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Tuesday, September 24, 2013

Why Popes Make Lousy Economists

Pope Francis recently opined: "We don't want this globalised economic system which does us so much harm. Men and women have to be at the centre (of an economic system) as God wants, not money."

Unfortunately, the globalised economic system he decries has raised the standard of living for every person on the planet in the last two centuries. We have gone from a planet of 1 billion people in the year 1800 to over 7 billion in the year 2013 - an increase of roughly six planet's worth of population - while feeding, clothing and housing all seven planet's worth of population to a level that essentially no one had in the 1800s. Certainly, he knows this. So what is he complaining about?

Economy: A Two-Fold Purpose
The global economy serves two purposes: (1) the work it creates provides us the income to maintain physical health and well-being, (2) that same work provides us with dignity and a sense of self-worth for the soul. However, we no longer seem to be able to provide both at once.

Before the Industrial Revolution, nearly everyone worked because universal work was necessary for society to survive. In a subsistence-level society, community survival walks on the edge of a knife. The failure of even one person to work, the failure of even one person to in some way provide sustenance for himself and his family, could easily be the straw that broke the community's back. That one last bushel of missing grain might turn out to be the missing calories that condemn the entire community to starve in the last few days before harvest.

For most of human history, every person's contribution to the community, no matter how small, really did count. Everyone mattered. Thus, man has historically always tied work with a sense of self-worth. But what happens when technology enters the picture? Physical comforts increase, but work, and the self-worth it generates, disappears.

Technology, Poverty and Dignity
In the Middle Ages, Europeans invented the horse collar. The horse replaced the ox as the main source of power to plow fields. Because horses work 50% faster, fields could both be plowed more efficiently and be located farther from urban centers. Half of Europe had been wilderness, but it could all now be plowed under. Europe's settled areas increased and population doubled, leading to the technological explosion that was the High Middle Ages. 

The Industrial Revolution replaced the horse with steam, then diesel, engines. But this time, there was no wilderness to plow under. That was already done. This time, something new happened. As agricultural output increased, farm jobs didn't increase. Instead, they dried up. The job market switched from agriculture to industry and manufacture, but population expanded faster than the job market. Something had to give. Something did.

The late 1800s invented, for the first time in history, child labor laws, intended to lock children out of the job market and decrease job competition for adults. It also invented retirement laws, wherein the government paid a wage to those over 65 in order to keep them out of the labor force. Children were told education was their job, they were forced into mandatory schooling. They were bored. Everyone, including children, began to understand that children were increasingly useless to the community. As children lost their jobs, children lost their dignity. As health conditions improved, population increased, but family size shrank. For the last 200 years, the overall production of children has steadily slowed. This is the demographic transition.

In the 1800s, as child production slowed, women were no longer needed in the home. As children lost importance and dignity, so did motherhood. Women began to move into the paid work force. In 1900, only 19 percent of women of working age were working or looking for work. In 2007, women represented 46 percent of people in the labor force.

By 1922, Henry Ford reduced the work week. He proved the automated production line took jobs and never gave them back. Production increased even though the work week was now only five days long, eight hours a day. What happened to agriculture now happened in manufacturing. Just as the engine had done with agriculture, automation reduced the number of jobs while vastly increasing manufacturing output.  Industry accounted for about 10% of the workforce in 1800, reached a high of 35% around 1955, and has been steadily declining ever since, dipping to less than 9% today.  

A society that was 95% agricultural in 1800 is now less than 2% agricultural, yet produces six-fold more food. Over one-half of US industrial jobs since 1980 have disappeared, yet we manufacture twice as many products. Mechanization has replaced, is replacing, both slave and wage labor. In each generation, fewer adults in any society need work to eat. The ancient Roman Empire used slave labor everywhere, but could only afford to give bread away in the capitol, not empire-wide. Even with pagan Rome's dignity-destroying slavery, there was not enough bread. The Industrial Revolution took jobs but gave bread. 

