The pope commends Mazzucato's thinking for offering a compelling analysis of problems in the global economy and what can be done to build a more sustainable and fairer world.

This coincides with his own hopes, including reframing economics on the basis of universal human values.

In November 2022 he appointed Mazzucato, a "great economist", to the Pontifical Academy for Life to "give it a little more humanity" and broaden its scope.

Both Francis and Mazzucato are highly critical of neoliberal forms of capitalism that have concentrated wealth in the hands of a few at the expense of the great majority of people.

Both urge reforms in global economic systems to eradicate hunger, gross poverty and inequality, as well as averting, in the pope's words, the looming climate "catastrophe".

Both have been strong supporters of the UN Sustainable Development Goals as the most promising program to promote a more just and inclusive order, yet they are alarmed that the SDGs are nor achieving their targets.

Many people are aware of the pope's call to action to remedy climate change and keep fossil fuels in the ground, but not so many know of his advocacy for reform of the international economy.

Francis embraced the UN SDGs as an historic effort to create a more humane and equitable world, and wrote Laudato si' in collaboration with some of the key architects of the SDGs.

The encyclical of May 2015 did not explicitly name the SDGs, since they were not approved until the UN delegates voted for them on 25 September 2015, immediately after the pope had addressed the UN General Assembly.

Active in economic and policy circles, and an advisor to many governments

Writing in "Financing the Common Good" in the Project Syndicate on 1 May 2023, Mazzucato insisted that "to create a truly inclusive economy… deep structural change is needed".

She echoed UN Secretary General Antonio Guterres in calling for a "Common Agenda" for global cooperation with decisive action.

Guterres warned that "the defining principle of the 2030 Agenda for Sustainable Development is a shared promise by every country to work together to secure the rights and well-being of everyone on a healthy, thriving planet. But halfway to 2030, that promise is in peril".

Mazzucato is particularly critical of how rich countries during the COVID-19 crisis, "aided by a flawed system of intellectual-property rights, hoarded vaccines".

She writes that "more than a million lives could have been saved" if accessibility and equity had been made explicit objectives in distributing vaccines.

Mazzucato is very active in economic and policy circles, advising many governments.

A dynamic speaker, she frequently addresses international conferences and has published widely.

Many of her talks are posted on the internet, including several TED presentations.

In 2020 she was appointed chair of the World Health Organisation's Council on the Economics of Health for All.

She has also served on the UN's High Level Advisory Board on Economic and Social Affairs, the UN's Sustainable Development Solutions Network Leadership Council, and the UN's Committee for Development Policy.

An Italian-American, she completed her PhD in economics at the New School of Social Research in New York in 1999, and lectured in US and overseas universities, including the University of Technology in Sydney in 2014.

In 2017 she became Professor in the Economics of Innovation and Public Value at University College London, and founded its Institute for Innovation and Public Purpose. She is married with four children.

Pope Francis has been reading Mazzucato for some years

In a recent book, The Big Con: How the Consulting Industry Weakens our Businesses, Infantilizes our Governments and Warps our Economies, Mazzucato and her colleague Rosie Collington expose the astonishing fraud and malpractice in the international financial services sector. The current situation of PwC in Australia illustrates the problem precisely.

Mazzucato and Collington in "Consultants and the Crisis of Capitalism" in Project Syndicate on 2 March 2023 pointed to "deeper structural problems with contemporary capitalism.

The consulting industry may not be wholly responsible for the financialization of the economy, corporate 'short-termism', or the gutting of the public sector, but it certainly thrives on them".

They "profited massively from the push toward privatization, management reform, private financing, outsourcing, digitalization, and austerity".

Pope Francis has been reading Mazzucato for some years.

Writing to a committee of judges about social inequality and the cost of COVID-19 vaccines in 2020, he urged people to read her book, The Value of Everything: Making and Taking in the Global Economy, saying that the world had lost sight of the true meaning of value. "I believe [her vision] can help to think about the future," he commented.

