By William K. Black
Quito: June 21, 2015
A New York Times article entitled “Championing Environment, Francis Takes Aim at Global Capitalism” quotes a conventional Harvard economist, Robert N. Stavins. Stavins is enraged by Pope Francis’ position on the environment because the Pope is “opposed to the world economic order.” The rage, unintentionally, reveals why conventional economics is the most dangerous ideology pretending to be a “science.”
Stavins’ attacks on the Pope quickly became personal and dismissive. This is odd, for Pope Francis’ positions on the environment are the same as Stavins’ most important positions. Stavins’ natural response to the Pope’s views on the environment – had Stavin not been an economist – would have been along the lines of “Pope Francis is right, and we urgently need to make his vision a reality.”
Stavins’ fundamental position is that there is an urgent need for a “radical restructuring” of the markets to prevent them from causing a global catastrophe. That is Pope Francis’ fundamental position. But Stavins ends up mocking and trying to discredit the Pope.
I was struck by the similarity of Stavins response to Pope Francis to the rich man’s response to Jesus. The episode is reported in Matthew, Mark, and Luke in similar terms. I’ll use Matthew’s version (KJAV), which begins at 19:16 with the verse:
And, behold, one came and said unto him, Good Master, what good thing shall I do, that I may have eternal life?
And he said unto him, Why callest thou me good? there is none good but one, that is, God: but if thou wilt enter into life, keep the commandments.
The young rich man wants to know which commandments he needs to follow to gain eternal life.
He saith unto him, Which? Jesus said, Thou shalt do no murder, Thou shalt not commit adultery, Thou shalt not steal, Thou shalt not bear false witness,
Honour thy father and thy mother: and, Thou shalt love thy neighbour as thyself.
The young man saith unto him, All these things have I kept from my youth up: what lack I yet?
The young, wealthy man is enthused. The Rabbi that he believes has the secret of eternal life has agreed to personally answer his question as to how to obtain it. He passes the requirements the Rabbi lists, indeed, he has met those requirements since he was a child.
But then Jesus lowers the boom in response to the young man’s question on what he “lacks.”
Jesus said unto him, If thou wilt be perfect, go and sell that thou hast, and give to the poor, and thou shalt have treasure in heaven: and come and follow me.
We need to “review the bidding” at this juncture. The young man is wealthy. He believes that Jesus knows the secret to obtaining eternal life. His quest was to discover – and comply – with the requirement to achieve eternal life. The Rabbi has told him the secret – and then gone well beyond the young man’s greatest hopes by offering to make him a disciple. The door to eternal life is within the young man’s power to open. All he needs to do is give all that he owns to the poor. The Rabbi goes further and offers to make the young man his disciple. In exchange, the young man will secure “treasure in heaven” – eternal life and a place of particular honor for his sacrifice and his faith in Jesus.
Jesus’ answer – the answer the young man thought he wished to receive more than anything in the world – the secret of eternal life, causes the young man great distress.
But when the young man heard that saying, he went away sorrowful: for he had great possessions.
The young man rejects eternal life because he cannot bear the thought of giving his “great possessions” to “the poor.” Notice that the young man is not evil. He keeps the commandments. He is eager to do a “good thing” to gain eternal life. He has “great possessions” and is eager to trade a generous portion of his wealth as a good deed to achieve eternal life. In essence, he is seeking to purchase an indulgence from Jesus.
But Jesus’ response causes the young, wealthy man to realize that he must make a choice. He must decide which he loves more – eternal life or his great possessions. He is “sorrowful” for Jesus’ response causes him to realize that he loves having his great possessions for his remaining span of life on earth more than eternal life itself.
Jesus offers him not only the means to open the door to eternal life but the honor of joining him as a disciple. The young man is forced by Jesus’ offer to realize that his wealth has so fundamentally changed him that he will voluntarily give up his entry into eternal life. He is not simply “sorrowful” that he will not enter heaven – he is “sorrowful” to realize that heaven is open to him – but he will refuse to enter it because of his greed. His wealth has become a golden trap of his own creation that will damn him. The golden bars of his cell are invisible and he can remove them at any time and enter heaven, but the young man realizes that his greed for his “great possessions” has become so powerful that his self-created jail cell has become inescapable. It is only when Jesus opens the door to heaven that the young man realizes for the first time in his life how completely his great possessions have corrupted and doomed him. He knows he is committing the suicide of his soul – and that he is powerless to change because he has been taught to value his own worth as a person by the extent of his great possessions.
