A
t 08:44 AM 9/10/00 +0300, you wrote:
>Hi there ,i wish to obtain the previous essays
> regards
>----- Original Message -----
>From: mckeever <[log in to unmask]>
>To: <[log in to unmask]>
>Sent: Friday, September 08, 2000 11:44 PM
>Subject: Moral Economics - 9
>
>
MORAL ECONOMICS
This project is to discuss how economics will be affected by moral concerns as expressed by POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE, published by the World Faiths Development Council in 1999 [33-37 Stockmore Street, Oxford, OX4 1Jt, United Kingdom; email: [log in to unmask]; URL: www.wfdd.org.uk]
The plan is to write a commentary on each point of the booklet and distribute the each point's commentary as a separate message to several listserv lists.
FIRST MESSAGE 4-20-00
Moral Economics - Essays On The Relation of Economic Theory to the Moral Perspective in POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE.
INTRODUCTION
This is the first of an occasional series of short essays about how economic theory interacts with a moral perspective written by Michael Pierce McKeever, Sr. Readers are invited to repost widely, but please quote the source. If you think that these messages will be inappropriate to this list, please send me a private email naming the list and your objection to the messages.
The book referred to above was written by Roger Riddel with the help of many and is published by the World Faiths Development Council [email: [log in to unmask]; URL: www.wfdd.org.uk]; it attempts to find common areas of agreement among the world's major religions on economic development issues.
PURPOSE: STIMULATE DISCUSSION
The purpose of these essays is to stimulate discussion about the issue of morality and economic theory. I believe that economic theory is too dangerous to be left to economists or to be left with no moral content. It is similar to the theories of nuclear fission and fusion. Were these theories left in the hands of practitioners and unregulated by social concerns, they would blow up the world. Economic theory is now left in the hands of economists and it is wreaking havoc.
FIRST POINT: DEVELOPMENT EMBRACES ALL DIMENSIONS OF HUMAN EXISTENCE
The WFDD's book begins with a Vision of Development and suggests that development embraces all dimensions of human existence, not just economic development. "If emphasis is placed only on economic development, even this will fail, as the balance necessary for human well-being will be lost. As the Jews say: 'Where there is no bread, there is no Torah, and where there is no Torah, there is no bread'".
ECONOMIC THEORY AND HUMAN EXISTENCE
Economic theory addresses only those human interactions which involve an exchange of money or commodities; as such, it ignores the larger part of human existence. Economics does not address love, family, culture, health, spirituality, the environment or many other things which make life rich and meaningful.
The question then becomes how to integrate non-exchange activities into economic theory. One way to approach this question is to address the issue of how economic theory is placed into action. Exchange activities today are regulated and controlled by government; Adam Smith may have postulated a "laissez faire, laissez passer" world of no government intervention in the market, but that world does not exist today in any meaningful way.
GOVERNMENTS ESTABLISH AND MODIFY ECONOMIC PRACTICE
Governments establish the policies and practices by which economic activity is conducted. Mostly, the governments are national governments, but they are increasingly international as national governments cede sovereignty to multi national institutions. Governments create the laws which create and protect private property, public order, rules of exchange, the money supply and so forth. But, many of the important aspects of life are created personally within a family or neighborhood unit or collectively in civil, non-governmental organizations.
Economic principles begin from the structure created by government and civil society; the principles describe how goods are created and acquired under whatever system is being examined. Therefore, the principles will apply under different sets of rules and different structures. So, it is possible for the government and civil society to create or change those rules to accommodate a wide variety of cultural and social values. It is also possible for the government to include a moral component to the economic rules of the society.
As an example, let's look at the value of family. Economic principles, with no moral component established by governmental authorities, may interfere with family cohesion or stability. In the United States, many mothers and fathers think they must work full time to create a decent life for their children. Working time takes away from family time and is detrimental to society to the extent that family ties are weakened.
