How Catholic Social Thought Helps Us Rethink Globalization

Conservatives want to create jobs by cutting taxes for the wealthy and reducing the size of government.  Liberals want government to spend money so as to boost demand.  Everyone tends to place the burden of job creation on Washington DC and what it does or doesn’t do.  What is actually needed, I think, is a dramatic rethinking of political economy. As this highly informative New York Times piece on “How the U.S. Lost Out on iPhone Work” illustrates, globalization has rendered the nation state increasingly ineffective in solving our economic woes, whereas the need for a global authority capable of ensuring that the benefits of a globalized economy are widely distributed is growing.

The article tells us that a few months before the release of the iPhone in 2007 Steve Jobs, who had been carrying the device in his pocket for several weeks, demanded the engineers find a way to create glass that wouldn’t scratch.  As it turns out, Apple had to go abroad to do this.  The article goes on to explain that

all iPhones contain hundreds of parts, an estimated 90 percent of which are manufactured abroad. Advanced semiconductors have come from Germany and Taiwan, memory from Korea and Japan, display panels and circuitry from Korea and Taiwan, chipsets from Europe and rare metals from Africa and Asia. And all of it is put together in China.

How many of us would prefer a third rate “made in the U.S.A” device to the iPhone 4?  I certainly wouldn’t.  The material benefits of a globalized economy – for those fortunate enough to enjoy them – are undeniable. Moreover, it’s not as though it is somehow better for American workers to have jobs than for Chinese or Taiwanese workers to have jobs – any more than it is necessarily better for Minnesotans, rather than Wisconsonites, to have jobs.

Suppose, however, that Governor Walker succeeded in all of his evil designs and Wisconsin’s workers – not just public unions — became stripped of all their rights and bargaining power.  Now suppose decent middle class jobs began to migrate from Minnesota to Wisconsin.  That would be a problem – and, in fact, that is the problem.  Here is how the piece describes Foxconn, one of Apple’s major Chinese business partners:

The facility has 230,000 employees, many working six days a week, often spending up to 12 hours a day at the plant. Over a quarter of Foxconn’s work force lives in company barracks and many workers earn less than $17 a day. When one Apple executive arrived during a shift change, his car was stuck in a river of employees streaming past. “The scale is unimaginable,” he said.

Despite its obvious benefits, globalization has given us 19^th century England all over again, with one important exception: national governments no longer have the clout needed to pass much needed reforms such as restrictions on child labor, minimum wage laws, environmental protections, and so on.  And so the need for a global authority becomes apparent.

Or does it?  Here is where I think Catholic Social Thought offers a far more balanced perspective than both the political left — which tends to put too much faith in public policy — and the political right — which puts too much faith in markets.  Set aside for a moment Catholic neocons like George Weigel and Michael Novak, whose cheerleading for capitalism owes more to classical liberalism than to Catholicism.  What you’re left with is, on the one hand the perspective advanced by the Pontifical Council for Justice and Peace which released a document several months ago calling for a global authority to address the “inequalities and distortions of capitalist development,” and  on the other hand, distributism,  which points out that empowering a global authority involves risks that may not be worth taking and that a much more lasting solution would be working toward an economy in which most people are owners of productive property.

It seems to me significant that both poles are represented within the Church.  What the Pontifical Council rightly recognizes is that capitalism cannot just be wished away – that we must work within the framework it imposes (i.e. globalization) toward what Centissimus annus calls “freedom in its totality”.  Yet, at best, a global authority would help make a bad system (i.e. a system in which power and wealth are concentrated at the top) less bad.  What distributism imagines is a better system in which Chinese workers own Chinese factories and American workers own American companies – a sharp contrast to the separation of ownership and work epitomized by the Apple executive who the Times quotes as saying that Apple “shouldn’t be criticized for using Chinese workers . . . The U.S. has stopped producing people with the skills we need.”  Thus, while the technologically innovative Apple fails to think outside of the capitalist box when it comes to its business model, distributist businesses like the Mondragon Corporation in Spain have already begun to demonstrate that it is possible to be at once competitive and fair.

Distributism, of course, imposes risks of its own, as localism can quickly degenerate into rigid notions of cultural identity that lead to exclusion of perceived outsiders.   Hence, the hostility to the multiculturalism within some contemporary distributist circles and the infamous anti-semitism of the early distributists (though, to be clear, the basis for this was not race but the association of Jews with international finance).  I have heard protests to the contrary; however, after making my way through most of Ian Kerr’s new biography of G.K. Chesterton, I am inclined to partially agree with Adam Gopnik that even Chesterton was not immune to anti-semitism.