Jesus then makes his famous saying that captures the corrupting effects of great wealth.
Then said Jesus unto his disciples, Verily I say unto you, That a rich man shall hardly enter into the kingdom of heaven.
And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.
The remainder of the passage is of great importance to Luther’s doctrine of “justification by faith alone” and leads to Jesus’ famous discussion of why “the last shall be first,” (in which his anti-market views are made even more explicit) but the portions I have quoted are adequate to my purpose.
Pope Francis’ positions on the environment and climate are the greatest boon that Stavin has received in decades. The Pope, like Stavins, tells us that climate change is a disaster that requires urgent governmental action to fix. Stavins could receive no more joyous news. Instead of being joyous, however, Stavins is sorrowful. Indeed, unlike the wealthy man who simply leaves after hearing the Rabbi’s views, Stavins rages at and heaps scorn on the prelate, Pope Francis. Stavins’ email to the New York Times about the Pope’s position on climate change contains this double ideological smear.
The approach by the pope, an Argentine who is the first pontiff from the developing world, is similar to that of a “small set of socialist Latin American countries that are opposed to the world economic order, fearful of free markets, and have been utterly dismissive and uncooperative in the international climate negotiations,” Dr. Stavins said.
Stavins’ work explicitly states that the “free markets” he worships are causing “mass extinction” and a range of other disasters. Stavins’ work explicitly states that the same “free markets” are incapable of change – they cause incentives so perverse that they are literally suicidal – and the markets are incapable of reform even when they are committing suicide by laissez faire. That French term is what Stavins uses to describe our current markets. Pope Francis agrees with each of these points.
Pope Francis says, as did Jesus, that this means that we must not worship “free markets,” that we must think first of the poor, and that justice and fairness should be our guides to proper conduct. Stavins, like the wealthy young man, is forced to make a choice. He chooses “great possessions.” Unlike the wealthy young man, however, Stavins is enraged rather than “sorrowful” and Stavins lashes out at the religious leader. He is appalled that an Argentine was made Pope, for Pope Francis holds views “that are opposed to the world economic order [and] fearful of free markets.” Well, yes. A very large portion of the world’s people oppose “the Washington Consensus” and want a very different “world economic order.” Most of the world’s top religious leaders are strong critics of the “world economic order.”
As to being “fearful of free markets,” Stavins’ own work shows that his use of the word “free” in that phrase is not simply meaningless, but false. Stavins explains that the people, animals, and plants that are the imminent victims of “mass extinction” have no ability in the “markets” to protect themselves from mass murder. They are “free” only to become extinct, which makes a mockery of the word “free.”
Similarly, Stavins’ work shows that any sentient species would be “fearful” of markets that Stavins proclaims are literally suicidal and incapable of self-reform. Stavins writes that only urgent government intervention that forces a “radical restructuring” of the markets can save our planet from “mass extinction.” When I read that I believed that he was “fearful of free markets.”
We have all had the experience of seeing the “free markets” blow up the global economy as recently as 2008. We saw there, as well, that only massive government intervention could save the markets from a global meltdown. Broad aspects of the financial markets became dominated by our three epidemics of “accounting control fraud.”
Stavins is appalled that a religious leader could oppose a system based on the pursuit and glorification of “great possessions.” He is appalled that a religious leader is living out the Church’s mission to provide a “preferential option for the poor.” Stavins hates the Church’s mission because it is “socialist” – and therefore so obviously awful that it does not require refutation by Stavins. This cavalier dismissal of religious beliefs held by most humans is revealing coming from a field that proudly boasts the twin lies that it is a “positive” “science.” Theoclassical economists embrace an ideology that is antithetical to nearly every major religion.
Stavins, therefore, refuses to enter the door that Pope Francis has opened. Stavins worships a system based on the desire to accumulate “great possessions” – even though he knows that the markets pose an existential threat to most species on this planet and even though he knows that his dogmas increasingly aid the worst, most fraudulent members of our society to become wealthy through forms of “looting” (Akerlof and Romer 1993) that make other people poorer. The result is that Stavins denounces Pope Francis rather than embracing him as his most valuable ally.
Conclusion: Greed and Markets Kill: Suicide by Laissez Faire
The old truths remain. The worship of “great possessions” wreaks such damage on our humanity that we come to love them more than life itself and act in a suicidal fashion toward our species and as mass destroyers of other species. Jesus’ insight was that this self-corruption is so common, so subtle, and so powerful that “It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.” Today, he would probably use “economist” rather than “camel.”