Mazzucato tweeted back: "Deeply honoured that the pope has read my book… and that he agrees that the future - especially post-COVID-19 - has to see a re-prioritization of 'value' over 'price'."

Advocating the State's role in promoting and protecting the common good

Mazzucato is well known for her 2013 book The Entrepreneurial State: Debunking Public vs. Private Sector Myths.

She highlighted the role that governments played in developing radical new innovations, like the internet, where government took the risks but private companies reaped the financial rewards.

Her 2018 book, The Value of Everything, critiqued neoclassical economics and argued that many large private firms have become rent-seekers, drawing excess profits from products that contribute no real value.

Against neoliberal policies of small government, she argued that the state has to shape the market so that it is not captured by powerful special interests and instead works for the common good.

Her Mission Economy: A Moonshot Guide to Changing Capitalism (2021) argued that when the United States decided to land men on the moon, the government put all its available resources into achieving this goal, in cooperation with private firms.

Mazzucato urged the international community likewise to prioritize critical social goals, as in the SDGs, and to mobilize resources needed to achieve them.

Francis does not claim to be an economist, but he is appealing to Mazzucato, other economists and people of goodwill everywhere to work collaboratively in shaping a world where everyone has the opportunity and resources to lead a more fulfilling life.

• Bruce Duncan is a Redemptorist priest and an emeritus lecturer in areas of social justice at Yarra Theological Union in Melbourne (Australia). He is a former editor of Social Policy Connections.
• Republished with permission from La Croix International.

"We won't properly absorb the lessons from the coronavirus crisis if we fall back into the traditional Republican and Democratic model of politics. We need a new vision to create a more resilient economy," the Florida Republican said in an April 20 column in the New York Times.

"The economy should be at the service of the common good," Rubio said. "It should work for us, not people for the economy."

The senator called for a renewed focus on the common good, a shift in priorities from short-term economic efficiency to long-term resiliency, and a better model of manufacturing to evaluate and address shortcomings in the response to the COVID-19 virus.

As of Tuesday, the spread of the coronavirus has killed more than 45,400 people in the U.S., with more than 810,000 known to be infected since early March. The virus usually causes mild or moderate flu-like symptoms, but severe cases can require hospitalization and become fatal.

Civil authorities, fearing that rapid increase in severe cases could overwhelm hospitals, ordered public health measures including orders for most people to stay at home.

Both the arrival of the virus and its response have had major effects on the U.S. economy, with 22 million Americans known to have filed for unemployment claims in recent weeks, CNN reports.

Only last week did the Trump administration release a three-stage plan to remove restrictions on social and economic life while also limiting contagion and responding to new cases.

The coronavirus medical response has been severely hindered by a shortage of appropriate protective gear and other medical equipment.

Rubio argued that some of the problems revealed in the epidemic are the consequences of decades-long trends.

"Over the past several decades, our nation's political and economic leaders, Democratic and Republican, made choices about how to structure our society — choosing to prize economic efficiency over resiliency, financial gains over Main Street investment, individual enrichment over the common good," Rubio said.

"Any prudent policymaker should recognize that both efficiency and resiliency are values we should prioritize and seek to balance. But that's not what we have done in recent decades," he said.

The senator warned that in a crisis, a lack of resilience in the economy can be "devastating."

"Though I believe resilience is one of the defining traits of an American, I also believe it's been absent from our public policy for too long. And this has become devastatingly clear in the current crisis," he said. Continue reading

His heresy?

Declaring the heliocentric view of the solar system: that the earth revolves around the sun.

His punishment was lighter than many others who faced the Inquisition.

He was "only" sentenced to house arrest until his death in 1642.

As is occasionally the case, the Roman Catholic Church's pronouncements did not age well, and it matters little whether Pope Paul V or Cardinal Bellarmine shoulders the blame.

The Church ordered Galileo "to abstain completely from teaching or defending this doctrine and opinion...the opinion that the sun stands still at the center of the world and the earth moves, and henceforth not to hold, teach, or defend it in any way whatever, either orally or in writing."