NON-MARKET UTILITY
A moral economic policy would create a climate for wages and benefits that would strengthen family life by raising wages, providing benefits for stay-at-home parents and encouraging family life. But, this value may interfere with the economic principle of efficiency of production which states that a society is efficient only when the marginal utility, or satisfaction from the next unit of a good obtained, of all consumers is maximized and any consumer cannot increase his or her utility by acquiring a different set of goods. The amoral economic policy used today includes only goods which are exchanged for money - a moral economic policy will include values which are not part of the exchange system.
The moral economic policy encourages higher wages so that workers can have a more satisfying family life. This will result in higher consumer prices. The choice is clear: it is more moral to pay slightly higher prices so that workers can have a good life and it is less moral to pay lower prices which force workers into marginal lives.
GOVERNMENT'S ROLE
Since a moral economic system includes the utility from values that cannot be exchanged in a marketplace, it becomes the government's responsibility to create an economic system which allows for the creation and protection of values which cannot be traded. It does this by passing laws and regulations which enable people to choose some of their utility from non-exchangeable goods. For example, a high minimum wage would permit more people to stay at home with children for more time. This system would balance the utility of market goods, namely low prices for consumer goods, with the utility of non-market choices, in this case time with the family.
Making this choice will require a government to create protections for companies which hire the workers since without protection from low wage countries in other countries, the companies which employ workers will be forced out of business. This policy would balance the desire for low cost goods with the equally valid desire for utility from non-market goods.
SECOND MESSAGE 4-28-00
Moral Economics - Essays On The Relation of Economic Theory to the Moral Perspective in POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE.
This is the second of an occasional series of short essays about how economic theory interacts with a moral perspective by Michael Pierce McKeever, Sr. Readers are invited to repost widely, but please quote the source.
SECOND POINT: DEVELOPMENT STRENGTHENS VIRTUE
People of all faiths believe that any economic development is based on, and has as its aim, the strengthening of virtues such as trust, altruism, honesty, tolerance, forgiveness and mercy. "Development processes which are not based on such moral values are not only useless, they are dangerous." (POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE, World Faiths Development Council, 1999, Section 1.2)
ECONOMIC THEORY AND VIRTUES
Economic theory and practice have an ambivalent relationship with most virtues. On the one hand, free market economics postulates that the common good will be furthered when buyers and sellers each act in their own self-interest, while on the other hand, free market economics does not address directly the issue of poverty or income disparity. Conversely, socialist economics forces choices about these issues on the entire population while producing at less than efficient levels.
VIRTUES OF FREE MARKET ECONOMICS
The position that the greatest benefits to society will come to all when both buyers and sellers act in their own self-interest has been supported by the principle of 'caveat emptor' or buyer beware; virtue is supposed to come to buyers and sellers in this system since buyers will be able to distinguish between high and low quality merchandise and high quality merchandise will drive low quality goods from the market place. Producers of high quality goods will prosper because they provide goods which meet or exceed buyers' expectations; producers of low quality goods will fail. High quality goods are seen as virtuous because they meet consumer expectations of effective products that do no harm in their use or making.
CONDITIONS ON FREE MARKET VIRTUES
Unfortunately, two facts interfere with this more or less automatic virtue enforcer: one, it applies only to competitive markets where buyers have legitimate choices; and, two, it fails to take account of the potential harm done by low quality producers before market forces drive them from business.
Buyers in markets where there is little or no competition can be forced through lack of alternatives to choose low quality or dangerous goods, or merely goods that are overpriced. Also, if there is little or no regulation of businesses which produce potentially harmful goods, many people can be hurt or killed before market forces drive the low quality producers from the market.
FREE MARKET MORAL ECONOMIC POLICY
Economic theory and policy can help provide virtue in the market by ensuring that markets are competitive and that producers of products which have the potential to harm people are closely regulated. Thus, pro-competition and anti-monopoly rules and regulations become supportive of virtue and thus moral.
VIRTUES OF SOCIALIST ECONOMICS
Socialist economies provide for all citizens many of the benefits of civilization: health care, education, freedom from hunger, etc. These appeal to the basic human desire to see all people treated fairly. However, socialism has at least two major flaws: one, it forces choices on the entire population; and, two, it is an inefficient producer of goods and services. Most economies produce more high quality goods and services under a market system whether it is pure or modified than they do under a socialist system.
