Pope Francis and Capitalism

I are a Capitalist

Shortly after being elected Pope last year, Pope Francis issued an encyclical letter, entitled "Evangelium Gaudium", or the Joy of Evangelization. The letter was directed mainly to the Catholic faithful but in a brief section designed to put his message in context the Pope seemed to direct his words to a wider audience. The section was entitled “Some Challenges in Today’s World.”

The Pope complained that “the majority of our contemporaries are barely living from day to day, and that “inequality is increasingly evident.” This inequality has resulted from “the enormous qualitative, quantitative, rapid and cumulative advances occurring in the sciences and in technology.”

The Pope insisted that we must say no to “an economy of exclusion and inequality,” and asked the often-quoted question, “How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points?”

He singled out for special criticism a kind of economic Darwinism.

“Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.”

He argued that so-called “trickle down” theories based on the idea that economic growth will make the tide rise for both rich and poor do not really work. They express “a crude and naïve trust in the goodness of those wielding economic power.”

There may be theories of this kind in the world today but I do not know of any place where the kind of unfettered or uncontrolled capitalism that the Pope mentioned actually exists. If inequality is actually increasing in the world today, it is going hand in hand with increasing state regulation and control of economies.

The Pope was not speaking infallibly in his encyclical. He admitted that:

“It is not the task of the Pope to offer a detailed and complete analysis of contemporary reality, but I do exhort all the communities to an “ever watchful scrutiny of the signs of the times.”

As an ordinary Catholic I would like to offer an anecdotal and incomplete analysis of the signs of the times based on my own experience.

I have to confess that I am a Capitalist. I even remember the year I became a Capitalist. In 1965 I was hired, right out of graduate school, as an Instructor to teach History at Sacred Heart University, a small, recently opened institution of higher learning in Fairfield, Connecticut.

Sacred Heart could hardly be called a university in those days. It was a small liberal arts college with the distinction of being the only Catholic college in the country staffed and run entirely by laymen. When I arrived the school was only in its third year of existence and the faculty was still in the process of formation.

Anyway, a few weeks after classes started the Business Manager of the school approached me to ask if I wanted to sign up for the fledgling school’s retirement plan. He explained that if I agreed to allocate a small percentage of my pay toward retirement, the university would match my contribution.

My starting salary back in 1965 was about $6000 and I had a wife and one small child. Retirement was the last thing on my mind. Nevertheless, it seemed like a good deal especially since the university would match it. If I reduced my pay by 6% or $30 per month, the university would add that much to my account. The reduction in take home pay would only be about $25 per month.

After I agreed to sign up, the Business Manager told me that I would have a choice of where my small contributions would be invested. Sacred Heart University had joined with the great majority of colleges and universities in the country to utilize the services of the Teachers’ Retirement and Annuity Association (TIAA) to administer and manage its retirement plan. The university would deduct the contribution and send it along with their matching contribution to TIAA where it would be invested as I chose.

At that time, there were only two investment choices. The first was a fixed or guaranteed account like a bank account. The principal in the account was guaranteed by the insurance company and it would earn a fixed rate of interest. The second option was a variable account where my contributions would be invested in a diversified portfolio of common stock. In this account, there were no guarantees. The principal value would fluctuate according to the vagaries of the stock market, and there could be no predicting what the actual rate of return would be.

Like the majority of teachers I elected to split my retirement equally between the fixed and variable account. I was not a student of finance or the stock market, and just decided to do what most others seemed to be doing. I had no idea that in electing to put half in the variable account that I was becoming a Capitalist.

The variable account was a relatively new creation. It was a mutual fund but since it was run by an insurance company, it was called a variable annuity. After years of lobbying TIAA had finally convinced the Government to allow insurance companies to get into the booming mutual fund business. TIAA’s variable annuity fund was called the College Retirement Equity Fund (CREF), and it would in time become one of the largest pools of investment dollars in the world.

When my little contribution went into CREF each month, I became a part, although very small, owner of practically every major company in the USA. Whatever their political feelings or philosophy, thousands and thousands of other college teachers throughout the country were also becoming Capitalists. We all were becoming owners of a slice of the American pie. Moreover, the government agreed not to tax our contributions or their earnings until we retired. 

Over the next fifty years the features of this type of retirement plan would be extended to a larger and larger segment of American workers. Self-employed individuals were allowed to use so-called Keogh plans. Corporations were allowed to set up tax favored 401k plans for their employees. Finally, the creation of IRAs enabled practically every American to have a stake in the American economy.