While the rival factions within the Catholic Church are each incomplete on their own, taken together they point us toward a unifying principle of subsidiarity, which, to quote Wikipedia, states that matters “ought to be handled by the smallest, lowest or least centralized competent authority.”  Subsidiarity, it seems to me, offers a way of thinking about globalization that avoids the overly rigid and simplistic faith in either big government or big business so common in politics today.

Mitt Romney, America’s CEO?

Mitt Romney has repeatedly insisted that his business experience qualifies him to be president; that he possesses a firm grasp of the economy and how it works that Obama lacks. Romney’s claim that a businessman would have a better grasp of job creation and economic growth than a bureaucrat seems at first to make intuitive sense, but quickly breaks down.

This is because, as Paul Krugman pointed out on Friday, America is “not, in fact, a corporation”:

Making good economic policy isn’t at all like maximizing corporate profits. And businessmen — even great businessmen — do not, in general, have any special insights into what it takes to achieve economic recovery.

Krugman goes on to describe a few specific differences between running a nation and running a corporation: the national economy is “vastly more complex” than a corporation and, moreover, corporations produce goods for other people whereas nations produce goods primarily for themselves.

Krugman could take the argument a step further. A private equity firm does not have to take into account competing goods; it simply maximizes profits by whatever means necessary. In Bain’s case, the profits were quite handsome: according to the New York Post, the firm made $578 million between 1987-1995 by investing 22 percent of its money in five companies. As it turns out, tens of thousands of middle class workers were laid off due to restructuring and all five companies eventually filed for bankruptcy, but this was all irrelevant to Romney the businessman. To Romney the politician, however, layoffs and bankruptcies are a serious liability; that’s the rub. The trouble with Romney’s rhetoric is not just that governing a country and running a private equity firm are two separate activities; it’s that each requires an entirely different outlook from the other. Broadly speaking, a businessman is sanctioned to pursue self-interest at whatever cost to others, whereas a politician is supposed to at least pretend to care about the general welfare. Arguing that experience at a private equity firm qualifies a person to president is a bit like arguing that experience as a drug dealer qualifies a person to be chief of police.

Now to be fair, Romney is a proponent of the “invisible hand” theory of capitalism whereby selfishness and greed in the marketplace mysteriously translate into public virtue. In defending Romney’s record, Reihan Salam makes an appeal to this theory:

Private equity accelerates “creative destruction,” moving firms out of obsolescence and into the cutting edge. Jobs are destroyed in the process. But jobs are also created. When target firms can’t increase operational efficiency, well, everything that can be sold off is and the money flows to some other business idea that will yield higher returns. That is one reason why, as the economists Nicholas Bloom and John Van Reenen recently observed, some countries are much more productive than others: they’re good at getting efficient firms to grow larger (and, as a corollary, letting less efficient firms die off). Creative destruction can be extremely hard on workers and families. Yet crippling this process leaves an economy riddled with weak, inefficient companies that sure as heck won’t create new jobs.

Perhaps it is true that Bain and private equity firms like it are guided by Invisible Hand. Perhaps, but that is not to Romney’s credit. (I leave aside Romney’s wildly misleading claim to have created 100,000 jobs while at Bain.) The most Romney can claim is that his time at Bain demonstrates his uncanny ability to generate wealth for corporate investors — which somehow I don’t think will go over well in the general election. If I were Romney, I would change the subject to the Olympics.

The Irrelevance of Ron Paul

Awhile back, Obama appeared on the Daily Show to defend his record against various criticisms from disgruntled liberals. At one point, Jon Stewart pointed out that many liberals felt Obama had not delivered on his campaign promise of changing Washington, in response to which Obama highlighted several legislative accomplishments and insisted that change doesn’t come overnight.

Although I remain a committed Obama supporter, I think it is plain that Obama’s critics, as channeled by Stewart, are correct on this point. With considerable help from the media, Obama portrayed himself as a transformative figure during the 2008 campaign — which turns out to have been highly misleading. An Obama presidency was going to transcend partisan divisions; instead polarization has intensified since Obama took the oath of office, as illustrated by the debt ceiling crisis and subsequent failure of the supercommittee to agree on a deficit reduction plan. Meanwhile, Obama has embraced many aspects of Bush’s foreign policy and has been far too timid on the economy, passing an insufficiently large stimulus package and extending the Bush tax cuts for the wealthy without much of a fight.

