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Structural Weaknesses of Capitalism
Ignorance and ideology replaced facts and economic fairness under Reagan. Reagan appealed to the Laffer curve and argued tax cuts would bring higher revenues. He confused investment and speculation, SROs and SUVs, militarism and security and held the self-healing market was the panacea and government was the problem. The Enron model of fraud included future profits in present balance sheets. Like predator tigers, the financial speculative banks burst their cases with the help of Reagan, Clinton and Obama and made private losses into public losses.
STRUCTURAL WEAKNESSES OF CAPITALISM
By Thomas Gehrig
[This article (Ein Gespenst im Vatikan) published in December 2013 is translated abridged from the German on the Internet, http://www.links-netz.de/T_texte/T_gehrig_vatikan.html.]
Pope Francis expressed himself clearly in a “fiery appeal” or “policy statement” on social themes. The pope is serious and gives all honors to his patron saint. The poverty-orientation of the mendicant order founder Francis of Assisi celebrates a resurrection at the Holy See: “Revolution in the Vatican”! (SZ, Sueddeutsche Zeitung, 11/27/2013). The pope regards our economic system as “unjust in its root”! Under the title “This economy kills,” the pope composed “a kind of inflammatory speech in which he fundamentally questioned the economic- and financial system” (FR, Frankfurter Rundschau, 11/27/2013). “The pope’s criticism of capitalism and wealth is left-rational” (SZ, 11/27/2013). “The man is not liberal” (Orobinski SZ, 11/26/2013).
The pope warns of what liberalism praises on its banners. The pope does not trust any more the “blind forces and invisible hand of the market” (Evangelii Gaudium). He demands a social policy that should be more “than a mere income support system.” “Dignified work and access to the educational- and health systems” should be possible for everyone. He turns against social inequality, the structural causes of unequal distribution of incomes and their “ideologies […] that defend the absolute autonomy of the markets and financial speculation.” He wants to solve problems from the root and for him the roots lie in this economy. He speaks of the “dichotomy between economy and public welfare” where others identify one with the other. He castigates that economy that runs “according to the criteria of competitiveness and the law of the stronger where the more powerful destroy the weaker.” The latter is part of the essence of the capitalist economy’s success and the resulting inequality. “Just as the command `you shall not kill’ sets a clear limit to protect human life, we must say a No to an economy of exclusion and disparity of incomes. This economy kills.” The pope speaks of the “excluded who are waste” and not only “exploited.” He thinks this is a new phenomenon but it is the well-known problem of the superfluous population as old as capitalism itself.
If that is our dominant religion, all are now “slaves of an individualistic, indifferent and selfish mentality” (Evangelii Gaudium) and dependent on our paymasters.
According to the biblical narrative of the New Testament, its protagonist spoke out very clearly in many passages against wealth. Riches are a kind of exclusion criterion for the community of faith. “No one can serve two masters: for either he will hate the one and love the other or he will be devoted to the one and despise the other. You cannot serve God and mammon” (Mt 6,24). What hard words! We could also recall the passage about the camel and the eye of the needle (Lk 18,25) in which God’s reign produces exclusion: that of the rich. A successful history of textual interpretation began and continues today since the consequences are intolerable for the ruling system.
In the latest message the other nasty side of Christianity appears. This means straightening practice for the frightened liberal world enlightened. Some try this. First the attack of God’s representative is admitted. Christianity has that disagreeable tradition. It extends from the early Christian communities in which the Jesus narrative was invented, church fathers like John Chrysostom to the social encyclicals of our day. “Unhappily a system is connected with industry that sees profit as the real motor of social progress, competition as the highest law of the economy and ownership of goods as an absolute right without limits and without corresponding obligations to society” (Pope Paul VI, 1967 encyclical).
Pope Francis hearkens back to this tradition. However according to Reiner Hank, he supports “a very uncouth anti-capitalism” (Hank FAS, 1/12/2013)… To him the pope seems infected by the “late-Marxist theology of liberation.” He speaks of a “revolution of the economy toward a socialist society of equals and nurses “anti-capitalist resentment.”
Unfortunately no final victory could be gained against that “great seductive power” exerted by the old “utopia of a Christian communism.” In his panic, Hank passes through the historical worn out nag. He says “Christianity” always had a very distanced relation to private property and “detested” riches. However that was largely ideology in the history of Christianity up to today – poverty-ideology, instrument of rule and 9only seriously intended opposition in a few special circumstances, opposition even against as church as an institution of power. The movement of mendicant orders led to social marginalization or to the Christian stake. The so-called theology of liberation that Hank regards as failed is not hegemonial in Christian churches.
