Nuggets of Wisdom

Thursday, November 28, 2013

New Pope’s A Dope About Capitalism

It’s times like these that make me proud to be Protestant and not have to surrender my spirituality (if not my critical thinking skills) to the preposterous pontifications propagated by a pious paraplegic of unprecedented privilege—otherwise known as the freaking Pope. (Apologies to all my Catholic followers—all one of you!)

Earlier this week, Pope Francis released his apostolic exhortation Evangelii Gaudium in which he decries the tyranny of “unfettered capitalism,” propagating his anti-capitalist, pro-socialist sentiments by perverting Christ’s commandments to aid the poor and needy—as if that requires wealth redistribution through central government planning!

His 84-page anti-capitalist screed—which papal infallibility decrees as coming from the “infallible voice of God”—is far too long for me to refute each and every piece of bogon; but I’ll touch upon one especially egregious papal passage wherein he regurgitates Marxist theory:
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.
While this worldview is gospel truth to Marxists, especially under Catholic liberation theology, history tells a much different story. Rather than being a tool for the powerful to gain more power, capitalism has allowed the powerless to divert power away from the powerful.

As Ludwig Von Mises explained, prior to capitalism, all wealth was accumulated by the monarchy, whom controlled the means of production and forced the serfs under them to meet their economic needs. This all changed under capitalism, as production shifted from the demands of the wealthy elite to the lowly consumer:
The characteristic feature of capitalism that distinguishes it from pre-capitalist methods of production was its new principle of marketing. Capitalism is not simply mass production, but mass production to satisfy the needs of the masses. The arts and crafts of the good old days had catered almost exclusively to the wants of the well-to-do. But the factories produced cheap goods for the many. All the early factories turned out was designed to serve the masses, the same strata that worked in the factories. They served them either by supplying them directly or indirectly by exporting and thus providing for them foreign food and raw materials. This principle of marketing was the signature of early capitalism as it is of present-day capitalism. The employees themselves are the customers consuming the much greater part of all goods produced. They are the sovereign customers who are "always right." Their buying or abstention from buying determines what has to be produced, in what quantity, and of what quality. In buying what suits them best they make some enterprises profit and expand and make other enterprises lose money and shrink. Thereby they are continually shifting control of the factors of production into the hands of those businessmen who are most successful in filling their wants. Under capitalism private property of the factors of production is a social function. The entrepreneurs, capitalists, and land owners are mandataries, as it were, of the consumers, and their mandate is revocable. In order to be rich, it is not sufficient to have once saved and accumulated capital. It is necessary to invest it again and again in those lines in which it best fills the wants of the consumers. The market process is a daily repeated plebiscite, and it ejects inevitably from the ranks of profitable people those who do not employ their property according to the orders given by the public. But business, the target of fanatical hatred on the part of all contemporary governments and self-styled intellectuals, acquires and preserves bigness only because it works for the masses. The plants that cater to the luxuries of the few never attain big size. The shortcoming of nineteenth-century historians and politicians was that they failed to realize that the workers were the main consumers of the products of industry. In their view, the wage earner was a man toiling for the sole benefit of a parasitic leisure class. They labored under the delusion that the factories had impaired the lot of the manual workers. If they had paid any attention to statistics they would easily have discovered the fallaciousness of their opinion. Infant mortality dropped, the average length of life was prolonged, the population multiplied, and the average common man enjoyed amenities of which even the well-to-do of earlier ages did not dream.
Or as Walter Williams poignantly summarizes:
Capitalism is relatively new in human history. Before the rise of capitalism, the way people amassed great wealth was by looting, plundering, and enslaving their fellow man. Capitalism made it possible to become wealthy by serving one’s fellow man. Capitalists seek to discover what people want and then produce and market it as efficiently as possible.
This isn’t merely the postulating of two “wacky” Austrian economists. History has proven, time and again, that capitalism, rather than leaving the powerless “without any means of escape,” provides such a means of escape from crushing poverty and oppression.

As this chart shows, global poverty has been on a rapid decline over the past century, especially within the past 30 years under the neoliberalism and globalization spawned by Reagan and Thatcher.

The Economists elaborates:
In 1990, 43% of the population of developing countries lived in extreme poverty (then defined as subsisting on $1 a day); the absolute number was 1.9 billion people. By 2000 the proportion was down to a third. By 2010 it was 21% (or 1.2 billion; the poverty line was then $1.25, the average of the 15 poorest countries’ own poverty lines in 2005 prices, adjusted for differences in purchasing power). The global poverty rate had been cut in half in 20 years.

The country that cut poverty the most was China, which in 1980 had the largest number of poor people anywhere. China saw a huge increase in income inequality—but even more growth. Between 1981 and 2010 it lifted a stunning 680m people out poverty—more than the entire current population of Latin America. This cut its poverty rate from 84% in 1980 to about 10% now. China alone accounts for around three quarters of the world’s total decline in extreme poverty over the past 30 years.
With all this in mind, it should come as no surprise that economic freedom correlates heavily with high living standards.

The Pope may claim that there is no evidence to support the tyranny of “free market capitalism,” but when has evidence ever mattered to an antiquated tyrannical institution that has historically suppressed scientific evidence?