Phil Hauck's TEC Blog

Sunday, January 25, 2015

Teaching Capitalism to Catholics

       Excellent column recently in the WSJ, trying to reconcile the practice of “free" markets with Catholic “social justice” principles … the accusation being that the two are incompatible.  Actually, quite the opposite.
The Catholic position posits that the following are  critical components of a “just” economic system:
    •  Protection of private property and human freedom;
    •  Concern for the common good (meaning, all people);
    •  Respect for human dignity;
    •  “Preferential option” for the poor.
Capitalism, properly formulated, does exactly this.  These are the Morals that must underly the practice of capitalism (which in a standalone form is amoral).  Indeed, even mediocre practices of capitalism have resulted in lifting more people from poverty than any other system ever tried.
The problem is that virtually every government corrupts capitalism.  Politicians listen to business advocates and pass rules and taxes that favor somebody over somebody else.  It’s plenty bad in the U.S. (witness the need to pass major tax reform that removes huge numbers of tax advantages for certain businesses), but much worse in other countries, especially Italy.  Lobbyists aren’t all bad, but their job is to advocate for regulations and tax changes that benefit their sponsors … to the detriment of someone else (whether other businesses or the general populace).
Yes, there need to be regulations and codes … but only the ones that provide the moral foundation desired by “the people” generally, and not specific interests.
The corruption of capitalism by politicians serving special interests (companies and business associations providing campaign dollars clearly want influence) is what is giving capitalism a bad name.  
So, decide what regulations and taxes we want to change … and the more tax breaks/deductions/credits we eliminate, the “purer” a capitalistic free market system we’ll have.  The trouble is that someone is benefiting from every one of those tax breaks/deductions/credits … and will be arguing and funding against the changes.
PS:  As far as the “preferential option” for the poor, we have that … in the form of Earned Income Tax Credits, housing allowances, what used to be called food stamps, training grants, unemployment comp and the like.  All are good, to the degree they benefit those while they are unable to fend for themselves.

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