One might think that being this profoundly wrong about something well outside the realm of theology would cause the magisterium, and the pope specifically, to tread very carefully even 386 years later.

But one would be wrong. Because here comes Pope Francis yet again, offering economic opinions from the bulliest of pulpits about something he understands no better than a garden-variety college freshman.

Mutually Beneficial Trade

Pope Francis's most recent ill-advised foray into economics occurred during his commemoration of United Nations World Day. Speaking on the problems of global nutrition, the pope said,

The battle against hunger and malnutrition will not end as long as the logic of the market prevails and profit is sought at any cost, with the result that food is relegated to a mere commercial product subject to financial speculation and with little regard for its cultural, social and indeed symbolic importance.

According to the pontiff, "the logic of the market" keeps people hungry.

But "the market" has no logic.

The market isn't a thing, let alone a sentient thing.

"The market" is the sum total of individual interactions among billions of people.

The market is the world community, the coming together of billions of people who both offer and want things that billions of others both want and offer.

The market is the metaphorical space in which people come together to trade. And they trade all kinds of things, including food.

While there is no "logic of the market," the logic of the people in the market is that they trade when it is to their mutual advantage to do so.

And this is something anyone concerned with world hunger, indeed even world peace, should applaud.

Until the maturation of markets—and capital—the way people gained riches was by looting and pillaging.

They took riches from others. People developed markets as a way to create riches through cooperation with others.

Whenever a trade occurs, both sides are better off for having made it. We know this because if they weren't, the trade wouldn't occur. This is the logic of the people who occupy markets.

Not surprisingly to anyone but perhaps Pope Francis, some of the first financial speculation in which humans ever engaged involved food.

Financial speculation and its more evolved cousins, options and futures contracts, evolved precisely as a means to fight hunger. Centuries ago, farmers incurred significant risk because they had to choose what crops to plant and in what quantities months before they could know what crop prices would be.

The more land a farmer planted, the more risk he incurred.

If there were a way to transfer this risk to someone else, farmers could afford to plant more food.

Financial speculation solved this problem by giving monied investors—today we'd call them capitalists—the ability to purchase crops before the crops were planted.

If crop prices went up, the speculators made profits.

If crop prices fell, speculators lost money.

Importantly, the speculators took some of the risk of price fluctuations off the backs of farmers, and this made it possible for farmers to plant more food. Continue reading

Quite unlike many recent communications on those issues, it was elegantly written - almost a joy to read.

It is a serious and constructive contribution to the debate and, in its earlier sections, it is, if not quite original, a vital contribution to the teaching of the Church.

The document has a beginning a middle and an end and is written in such a way that you don't have to keep re-reading it to work out what the over-riding theme is.

Sadly, modern Church teaching documents on economic matters have not had such elegance: this letter is more like Quadragesimo Anno or Rerum Novarum.

Indeed, its content could have been written by Oswald von Nell-Breuning, the author of the former encyclical.

A feature of other recent documents on finance and the economy is that they have tended to exaggerate or, quite often, say things which are simply not true about the factual picture and this has taken the focus away from the essential moral and social teaching message.

This letter makes no such mistake.

So, what does it say?

In the first half the document, the authors, from the Congregation of the Doctrine of the Faith and the Dicastry for Promoting Integral Human Development, discuss at some length, though concisely, the essential nature of economic behaviour.

Economics is about human action in the economic sphere and so it cannot be separated from the need for ethics.

Keynesian economics and neo-classical economics have separated economics from ethics in order to focus more clearly on particular aspects of economic problems.

This works to an extent, but, just as when we focus on part of a painting in an art gallery, we have to adjust our eyes and step back to see the full picture in all its glory.

Economics and finance is about human interaction and co-operation.

It is ultimately inseparable from a consideration of normative ethics.

In recent documents, such discussion has got mixed up with sideswipes at those who believe in free markets (ironic, given that it is Austrian economics' followers of Hayek and Mises who are quickest to understand the human element) or grandstanding about the failure of globalisation and markets to promote welfare for the most needy.

This time is different.

