Q: What was the immediate cause of the economic crisis?Like all "elevator speeches," the quick answer raises more questions than it answers — such as the issue that people are in trouble now, how will making them capital owners in the future do anything to help that? Here's the short answer to that:
A: The immediate cause of the economic crisis was the creation of money for consumption, speculation, and government spending instead of for investment in capital projects that will pay for themselves out of future earnings.
Q: What is the solution to the economic crisis?
A: The solution to the economic crisis is to create money for financially feasible capital investment, and by that means empower every person with the means of acquiring and possessing a capital ownership stake sufficient to generate an adequate and secure income if thrift and frugality are exercised.
Q: What are people supposed to do now, and until they own enough capital to generate an adequate and secure income?That is, we need to take care of people now by making whatever redistribution of wealth is necessary to keep people alive and healthy in a manner that respects their human dignity. Do not, however, labor under the delusion that a redistribution of wealth is anything other than a barely tolerable expedient as an emergency measure. Such measures cannot last, and must be replaced at the earliest opportunity with a system that enables people to gain a living income through their own efforts, whether through their labor, their ownership of capital, or both. Society must apply the principles of economic justice. This, as we might expect, raises more questions:
A: Caritas in Veritate states the principles and suggests specific measures that can be undertaken at the present time to keep people alive and healthy in a manner befitting the demands of human dignity, but without prejudice to the need ultimately to empower people with the means to acquire and possess capital of their own.
Q: What are the principles of economic justice?That's about all anyone would have time (and the listener the patience) for in an "elevator speech" situation. For anything more, it's probably better to let the great thinkers speak for themselves. Thus, if people want details and specifics, refer them first to Father Ferree's Introduction to Social Justice, an analysis of the social doctrine of Pope Pius XI. It's relatively short, but challenging, as it forces people to question many of their basic assumptions about social justice.
A: There are three principles of economic justice, 1) The principle of Participation (or Participative Justice), 2) The principle of Distribution (or Distributive Justice), and 3) The principle of Harmony (sometimes referred to as Social Justice).
Q: What are the basic things that a society must have to be economically just?
A: To be economically just, a society must embody the "four pillars of an economically just society" in some form: 1) A limited economic role for the State, 2) Free and open markets as the best means of determining just wages, just profits, and just prices, 3) Restoration of the rights of private property, especially in corporate equity, and 4) Widespread direct ownership of the means of production, individually or in free association with others.
Referring people to Introduction to Social Justice on the CESJ website also takes them (obviously) to the website. There they can find some very in-depth treatments of the principles of economic and social justice as well as specific proposals applying the principles, most especially Capital Homesteading.
You may have to warn people that the material presented on the CESJ website is not a panacea, nor is it easy for someone who might be stuck within certain modern thought frameworks and assumptions to grasp, but the advantage is that a serious investigator can always make contact with us directly via the contact information on the website.
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4 comments:
In all due respect, your answer as to the cause, is in my view, the symptom. The symptom of a moral problem--greed or unbridled opportunism, if you prefer.
Keep up your good works,
Max Weismann,
Co-founder with Mortimer Adler
Center for the Study of The Great Ideas
You're right -- and that's why I cautiously (and very cleverly) qualified the bad use of credit as the *immediate* cause, and noted that explaining the underlying causes would take much more time -- as I've found out putting together what I thought was going to be a short survey of the conflict between the need for widespread ownership of the means of production, and the perceived necessity of using existing accumulations of savings as the sole source for financing capital formation.
Yes, the basic underlying problem is society's drift away from its proper basis in the natural law, which has led to the greed or unbridled opportunism providing the incentive to misuse our financial institutions.
Thus, I would say that the immediate cause of the current situation is the bad use of credit, while the mediate cause is the moral decay of our society.
Well if Michael Greaney would indulge me, my elaboration would be simply this, in support of “Caritas in Veritate”.
P.S. I would suggest reading as well ‘The Capitalist Manifesto’, by Louis Kelso and Mortimer Adler.
[A kind of Elevator conversation,.."What caused the economic crisis?"]
In a March 2009 question-and-answer session with parish priests and clergy in the Diocese of Rome, the Pope responded to the petition of Father Giampiero Ialongo, for "the courage to denounce an economic and financial system that is unjust at its roots" and "an authoritative word, a free word, which will help Christians . . . to administer the goods that God has given":
As you know, for a long time we have been preparing an encyclical on these issues. And on this long path I see how difficult it is to speak competently, because if the economic reality is not addressed competently, one cannot be credible. And, on the other hand, we must speak with a great ethical consciousness, created and inspired by a conscience forged by the Gospel. In the end, it is about human avarice as sin or, as the Letter to the Colossians says, of avarice as idolatry. We must denounce that idolatry that is opposed to the true God and that falsifies the image of God through another god, "mammon."
. . . . Because egoism, the root of avarice, consists in loving myself more than anything else and of loving the world in reference to myself. It happens in all of us. It is the obscuring of reason, which can be very learned, with extremely beautiful scientific arguments but which, nevertheless, can be confused by false premises. . . . Without the light of faith, which penetrates the darkness of original sin, reason cannot go forward. But it is faith, precisely, that then runs into the resistance of our will. It does not want to see the way, which would be a path of self-denial and of correction of one's own will in favor of the other, not of oneself.
[W]hat is needed is the reasonable and reasoned denunciation of the errors, not with great moral statements, but rather with concrete reasons that prove to be understandable in today's economic world. . . . To realize that these great objectives of macro-science are not realized in micro-science—the macroeconomics in the microeconomics—without the conversion of hearts. If there are no just men, there is no justice either . . . Justice cannot be created in the world only with good economic models, even if these are necessary. Justice is only brought about if there are just men. And there are no just men without the humble, daily endeavor of converting hearts, and of creating justice in hearts. [emphasis added]
Finally, I understand that The Just Third Way is looking for "Just men and women" ... I fall short but sign me up.
One of the "problems" with the act of social justice is the pervasive belief that the human person must be perfected before organizing with others to correct flaws in our institutions. This is a kind of "Catch-22," for our institutions are there to help us acquire and develop virtue, thereby becoming more perfect in a manner consistent with our essential nature.
In English: You don't have to be good before organizing with others to correct our institutions, you just have to want to be good and be willing to work at it, accepting all the backsliding and failures along the way as part of the process.
So, Nail-in-the-Wall, you hit the nail on the head. Possibly the best way at present to sign up for the Just Third Way is to keep reading this blog (you knew that was coming), visit the CESJ website regularly to work your way through the rather large volume of material in (relatively) easy pieces, join the Kelso Binary Economics discussion group (info. on the website, www.cesj.org), and, when ready, send in a volunteer application and get with Dawn Brohawn to see how your interests and abilities can be fitted into an existing project, or propose a new initiative if you are willing to carry it out.
Now I have to go back and rethink today's posting in light of your comments.
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