Debate Over Capitalism Inspired By Selection Of Pope Francis

The selection of Argentina’s Jorge Mario Bergoglio to lead the Catholic Church normally would not be seen as an event that would inspire a great economic debate about the morality of capitalism. But we are not living in normal times. Everything seems to have a political meaning.

In choosing to be known as Pope Francis, Bergoglio has – intentionally or not – inspired a reexamination of the role of capitalism and its impact on poverty.

This debate was echoed in a recent Bloomberg News editorial, which first stated that “we won’t presume to tell him how to think on matters religious” but did encourage Pope Francis to speak to “the best tradition of Catholic economic thought.”

“Ideally, that means recognizing the value of free markets and free economies, and realizing that work and trade endow humans with not just wealth but also dignity and freedom,” argue the editors.

The Moral Case For And Against Capitalism
Is capitalism moral? A simple question. Yet, as Washington Post columnist Steve Pearlstein demonstrates, not one which lends itself to an easy and uncomplicated answer.

In an extended column, Pearlstein looks at the arguments used by both sides. For liberals, the immorality of capitalism is that its goal is not to ensure an equal outcome despite the reality that individuals are not born into equal circumstances. Some are born wealthy, have greater access to education, etc.

Conversely, Pearlstein writes, one of the problems with this argument is that liberals “have yet to articulate the moral principles with which to determine how far the evening-up should go — not just with education but with child care, health care, nutrition, after-school and summer programs, training, and a host of other social services. . . . . Such questions get lost in today’s debate, which is focused on fiscal benchmarking against current spending rather than moral benchmarking against agreed-upon principles.”

Question Is Not Whether Government Is Right Or Wrong, But If Government Is Doing The Right Things
He concludes: “If our moral obligation is to provide everyone with a reasonable shot at economic success within a market system that, by its nature, thrives on unequal outcomes, then we ought to ask not just whether government is doing too much or too little, but whether it is doing the right things.”

Earlier this year, Harvard Business School’s James Heskett wrote an article in which he approached the question of capitalism’s merits from a different vantage point asking whether we have exceeded “the optimal point of inequality” and are now “descending into an era of a vanishing middle class.”

Can Conscious Capitalism Reduce Income Inequality?
Proceeding under the auspices that this is the case, he then addresses the quandary of what next by looking to the arguments made by Whole Foods CEO John Mackey that  “conscious capitalism” can reduce that inequality.

According to Mackey’s definition, conscious capitalism embraces the following:

  • a purpose higher than merely generating profits and shareholder value;
  • integration of all stakeholders in that sense of purpose;
  • conscious leadership devoted to the higher purpose and stakeholder integration;
  • a conscious culture with shared values that reflect the higher purpose.

Listen to a March 13 interview with John Mackey here.

The Philosophers Who Are Shaping The Economic Debate
Jeffrey Dorfman, a professor of economics at the University of Georgia, contends that one reason why compromise has proven elusive in Washington is an inability to agree “on the definitions of such seemingly simple concepts as what it means for the country to be better off, what would constitute an improvement in the general welfare, or even what is fair.”

So, Dorfman probes the philosophies guiding the economic policy disagreements in Washington. The three philosophers identified as shaping the current discussion are:

Italian economist Vilfredo Pareto from the late 1800s and early 1900s; Nicholas Kaldor, a Hungarian economist who became British and produced his key works in the mid 1900s; and American John Rawls, whose 1971 book A Theory of Justice outlined his economic beliefs.




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