Some of the great advances in economic wellbeing are recognised.

It is not noted that the growth of globalisation and financialisation has coincided with the first era in over 200 years that income inequality on the planet has fallen.

Slightly more oddly is that the letter, quite rightly, mentions that there is much more to economic life than can be measured by GDP, but it does not note the collapse in infant mortality and child labour and the fall in deaths from pollution or huge increases in literacy that have taken place since globalisation took off in the early 1980s. Continue reading

• Image: Catholic Herald
• Oeconomicae et pecuniariae quaestiones

An economic worldview has evolved that sucks the meaningful marrow out of life.

The big question we should be asking is whether our economic system is serving us or are most of us consigned to serving it?

We pay homage to the little scrutinised goal of economic growth as progress towards some undefined Nirvana on earth.

Yet few of us understand what this concept of economic growth actually means. It is a narrow obsession with ensuring that as a nation we make and consume more material stuff.

This obsession is calculated by a statistic called GDP. Even Simon Kuznets, who developed this statistic in the 1930s, warned that it wasn't a good measure of human happiness and wellbeing.

Yet to question this current economic orthodoxy invites ridicule and dismissal even though it may be destroying the planet we inhabit.

Not to worry, economic growth and progress should fix that. Leave it to market forces. Yeah, right.

This economic ideology has some parallels with the overwhelming tyranny of Christian belief in old Europe.

It is a world view that is dangerous to challenge. OK, criticising GDP and economic growth in public is unlikely to get your head lopped off or your height extended on an inquisition rack. You are more likely to retain your testicles, but only just.

Yet we should be seriously challenging the current economic orthodoxy. Maybe we are running so fast and hard to serve the system that few of us have the time or energy to stick our heads up and question it.

The technical term for this is the "hedonic treadmill".

Many Kiwis these days are too busy paying off huge mortgages on overpriced weatherboard houses that bear a striking resemblance to the affordable old houses our grandparents once owned. Continue reading

• Peter Lyons teaches economics at Saint Peter's College in Epsom and has written several economics textbooks.
• Image: Otago Daily Times

In a statement from the Australian Catholic Bishops Conference (ACBC) released yesterday, the bishops stated that "political decisions" can damage the institution of marriage and hurt families.

Australia's federal election is scheduled for July 2.

The Australian Labour party has promised to legalise same-sex marriage within 100 days if it is elected.

Prime Minister Malcolm Turnbull has promised to hold a A$160 million plebiscite on the issue if he is re-elected.

The bishops' statement, titled "A Voice for the Voiceless", affirmed that marriage and family are at the heart of a healthy social environment.

But "political decisions can end up undermining marriage and providing less and less support for families despite a rhetoric that claims otherwise".

"The fact is that economic decisions have been less and less favourable to families in recent years; and it may be that political decisions in the future will undermine further the dignity and uniqueness of marriage as a lifelong union of man and woman," the bishops stated.

"Support for marriage and the family does not look a big vote-winner, so that even the most basic human institution, upon which the health of a society depends, can become part of the throwaway culture or at best an optional extra."

The purpose of the bishops's statement was "to give a voice to the voiceless and make their faces seen, however briefly . . . ".

The bishops highlighted "a danger that the economy can become a kind of false god to which even human beings have to be sacrificed".

The bishops also raised the plight of asylum seekers, the mentally ill, indigenous Australians, the elderly, sex abuse survivors, unborn babies who are "defenceless", the environment and highlighted the dangers of focusing on economic management at the expense of human beings.

The statement added that "any society is ultimately judged not on how well it manages the economy but on how well it treats the thrown-away people".

And on tackling climate change and protecting the environment, the bishops stated that "now is the time to act".

Sources

• Sydney Morning Herald
• Australian Electoral Commission
• ACBC statement: A Voice for the Voiceless
• Image: Leeduguid.com.au

But how this came about has become a point of contention.

While the US senator said he accepted a Vatican invitation, one of the conference's organisers said that his campaign had lobbied for his inclusion.