Pope Francis leaves “no doubt” (Hank 2013) that those working models that “defend the absolute autonomy of the markets and financial speculation” are “ideologies (Evangelii Gaudium) that the pope detests. He considers those theories “erroneous” (Hank 2013) “that assume all economic growth helped along by the free market by itself creates greater equality and social bonds in the world” (Evangelii Gaudium). That is the perspective of liberal defenders of capitalism.
The pope is not a “defender of private property” (Hank 2013). No, he sees theft in property and quotes John Chrysostom (350-407). “To not share one’s goods with the poor means to steal them. The goods we possess belong to them, not to us” (Evangelii Gaudium).
On the other hand for Hank, the Pentecostal communities are bearers of hope of a religion of the rational. In them “hard diligence and the capacity for social balance should be awarded prizes and not discredited by liberation theology.” Why not scientology, one could ask Hank. However the pope does not taker note that poverty and in3equality have decreased in Latin America in course of free enterprise reforms. Today a billion people less than twenty years ago starve in the world. “The growth successes of a capitalist economy are responsible for that” (Hank 2013)… Deng Xiaoping is praised as a shining model of capitalism.
Jorg Bremer in FAS emphasizes the new pope comes from Latin America but comes to a somewhat different conclusion than his colleague because “social market economy remains a foreign world” there. That is the reason the pope regards “the economic system of the West generally as `unjust in its root’” (Bremer FAS, 12/1/2013).
In summary the pope according to Hank has “only mercy and alms to offer the poor” like Mother Te4resa and criticizes redistribution, socialism and communism. What he really wants to say is his personal article of faith: “that the market economy and capitalism are needed to overcome poverty” and “this pope – in his late-Marxist blindness or delusion – cannot see this” (Hank 2013). On the contrary he sees through these ideologies and criticizes the “trickle-down theory” that assumes that all economic growth furthered by the free market by itself creates social bonds” (Evangelii Gaudium). This view, as the pope says, has never been confirmed by facts.
On the everyday liberal “fighting poverty,” the question was asked in the same FAS whether Germany was really the “land of seven million poor devils” (cf. 2013 Data report) and now needs care-packages. The statistical calculation, the concept of relative poverty, is criticized. People can live well in relative poverty. Everyone is not improved when the economy advances. “We work with a politically deformed concept of poverty” (Petersdorf 2013). Whoever has less than 60 percent of the median income – 980 euro in Germany 2011 – is described as poverty-endangered.
Who is now behind this sleight of hand? Answer: the social state! “As long as poverty can be represented statistically, there is a legitimation for building the social state” (Petersdorf 2013). The findings could be presented more positively. “The same fact could be read very differently when one proclaims to the astonished world: In Germany, three-quarters of the poor do not live without regular meals” (Petersdorf 2013). 40 percent can afford a vacation, 70 percent a car and 85 percent a computer. “Only three percent of the people say they cannot manage with their monthly income” (Petersdorf 2013). However they say this after receiving their social transfer which is put in question here.
The poverty-calculation is based on the calculation of relative poverty – which is entirely sensible – and describes social inequality. The intention of authors like Petersdorf is to make this inequality appear acceptable. Only a very small part of the 6.7 million persons graded as poverty-endangered are on the breadline. The poor can drive cars, play on the computer etc.
Let us return to Hank. Cardinal Reinhard Marx explicitly contradicts Hank in the following FAS: “No the church does not despise the rich” (Marx 2013). The criticism of the pope amounts to “the reproach the church does not understand capitalism which ultimately improves the world.” On the other hand Cardinal Marx does not see it t6hat way and defends the pope’s appeal “to think beyond capitalism.” The poverty going along with capitalism must be fought structurally, not only charitably.” The cardinal reminds Hank that it was today’s “finance capitalism” that led (and thus killed) in a “catastrophic crisis.” “Capitalism,” cardinal Marx said, “must not become the social model.” He turns against the “excesses of primitive capitalism” and the continuing “economization” of the world which means “making the rhythm of society dependent on the exploitation interests of capital.” Capitalism becomes “the global and all-embracing standard.” Capitalism is “seen as an “original or natural event” – without alternative. Understanding progress as “evolution of this capitalism” is ideology just like “the notion that there could be pure markets that could produce the good in a free competition.” “The future is not capitalism.”
That is anti-capitalism. However the well-known game “bad capitalism – good market economy” now follows with Marx. The term capitalism “leads astray like all `isms’ that claim to define all life from a certain point” – like Catholicism, Protestantism, conservatism and liberalism. “Capitalism and market economy are not the same.” The criticism of the pope has nothing to do with a “rejection of the market economy” since a market economy is “necessary” and “rational.” What is the distinction? Do moral criteria govern in the social-democratic state? Still the structural causes of poverty, exploitation and exclusion that are deeply rooted in the capitalist production method cannot be removed in principle.
