Sunday, August 23, 2015

Neither god nor capitalism works in mysterious ways!

The hippie, er, Pope, is on a tear talking up the environment and criticizing capitalism, which will certainly make the right-wing Catholics wonder if Francis is some kind of a Manchurian Candidate ;)  One of the problems I have with the faith-based people, which includes not only the religious but also those who make religions of their favorite causes, is that they often tend to obfuscate facts or even try to hide them.  Ricardo Hausman goes after the Pope with facts.  But, first, what was the Holy See's problem with capitalism?
Pope Francis said in a recent speech in Bolivia: “This system is by now intolerable: farm workers find it intolerable, laborers find it intolerable, communities find it intolerable, peoples find it intolerable. The earth itself – our sister, Mother Earth, as Saint Francis would say – also finds it intolerable.”
Typically, this is what happens when preaching to the choir--there is no dissent. The audience, in fact, leaves even more strengthened in their "faith," which in this case is that all the problems of this world can be attributed to capitalism.

Except for an inconvenient truth--our lives have become way more tolerable than conditions have ever been only thanks to capitalism.  If the Industrial Revolution marks as an easy to reference starting point for the economic system that we now practice, all one has to do is think about life as it was prior to that time period.  How many among us would want to live in the conditions that existed, say, 300 years ago?  (The Pope would, I am sure, because the Vatican was immensely more powerful and influential back then!)

Hausman writes:
In poverty-stricken Bolivia, Francis criticized “the mentality of profit at any price, with no concern for social exclusion or the destruction of nature,” along with “a crude and naive trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.”...
Francis is right to focus attention on the plight of the world’s poorest. Their misery, however, is not the consequence of unbridled capitalism, but of a capitalism that has been bridled in just the wrong way. 
I am no rah-rah fan of capitalism, as the regular readers know all too well.  But then there is no way I will engage in a rhetorical wholesale condemnation either.  Because, there are far too many nuances to think about.  Consider one of the many sweeping accusations of "profit at any price."  Of course, there are atrocious practices like pollution or ill-treatment of the workers, primarily thanks to how those with money are able to rope the government in and get away with such crimes.  But, there is also the other side of the same system that encourages investments even when they do not generate big time profits at all.

You are perhaps thinking that it is so un-capitalistic for the system to voluntarily support when we think it is always "profit at any price."  James Surowiecki writes about " two common but ultimately questionable assumptions":
 The first is that corporate decision-makers care only about the short term. The second is that it’s the stock market that makes them think this way.
Quick. Can you think about capitalistic behavior that has resulted in strong support for companies that don't seem to generate profits?  Stumped?
Of course, there’s no shortage of investors who are myopic. But the market, for the most part, isn’t. That’s why companies like Amazon and Tesla and Netflix, whose profits in the present have typically been a tiny fraction of their market caps, have been able to command colossal valuations. It’s why there’s a steady flow of I.P.O.s for companies with small revenues and nonexistent earnings. And it’s why the biotech industry is now valued at more than a trillion dollars, even though many of the firms have yet to bring a single drug to market. None of these things are what you’d expect from a market dominated by short-term considerations.
Back when the Pope ruled the world, freedom was not known to most of the world, except for a tiny few who were the rich and the powerful.  It was a world of slavery and diseases and tortures and short-lives and poverty and starvation.  We have a lot more to do in order to address diseases and poverty and starvation and many more human sufferings.  But, no soaring rhetoric condemning capitalism will deliver any miracles, even if the faithful blindly believe in the power of miracles.



Mike Hoth said...

I'm starting to wonder if you just miss my jabber with the topics of your recent blog posts! I may also be required to point out that while many of the "faithful" have a tendency to follow to Pope's word as truth, that is less a problem with the zealous followers and more of an issue with the lazy ones. We are far too easy to fool and much too lazy to avoid it (we as a general term for humans) and thus, we fall into these groups.
There is simply too much stuff to know for all of us to research it ourselves, and most people will therefore seek a source with many answers. A holy book, a news channel...The Economist, perhaps? :) There is nothing wrong with this strategy, but nobody wants their source to be wrong because they've put too many eggs in that basket to just drop it. Thus, even when that source says something as silly as "Capitalism has made everything worse" many people will ignore any other data to support him. They can't afford for him to be wrong!

Sriram Khé said...

If these are the kinds of topics that draw you to this blog, then, it seems like you will comment about the latest blog-post too ;)

"because they've put too many eggs in that basket to just drop it" ... which is why after a while the committed religious fundamentalist has no option but to further entrench in that fundamentalism. A Greenpeace activist has to go about protesting. Educators have to defend their ways of teaching. We keep going along these lines and it becomes all the more clear why I finally chose the name for this blog that I have had for a while now: professions conspire against those who are not familiar with the details of that professional practice. Honest inquiry often could compel us to change our opinions, but if we had tied our existence to a false narrative then, of course the instinct is to cover up what is real ;)

"There is simply too much stuff to know for all of us to research it ourselves" ... indeed. But then education means that we should inquire into something when we feel that it could be too good to be true ... I suppose I am always more suspicious of clean and convincing narratives than I am of the murky ones ...

Ramesh said...

I am a rah rah fan of capitalism, but I daresay thou protest too much. I glanced through the Pope's speech and the word capitalism does not feature even once, I think. He did condemn "the mentality of profit at any price, with no concern for social exclusion or the destruction of nature?" - are you going to seriously object to that ? He is arguing against greed being the sole motivator . I see nothing wrong with that. Sure there is a strong leftist slant to his argument, but that is only to be expected.

He has sympathised with "the endangered campesino, the poor laborer, the downtrodden native, the homeless family, the persecuted migrant, the unemployed young person, the exploited child, the mother who lost her child in a shootout because the barrio was occupied by drugdealers, the father who lost his daughter to enslavement…." So its not capitalism he is taking an extreme position against. He is just, if I may suggest, doing his job !

This Pope is a huge breath of fresh air to the Catholic World. He can hardly be termed extreme - he is understanding, compassionate and is willing to challenge the stuffy Vatican Ramamritham.

Sriram Khé said...


Most read this past month