Margaret Archer, president of the Pontifical Academy of Sciences, which is hosting the conference said "Sanders made the first move, for obvious reasons".

The invitation sent to Mr Sanders was signed by Bishop Marcelo Sanchez Sorondo, chancellor of the Pontifical Academy of Social Sciences.

Continue reading

Ms Klein, who campaigns for an overhaul of the global financial system to tackle climate change, will take centre stage at the conference alongside Cardinal Peter Turkson.

The cardinal is president of the Pontifical Council for Justice and Peace, which issued the invitation to Ms Klein.

The conference will focus on Pope Francis's encyclical Laudato Si' and its implications for work against climate change and towards just economies and lifestyles.

Delegates will also look ahead to two major international climate change meetings in New York and Paris.

Ms Klein, the author of "This changes everything: Capitalism Vs the Climate", expressed surprise and delight at receiving the Vatican invitation.

"The fact that they invited me indicates they're not backing down from the fight," she said.

"A lot of people have patted the Pope on the head, but said he's wrong on the economics.

"I think he's right on the economics," she said.

Critics have argued the Catholic Church should not be involved in an issue that should be left to presidents and policy-makers.

But Ms Klein said the Pope's position as a "moral voice" in the world - and leader of 1.2 billion Catholics - gives him the unique ability to unite campaigners fighting for a common goal.

"The holistic view of the encyclical should be a catalyst to bring together the twin economic and climate crises, instead of treating them separately," she said.

Ms Klein will join Cardinal Turkson and the co-chair of the Intergovernmental Panel on Climate Change, Professor Ottmar Edenhofer, at a press conference on July 1.

On Sunday, an estimated 5000 people, including faith leaders, scientists and environmental campaigners, marched to St Peter's Square to support Laudato Si' and urge world leaders to take action.

There, Francis encouraged a multi-faith effort to help protect the environment.

"I encourage the collaboration between persons and associations of different religions on behalf of an integral ecology," he said.

Sources

• The Guardian
• The Guardian
• CIDSE
• Image: The Guardian

He was referring to the the Pope's encyclical Laudato Si'.

"Thank God Catholics are free to disagree with this personal position of the Pope."

Hartwich questions whether the pope "actually understands what he is writing about."

The pope's discussion of 'relativism', relating to the potential for people to treat one another as objects, Hartwich says is confused.

"Some of his observations are so far off the mark that they would be offensive if one took them seriously," he said, referring particularly a passage in which Hartwich says the Pope equates "economists favouring markets" with "child molesters."

"This leads him to claim that this 'kind of thinking leads to the sexual exploitation of children and abandonment of the elderly who no longer serve our interests."

"It is also the mindset of those who say: 'Let us allow the invisible forces of the market to regulate the economy, and consider their impact on society and nature as collateral damage'."

"With all due respect, this is utter, offensive nonsense. Economists favouring markets do not share the same level of morality as child molesters." Hartwich said.

New Zealand Initiative has recently called for a shake-up of the New Zealand charities sector.

It also recommended to the New Zealand government that private investors be given the opportunity to invest in and make money from the provision of social services (social impact bonds)

Source

• oliverhartwich.com
• Image: nbr.co.nz

It was 25 years ago this month that communism ceased to be a threat to the west and to the free market.

When sledgehammers started to dismantle the Berlin Wall in November 1989, an experiment with the command economy begun in St Petersburg more than 70 years before was in effect over, even before the Soviet Union fell apart.

The immediate cause for the collapse of communism was that Moscow could not keep pace with Washington in the arms race of the 1980s.

Higher defence spending put pressure on an ossifying Soviet economy.

Consumer goods were scarce. Living standards suffered.

But the problems went deeper.

The Soviet Union came to grief because of a lack of trust.

The economy delivered only for a small, privileged elite who had access to imported western goods.

What started with the best of intentions in 1917 ended tarnished by corruption.

The Soviet Union was eaten away from within.

As it turned out, the end of the cold war was not unbridled good news for the citizens of the west.