ECONOMICS AND CHARITY
The virtues of altruism, charity, tolerance, forgiveness and mercy are not directly addressed in free market economics, although they are addressed in socialist economics. Free market systems usually leave these virtues to individual choice or to the political system to implement while socialist systems force choices about virtues on the entire population.
A moral economic system is one that avoids the extremes of either ignoring common virtues or forcing centralized moral choices on the entire population while still addressing the issues of poverty, health, income disparity and misery and producing an efficient quantity of high quality goods and services.
THIRD MESSAGE 5-11-00
Moral Economics - Essays On The Relation of Economic Theory to the Moral Perspective in POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE.
This is the third of an occasional series of short essays about how economic theory interacts with a moral perspective. Readers are invited to repost widely, but please quote the source.
THIRD POINT: TENSION BETWEEN SPIRITUAL AND TEMPORAL
Religious people vary greatly in the emphasis they place on spiritual experience on the one hand and the emphasis they place on taking action to build up a better world on the other hand. "…many religiously inspired people are making an increasing effort not only to contribute to practical improvements in the lives of the poor, but also to try to understand the nature and causes of poverty…" (POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE, World Faiths Development Council, 1999, Section 1.3)
Thus, faith based concerns are with poor people and the factors underlying poverty when spiritually inspired people address temporal issues.
ECONOMICS ADDRESSES WEALTH CREATION, NOT POVERTY
Economic theory discusses the creation of wealth - it does not address the problem of poverty. A standard answer of economics is that the amelioration of poverty is a political question that is best left to the appropriate sovereign government. However, the application of economic theories through the economic policies of various governments have immediate and drastic consequences on both poor and wealthy people.
MORAL ECONOMICS ADDRESSES CONSEQUENCES
Moral economics will consider the consequences for poor and for wealthy people of any policy enacted pursuant to a theory. Will the effects of a policy change be that poor people are made better or worse off? If the theorist addresses the consequences of policy decisions, then s/he can make a claim to a more moral approach than if those consequences are not addressed.
Then, the appropriate sovereign can make policy and political decisions with a better knowledge framework than is the case if the consequences are not discussed. It seems that most economists can embrace this approach
FOURTH MESSAGE 6-5-00
Moral Economics - Essays On The Relation of Economic Theory to the Moral Perspective in POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE. [www.wfdd.org.uk/]
This is the fourth of an occasional series of short essays about how economic theory interacts with a moral perspective. Readers are invited to re-post widely, but please quote the source.
FOURTH POINT: DEVELOPMENT AN OPEN ENDED PROCESS
Many people of faith recognize that different faiths have different interpretations of the origin of the universe and the place of human beings within it. As result, these people hold the view that "development is a continuing process, and one whose parameters lie open to revision." [para. 1.4]
ECONOMIC GROWTH
Many in the development field hold that economic growth is the single solution to development and poverty reduction; some assert that while other issues may be relevant, no poverty reduction can occur without economic growth.
Economists define economic growth as annual increases in Gross Domestic Product [GDP] measured on a per capita basis, adjusted for inflation.
Thus defined, economic growth can reflect real activity in those countries with reliable statistic gathering abilities; but, there are many countries where the ability of economic statistics to reflect reality is open to question for a variety of reasons. Nevertheless, GDP per capita is the economic statistic that is most widely collected and reported among many countries. Because it is readily available, it is widely used as a definitive measure of economic performance.
A moral economist will look with great caution at comparisons of GDP per capita between countries with substantially different economic structures and cultural values and will find other measures of comparison before making policy recommendations.
GDP PROBLEMS
The measurement of economic activity through national government collected statistics has more fundamental problems than the accuracy of the numbers, however.
Economic activity measures only those activities which involve the exchange of money through a statistic gathering process. Any activity which does not involve the exchange of money or does not involve a statistic gathering process will not be counted in a country's GDP.