It’s true that few of us will have the income or assets of Rock stars like Madonna, TV personalities like Oprah, or athletes like Tiger Woods. But more than anywhere else in the world, we do have the opportunity to acquire and keep property. We can even buy and sell shares in the companies we work for.

Trickle down economics may be an odious theory but I don’t call what has gone on in America in the past fifty years trickle down economics. It is something else and whatever you call it, it has worked to raise the standard of living in this country to the highest that has ever been seen in the world. Other countries have an emigration problem. Only we seem to have an immigration problem.

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Pope Francis and Violence

                                            

I’ve been thinking for a while about a post on “Evangelium Gaudium”, the controversial first encyclical written by Pope Francis last year shortly after his elevation to the Papacy. Evangelium Gaudium means “The Joy of the Gospel” but events today in the Middle East and elsewhere might make one consider that the Papal message of joyful evangelization seems almost irrelevant in a world full of butchery and violence directed against Christians.

A friend of mine sends me a daily listing of incidents of persecution against Christians ranging from the brutally violent ones that have finally broken into the media in Iraq to the ongoing outrages that go largely unnoticed in China, India, and Africa. In his encyclical Pope Francis noted that evangelization should involve more than words or preaching. He agreed that actions speak louder than words but I don’t think he imagined the martyrdom that so many Christians have had to endure since he became Pope.

Although Pope Francis commands worldwide attention, Evangelium Gaudium was directed primarily at Catholics and their leaders. It called on all Catholics to evangelize or to spread the gospel message of service and humility. The Pope set out this goal in the very first paragraph:

With Christ joy is constantly born anew. In this Exhortation I wish to encourage the Christian faithful to embark on a new chapter of evangelization marked by this joy, while pointing our new paths for the Church’s journey in years to come.

Yet, what can this message mean to the thousands and thousands of Christians murdered, tortured, robbed, abducted, and raped all over the world? The Pope’s message seemed largely directed towards the developed world that was once largely Christian but now has become more and more secularized.  Perhaps this is why the Pope singled our materialism as the number one problem.

The great danger in today’s world, pervaded as it is by consumerism, is the desolation and anguish born of a complacent yet covetous heart, the feverish pursuit of frivolous pleasures, and a blunted conscience.

It is true that the Pope argued that inequality of wealth breeds violence, a violence almost justified since it has been caused by oppression and exclusion. I believe that few people have taken the trouble to read the encyclical and have rather been content with a few media snippets. It is clear though that Pope Francis is no Communist or Socialist. He does not call for the State to take over the means of production.

He does direct criticism though at uncontrolled Capitalism, a system that he believes is based on “survival of the fittest” or “trickle down” economics.

I just heard of an example of trickle down economics. A wealthy hedge fund manager recently gave his daughter an extremely costly and elaborate wedding. The rehearsal dinner itself cost $100000. True, I suppose someone could argue that vendors, waiters, dishwashers, hairdressers, clothiers and other lowly folk all benefitted from the wedding. Still you can see why the Pope might be upset at this excess. In the encyclical he asked how could anyone throw away food when so many are starving?

Nevertheless, I’m not sure that the inequality of people in this wedding causes violence. On the contrary, it wouldn’t surprise me if most poor people didn’t admire the rich and famous. Certainly, the current violence in the Middle East does not seem to be the result of economic inequality. ISIS is heavily armed. Where did they get the money to buy machine guns, rocket launchers, mines, and humvees? I suspect that the Sunni militants are more well to do than the majority Shiites they are terrorizing. They would also seem to be better off than the Christians they are robbing and murdering.

The Pope does not claim to provide a sociological analysis of the world’s problems but rather in Evangelium Gaudium he speaks more as a missionary prophet. His warning to the developed world about materialism and its dangers is not new. It pervades the gospels, and can be found throughout the Hebrew Scriptures. He writes,

the majority of our contemporaries are barely living from day to day, with dire consequences….inequality is increasingly evident….This epochal change has been set in motion by the enormous qualitative, quantitative, rapid and cumulative advances occurring in the sciences and in technology…

I would like to discuss the whole question of the changes the Pope alludes to here in another post. For now, I think that there is a much more pressing need. It is time for the Pope to call a summit of religious leaders from all faiths to demand an end to sectarian violence. In particular, he should ask Moslem religious leaders to call for an end to the satanical violence and persecution of Christians who have lived in peace in Moslem controlled lands for centuries. Can this brutality be the will of Allah?

The Pope is the only figure in the world who could convene such a summit. Assisi would be a good venue.