For a large part of the postwar era, the Soviet Union was seen as a real threat and even in the 1980s there was little inkling that it would disappear so quickly.

A powerful country with a rival ideology and a strong military acted as a restraint on the west.

The fear that workers could "go red" meant they had to be kept happy.

The proceeds of growth were shared. Welfare benefits were generous. Investment in public infrastructure was high. Continue reading

Sources

• The Guardian
• Image: ieaTV

A recent circular letter from the Congregation for Institutes of Consecrated Life and Societies of Apostolic Life dealt with the use of financial resources by religious orders.

Under church law, each order is required to have an "economo," or treasurer, and that person should receive specific training in budgeting and bookkeeping, but every member of an order must have a general idea of the community's assets and expenditures.

The Congregation told communities they must adopt modern budgeting and bookkeeping practices and ensure their spending is for ministries in line with their founding purpose and the good of the whole Church.

"All members of the institute should be aware of the importance of working with a budget and estimates in the knowledge that these reflect the values and spirit of the institute," the document said.

Because the most pressing needs of the church and society may change over time, every order must "define which works and activities to pursue, which to eliminate or modify" and what new areas of ministry they should try to develop, it said.

Too often, the letter said, assigning economic oversight to just one person "generated lack of interest about economics within the community, leading to a loss of contact" with the costs of the community's daily life and activity and "provoking a dichotomy between economics and mission."

Efficient monitoring, including professional outside audits, will also help religious communities make decisions around projects.

Continue reading

Balvo, who was recently the Pope's representative [apostolic nuncio] in Wellington was addressing the United Nations Environmental Assembly.

He said that while the desire to moderate the consumption of goods was commendable, it was necessary to abandon the model of "an uncontrolled consumerism, an immeasurable enjoyment."

"The current world economic system, manipulated by the powers of money," does not favour the inclusion of the poor for the sake of the common good," he said.

He added that there was a need to pay greater attention to the "spiritual dimension" of sustainable development.

The first United Nations Environment Assembly was attended by over 1065 participants, 163 member states, 113 Ministers and featured 40 events.

It took place in, Nairobi, Kenya 23 - 27 June 2014.

Archbishop Balvo is now the apostolic nuncio to Kenya and South Sudan.

He is also the permanent observer of the Holy See at the bodies of the United Nations for the environment and human settlements.

Read the whole statement

Source

• The Vatican
• Image: photo1.blogger.com

Whether the poor also get poorer is another matter.

What would the taxi driver who took me across Beijing last year in a Toyota tricked out with three smartphones have said?

Not so long ago, he was driving a three-wheeled, pedal-powered rickshaw.

It's more a case of the poor getting richer too - but without political intervention, they'll never catch the rich.

In the English-speaking world particularly, still reeling from the global financial crisis and growing tired of a managerial elite whose salaries appear unstoppably stratospheric, Piketty's new, best-selling doorstop of a book - Capital in the Twenty-First Century - is altering the debate about wealth, income and the future of capitalism and is set to be Harvard University Press's all-time best-seller.

Piketty has reframed the discussion by combining, for the first time, data sources spanning more than three centuries to prove that those with accumulated wealth are almost guaranteed always to become richer than those who work for a living.

The distinction between wealth and income is important.

Although excessively high incomes for chief executives is a live political issue, and Piketty would tax them at a rate as high as 80%, the bigger issue is the inter-generational impact of wealth accumulation.

He proposes taxing such wealth at a rate of 0.1-0.5% for fortunes of less than €1 million ($1.6 million), 1% for fortunes from €1-5 million, 2% for €5-10 million and from 5-10% for fortunes in the hundreds of billions of euros.

Critics note that if he's calling $1.6 million a fortune, then Piketty is putting many of the developed world's homeowners in the same boat as the "one per cent" global elite.

However, most of the attacks on his findings focus on the proposed solutions rather than the quality of the research that animates his conclusions. Continue reading.

Source: The Listener

Image: Emmanuelle Marchadour/AP in The Guardian

Meg's chronic health condition ruled out paid employment, so she was on a benefit.