I revisit these grievances not so as to criticize Obama, but so as to introduce a point I would like to make about Ron Paul. Paul, it seems to me, is offering Republican voters what Obama seemed to offer Democratic voters in 2008: the promise of remaking the political system. The political visions of Obama and Paul differ enormously, of course. And undoubtedly there are Paul supporters now who back Paul because they agree with Paul — just as there were Obama supporters then who backed Obama because they agreed with Obama. But what I have noticed is that most Paul supporters tend to support him simply as an antidote to the status quo, while fully acknowledging his quakery on the gold standard, the Federal Reserve, and other issues.

Fine. But, even conceding Glenn Greenwald’s point (and I do) that, from a left-wing perspective, Paul is raising important but otherwise neglected points on foreign policy, and, from a right-wing perspective, Mark Shea’s point that Paul is “a sort of counterweight to the Party of Crazy,” where does that leave us? If we’ve learned nothing else from the Obama presidency, it is that elections cannot fundamentally alter our political system. If Paul were serious about winning the presidency, he would need to rapidly move toward the center – which, of course, won’t happen. Even supposing an electoral miracle in which Paul continued to espouse libertarianism but somehow won the presidency, Paul would out of political necessity end up embracing centrist policies once in office. As Warren points out, the hypothetical president Paul’s political dilemma would be this:

So, we’d either have a president who has to compromise all the far-fetched goals of his candidacy to get things done and would thus be portrayed as weak or, if he’s successful in implementing his radical positions, he’d make huge changes to our government that would be unpopular with the majority of Americans and/or cause our economy to tailspin after 2 years of a hard fought, slow recovery.

As his supporters freely acknowledge, Paul is unelectable. Beyond that, there isn’t much to discuss – let alone get upset about – regarding Paul beyond the general merits of libertarianism and the value of having Paul’s views represented on the national stage.

This leaves aside the question of voting one’s conscience. Even knowing that Paul can’t win, should I nevertheless vote for him? If I am a committed libertarian or constitutionalist, then yes, I should. But most of us aren’t committed libertarians or constitutionalists. Moreover, if I am voting purely on the basis of conscience, then the “lesser of two evils” argument — including the argument that Paul is preferable to Obama on foreign policy — falls by the wayside. Paul is either electable or he is not electable. If he is not electable, it doesn’t really matter how he stacks up ideologically next to Romney or Obama. What matters, if I am to vote my conscience, is the extent to which he conforms to my own personal vision of the Good. But if this is the case, then for a liberal concerned about foreign policy and civil liberties, Dennis Kucinch would be preferable to Paul. And since neither has a chance of winning the election, it doesn’t much matter whether or not Kucinch is running. For a conservative, Paul Ryan might be a better choice. Personally, I would write in John Medaille.

As you can see, there is a reductio ad absurdum to voting one’s conscience. This is because the notion of a conscience divorced from practical and political realities is fundamentally incoherent. Trying to use the ballot box to overturn the status quo is like trying to use a minivan to overthrow traffic laws. This isn’t to dismiss revolutionary impulses as impractical, but to suggest that they work best outside of the political system altogether. Case-in-point: Occupy Wall Street.

Foreign Policy Apples to Oranges: Greenwald on Obama and Ron Paul

Ron Paul presents a unique dilemma for progressives.  On the one hand, his fondness for deregulating markets and the dismantling of the welfare state is consistent with the policy preferences of his GOP primary counterparts.  Paul is arguably worse on the economy than Huntsman or Romney insofar as he, unlike the later candidates, seeks to eliminate, rather than merely reduce the size of, Social Security, Medicare, and other essential programs (which are in his view “unconstitutional”).

