Recently a student in a local Catholic school asked us for
help on a question in economics class: “Present three (3) economic costs and three (3) economic benefits that
would be associated with the short-medium term solution to the crisis of people
fleeing violence and poverty from countries in Africa and Asia.” From the Just Third Way perspective, this
appeared pretty straightforward.
 |
| "Give me 100 words on how to solve the world's problems." |
Not so from the usual frame of reference. First, the question implied that there is a
single solution that fits the short- and mid-term. That is incorrect (and saying that would have
gotten the student a failing grade. . . .).
Using the terminology in the question, the answer had to be framed as a short-term expedient to meet current
needs (calling it a “short-term solution,” not an expedient that is anything
but a solution), and a mid- to long-term solution to the underlying
problem.
The short-term expedient (“solution” . . . that is not a
solution) is charity/redistribution. If
private resources prove inadequate to assist people, governments may levy
additional taxes to assist people to avoid harm to the common good. This is an instance of the “extreme cases”
noted by Pope Leo XIII in § 22 of Rerum
Novarum that permits redistribution as an expedient. The economic costs associated with this
include:
 |
| Draining the tax base to no effect. |
1. Stretching the tax base of the assisting countries to the
limit, and sometimes beyond. Governments
then fall back on the hidden tax of inflation by issuing more debt (bills of
credit), weakening their own economies and undermining their own productive
capacity, and thus shrinking the tax base.
An extreme example of destroying the economy in order to provide social
welfare payments is Greece.
 |
| Impure Jewish Science |
2. Providing assistance to refugees encourages more
refugees, thereby putting an even greater strain on resources and, more
importantly, draining the countries from which they come of people who are
needed to implement a financially feasible and sustainable solution in the
short- to long-term. This happened
during the Third Reich in Germany, when many of the top scientists and
philosophers were forced to leave . . . thereby ensuring that “Jewish science”
would not pollute the purity of National Socialism. The fact that some of the scientists were key
to the development of the atomic bomb you may view as good or bad, but some
authorities believe it prevented the Nazis from having nuclear weapons to mount
on V-2 missiles to conquer the world.
3. It convinces people that the short-term (and costly)
expedient is, in fact, a solution, when it is anything but. This encourages those who are aware that it
is not a solution to advocate withholding all aid, and those who think it is a
solution to advocate beggaring their own countrymen for humanitarian
reasons. Neither group realizes that a
short-term expedient only buys time so that a feasible and sustainable solution
can be implemented. See “Pope
Francis and the Just Third Way”.
The benefits include:
Buying time to implement a feasible and sustainable (and,
hopefully, just) mid- to long-term solution.
(This is a way to segue from the third “cost” into the first “benefit.”) The caveat is that the solution must be based
on correct principles. In our opinion, of
course, the principles are the three principles of economic justice (see the
article linked to, above), implementing the four pillars of an economically
just society (again, explained in the article).
 |
| Leo XIII: "Many excellent results will follow from this." |
Leo XIII actually gave three benefits to a program
consistent with the Just Third Way in § 47 of Rerum Novarum:
“47. Many excellent results will
follow from this; and,
(1) “[F]irst of all, property
will certainly become more equitably divided. For, the result of civil change
and revolution has been to divide cities into two classes separated by a wide
chasm. On the one side there is the party which holds power because it holds
wealth; which has in its grasp the whole of labor and trade; which manipulates
for its own benefit and its own purposes all the sources of supply, and which
is not without influence even in the administration of the commonwealth. On the
other side there is the needy and powerless multitude, sick and sore in spirit
and ever ready for disturbance. If working people can be encouraged to look
forward to obtaining a share in the land, the consequence will be that the gulf
between vast wealth and sheer poverty will be bridged over, and the respective
classes will be brought nearer to one another.
(2) “A further consequence will
result in the great abundance of the fruits of the earth. Men always work
harder and more readily when they work on that which belongs to them; nay, they
learn to love the very soil that yields in response to the labor of their
hands, not only food to eat, but an abundance of good things for themselves and
those that are dear to them. That such a spirit of willing labor would add to the
produce of the earth and to the wealth of the community is self evident.
(3) “And a third advantage would
spring from this: men would cling to the country in which they were born, for
no one would exchange his country for a foreign land if his own afforded him
the means of living a decent and happy life.
“These three important benefits,
however, can be reckoned on only provided that a man's means be not drained and
exhausted by excessive taxation. The right to possess private property is
derived from nature, not from man; and the State has the right to control its
use in the interests of the public good alone, but by no means to absorb it
altogether. The State would therefore be unjust and cruel if under the name of
taxation it were to deprive the private owner of more than is fair.”