The budget recorded the family's 2012 weekly income as $484 and proposed the following spending:

• Food: $130 for simple but nutritious meals recommended by the University of Otago Department of Human Nutrition.
• Housing: $119 for a state house at a subsidised rate.
• Household energy: $40 - the house was neither warm nor in a good shape; it may have been condemned shortly after - sewage flowed outside when it rained.
• Medical and educational costs: $53, despite our providing "free" health care and schooling.
• Transport: $97 - high because the house was badly located and they needed to travel for health care.
• Phone: $26.

These amounts total $465, leaving just $19 a week for everything else, including clothing and footwear, entertainment, recreation, dental care, consumer durables, insurance and a variety of things that could be considered normal, such as haircuts, presents, school trips and pets.

There's no allowance for alcohol or tobacco, you'll note. Continue reading.

Dr Brian Easton has written an economics column for The Listener for 30 years, holds positions at four NZ universities, and has advised the NZ government.

Source: The Listener

Image: Emma Beer/Stuff

Easton, who's recently published a user's guide to economic inequality, says inequality is difficult to measure.

One indicator might show it going up while another has it coming down or staying the same, 'so it's easy to choose the indicator you want'.

But, he says, all the indicators are that New Zealand suffered a sharp rise in inequality as a result of policy changes to tax rates and benefits 30 years ago and is now in the company of those OECD countries with the biggest gap between rich and poor.

'The simple way to put this is that in the 1980s we were in the bottom half of the OECD as far as inequality was concerned. Those above us had greater inequality.

'By the mid-1990s we were in the top half — among the most unequal parts of the OECD — and it's still like that.' Continue reading.

Cecily McNeill has edited Wel-Com, the newspaper for the Wellington and Palmerston North dioceses, for the past eight years, and worked as a radio journalist for 20 years.

Source: Eureka Street

Image: mimosaplanet.com

Between his hints at rehabilitating liberation theology—condemned by his predecessors—and talk about casting off "the economic and social structures that enslave us," Marxism isn't totally out of the question.

But happily for nervous church leaders, Francis's first Apostolic Exhortation, issued Tuesday, doesn't quite suggest someone who would get "Marx" in an Internet-style "Which Economic Theorist Are You?" quiz.

Granted, he wouldn't exactly get Friedrich von Hayek or Ayn Rand, either.

But you know whom he might plausibly be matched with, though? A favorite political economist of anti-free market academics: Karl Polanyi.

Karl Polanyi is most famous for his book The Great Transformation, and in particular for one idea in that book: the distinction between an "economy being embedded in social relations" and "social relations [being] embedded in the economic system." Continue reading.

Source: The Atlantic

Image: The Telegraph

"I've probably learned more about economics working in factories than I did from my Ph.D. program," says Clark. Working on an assembly line in a motor oil canning factory for $2.35 an hour, he saw how racial and ethnic minorities are treated differently in the workplace. A job at a wire striping factory helped to illustrate Adam Smith's theory on the division of labor. And earning $9.10 an hour to wash pots at a nursing home helped Clark appreciate the power of unions.

In the real world Clark found that ideologies proposed by economists fail to hold up. "This is really the big problem with my profession," he says. "We look at markets as if they're like the ones we teach in textbooks and they're all the same. But they're not. Every market has to be established with a set of rules."

Too often, Clark argues, those rules favor the rich at the expense of the poor. But applying Catholic social teaching to real world economics may just offer a solution that benefits everyone. Hopefully his students are taking good notes.

What do most economists get wrong about the economy?

They have this one theory, which they don't know well enough to know that it doesn't hold together, and they just keep on applying it. It's all based on this idea that the market will always lead you toward full employment if you get out of the way. But there's no evidence of this working. Continue reading

Sources

• U.S.Catholic
• Image: The Telegraph

The Occupy Wall Street protests have swept around the globe. While it is hard to identify a coherent program in these protests, it is clear that they have touched a nerve in Western society in regard to how the socio-economic system functions in the aftermath of the great financial crisis of 2008.

