final cause or purpose of the U.S. economy on both sides of the divisive chasm between the dominant political parties in the U.S.   Consider the following:
 “The concept of a moral society that I take as the benchmark for examining what difference economic growth makes is the image held out by the Enlightenment thinkers whose ideas were key to the creation of America as an independent nation and have remained central to Western thinking ever since.   Its crucial elements include openness of opportunity, tolerance, economic and social mobility, fairness and democracy.   America’s greatest need today is to restore the reality and thereby, over time,  the confident perception, that our people are moving ahead.  If doing so will require public policy choices that are hard, so be it.  ONLY WITH SUSTAINED ECONOMIC GROWTH, and the sense of confident progress that follows from the advance of living standards for MOST of its citizens, can even a great nation find the energy, the wherewithal, and most importantly the human attitudes that together sustain an open, tolerant and democratic society, (p. 436) …when Ronald Reagan, evolving from his career as an actor, appeared on television in G.E. commercials proclaiming “Progress is or most important product,” most American viewers understood that he was associating the company’s contribution to society with more than just the products it manufactured and sold.  …Today the same presumption of a connection running from technological progress to material progress to progress in more fundamental indeed moral dimensions of human life is evident at Disney World’s EPCOT in Orlando Florida.  (Benjamin M. Friedman, The Moral Consequences of  Economic Growth,  Knopf,  2005, p.21)

   Robert Reich, President Clinton’s Secretary of Labor and supporter of NAFTA says,  “…both the United States and China are capable of producing far more than their own consumers are able of buying. …both societies are threatened by a disconnect between production and consumption.” (Robert Reich, Aftershock, Alfred A. Knopf, NY. 2010, p. 7 3 -74.)

The problem of overproduction was recognized by Marx (the cause of recessions and depressions, Das Capital) and Pius XII.

Pius XII said,
   “In the face of the pressing duty in the field of social economy of balancing production with consumption, production wisely measured to the needs and dignity of men, the problem of the regulation and of the establishment of the economy. In so far as production is concerned, is today of prime importance.” (Pius XII, “Discourse to International Congress of Social Studies,” June 3, 1950)
Marx wrote:   “The historical value and justification of the capitalist are to be found in the fact that he ruthlessly forces the human race to produce for production’s sake;…” (Karl Marx, Capital, the Communist Manifesto and other writings, The Modern Library, 1959, p. 160.  For a more complete explanation see Chapter XXIV – “Crises” p. 293)

   Economic growth as such can-not be the driving force of the economy if we are to survive.  Growth has to be in terms of preservation of the environment.  Growth in the sense of increased economic activity for the marginalized must be factored in, but it can’t be in terms of destroying the environment.  Austerity is proportionally necessary for all,  not to save the banks and the financial system, but to save the environment and humanity.  The question of jobs in the Wisconsin recall election is discouraging.  The debate is over who can create or who has created more jobs.  Nothing is said about what kind of jobs: union jobs with benefits – with the right to collective bargaining?  Are they “green” jobs?  Repair the infra-structure – why? - to support and augment the current economic structure to continue the consumer society?

   It’s a question for Europe’s leaders as well.  Germany wants Greece to bite the bullet and accept austerity but doesn’t Germany have some responsibility?  The reason for the austerity program:
Olli Rehn, European commissioner for economic and financial affairs said, “It’s a false debate,” in reference to differences between France and new president Holande favoring European stimulus programs and Germany’s Merkel favoring austerity for the poor countries such as Greece. “Everyone favors growth, but Germany will not allow old fashioned pump-priming oiled by new deficit spending.  Mrs. Merkel wants sustainable growth.”  (“International Herald Tribune,” May 15, 2012)  But what does sustainable mean, annual 3% growth until doomsday?  It should mean a good life for all while respecting the limits and sacredness of the environment.

   European leaders make no reference to preferential option for the poor or protection for the environment.  We need a different way of thinking- beyond the “age of the enlightenment.”  Where’s the medieval age Francis of Assisi when we need him?

   Respect for the environment: let’s look at a May First document issued in 1980 by U.S Heartland Bishops.  Remember - regional bishop’s conferences were encouraged by Vatican II. 

   “The first human inhabitants of the land were nomadic American Indians.  Although belonging to distinct groupings and cultures, these Native Americans shared an attitude of respect for the earth and for all the natural world.  Their way of life and their religion were based on a sense of harmony with the nature and a sense of gratitude to the Spirit who provided for their needs through the bounty of the earth and other living creatures.” (Strangers and Guests, A Regional Catholic Bishops’ Statement on Land Issues, May 1, 1980, pp. 3-4)

   The “Heartland Bishops” refer to a Homily of John Paul II during a Mass at Yankee Stadium in 1979. (p. 16)   “Christians will want to be in the vanguard in favoring ways of life that decisively break with a frenzy of consumerism, exhausting and joyless.”  “WE MUST FIND A SIMPLE WAY OF LIVING.”

   It is possible to find political agreement on: looking for and finding a “final cause” for the economy.  Two reasons:  a given human natural respect for people and the environment – and survival.

   Karl Marx and C.H. Douglas would say I told you so.  Are there any Distributists around?  Some of their ideas are still viable.  See previous blog posting: March 26, 2012, “Solutions to the Problem of Inequality.”