Theoclassical economists are the high priests of this celebration of greed that Stavins admits poses the greatest threat to life on our planet. When Pope Francis posed a choice to Stavins, he chose to maintain his dogmatic belief in a system that he admits is suicidal and incapable of self-reform. The reason that the mythical and mystical “free markets” that Stavins worships are suicidal and incapable of self-reform even when they are producing “mass extinction” is that the markets are a system based on greed and the desire to obtain “great possessions” even if the result is to damn us and life on our planet.
Adam Smith propounded the paradox that greed could lead the butcher and baker (in a village where everyone could judge reputation and quality) to reliably produce goods of high quality at the lowest price. The butcher and baker, therefore, would act (regardless of their actual motivations) as if they cared about their customers. Smith observed that the customer of small village merchant’s products would find the merchant’s self-interest a more reliable assurance of high quality than the merchant’s altruism.
But Stavins makes clear in his writing that this is not how markets function in the context of “external” costs to the environment. In the modern context, the energy markets routinely function in a manner that Stavins rightly depicts as leading to mass murder. Stavins so loves the worship of the quest for “great possessions” that he is eager to try to discredit Pope Francis as a leader in the effort to prevent “mass extinction” (Stavins’ term) – suicide by laissez faire.
(No, I am not now and never was or will be a Catholic.)
Who’d have thunk it that Mr. Black is so well-versed in the true teachings of Christ. The Pope also said over the weekend that any person involved in the arms business cannot call himself a Christian without being a hypocrite. Sure puts the lie to W’s professed born-again Christianity, as it does to the rest of the Republicans inane comments that “I don’t listen to the Pope regarding politics”, as if global climate change and the armament industry and the warmongers were simply political issues. And it surely puts the lie to all those Republicans — the ones you find on Fox news, for example — who constantly bray about how this nation was founded on Judeo-Christian morality but reject the teachings of a true Christian if it upsets their world views. Nothing stinks more than self-righteous hypocrisy.
@m s 57 You’re being a bit mean-spirited there. I for one enjoyed the piece and don’t think it’s self-righteous in the least. I think it’s a dig at economists which is fair enough in my book.
It is unfortunate that this article — well-intentioned though it is — thoroughly misrepresents my views (and misquotes me). I do not know the source of the commentary that is associated with my name, but I regret this very much. I certainly have not been dismissive of the Pope nor his message, nor have I ever expressed any personal attack on the Pope, the great institution he represents, or his broader message. I have simply expressed my sincere disagreement with one element of the encyclical, , as noted in the New York Times, because my view after decades of careful study is that carbon taxes and well-designed carbon cap-and-trade systems are the best and most feasible approach for addressing climate change in a meaningful way in sufficient time. This is not about the defense of markets per se, but about successfully addressing the threat of climate change.
The painful choice offered the rich man is the bargain of Faust. The consequence of choosing the wealth of the world is loss of his soul. The assumption in both cases is that virtue requires the surrender of wealth, indeed the rich man cannot qualify for eternal life. His charitable impulse must be to give everything to the poor, nothing withheld. But is this assumption correct? No, a strong case can be made that a rich man, totally motivated to helping the poor, can best do so by maintaining his wealth to provide a steady stream of wise charity totally motivated by altruism; best because the amount he gives will cumulatively greatly exceed what he would have given in in one grand gesture. The rich man does not have to compromise; the key here is that his motivation remains total. Wealth is not in itself sinful; greed is, which he totally lacks. Poverty in itself is not virtuous, and is not a required condition of virtue. Therefore he doesn’t have to make the grand gesture by surrendering his wealth in order to acquire virtue. Virtue lies in the nobility of his total altruism. So what Pope Francis criticizes is not wealth, but the greed that motivates some rich men. Their greed impels them to resist regulation of their market behavior by embracing laissez faire. They do so entirely out of single minded self-interest, which is greed. I feel sure that Pope Francis is not telling us to acquire virtue, eternal life, by running off naked toWalden Pond. In the path of Jesus, he embraces charity and rejects greed. We all know that some people who don’t read history embrace laissez faire because they mistakenly believe the unregulated market will regulate itself. Wrong as this belief demonstrably is, the underlying motivation of such people is not necessarily greed. Obviously not all people who strive in the marketplace are guilty of the sin of greed.
ChathamH Forbes Sr.: Would you personally like to receive your living through charitable giving because it “provide[s] a steady stream of wise charity totally motivated by altruism; best because the amount he gives will cumulatively greatly exceed what he would have given in in [sic] one grand gesture?” You see, even the poorest and most bereft man or woman would rather earn his/her own living than be handed charity even by the wealthiest man.