More extreme reactions can be identified in the Greek riots. The one clear note appears to be resentment at perceived corporate greed.

The Tea Party movement in the US, and its spin-offs around the world, such as the Convoy of No Confidence Rally in Canberra, express a similar anger at the status quo, though for them the growing debt crisis and a perceived culture of entitlement are the targets.

Both give expression to a crisis of confidence in the economic system and in the ability of our political processes to manage it.

Whatever the merits of such protests and the associated issues of free speech and democratic processes, it must be said that the capitalist system has shown itself over the last century as one that has been remarkably flexible and resilient.

It has seen off rival economic and political challenges from the extremes of right and left, and it is far too early to speak of any substantial challenge to its dominance today.

But perhaps there is a real taste for exploring alternatives.

In 1973 economist and philosopher E. F. Schumacher coined the phrase 'small is beautiful' — this was, in fact, the title of his seminal book on economics. In an age that had produced many great 'isms' (communism, fascism, capitalism) Schumacher advocated a more human-scale, decentralised approach to society. The subtitle toSmall Is Beautiful was 'economics as if people mattered'.

In more recent times Schumacher has been described as the 'soul of the Green movement'. Satish Kumar, editor of Resurgence, sees in the Greens community and economic policies the influence of Schumacher's belief that 'the environment is not just an empirical, technical, policy matter; it is related to human values, which are a part of natural values.' Read more

• Source: Eureka Street
• Image: Neil Perkin

German Chancellor Angela Merkel said she and Pope Benedict XVI spoke about financial markets. She said that they discussed the need for policy makers to assert their authority over financial markets for the public good.

"We spoke about the financial markets and the fact that politicians should have the power to make policy for the people and not be driven by the markets, and that this is a very, very big task in today's times of globalization," Merkel told reporters

Merkel said that they also talked about Europe, a topic of "great interest" for the Pope, and European unification, which she said is "indispensable" for Germans. "It means prosperity, democracy and freedom to us," she said. "I believe that was an important message."

Benedict also addressed the Bundestag. "Never before in history has a pope spoken before an elected German Parliament," said Norbert Lammert, the president of the Bundestag, who invited the pope to address lawmakers. "And seldom has a speech in this house created so much attention and interest before it was even given."

Some members of Parliament boycotted his address but if anyone was expecting something controversial they were most likely disappointed. In comments that verged at times on the academic, the theologian Pope spoke about the importance of responsibility of political leaders, and touched on several themes at the heart of his papacy: the fight against secularism and relativism. He also called for a debate on ethics.

Speaking after another of the Pope's addresses, Karin Kortmann, vice president of the Central Council of German Catholics said "It would be beneficial to see where we can build bridges and where the church can be an important adviser to our society in social, economic and political matters."

Source

• The New York Times
• San Francisco Chronicle
• Image: The Absolute Arbitrageur

Speaking at the London School of Economics he said that while some were seeking a change of culture, as a group the financial sector had failed to reform itself.

"Until a different culture has taken hold, I cannot see how a real and necessary change can take place," he said.

In his lecture "Good Life in Hard Times" he said the market, the state and society all exist to serve humanity and the common good.

Nichols argued strongly in favour of religious freedom, saying that it helped a thriving civil society and "increases our capacity to do good in the public square" and maintained that a society of many faiths, such a Britain, had a chance to export a new model of tolerant pluralism.

"Britain is a remarkable test case. We are living in a crucible in a global experiment of religious co-existence," he said. "In this country we have the opportunity, through the greater acceptance of the positive role of religion, to exemplify and perhaps export a new model of tolerant religious pluralism."

The archbishop argued that religious voices should not be excluded, but should not be given special privilege, either.

He said: "The mature and enlightened secular square should echo to the sound of many faiths, in dialogue with one another and with secular protagonists to the enrichment of all."

Related
Good Life in Hard Times - Archbishop Nichols speech and Podcast
Source: Catholic Herald
Image: Catholic Church in England and Wales (Flickr)