So why are some of my Occupy Minnesota friends suddenly getting turned on to congressman Paul?  In a word, priorities.  It cannot be denied that Paul compares quite favorably with Obama on civil liberties and foreign policy, as Glenn Greenwald points out in this recent post.  Echoing Jefferson’s denunciations of George III, Greenwald makes Obama look positively tyrannical:

The candidate supported by progressives — President Obama — himself holds heinous views on a slew of critical issues and himself has done heinous things with the power he has been vested. He has slaughtered civilians — Muslim children by the dozens — not once or twice, but continuously in numerous nations with drones, cluster bombs and other forms of attack. He has sought to overturn a global ban on cluster bombs. He has institutionalized the power of Presidents — in secret and with no checks — to target American citizens for assassination-by-CIA, far from any battlefield. He has waged an unprecedented war against whistleblowers, the protection of which was once a liberal shibboleth. He rendered permanently irrelevant the War Powers Resolution, a crown jewel in the list of post-Vietnam liberal accomplishments, and thus enshrined the power of Presidents to wage war even in the face of a Congressional vote against it. His obsession with secrecy is so extreme that it has become darkly laughable in its manifestations, and he even worked to amend the Freedom of Information Act (another crown jewel of liberal legislative successes) when compliance became inconvenient.

I won’t quote the passage in full, as it is quite lengthy.  I think, though, that this paragraph alone raises serious questions about Obama’s credibility.

Here’s the thing, though.  Greenwald conveniently glosses over the distinction between what Aristotle would call the major and minor premises of practical reasoning.  The major premise is the general notion or notions by which one acts.  In the case of the war in Afghanistan – and, more generally, the War on Terror – the notion is something like “rooting out terrorism in countries like Afghanistan and Pakistan will help save American lives.”  The minor premise is a specific circumstance, e.g. “a drone strike in Waziristan will kill five militants.”

Now obviously ends don’t justify means.  There are, according to my view at least, certain things that just should not be done under any circumstances.  With that said, a distinction ought to be made between an attack that is directed at civilians (which is arguably never justified) and an attack against combatants that results incidentally in civilian casualties (which inevitable in any war).   As for the expansion of presidential powers, the nondisclosure of government documents, and related matters, Greenwald takes it as self-evident that these measures can never be justified – and, to be clear, I find the actions of the Obama administration deeply troubling in these respects.  However, it is not difficult to think of considerations that might lead to a more nuanced view, e.g. an imminent threat to American lives.

I don’t at all mean to engage in a sophistic defense of Obama here.  Rather, what I want to suggest is that Greenwald is making an apples-to-oranges comparison between Obama and Paul.  The overall thrust of Obama’s foreign policy — that is, the major premise — isn’t cluster bombs or drone strikes; it is the belief that war in Afghanistan can help protect American lives and that the benefits of such a war outweigh the costs.  The overall thrust of Paul’s foreign policy, by contrast, is non-intervention (though presumably Paul would use military force to counter a direct attack).  That is a more relevant comparison.

At the same time, there is a sense in which the comparison is still not quite apples to apples, but more like apples to crab apples.  After all, Paul’s non-interventionism is a position at far greater level of abstraction than Obama’s views on Afghanistan.  In reality, the most relevant comparison would be Paul’s non-interventionism and Obama’s Wilsonian idealism.  Personally, I lean toward the former, though out of practical considerations, rather than the ironclad belief that the government should never under any circumstances do anything more than enforce contracts and protect property rights. With that said, Greenwald’s critique of Obama is far less damning when framed as a choice between rival philosophies, rather than as a litany of offenses on the part of the Obama administration – especially considering that the effects of Wilsonian foreign policy have not been entirely negative. 

Blogatical

Blogging has connected me with others and deepened my understanding of politics. It has also added considerable stress to my life. Not the writing part, so much as wading through the endless barrage of posts in my RSS feed.

Seeking information on the Internet, the saying goes, is like taking a sip of water from a fire hose. I think the task can be managed successfully, but it sure does take focus. And that is what I need a whole lot more of right now: the ability to sit down with a book or a friend or a meal and just be present. So be present is what I’m going to do.

Just not online.

Having a Hard Time Finding a Job?

This may have something to do with it:

In other news, the fine folks at JPMorgan Chase saw a 47% increase in profits last year.

There’s a line in an Elvis Costello song: “I used to be disgusted, now I try to be amused.” Me, I’m just bored.

Democracy vs. Fake Democracy

Via the Dish:

What is Freedom?

In its quest for scientific objectivity and prestige, economics has tended to shy away from normative evaluations. Paul Krugman may favor a generous welfare state, and Thomas Sowell unfettered competition, but both economists imagine themselves to be simply describing the world as it is — as do their peers. Hence, Krugman and his saltwater peers assume that “the facts have a liberal bias,” and freshwater economists do just the opposite.