I disagree with you that “Wealth is not in itself sinful.” The thing that allows some to become wealthier than others is greed; you cannot have one without the other.
You are following the same logic as the wealthy young man in Jesus’s story.
JEHR: No, I am not following the same “logic.” Think again. You have said that wealth is in itself sinful. Obviously that is an incorrect statement. Neither in its acquisition nor its maintenance is it sinful. What is sinful is greed, the motivation of total self-aggrandizement, the miserly mindset, the obsession with personal gain to the exclusion of all else. This mindset is not prerequisite to acquiring and keeping wealth. Surely you can see this?
I am sorry to say, Mr. Stavins, but we should all be very careful about our present economic world order which includes so-called free markets because the “free” does indeed apply only to the freedom of the market to do whatever the “marketers” want without regard to the impact on people and their environment. Just look at the Alberta tar sands which in a few years will turn most of Alberta into a moonscape. We cannot afford to lose even one mouse because of pollution let alone dozens of ecosystems in our country!
Mr. Black, a tour de force!
I am always impressed by Prof. Black’s occasional, and erudite, references to Luther’s writings. I am surprised, I must say, to hear that he was never a Catholic! I had assumed, given his interest in matters Irish, that he was, at least, a cultural Catholic. Cardinal Cajetan tried to force Luther to recant, but who could make Pope Francis recant? Of course, his is no Augsburg Confession, but just a restatement of what has been the Catholic position on wealth for hundreds of years.
Good for the Pope! Here are some suggestions for how his church can lead the way:
Pope Francis: Care for Our Common Home
By Catherine Austin Fitts
A Papal Encyclical is a letter concerning Catholic doctrine which is circulated by the Pope. This week, Pope Francis published a new Encyclical: Laudato Si’ of the Holy Father Francis – Care for Our Common Home.
The 180+ page document sounds the alarm regarding the global degradation of living things: people, animals and our environment.
If this document had been authored by a professor of theology, there would be much room for common ground. However, it has been written by the leader of an institution which has been the single most powerful in the Western world for the last 500 years – a period during which the central banking-warfare model has been busy harvesting our common whole.
There is a profound disassociation from the nuts-and-bolts of what the Catholic Church (and its networks and investment syndicates) have been doing and the sources of their wealth. This Encyclical is, if you will, a concept piece independent of the financial and political realities of the Vatican, the Catholic Church and its allies.
Assuming that Pope Francis first and foremost addressed the Encyclical to bishops, patriarchs, primates, archbishops as well as to the general population, I would like to propose several steps which the Pope, the Vatican and the leadership of the Catholic Church (collectively, the “Church”) might take to integrate some of the best ideas in this document into the power lines controlled and influenced by the Church. (continued)
To refer to the current economic order as “laissez faire” is totally bizarre. It is light-years away from laissez faire, and that is precisely the problem.
Peter Tenebraum: (Forgive my misspelling of your name, but it isn’t before me.) Do I understand you correctly that you believe that the alleged absence of laissez faire is the problem? Perhaps you and I define laissez faire differently. My understanding of the term is a totally free market, unfettered by any regulation. If that is your definition also, then we disagree entirely. Unrestrained market activity, i.e. laissez faire, has repeatedly, in fact invariably, brought down the entire economy in this country. Since that is incontrovertible historical fact, how can you support the rationale for laissez faire? Remember that the term is an absolute. It’s either a free market or it’s not a free market. Moreover, self-regulation of the free marketplace is a contradiction in terms. In practice, self-regulation simply hasn’t worked, as Bill Clinton later discovered when he allowed it and the market responded with ruinous casino activity and disaster. As Santayana told us in 1905, those who don’t read history are doomed to repeat it. Laissez faire, in any language, is a very bad idea.
Mr Stavins, I would tend to disagree with your point of view regarding cap and trade and carbon taxes being the best way to address climate change. A successful measure would be to take the bull by the horns today and say we will produce less green house gas emiting fuel than we did yesterday; tomorrow we make less than we used today. We would continue this until we no longer use carbon as an energy source.
Neccessity is the mother of invention. If we don’t make limiting carbon based fuels an immediate and ongoing process we fail to create the demand for the alternatives of the future.
Clearly, we are all not able to see how preventing further climate change is a neccesity but markets do respond to the creation of a new need. Isn’t this what the productive part of industry needs to kick start it again?