It invented the both five-day work week and the modern welfare state.  Now, all the poor throughout the nation, even throughout the world, can be fed, clothed and housed, and they are. But they have no jobs, no dignity. It will only get worse.

3-D Printing and The Future
3-D printing will destroy manufacturing in every form. It is currently possible to 3-D print an entire houseplanea rocket engine, even food. Costs are currently high. Costs will drop. As costs do, as people gain the ability to produce items on their 3-D printers as easily as they now search for information on the web, jobs will continue to disappear. But physical poverty will not re-appear. As physical poverty disappears, moral and ethical poverty will only increase.

The job market now centers on information. By definition, one-half of the population has an IQ below 100. Thus, one-half of the population cannot be retrained to join the new job force. Automation has taken 98% of the farm jobs. It has taken, or will take, 98% of the manufacturing jobs. There are no jobs, and thus there is no dignity, for one-half of the population. One-half of the normal distribution curve is now, or will soon be, labelled useless.

Already, children have lost so much dignity that some segments of the population see no moral or ethical problem with cutting them up, alive, and selling their body parts. The sick and aged are encouraged to kill themselves via assisted suicide laws. Far from participating in the harvest, the "useless" are the harvest. As we have grown rich, we have grown cold.

Society can feed, clothe and house all of us. We will not be physically poor, but half of us will not have work. We will have to gain our sense of dignity from something other than work. No one knows how to do that.

The Paradox the Pope Poses
This is the paradox the Pope poses to us. Pope Francis hates poverty, whether it be of body or soul. He wants the poor to be fed and clothed, but he also wants them to have dignity, and the only way he knows how to do that is to make sure they are employed.

Pope Francis hates the welfare state nearly as much as he hates abortion. But. currently, he can't have it both ways. Personnel costs are the highest component cost of any product. We can't give the poor both food and jobs.The same global economy that has functionally removed physical poverty from society has also functionally removed the dignity of work from society. Can we give them food and dignity? Perhaps. But we don't know how.

We already recognize that technology has separated procreation from sexuality. Technology removed dignity from children and the aged. With children and parenting devalued, it also removed dignity from sex. The Catholic Church has not figured out how to make people recognize and correct the loss of dignity in any of these areas. Catholics know this is a problem, but we can't convince anyone else that it is.

What the Pope and most other Catholics don't yet fully realize is this: technology has also separated poverty, dignity and work. One-half of the population has become a parody of what P.G. Wodehouse himself parodied in Wooster and Jeeves: we now have an entire class of men and women who do not derive their dignity from their work. However, unlike Wooster, neither do our men and women derive their dignity from their social status. They have neither employment nor social status. Thus, they have no dignity.

Technology has given them their creature comforts but has taken both their jobs and their dignity. As with the children a century ago, these adults will be well-fed, but they won't be getting their jobs back.

It isn't the worship of money that lies at the bottom of this morass. It is the inexorable advance, the universal embrace, of the labor-saving machine. Our problem isn't capitalism per se, nor has Pope Francis said that it is. Our problem is the loss of dignity.

If the Pope can't get people to stop using condoms, how likely are they to stop using their cell phones? Who is going to return to the labor-intensive card catalog and paper phone book, much less the labor intensive spinning mill, when a 3-D printer can produce whatever you need at the push of a button? How many people will trade their fully laden table, their air-conditioning, automobile, smart phone and Internet access for the dignity of a job, especially if by gaining the job, you had to surrender any guarantee that you could still keep the creature comforts just listed?

Worse, what does it mean to say "the dignity of a job"? What constitutes work? What most "information workers" do today isn't what we have historically considered to be work. They don't break a sweat or a finger. No matter how hard they type, they don't get a callus. They sit in air-conditioning, eat snack foods, drink fizzy flavored water, never worry about cholera or typhus, never slap a mosquito or burn off a tick. The dignity of work has changed. It is changing again.

