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The whole idea of a moral basis to capitalism seems inherently broken to me.

The Pope recently made his first “apostolic exhortation”, which is totally what I’m going to start calling my tweets in future in a further attempt at self-hype and aggrandisement. (“Apostles, I exhort you. Look at this picture of my cat making a derpy face. LOL. Please RT.”)

In this exhortation, he talked about poverty, and wealth inequality, and all the stuff that’s increasingly been interesting me lately. Pontiff Frankie Prime seems to genuinely give a crap about the whole poverty deal, at least by Papal standards. I get the impression he genuinely sees people suffering because of economic injustices and wants to prioritise improving this situation, even if he is only doing a minuscule fraction of what’s within his power from that massive palace of his.

Anyway, his description of the tyranny of “unfettered capitalism” got a lot of people agitated, and often with good reason. I’m not sure that his proposed improvements to the global economy are cogent, or that his statement of the problem is even internally consistent; part of what defines capitalism is the fetters, in the form of property rights and so forth.

I don’t have any especial interest in analysing the Pope’s proposed economic policies, not least because by his own admission he’s not really trying to speak in economic, academic terms. But I just listened to a Freakonomics podcast which discussed the Pope’s ideas with a number of economists, and a few things bugged me about the defenses of market systems that ensued.

Joseph Kaboski, an Economics Professor and a Catholic, argues that ethics comprise an important part of a market economy. He provides a simple example in which they come into play, of someone getting over-charged at a car dealership because they didn’t speak great English, and so weren’t in a position to fully inform themselves of the details which would have helped in their negotiations. The point he’s trying to demonstrate is that “ethics are important in markets”.

But being “important” is a vague concept – what role do ethics actually play here? It’s clear that unethical behaviour would be an option for some unscrupulous person in this situation, and that it harms some innocent bystander as a result (and arguably damages market efficiency) – but none of that needs to matter to the unethical actor. He’s just made a tidy profit off of some hapless loser, beyond what was merited by the quality of the product – and he’s strongly incentivised by the system in place to do so whenever he can get away with it. Unethical behaviour makes those doing it better off.

There’s no solution proposed to this. It’s not even recognised as a problem. Another contributor to the episode, Jeffrey Sachs, says that “our indifference, our brazenness, our hard-heartedness, is no favour to ourselves or to the functioning of our societies”. But sometimes brazen, hard-hearted, unethical behaviour is a favour to ourselves, at least in the short-term. It might screw over the functioning of society if we all act that way, but why should I care? I got mine, Jack.

Obviously I think I should care. There is a moral obligation, I’m not going full relativist here. But when people who flout that obligation flourish as a direct result, and do better than those who act more ethically, the system is inherently broken. There’s no point arguing that your system will work fine if people would just behave more ethically, when the system is designed to reward those who don’t. There needs to be something built-in to the system so that socially harmful and undesirable behaviour isn’t massively appealing to anyone with flexible morals.

On a briefer note, here’s another quote from Kaboski, amid some more detailed statistics of how much things have been improving lately:

More people have escaped extreme poverty in the past 25 years in part through the growth of China and India than in any period of human history.

There are aspects of this whole debate to take heart in. Things do get better. But I call bullshit on this limited success as a vindication of any given application of capitalist market economics in recent years. There are still billionaires collectively hiding trillions of dollars offshore, for whom sums of money equivalent to whole countries’ GDPs act like a meaningless high-score, and there are still thousands of children starving to death every day.

It might be better than it’s ever been. It’s still not fucking good enough.

Classroom discussion questions

1. Do we have any obligation to care what the Pope says about anything, given the global extent of the child abuse network he oversees?

2. What would “unfettered capitalism” actually look like? What, if any, role would the government play in such a system?

3. Shouldn’t we have figured out how to sort out all the money without being dicks about it, by this point in our civilisation?

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