In previous posts, I have insisted that factual assertions are always value-laden. (As does Thomas Stork in this excellent discussion of the role “power and institutions” play in determining wages.) It would appear that at least one economist agrees: Harvard business professor Edward L. Glaeser, who identifies “human freedom” as the moral core of the economics discipline, and who cites Adam Smith and John Stuart Mill as examples of economists who saw freedom as “a fundamental good, a thing to be valued for itself.”

In elaborating this point, Glaeser runs into the same problem his Enlightenment predecessors did: defining freedom. If it is true that economists assume that freedom of choice is “the fundamental objective of public policy,” shouldn’t they at least establish what that objective entails?

Apparently not:

Economists’ fondness for freedom rarely implies any particular policy program. A fondness for freedom is perfectly compatible with favoring redistribution, which can be seen as increasing one person’s choices at the expense of the choices of another, or with Keynesianism and its emphasis on anticyclical public spending.

Many regulations can even be seen as force for freedom, like financial rules that help give all investors the freedom to invest in stocks by trying to level the playing field.

Freedom might mean wealth redistribution and regulation of the financial sector, but it might not. Despite having quoted John Stuart Mill as saying that “the only freedom which deserves the name is that of pursuing our own good in our own way, so long as we do not attempt to deprive others of theirs, or impede their efforts to obtain it,” Glaeser now acknowledges that freedom is compatible with “increasing one person’s choices at the expense” of another. Mill gave us a definition of freedom that — however flawed — is at least clear-cut. Glaeser allows freedom to become a balancing act, but does not profess to know how or whether it should be performed.

When it comes to “human interaction and trade,” however, Glaeser reverts to Mill’s definition of freedom, understood within a distinctly neoliberal framework. For Glaeser and other economists (including Krugman!), it is simply misguided to argue that the choices of a sweatshop worker ought to be increased at the expense of the choices of a Nike, Walmart, or Starbucks. Somehow, in the case of NAFTA and other trade agreements, freedom does imply a particular policy program.

But why? Is freedom not possible apart from competition within a capitalist system? Were the small farmers of Mexico unfree before their country opened its borders to American corn? Is freedom $1.00 per hour at a Maquiladora? Is it becoming an undocumented worker in a foreign land just to survive?

Is choosing capitalism freedom?

Mac Haters, Meet Anti-Catholics

A few days ago, Andrew Sullivan described Apple Stores as having the “innovation and beauty” that a “renewed Christianity would muster in its churches, if it hadn’t collapsed in a welter of dogma and politics.” As a fellow Mac enthusiast and liberal Roman Catholic, I couldn’t agree more.

I was amused this morning by this Dish reader’s reply, which sought to deny Apple’s status as a “secular Church.” To my mind, at least, the reader’s criticisms only strengthened Sullivan’s point. I mean, the analogy is a bit ridiculous to begin with — but let’s run with it. Suppose I substitute words like “the Catholic Church” and “Roman Catholics” each time the Dish reader uses “Apple” and “Apple users,” and vice versa. What results is (with a few edits) as follows:

You disappoint me with your praise for the Catholic Church. If anything, the Church seeks to brainwash . . . Apple products are designed to bring a sense of warmth and spirituality and mysticism; the Catholic Church is sterile and smug. Catholic Churches look like a room out of the Death Star more than an Apple Store or a place I would want to worship.

What galls me the most about the Catholic Church is their slogan — “A human being must always obey the certain judgment of his conscience.” This is as Orwellian as it gets, considering that customization is the enemy of all things Roman Catholic.

They want complete control over all religious believers at all times. If you need God, you can only get him from The Catholic Church . . . I come back to the evil empire again because it truly is what The Catholic Church most resembles.

What’s worse about the slogan is that I’ve never encountered such groupthink as I do with Roman Catholics. Everything The Church teaches about faith and morals is infallible. No questions asked. When you suggest there might be some issues such as pedophilia, you are completely shot down. Criticism is not allowed in the house of Benedict XVI (as proven by its recent attempts to censor any and all critics).

Finally, we get to the worst of it: Roman Catholics tend to think that the Church cares about them. They think of the Church as their friend, far more than just an organization that wants their money.

What Happens When Two Geniuses Get Together

…is this.