Tag Archives: Big government

Business and the option for the poor

SAM GREGG writes that lifting people out of poverty — and not just material poverty but also moral and spiritual poverty — does not necessarily mean that the most effective action is to implement yet another welfare program. There is no reason to assume that the preferential option for the poor is somehow a preferential option for big government . . .

Sam Gregg

Sam Gregg

Like the term “social justice,” the phrase “preferential option for the poor” is part of the Catholic lexicon. Some use the phrase to insist on interventionist economic policies. Catholic social teaching, however, leads to more nuanced conclusions — economically and theologically.

The term “option for the poor” gained traction in Catholic thought in the late 1960s and ’70s. The term had influenced various forms of liberation theology throughout that period, but such claims tend to downplay the fact that the Church has always maintained a special outreach to the poor.

Old Testament prophets spoke clearly against the oppression of the poor, not to mention Christ’s statements that he himself may be recognized in the poor and in those who suffer persecution. Moreover, love for the poor and marginalized was put into practice from the Church’s genesis. In the Roman Empire, for example, the pagan Greeks and Romans were astonished at Catholics’ willingness to aid the sick and disabled, the elderly and abandoned whether they were Christians or not.

The Catholic understanding of poverty, however, doesn’t make the mistake of imagining that poverty can be reduced to issues of material deprivation. In the 1980s, in the midst of the Church’s sharpest critique of liberation theology influenced by Marxism, the Congregation for the Doctrine of the Faith (CDF) reminded Catholics that poverty had a rather more expansive meaning in Christian belief, thought and action.

From Christianity’s standpoint, everyone is poor inasmuch that all of us are deeply inadequate in the face of God’s justice and mercy. Why else would Christ need to come into the world to save us from our sins and flaws? Indeed the Christian embrace of poverty involves everyone exercising detachment from material wealth: “It is this sort of poverty, made up of detachment, trust in God, sobriety and a readiness to share, that Jesus declared blessed” (Libertatis Conscientia, #67)

What does living out the option for the poor mean in practice? We must engage in works of charity — those activities that often address specific dimensions of poverty in ways that no state program ever could. And this means giving of our time, energy, and human and monetary capital in ways that bring Christ’s light into some of the darkest places on earth.

Yet this does not mean that Catholics are required to give something to everything, or even that Catholics must give away everything they own. As Fr. James Schall, SJ, writes, “If we take all the existing world wealth and simply distribute it, what would happen? It would quickly disappear; all would be poor.” Put another way, living out the option for the poor may well involve those people with a talent for creating wealth doing precisely that.

The option for the poor, however, does not rule out any form of government assistance to those in need. Yet lifting people out of poverty — and not just material poverty but also moral and spiritual poverty — does not necessarily mean that the most effective action is to implement yet another welfare program. There is no reason to assume that the preferential option for the poor is somehow a preferential option for big government. Often, being an entrepreneur and starting a business which brings jobs, wages, and opportunities to places where they did not hitherto exist is a greater exercise of love for the poor (and usually far more economically effective) than another government welfare initiative.

The Catholic understanding of the option for the poor also means recognizing that those who suffer from material deprivation are human beings graced with reason and free will. Hence, like everyone else, they are  also capable of engaging in some form of integral human flourishing. Sometimes a welfare program or new regulation is not the best way to help them — especially when such measures actually impede or discourage people from using their initiative and/or choosing to work.

Though we rarely think about it this way, deregulation is often a concrete way to promote the option for the poor. Living out the option for those in need could be manifested, for example, in working to remove tariffs that block the poor from global markets, or which encourage people to stay in U.S. industries that are becoming uncompetitive in a global economy. It might also involve making the process of creating a business faster, or providing more transparent, less bureaucratically burdensome ways for people to migrate to countries where there are more opportunities.

There are many ways of living out the option for the poor, whatever our vocation in life. With some of the creativity that’s essential for success of business, Catholics can indeed help bring liberty to many of those burdened by poverty.

DR. SAMUEL GREGG is research director at the Acton Institute and the author, most recently, of Becoming Europe and Tea Party Catholic.

After One Hundred Years

Joseph Dunn writes that big government hinders the poor from gaining wealth . . .

DunnAfter One Hundred Years
Joseph J. Dunn
CreateSpace, 2013
414 pages, $26.99 paperback

Dunn’s new book, subtitled Corporate Profits, Wealth and American Society, weaves the rise of large corporations, expansion of the federal government, and the growth of America’s vibrant nonprofit sector into an enjoyable epic. Dunn reveals how these developments affected the prosperity of the middle class and the security of those in need.