Heribert Prantl in the SZ (Sueddeutsche Zeitung newspaper “Does capitalism kill?”, 12/9/2013) offers a soft confession that mainly seeks to pour water in the wine of the papal message. He also plays the well-worn game “bad capitalism versus good social market economy.” “Francis meant radical capitalism, not the social market economy.” That only kills – perhaps. The message of the pope is only “admonition.” Clearly “capitalism is not good per se. Capitalism has weaknesses, structural weaknesses.” Prantl calls “radical capitalism” a “primitive religious doctrine.” He admonishes in view of the excesses and thus can rescue the whole. What “structural” means is dubious here. Can structural weakness be controlled through rational policy and reforms? Is the social market economy a structurally changed capitalism? What system do we presently have? The pope’s criticism was directed at the “root” of the system. The citizen is not told what that meant.
The SZ-economics editor rejects Pope Francis’ criticism of the absolute autonomy of the market.
The editors of the Frankfurter Allgemein newspaper should be questioned. What can we do for our readers given such an apostolic writing so their spiritual welfare is not harder on their stomachs than the stock prices?
As the command “you shall not kill” sets clear limits to protect human life, a “No” to an economy of exclusion and disparity of income” is imperative today (Evangelii Gaudium). The engagement of the pope opposes the conservative’s sense of reality: “Ding Dong! Marx is dead! Ding Dong! Communism is dead! (Boris Johnson, London’s conservative mayor). Inequality is necessary and the market is our master…A person is not as do-gooder; a person is an egoistic swine (a profit maximizer, a homo oeconomicus). That combines excellently with our economic system. “I do not believe economic equality is possible. A measure of inequality is indispensable for the spirit of envy. Like greed, envy is a valuable spur for economic activity” (Johnson).
When everyone acts according to their inner greed, the natural basic equipment alone makes the difference – some have better genes making them fit for survival training in capitalism that others call life. “Whatever you hold of IQ tests – in a discussion about equality it is relevant that 16 percent of our species has an IQ under 85 while two pe4rcent have one above 130” (Johnson). At the end Johnson recommends to hearers of his Margaret Thatcher’s lectures the “mentality of proud pirates” “for whom being rich is not a shame but the opposite” (Johnson). And the weak go off the plank!
The dilemma exists for the middle class as well as for Christianity, not to put capitalism in question (on principle) and at the same time to react to its system-conditioned inhuman social consequences which they only gloss over with social reform. Christians have a word for that: hypocrisy. Unfortunately one cannot solve the contradictions of this society.
Do we now see that the Catholic Church is taken over by a horde of anti-capitalists? Keep calm. The pope is not a communist, thanks be to God. He transports the necessary ambivalences of a rule ideology in a modern garb, perhaps with a stronger emphasis on the social given the obvious success of neoliberal competition which provokes reactions from the middle class. For the pope, the activity of an entrepreneur is a “noble work” (Evangelii Gaudium). He has moral outrage about the relation of poor and rich and no understanding of capitalist exploitation. If he were read politically, the question would be what followed from the root-criticism and what does it mean – aside from political reforms? In this regard he is different from the political governors on earth and from communism.
The emancipation of the woman was the standard of social emancipation for others. Other programmatic writings understood that their chains remain with the dominant society even if they are golden and their tension is more relaxed. In such a perspective, self-determination is the basic orientation. Religion on the other hand – where its representatives like the pope turn against the “fetish money” remains caught in fetishist consciousness…
“The ideology of Marxism is false,” Francis emphasized in an interview with the Italian newspaper La Stampa (SZ, 12/16/2013). Where it becomes ideology, Marxism cannot fulfill any claim of truth any more than theology and the economy of capital. On the other hand Marxist theory is criticism and is oriented in self-liberation. “The criticism of religion ends with the theory that the person is the highest being and with the categorical imperative to overturn all conditions where the person is a humiliated, enslaved, abandoned and contemptible being” (Marx 1844).
In the FAS section “Money and More” on the fourth Sunday in Advent, Thomas Mayer described capitalism as the best of all worlds. “The capitalist economic system in the past thirty years has delivered a billion people out of poverty where the socialist system brought them.” How could he say that? Where do we find the countless examples that a socialist (or state-capitalist) state made people poor?
Mayer obviously does not share the pope’s love of regulation. “How can we know that new regulations will improve things? The phenomenon of greed is ultimately as old as humanity.” Does he mean the genetic greed for success measured in the currency of the dominant system? He comes close to a self-knowledge when he associated his church tax payments with the modern indulgence trade. They do not help people enter heaven today but are social demonstrations of adjustment and affirmation. That must have been clear to him as a protestant. Serious discussion about what the faith content of the Christian religion could be is completely irrelevant. Behold your greed, makes capitalism function.
Stefan Meretz, CRITICISM OF POPE FRANCIS
[This article posted on December 10, 2013 is translated from the German on the Internet, http://www.streifzuege.org/2013/exklusionslogik