…is the law of gravity an accomplice?
Recently I caused a small dust-up at my Facebook page by citing (approvingly) Pope Francis in this recent Business Insider story, “Not paying fairly … [and] only looking at how to make a profit … goes against God!” and then adding, “I do wonder what, technically and practically, he means by ‘not paying fairly’. What wage would he set up in Bangladesh, exactly? My question is of the ‘Yes, and then…?’ kind. Remove all those low-paying jobs in the name of dignity! Yes! And then replace them with what? And by whom?”
Here are some of the responses I got:
A: $50 a month is not a fair wage in any country. … The bottom line, especially among so-called Christian companies should not be profit, but what is right and just before God.
B: A living one…
C: No easy answers. Everyone should be worthy of work that gives them a sense of dignity and purpose.
D: If a business cannot afford to pay its bread and butter employees a fair wage, it does not have a solvent business model.
This led me to ruminate a few days later:
There’s a twofold reason economics is called the dismal science: either because its best conclusions are sentimentally unappealing, or because its more aesthetically appealing claims are also its most vague and impractical. I sometimes joke with students who ask me, “What’s the answer to X?” by saying, “The correct answer.” Unfortunately, when I ask what the “moral” or “religious” solution to labor injustice is, I hear that it’s a living wage, a matter of equity/dignity, complex but obviously not Y, etc. That kind of reply, however, is a case of the second mode of how economics is dismal: it’s sentimentally attractive precisely because it’s so vague and protean. It allows one to say the right things without providing any clear, real-world measures for actually solving the problem. Blame the bankers! Blame the businessmen! Blame The Man! (Err, did someone say “Blame The Jew!”?) Yawn. So I find my choices as a socially minded Catholic, frankly, extremely gloomy. I can reject capitalist reasoning on theological and moral grounds, but be rationally unconvinced of the economic coherence of “moral” economics, or reject ephemeral rhetoric about “social justice”, but be labeled a Heartless White Male Oppressor™. Hrmph. Now I’ll get back to reconciling myself to the economic equivalent of Young Earth Creationism.
I’m currently of the belief that there are objective laws of economic transaction, whether they be located in evolved human biology or in the parameters of information exchange. As Henry Hazlitt defined it in Economics in One Lesson (1946), “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.” Competence in any art requires acknowledging and ‘cooperating’ with the objective features and limitations of the medium. The responses I got from A, B, C, and D dodge this objectiveness. Moralizing about the market without respecting its objectivity is like feigning outrage at how cruelly gravity pulled the man down from the window when you pushed him out.
As Jay Richards writes in Money, Greed, and God: Why Capitalism is the Solution Not the Problem (p. 5):
No serious Christian writing about natural science would ignore the the basic facts of chemistry or astronomy. But too many Christian leaders feel free to ignore the basic facts of economics. This is a serious mistake, because economics is not just a bunch of baseless opinions. The twentieth century was one big lab experiment for the economic theories of the eighteenth and nineteenth centuries. The results … are in … [and it’s] time for Christians to take an honest look at the economic facts and get acquainted with capitalism.
Richards continues (pp. 7–8):
Economic truths are truths. But they don’t stand outside God’s dominion. … We suspect [a contradiction between capitalism and Christianity] because many of capitalism’s champions and critics miss the subtleties of the capitalist system: to prosper, a market economy needs not just competition, but rule of law and virtues like cooperation, stable families, self-sacrifice, a commitment to delayed gratification, and a willingness to risk based on future hope. These all fit nicely with the Christian worldview.
Moreover, … the essence of capitalism is not greed. It’s not even competition, private property, or the pursuit of rational self-interest. These last three items … are key ingredient in a market economy … but the heart of capitalism lies in [allowing] wealth to be created…. And only the creation of wealth will reduce poverty in the long run.
Richards then sharpens the paradox (emphases mine):
Paradoxically, the key source of material wealth in a modern market economy is immaterial. It’s spiritual. Wealth is created when our creative freedom is allowed to prosper in a free-market environment undergirded by the rule of law and suffused with a rich moral culture. … Our creative freedom [à la capitalism] reflects [our being created in God’s image]. This is one of the least appreciated truths of economics.
(I’m finally getting around to reading Richards’ book in order to keep my spirits up about these matters and find some measure of intellectual solace.)
How many jobs have my anti-capitalist friends or Pope Francis given to the Bangladeshis (other than those, I mean, subsidized by their own transactions in the global market)? In his refutation of what he calls “the Nirvana Myth,” Richards reminds us (p. 31), “When we ask whether we can build a just society, we need to keep the question nailed to solid ground: just compared with what?” My liberal friends A, B, C, D, et al. want there to be “good businesspeople” in the world––but what do they mean by “good”? Good as in morally righteous or good as in fiscally competent? It is economically wrong––or bad––to tell an entrepreneur that he can be a “good” business owner by avoiding profits. You can’t review his 2012 earnings and tell him that $60,000 of it should have gone to the local homeless shelter, since he only has a surplus of at least $60,000 because he sought ample profits in the first place. Nor can you scold him into steering this year’s profits into charity in order to be a “good” businessman by 2014, since by then, his aversion to profits will reduce what he could give to charity. And on it goes. As Richards notes (p. 3), “We hear about ‘business ethics,’ as if business had unique moral hazards not encountered in the law or medicine or education or the ministry. Few have ever heard a sermon that dignifies business as a calling” (emphasis mine). That is a scandal against the sovereignty of God, as if He could not sanctify the humans He loves in the entire sphere of business.
The root of the problem is that it is a fallacy to say that businesspeople cannot practice charity while also practicing sound business policies. He does have a moral duty to give what he pledges to his workers; withholding their wages would indeed be unjust (cf. James 5:1–6). Slave labour, as Pope Francis hyperbolically called conditions in Bangladesh, is the absence of payment for labor. Precisely because workers there have made a pledge to work for the capital their employer is offering up front, sometimes years before long-term profits start rolling in, means they agree to the terms of their labor, which is the antithesis of slavery.