Many of the most compelling human values are not reflected in GDP; values such as love, spirituality, family, health, clean air, clean water and hope are not reflected anywhere in GDP. In countries with vigorous black markets, a significant part of the economic activity that does involve the exchange of money are not reported.
In addition to treating per capita GDP figures with skepticism, a moral economist will ensure that any policy recommendations will not interfere with fundamental human values. Such an economist will recognize that a single focus on economic growth, if growth is achieved, can result in detrimental effects on other indicators.
Also, moral economists will be constantly alert to newly developing methods of measuring and ameliorating poverty; they will avoid dogmatically espousing any one method or approach. After all, one of the most common reasons that efforts at change in organizations is not successful is an 'activity-centered' approach wherein the efforts are directed to an activity which is supposed to bring about the desired results rather than a focus on the desired results. [Alex Miller, Gregory Dess, STRATEGIC MANAGEMENT, 2nd ED., McGraw Hill, 1996, p. 337.] Moral economists focus on the desired results and not on any particular activity which is 'supposed' to bring about a desired result.
FIFTH MESSAGE 6-15-00
Moral Economics - Essays On The Relation of Economic Theory to the Moral Perspective in POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE. [www.wfdd.org.uk/]
This is the fifth of an occasional series of short essays about how economic theory interacts with a moral perspective. Readers are invited to discuss and to re-post widely, but please quote the source.
FIFTH POINT: POVERTY IS A MULTIDIMENSIONAL PHENOMENON
While poverty is usually understood to be a lack of some level of basic material necessities of life, faith based communities broaden the definition of poverty to include a lack of families or social networks, environmental destruction, exclusion from socially rewarding activities or the elimination of self identity through a destruction of culture. "...materially poor people often possess valuable types of wealth, which should not be depleted by the developmental process." [POVERTY AND DEVELOPMENT, para 2.1]
GOVERNMENTS ADDRESS THESE ISSUES
As discussed previously, economic theory is concerned with material and monetary aspects of life and does not address cultural or societal issues. Yet, one of the reasons that people institute governments is to protect the values they hold dear as a society or culture. And it is these very governments that create the markets and regulatory bodies that constitute an economy. Thus, there is an inherent conflict between interests: on the one hand, governments encourage market forces as a means to material well-being; while on the other hand, governments also regulate market forces so that the poor and weak are cared for.
GOVERNMENTS ALSO BALANCE FOREIGN WITH DOMESTIC INTERESTS
When a national government coincides with a culturally, socially and religiously homogeneous population, a moral government attempts to find a balance between economic activity and cultural, social and religious protection. In today's economy, that balance involves necessarily the additional balancing of the interests of foreign business interests with the already difficult task of balancing domestic economic activity with social protection. Further complicating the problem for most nations is the fact that most national governments must deal with diverse populations rather than homogeneous populations.
OBSTACLES TO ACHIEVING A GOOD BALANCE
This balancing of domestic economic activity, domestic social, cultural and religious interests and the forces of foreign economic interests becomes especially difficult when any one of several things occurs:
1. Foreign economic interests attack the economic, cultural or spiritual basis of the culture, whether by design or by accident;
2. National leaders are corrupt and/or unable to understand or discharge their leadership obligations;
3. International institutions pressure national leaders to accept policies which tip the balance; or,
4. Dedicated national leaders lack a coherent philosophy with which to refute arguments posed by foreign or domestic interests wishing to tip the balance in their personal favor.
Today we see all the foregoing points present in almost every country. These pressures are institutionalized in several ways. Foreign cultures spread to local cultures through entertainment products which undermine local cultures. A global push to 'free trade' and 'open markets' attacks the abilities of dedicated leaders to protect a balance of competing interests in their country. 'Rules based trade' as embodied by the WTO can and does challenge any national policy which conflicts with the private economic interests of foreign countries.
GLOBALIZATION - FORCE FOR GOOD?
Economic theory suggests that all people will be better off when market forces can create an efficient economy where the greatest quantity of goods is consumed by the greatest number of people. This part of economics leads some well-intentioned people to suggest that any national restrictions on the free flow of goods and services among countries will reduce the quality of life for all. That logic then suggests that it is a good thing to encourage national governments to reduce the barriers to foreign goods and services. The reasoning continues that the more efficiently produced goods from other countries will force local businesses to raise their standards to international standards or face bankruptcy, thus making the entire domestic economy more efficient.
