The day has arrived. The much awaited day of wreckoning (yes I misspelled that on purpose) between Paul, the Free Marketeer, and Josh, the Chestertonian Distributivist. This is the third and final part of our three part series, so those of you who haven’t caught up yet, you might want to go back and read the other previous posts first. Paul’s post is here and Josh’s is here. This post will be a bit longer, as it is two responses posted together. The first reply will be by Paul.
PAUL VS JOSH
Yes, that’s right. I am just prideful enough to start this section with the Latin word St. Thomas Aquinas used before all of his counterpoints, but I’m humble enough to admit how prideful that makes me.
Pretend this is the face you see when you picture me writing this.
So in response to what Joshua Clemmons, as well as to several others who commented on our posts–many of whom said I was guilty of market idealism (though government idealism is, perhaps equally dangerous)–I offer the following food for thought.
THE DOCTRINE WILL NOW SEE YOU
I thoroughly enjoyed reading Josh’s post, and not only because his well-researched and elegant prose made my blog post look like a third grade essay but also because he made some seriously strong points.
Side-by-side rendering of our two blog posts (mine on the left)
NATURAL LAW, NATURALLY
Now, I understand that Pope Francis is trying to caution against greed and that is a healthy caution. But there’s one side of his profit equation that Pope Francis doesn’t mention. There’s no switch that businessmen can simply flip to “maximize profit mode.” Profits come from somewhere, and unless you’ve got a healthy flow of tax-payer dollars heading your direction, the only way you make profit is by running a business well. To do that you have to have consumers who are (brace for the italics)willing to pay for what you are selling. Ultimately the market boils down to the Law of Supply and Demand, which is as much a law as the Law of Gravity. Interestingly enough, they both follow the logic of “what goes up, must come down,” but allow me to explain.
Let’s say in a disaster of improbable magnitude all cars in Texas stop working but the one I’m renting out on RelayRides. Demand for that car just shot through the roof (thankfully, it has a sun-roof). Now, let’s say I’m nice about it, but I still realize that there are too many people for the one car–how should I take that into consideration? By raising the price. Simple. Now only the people willing to pay top dollar for a rare good will pay, and I can make money for being willing to sacrifice the use of the lone vehicle myself (realistically I would just park it and pretend it doesn’t work lest a Walking-Dead-type scenario ensues).
But something else happens. People from out of State, hearing that I can charge insane amounts of money for renting a car out bring their extra vehicles into the State in order to make extra money. They cannot simply charge the same price though; to get an edge they undercut my price. If enough people do this, the price eventually drops as supply meets demand, and three things happen: 1) everyone has cars again, 2) they are no longer expensive, and 3) even more people have moved to Texas. In a competitive system, what goes up, must come down.
There’s only one exception to this rule, and you guessed it: government intervention.
ONE MEDALLION TO RULE THEM ALL
To keep with the car scenario but to give it a different spin, let’s look at the face-off between cab drivers and Uber in NYC:
Sukhdev Singh has been driving a yellow cab for five years now. An immigrant from India, Singh moved to New Jersey when he was 12-years-old. He now owns a cab and a medallion which he bought along with his brother for $950,000 about one year ago. Singh’s livelihood, however, has become precarious with the emergence of Uber.
The cab medallions are a government invented system that artificially constricts the supply of cabs while driving up the price to run one, which cab drivers pass on to their riders…making everyone but government officials poorer. There are even medallion leasing companies that profit off of the profit that the government makes by artificially reducing supply. Talk about a waste of productivity.
So what has Uber done? Well again, what goes up, must come down. Seeing the high prices a cab company can fetch, they have gone and found a better way.
Uber has offered a more efficient, low-cost alternative to what was essentially a mafia-esque racket for generating income for the State at the expense of everyone else. But then some guy with a better idea found a way to create a better system that enriched the consumer (lower cab fare equals more dollars that stay in my pocket), the drivers (no million dollar down-payment just to be able to do the incredibly difficult job of…drumroll…driving a car), and yes, for the owner of Uber himself. This obviously doesn’t make him a bad person. Who’s to say the government officials were not also looking out for their own interests…but without adding any more value? I’d rather let the owner of Uber make money since he has done everyone a service.