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Pope and Poverty

Fr. Jorge Mario Bergoglio

                                       

I’ve been thinking about writing about the new Pope from Argentina ever since his election a few weeks ago. Despite some carping from typical quarters, Pope Francis I seems to have gotten off to a good start. His choice of name, simplicity of lifestyle, and concern for the poor has elicited worldwide applause.

Nevertheless, I worry that many of his early fans might turn against him when he cannot fulfill all their expectations. No one man can do it all and ever since Vatican II Catholics have been continually reminded that the world’s problems are everyone’s responsibility. It was probably always wrong for the laity to think that everything was up to the clerical leaders of the Church, but in the last few decades it has become increasingly difficult for the ordinary person to say, “why don’t they, meaning the clergy, do something about this or that?”

Still, it is clear that the Pope can play a major role. Pope Francis I has already expressed his belief that the poor should be a major concern of the Church but why should his attitude be a surprise to anyone, or regarded as a step in a new direction?

But how are the poor to be helped? I think some of the early plaudits for the Pope came from those who believe that the Catholic Church has vast financial resources or assets that could be sold or used to benefit the poor. It’s as if they want Michelangelo’s Pieta to be auctioned off and the proceeds used to benefit the needy.  Or, perhaps they believe that chalices and other religious articles should be melted down and sold for cash.

 

A recent news article in a local newspaper gave front-page attention to the disparity between rich and poor even in the United States. The article focused on the plight of a single mother living with her four young children in low income housing in Greenwich, Connecticut, one of the richest communities in America.

Here is her story in a nutshell. She grew up in a household without her father. She claims that as a young girl she was sexually abused by her mother’s boyfriend. She became a rebellious teenager and traveled with a bad crowd. She had a baby out of wedlock at around the age of 15, and when she turned 18 both she and the baby were kicked out of the house by her mother. Since then she has always looked for work and tried to better herself. Somehow, she managed to take classes but ran up a student loan debt of about $25000.

 

At the same time she found a new boyfriend and they quickly had three more children even though he did not have a good job. Recently she had a fight with the boyfriend and kicked him out of her apartment even though she still claims to love him. It would appear that he has no intention of supporting his children. Of course, they never bothered to marry.

How does she survive? She lives in low income subsidized housing in Greenwich at a cost of $50 per month. It would be difficult for an ordinary person to find a rental in Greenwich for less than $2000 per month. As a resident of Greenwich, her children can attend one of the best school systems in the country at virtually no cost to her, especially since she pays no taxes. She gets about $650 per month in food stamp assistance. She and her children are most likely eligible for free medical care under Medicaid.

Let’s add it up. She gets housing assistance worth about $24000 per year. If her four children had to go to a private school, it would easily cost about $15000 each or $60000 per year. She gets almost $8000 per year for food stamps. A medical insurance plan comparable to Medicaid would easily cost over $10000 per year for a family her size.

I’m not blaming this young woman or others in similar situations. She has had a hard life and with little apparent guidance or assistance. In fact, she seems always to have looked for work, and she certainly had the smarts to find housing in Greenwich, a choice she made so that her children could grow up in a community largely free of crime and drugs.

But how is the Pope or any other religious leader to help her? She certainly could use more income but it would appear that more than anything else she could have benefitted from some spiritual or moral guidance during her lifetime. Did anyone ever tell her that bedding down with a man who lacked both the will and the skill to support a family was a bad idea?

More than a dispenser of alms the Pope has to be a spiritual and moral leader. One of the things that I have found most objectionable about the press coverage of the new Pope is the way in which his election is being used as a kind of slap at his two predecessors, John Paul II and the recently retired Benedict XVI. By implication, it would appear as if they did little to help the poor.

  

If that is the case, why are the fastest growing and most dynamic parts of the Catholic Church found in the poorest areas of the world? Why, for example, is Catholicism growing by leaps and bounds in Africa despite often vicious persecution? Maybe the poor of the world, who are not so fortunate as to live in Greenwich Connecticut, have looked to the previous Popes as liberators. It can be argued that by his efforts to bring freedom to his native land of Poland, Pope John Paul Ii did more for the world’s poor that any Pope in history.

Just go to this link and view the Polish company of Les Miserable performing “One More Day” in a Warsaw mall that looks like it could be the Mall of America. Before the Pope’s initiative, Poland was one of the poorest countries in Europe. Maybe the people at the Mall turned out to be a little more materialistic than the Pope might have desired, but they are no longer poor. Video can also be viewed below.