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How Catholic Social Thought Helps Us Rethink Globalization

January 22, 2012

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 19th 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.

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