And this is what we see time and time again: what the free market always and everywhere encourages is a decrease in costs to the consumer. If the yellow cabs are too expensive, partly because there are too few of them (partly because New York just decided there would be (partly so I could do more parentheses)), then someone else will find a way to deliver more cabs faster at a lower cost and make my life a little less expensive in the process. Plus they have an app that shows you where the car is. You can SEE it driving towards you on your PHONE. How awesome is that? (Note-to-self: make an app that does the same thing but for parents who want to keep track of their teenagers…call it pUBERty.)
A PROFIT IS NOT WITHOUT WELCOME
In closing, I simply want to leave you with a quote from the Church, because Catechism:
In the work of teaching and applying Christian morality, the Church needs the dedication of pastors, the knowledge of theologians, and the contribution of all Christians and men of good will….Thus the Holy Spirit can use the humblest to enlighten the learned and those in the highest positions (emphasis mine, CCC 2038).
So even the Catechism says we have to seek wisdom in places we would not normally expect to find it, even from the humblest of sources. And though I can in no way be included in that category, and while I still recognize that I am not the authority on all things faith and morals, I do have enough faith and morals to recognize the laws of nature when I see them.
FOR YOUR REFERENCE
These three articles provide some fantastic reference material, all three are far more academic in their approach than much of the polemics we’ve seen hurled around on the interwebs during this debate. If you want to learn more about the interplay between state, markets, and the environment from a more free market perspective, this article from The New Atlantis is awesome. Many have notedincluding myself that environmentalism is far more like a religion than a group of objective scientists. The Pope has aligned himself politically with a group of allies who would be very happy to see the end of Christianity. This article provides greater clarity on the church’s stance on the environment and the important data that Laudato Si left out. For more information on how the market can provide greater protection for the diocese than the state can, read the infamous Murray Rothbard as he writes exactly how property rights is the answer to environmental protection.
A Response to The Market: The Love of Neighbor, Love of Self
I really appreciate Paul Kolker’s upbeat personality showing through in The Market, but I take issue with his claims! Unfortunate. I will give a brief but systematic response in order to, I hope, demolish his theses in the most effective polemical charity I can muster. Enjoy!
I take the liberty to paraphrase Paul’s view on the market, based on what I gleaned from his assertions. The market contains accountability built in, is more effective than the state, incentivizes us to work for the common good, and it embodies the commandment of love of neighbor. In this system, profit is a measure of service. In other words, the Market is the embodiment of love, compelling us to the same, and those who avail themselves of it are blessed for their service. There are a number of problems with this vision of the market, not to mention that one could justly replace the word “market” with “Jesus” and have a complete theological treatise. Let’s go a bit deeper though.
First, let me state the obvious: the market does not incentivize anything. An encounter with the value of one’s neighbor inspires our love, not a system that allows for our exchange of goods and services. The market is not against the love of neighbor, but it does not inherently foster it either, or else we forget man’s fallen state. The market, like money, is ambivalent on the matter.
They say that you have to spend money to make money. What follows is that those with more financial means have more potential to increase their financial means. If we think of the competition and teamwork that exists within a market on the analogy of a basketball game, we must think of it as a game of make-it-take-it, with the caveat that when a team wins a point their players get taller and faster. How do you think that game will play out? As soon as you get sufficiently ahead, your competition is no longer competitive. Translated into the market economy, the wealth gap grows and the rich get richer and the poor get poorer (relative, not necessarily absolute poverty increases). This alone does away with Paul’s assertion upon which the larger part of his argument hinges: “The market system necessarily embodies this commandment (of love of neighbor) because in a competitive system people are not going to settle for being mistreated.” Those being mistreated cannot compete! Human trafficking is a market. It is noteworthy that when the wealth of nations is overly concentrated, power is too! What’s called for on our analogy is a regular game of basketball with referees and rulebooks. The market needs a proper juridical framework with accountability in order to be oriented toward the common good.