LOGICAL PROBLEMS OF GLOBALIZATION
There are a number of problems with this logic in addition to the obvious problem that material well being does not eliminate poverty. First, in today's world this logic has been implemented solely by international institutions; these institutions force changes in national governmental policies which benefit primarily the private, financial interests of businesses in foreign countries. Thus, national governments are required to unbalance their mix of competing interests in favor of private foreign interests. Faith based communities reject the concept that poverty can be relieved by focusing on material goods solely.
Second, any national government represents all the interests in society and must balance those interests in order to achieve some form of harmony and poverty reduction; favoring any single interest at the expense of any other interest is a violation of the trust the population grants to the leaders. This is compounded by the common practice of foreign corporations to use the governing party in power to gain a financial advantage; foreign corporations apparently do not use their power to accelerate social change or encourage less corrupt governments.
Third, the existence of such institutions creates a moral hazard problem - national leaders are reluctant to deny social spending to their populations because there exists international institutions which will bail them out of their budgetary crises; this shifts the blame to the institution and away from the national government.
Last, pressures to globalize can be imagined which have the possibility of really helping people. One can envision an international advisory body which assists in eliminating corruption, managing the influence of outside pressures and balancing the competing interests of society. Unfortunately, such an institution is merely a dream at this time.
BALANCE: A MORAL DUTY
The moral duty of any responsible leader is to balance all the internal interests with each other and to balance external interests with internal interests. This is a very difficult task and one that is vilified in the intellectual community today. But, it is a necessary task in order to create and protect the various forms of wealth that are recognized by the faith communities. It requires a clear headed view of the limitations and benefits of economic theory.
SIXTH MESSAGE 7-15-00
Moral Economics - Essays On The Relation of Economic Theory to the Moral Perspective in POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE. [www.wfdd.org.uk/]
This is the sixth of an occasional series of short essays about how economic theory interacts with a moral perspective. Readers are invited to discuss and to re-post widely, but please quote the source.
SIXTH POINT: POVERTY IS A WIDELY VARYING PROCESS
"…Many religions [believe] that poverty can …be understood as the absence of what people need to fulfill their (God-given) potential. This suggests that poverty should be seen as a process…It is helpful to distinguish between:
- absolute and relative poverty
- temporary and more permanent poverty
- vulnerability (specifically, the vulnerability of those not currently considered poor to become poor, and of those in poverty to move into extreme poverty)."[ POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE, para 2.2]
SOLUTIONS TO POVERTY: AN IMPOSSIBLE DREAM?
If poverty is viewed as a process, then it may lie outside the range of simple 'solutions'. Perhaps it is more appropriate to consider that poverty is one of the components of mankind instead of a problem to be solved.
The obvious danger in that position is that it can provide a rationale for doing nothing at all for poor people: if poverty is an essential part of the human experience, then a tortured logic could argue that there is no point in working to reduce or eliminate it. Such a position conflicts with a moral position. Among other things, that position assumes that poor people are responsible for their poverty and have the ability to change their condition on demand. Such a position is absurd on its face.
A moral approach to poverty, then, requires that action be taken.
POVERTY HAS AN INFINITE VARIETY OF ELEMENTS
"In the experience of faith-based organizations, the differences to be found among people who are poor are greater than the similarities." [loc. cit.]
Moral actions to reduce the effects of poverty will take account of the infinite variety of elements of poverty. Therefore, any single approach to poverty reduction, prevention or amelioration is doomed to failure to the extent that it does not allow for such diversity.
As discussed earlier, poverty has culture specific components; any moral action to combat poverty is also specific to a culture. This means that global approaches to poverty reduction cannot succeed and it means that successful poverty reduction strategies include cultural differences.