The Pope said, "Where there is no work, there is no dignity." Technically, we know that bare phrase is untrue - each of us has dignity because we are each an image of the Persons of the Godhead. What he means is, society doesn't assign dignity to those who do not work. This is also true, but it doesn't address the basic issue. The problem of physical poverty is essentially solved. We must decide if dignity is inextricably and uniquely attached to work. For if we want people to have dignity in secular society, we may have to find a new way to derive it.


Ron Van Wegen said...

"It is currently possible to 3-D print an entire house, plane, a rocket engine, even food."

Um, not quite yet!

nomdeplume said...

And as we've seen lately, economists also make bad economists.

Steve Kellmeyer said...

Ron, I put in the links.

The plane, rocket engine and food have already been produced. The house can be done, it just hasn't been done yet.

Paul Stilwell said...

Funny how you don't mention the actual cost of poverty apparently being "solved". You know, like the fact that nobody actually owns anything; that the bulk of the world's wealth is owned by a very few who enslave the rest of the world to debt. Debt, money-as-debt, which is what actually makes people unemployed - not technology.

Debt, which is what the global economy is based upon and how it runs.

And what's at the heart of debt? Love of money.

As technology changes and develops so does work change and develop. Or it would change and develop if it wasn't for money-as-debt. Work does not just disappear.

You don't equate work inextricably with dignity because you are only talking of physical labour - physical labour in contradistinction to technology, and you talk of technology only insofar as it removes physical labour.

Guess the Pope is right.

Steve Kellmeyer said...

I know that sex is inextricably linked with procreation because the Magisterium constantly tells us that, as does the science.

It isn't nearly as clear that dignity is inextricably linked with work. Even if it is, we must then figure out what constitutes "work", because that isn't nearly as clearly defined as sex.

As for debt, money and slavery, each of those also have definitions which are interdependent and not very clear precisely because each has radically changed over the course of the intervening centuries.

Finally, work absolutely does just disappear. Ask any computer.

Steve Dalton said...

Not only do Popes make lousy economists, but so do many Catholic laymen. It's incredible how many of them push distributism as the idea economy. What gets me about their advocacy of this system is most of them, to the best of my knowledge, have no real understanding of economics. Their big hero's, Chesterson and Belloc, were never trained as economists, yet they are supposed to be pillars of this system. And when you try to point out the flaws in their reasoning, you're damned as a heartless capitalist. Capitalism works, socialism, and it's derivatives, like distributism don't.

Joseph D'Hippolito said...

I would watch carefully what Pope Francis does with "Caritas in Veritae," Pope Benedict's encyclical advocating an international centralized financial system "with teeth" (quote from encyclical) that would help solve international environmental problems and food-production problems, curtail the arms race and fight global warming.

I kid you not.

I might be wrong on the part about global warming, but I know I'm right about the rest. Just read the encyclical.

Joseph D'Hippolito said...

The problem with most Catholic discussions about economics is that the whole Catholic economic viewpoint reflects European centralization and collectivism. Let's not forget that the feudal system was essentially collectivist, and the Catholic Church had perhaps its greatest power and influence when feudalism was at its height. Catholicism isn't going to look at capitalism with a favorable eye simply because that system runs counter to much of the centralized, collectivist ethic that has dominated European thinking. There's a reason why Britain, which historically took pride in not being a part of Europe, was the most economically successful country for nearly two centuries before the post-WWII years.

Kevin O'Brien said...

Steve Kellmeyer, you are brilliant. You may be a crank, but you're brilliant.

Steve Dalton, if you don't understand that Socialism does not equal Distributism, you are not to be taken seriously. I admit Distritubtism has its flaws, but you can't argue apples and oranges with a man who insists that an apple is an orange.

Meanwhile, Mr. Kellmeyer, I think you're on to something - even though I agree with Paul Stilwell on this thread.

Perhaps dignity comes not so much from "work" as from "vocation" - not merely in the sense of marriage or consecrated life, but in the sense of God's call to us, the mysterious thing that has some relation to what we do for a living.