Paul talks about the market’s inbuilt accountability. Perhaps a certain kind of accountability is built into the market based on the consumer’s control over demand. However, this accountability is not necessarily oriented to the common good, because we know that societies’ many demands are not necessarily, how shall I say,…holy. An example of a market with inbuilt accountability is the black market. Pimps, loan sharks, mob bosses, drug- and warlords all keep their organizations accountable, no? And their services meet demands, or else there would be no black market. If we fail to recognize that there is a place for governance and civil society to influence the market and delimit its freedom because of an ideology that says that the Market will provide, then we will and do hinder the human family from obtaining the common good. It will provide, but only the goods and services that we demand. Culture, good and bad, fosters demand, but culture cannot flourish properly without the ability of all within society to participate economically. Nuff said on that point.
What’s more interesting is that the idea of a good that is common is different than joint activity forprivate goods achieved through contractual arrangements. The private ends achieved through a contract are not “common goods”. One person wants a car for the weekend while the other wants the profit achieved by renting it. They both walk away with what they want and commutative justiceis achieved. There is nothing wrong with that! Their desires coalesce for joint action, but these are different goods, not a common one. This is one area in which the market fails, left to itself; not in forming relationships, not in efficiently increasing net wealth, but assuring distributive justice and the common good (Summa Theologica, II-II, Q. 61).
In summation: the Church and Pope Francis are concerned with a growing idealization of the market, as if it were immune from corruption or misdirection and a vision of society as an amalgamation of private interests rather than a unity with a common good. We are all urged to humbly and faithfully measure the varying weight of authority within the social teachings of the Church, even within a singular document, and align ourselves with our faith prior to any other teachings that might suit our fancy (2 Tim 4:3).
EXCURSUS: DEFENDING THE POPE
Paul, and many others like him are decrying the Pope for his so called attacks on business.
Pope Francis is not against business (Laudato si, 29)! The personal example that Paul gives, of how the market works, would not be a problem for the Pope or the Church. On another note, Paul says: “the language of Pope Francis’ commentary on economic and political issues has been far more critical than any Pope in history.” This just is not true. Francisco has not been more critical than previous popes. Others have been just as critical (John Paul II, Centesimus annus, 40, 42; Paul VI,Populorum progressio, 26, 33, 58; Octogesima adveniens, 9,61, 88; John XXIII, Mater et magistra, 38, 39, 71; Benedict XVI, Caritas in veritate, 35). Why is this continuity so important? The social doctrine of the Church cannot be treated as having the same weight of authority in all its parts. Even within a single encyclical, there is often varying authority which calls the faithful to differing degrees of assent. Something that can add weight to a teaching is the frequency with which it is proposed (Lumen Gentium, 25). For more, I suggest Thomas Storck’s article ““What Authority Does Catholic Social Teaching Have?”.
Paul sounds an alarm regarding the Pope’s call for wide reaching global governance with appropriate power commensurate with its charge, suggesting that this is radically new for a pope—i.e. infrequent. Francis’ urging is not new and comes, ironically, in the form of a quotation of a previous pope, Benedict XVI, who in turn refers to Pope St. John XXIII (LS, 175; Pacem in terris, 137; see also Caritas in veritate, 24). A faithful Catholic would need to take the proposal with a high degree of deference, seeking to understand what is being proposed rather than seeing in it a call for an unjust consolidation of power. On the analogy of the basketball game, our historical situation regarding the relationship between the modern sovereign state and the global market is as if the game has multiple balls, multiple baskets, and the crowd is rushing the court, all the while the number of referees remains the same. It seems the Church is humbly suggesting the need for more referees. I suggest watching Russell Hittinger’s talk “The Theologico-Political Problem Today”.