NEW BOOK TITLE
On another note, the writer has received mention of a new book; while the book is not reviewed in this space, its direction is promising:
Global Capitalism, Liberation Theology, and the Social Sciences : An
Analysis of the Contradictions of Modernity at the Turn of the Millennium
by Andreas Muller, Arno Tausch, Paul Michael Zulehner
http://www.mzf.org/froben.htm
http://www.univie.ac.at/
Price: $69.00
Hardcover (April 2000)
Nova Science Publishers, Inc.; ISBN: 1560726792
SEVENTH MESSAGE 7-27-00
Moral Economics - Essays On The Relation of Economic Theory to the Moral Perspective in POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE. [www.wfdd.org.uk/]
This is the seventh of an occasional series of short essays about how economic theory interacts with a moral perspective. Readers are invited to discuss and to re-post widely, but please quote the source.
THREE APPROACHES TO POVERTY:
FIRST APPROACH: IMMEDIATE ALLEVIATION
"…the most traditional approach has been to provide the poor with the goods they need to merely survive." [POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE, para 3.1]
This is a straightforward issue: when people are starving, you give them food so they do not die. Economic theory and practice has a provision called a transfer tax designed for taking resources from wealthy people and giving them to poor people. The government taxes wealthy people to provide the means so that citizens do not perish.
Two issues arise here. The first is a definition of survival; the second is a delineation of which government it is that enacts the transfer tax.
Is survival merely enough food to prevent starvation, or, does it also include shelter, fuel and perhaps a radio for hearing what future weather patterns my do to one's crops? As discussed previously, a moral position recognizes that there can be many answers to that question; such a position does not apply a standard answer to all people at all times. Survival can be deemed to include material goods beyond food to prevent starvation.
Which government shall take responsibility for the starving? If the national government is unable to prevent starvation due to war or other catastrophes, should developed countries take responsibility for action? Or, should neighboring countries take the responsibility?
Recognizing that different governments will have different answers to that question suggests that a rich distant government or a poor neighboring government may be morally constrained to provide food enough to prevent starvation from considerations unrelated to anything but compassion for the starving. A moral act is accomplished when one political body steps forward to prevent tragedy.
EIGHTH MESSAGE 8-8-00
Moral Economics - Essays On The Relation of Economic Theory to the Moral Perspective in POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE. [www.wfdd.org.uk/]
This is the eighth of an occasional series of short essays about how economic theory interacts with a moral perspective. Readers are invited to discuss and to re-post widely, but please quote the source.
THREE APPROACHES TO POVERTY:
The previous, seventh essay discussed the first approach to poverty, namely immediate alleviation. This essay discusses a second approach to poverty.
SECOND APPROACH: SELF RELIANCE AND "EMPOWERMENT"
Faith based communities recognize that charity is appropriate only in extreme circumstances because it perpetuates a lack of dignity associated with poverty. The second approach strives to enable poor people to acquire the skills needed for self sufficiency.
SELF SUFFICIENCY REQUIRES DIVERSITY
However, the danger exists that agencies and communities offering solutions to poverty may impose solutions on people without considering the unique values of their culture. Faith based solutions understand that such cultures require strong civil organizations so that solutions imposed from outside can be modified to suit local conditions. Such a network of effective civil organizations in an impoverished community will also decentralize decision making; this decentralization helps ensure that local values are maintained. For example, the author of these essays has developed a set of 34 economic policies which are designed to allow for decision decentralization, adaptation to local cultures and effective economic development; they can be found at http://www.mkeever.com/. This set of policies is much more comprehensive and inclusive that traditional economic policy proscriptions.
A TRADITIONAL ECONOMIC SOLUTION CREATES TWO PROBLEMS
Traditional economics offers one solution to all problems. As seen in today's multilateral institutions such as the World Bank and the IMF, modern economic theory offers only one set of policies to cure all ills. Faith based communities reject this approach to self reliance as condescending and ineffective.
These traditional approaches create two problems. First, Western style democracy may not be the best way to achieve empowerment in all cultures at all times. Second, market economies, especially in international trade, create many injustices due to recognized market failures; market economies require careful control to create a moral society.