Dunn delivers a timely exploration of how corporate profits, personal fortunes and philanthropy have benefited American society over the course of a century. The book is clear about innovation as an essential source of new jobs, rising tax revenues, and improved money flows at non-profits.

Order: Amazon, Barnes & Noble

Reforming capitalism for freedom

MICHAEL M. MILLER writes that our economy needs serious reform — business as usual is not acceptable. However, a correct diagnosis of the problem is in order before making significant changes. He also argues that the free market requires serious moral restraint — especially on the part of those with power like big businesses and government  . . . . 

Michael M. Miller

Michael M. Miller

In the wake of the financial crisis, one of the recurring themes among business and political leaders is the need to reform capitalism and create new ways to think about business and the role of profit.

The common narrative is that “business as usual” doesn’t work. We’ve tried the free market and while it made money for some, it also caused the housing boom, the financial crisis, and created a society where all that matters is making as much profit as possible. The financial crisis is calling us to come up with new models of how we should arrange the economy. There are two issues here: first, a new way of looking at business and second, the reform of the current economic system. Let me address both, beginning with business.

It’s good that business leaders are making an effort to understand that business is about more than just profit. Profit is important, of course, but as Blessed John Paul II reminded us, profit is not the main purpose of business. The main purpose is to serve human needs and wants. Profit is one of the indicators that reveals whether you are meeting those needs.

I also agree that business as usual is not enough. We’ve had some serious moral crises in business from fraudulent accounting to big banks colluding with the government to receive special bailouts. What’s more, business is not outside the requirements of morality. Most corporate social responsibility programs have a serious flaw — they are relativistic. You can’t build a culture of business ethics if there is no truth and no right and wrong. Though mainstream business leaders rarely talk about it, business has the moral and social responsibility to cultivate a healthy moral ecology. This means honesty and obeying the laws; it also means respecting families and not exploiting women to sell products.

Let’s move to the issue of reforming the economy. There is incessant talk about the need to reform capitalism, but my first question is: What do we mean by capitalism? Unfortunately, the term “capitalism” has become proxy for “that which is bad” and often becomes a substitute for the sins of greed and avarice. There’s another problem — and a more serious one. In common parlance word “capitalism” is usually identified with a free-market economy both by its detractors and defenders. But capitalism and the free market are not always the same thing. There are many different varieties of capitalism: oligarchic capitalism, corporate capitalism, crony capitalism, managerial capitalism, and free-market capitalism to name a few.

Most of the critics of capitalism lament so-called “market fundamentalism” or “unfettered markets,” but we don’t have anything of the sort. What we have in the U.S. is a type of managerial-crony capitalism where big business and big government collude to make regulations that serve their interests. When things went wrong with our managerial capitalist system, instead of assigning blame correctly we blamed this mythical free market.

Our economy does need reform, but if we are going to address a problem we have to identify it correctly. The problem is that our diagnosis is wrong. The source of the financial crisis was not “market fundamentalism” but a complex interrelationship of government regulation, lobbying by interest groups, the manipulation of interest rates and the money supply, big business and government collusion, and political and social policy all mixed in with age-old vices like greed and imprudence.

There is a tendency to think that the default position of capitalism is a free market and that regulations and government interventions are necessary to resist this return to what is called “unfettered” or “savage” capitalism. But this is a serious misconception. In practice, the free market requires serious moral restraint — especially on the part of those with power like big businesses, government and interest groups. They have to exercise restraint and virtue not to use their power to gain an unfair advantage by colluding or lobbying the government for protection. One of the most important, though often neglected, elements of authentic corporate social responsibility is for companies to help maintain and encourage a free and competitive economy that enables entrepreneurs to compete — even if this means a possible loss to their own business. Too often companies, once they become successful, look to government to undermine the free and competitive economy that they benefited from.

Free economies are like free societies. As William Allen said well, you cannot have self-government without self-governors. In the same way you cannot have a free economy without free and virtuous people. A real free and competitive market, to use Lord Acton’s line, is “the delicate fruit of a mature civilization.”

MICHAEL M. MILLER is a research fellow at the Acton Institute and director of PovertyCure, which promotes entrepreneurial solutions to poverty in the developing world.