NINTH MESSAGE 9-8-00
Moral Economics - Essays On The Relation of Economic Theory to the Moral Perspective in POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE. [www.wfdd.org.uk/]
This is the ninth of an occasional series of short essays about how economic theory interacts with a moral perspective. Readers are invited to discuss and to re-post widely, but please quote the source.
[Note: This message adds several people to the distribution list. If you wish your name removed from the list, contact me privately and I will remove you. Alternatively, if you wish to obtain the previous essays I will send you a file.]
THREE APPROACHES TO POVERTY:
The previous, seventh and eighth essays discussed two approaches to poverty, namely immediate alleviation and self-reliance and "empowerment. This essay discusses a third approach to poverty.
THIRD APPROACH: LINKS BETWEEN WEALTH AND POVERTY
"All religions would see the extreme material poverty in the world today as a moral indictment to contemporary humanity and a breach of trust within the human family...There is no religion in the world which does not condemn the hoarding of riches by some, while others live in misery, particularly because of the causal relationship between the two conditions." [POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE, para 3.3.1]
ECONOMIC THEORY SUPPORTS INEQUALITY
Modern economic theory counterpoises to this clear statement a theory that accumulating wealth is not sinful because wealth accumulation creates capital, which is then used to create jobs. Since jobs and wealth can be created and are therefore expandable, it is not the case necessarily that one person's riches come at the expense of another person.
Further, economic theory teaches that a society's material well-being will be maximized when the marginal monetary value of all goods and services is equalized. This construction ignores personal or societal values with no monetary component and it places undue influence in the hands of people with disposable income.
VALIDITY OF ECONOMIC THEORY VS. FAITH BELIEFS
This conflict is at the heart of the difficulty in reconciling economic theory with a moral perspective.
History argues in favor of the faith position - religious beliefs have been in existence far longer than economic theory.
Also, economists recognize market failures as a part of economic practice; the biggest market failure today is the market's predilection to create or exacerbate income and wealth inequalities. This can be seen in the results of globalization wherein many of the world's poor live in material misery while a relatively few amass vast wealth.
Further, the moral perspective states that amassing riches "while others live in misery' is immoral. If it were possible to amass wealth while others lived in relative ease, perhaps it would be moral to do so; however, history to date does not encourage this position.
INCOME REDISTRIBUTION REQUIRED - STATUS QUO MUST CHANGE
"The faith communities are convinced that a more equitable distribution of the world's wealth is needed for an effective reduction of poverty." [POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE, para 3.3.1]
"Much poverty exists because current development processes often bypass the poorest people...The Roman Catholic Church, for example, teaches that private ownership of property is subject to social responsibility. This means there must be a change of lifestyle among the rich, and changes in the models of production and consumption, as well as in the established power structures that govern society today." [POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE, para 3.3.3]
ECONOMIC THEORY SUPPORTS STATUS QUO
Much of current economic theory supports the established institutions in today's world. In order for an alleviation of poverty, alternative economic theories must be examined and taught. Economic teaching today is in turmoil as proponents of the established power structure seek to eliminate alternative viewpoints; in some cases, going so far as to purge history of economic thought from universities lest students learn of alternatives.
A moral economist will search for viable alternative theories, which can include a moral component.
INTERNATIONAL AID
"Only when those with most power are able to view the whole of humankind as a family will the full horror of allowing so many to perish while others are overwhelmed by a surfeit become clear. However, it is not only a question of morality, but of practical interdependence. Globalization is surely teaching us that none will survive unless peace, based on international, as well as national, social justice becomes the aim of development" [POVERTY AND DEVELOPMENT: AN INTER-FAITH PERSPECTIVE, par 3.3.3]
Morally effective international aid will address the issues of top-down structures, invalid priorities and corruption. At the very least, complete debt relief will enable governments to spend hard earned foreign currencies on medicines and education instead of repaying old debts to international bankers.
Michael Pierce McKeever, Sr.
Economics Instructor, Vista Community College, Berkeley, CA
MIEPA URL: http://www.mkeever.com/
Corp Ethics List: http://www.egroups.com/group/corp-ethics/
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