Pius XI 2. deviation of productive investment
3. Economic systems. Capitalism
John XXIII said that the common good encompasses the whole man, ie both the demands of the body as the spirit. Therefore, leaders must ensure that well, so that, without neglecting the spiritual goods, offering the public the material prosperity (PT, 57).
is important to note that warning, because economic relations do not arise from acts of God, but as a result of human behavior. There is no fatality in the economy. While economic science has its own laws and methods, the economy and human activity must be subordinated to political and moral, to make possible a straight Economic Order. Recall that order is to arrange things to an end, is an intelligence operation, not the will.
From a doctrinal perspective, we display can present an alternative economic order, according to the intellectual and political approach is chosen:
i) Some believe that the economic order arises only by interaction of factors. It is the liberal assumptions of the "invisible hand , which will arrange things so that there is a balance of interests in the market.
Church rejects this hypothesis, it has not been verified ever before. On the contrary, considers that:
"You can not trust either the only development almost mechanical process of economic action of individuals or the single decision of public authority. For this reason it is necessary to qualify as false doctrines that are opposed to the reforms necessary in the name of a false freedom as sacrificing fundamental rights of individuals and groups for the sake of the collective organization of production. "( GS, 65)
ii) When Economic Order is designed by the State and performed by himself, falls in statism. The above paragraph explains the reasons for rejection of this position, by the Church. Historical experience shows that a nationalized economy overrides the freedom of citizens and social groups, as well as being inefficient in the long term.
iii) Economic Order designed by the state but by individuals , as freely as possible, is promoted by the Church.
not for the State "to" economic, but "command and coordinate." Justice imposes limits on freedom of individuals in this field and may impose burdens that the public authority. In effect
"It is up to public authorities to choose, to lay down the objectives to be pursued, the goals must be set, the means to reach them as stimulating all the forces grouped under this common action. But they have to be careful to associate with this private initiative and intermediary bodies. Thus avoid the danger of complete collectivization or of arbitrary planning, to deny freedom, preclude the exercise of fundamental rights of human beings. "(PP 33)
1. The two fundamental laws of economics
The economy is primarily a man's relationship with things. But with a certain kind of thing only, which are the rare and useful things . Scarcity and utility, are necessary for things having economic value. In this connection, there arises a fundamental law of economics that is:
Law of supply and demand . One thing, in so far as is needed or is it limited its value tends to increase, and tends to decrease to the extent that it is more abundant. This law has been done extensively, especially since the French Revolution, the price of labor, imposing man with the same relationship you have with things working man becomes a commodity, subject to the law of supply and demand, so call this free competition, so that when there are large labor supply, which is when people are most in need, the value of low wages.
These social, handled with technical criteria, are those that have plunged the people into the social injustice we suffer. Aberrant what liberalism is not to defend the natural law and spontaneous economic relations, but expect that trend to operate outside any framework and subordination to higher laws. This law is spontaneous in the economy, does not mean that you can not make a smart system that natural tendency.
A second fundamental law of economics that is: the
Reciprocity Law Changes , which is under spontaneous order of market trends to the common good, which explains why, at the same time, a political law. Reciprocity law changes, is the condition or course prior to the law of supply and demand functions normally without distorting and unbalancing the economy of a society.
Under this law, when, after sustaining a certain richness, is exchanged, it must be such that there will be no delays or economic developments in different sectors. That is, any sector should be brought forward or delayed under the exchange itself.
say that the law of reciprocity is the policy change because is only through its effect is achieved social justice, but we also say that is an economic law is not respected because when distortion occurs economic system and the economy is slowing down until reaching the market crisis.
The economy is mainly trade and economic apparatus consists of four key sectors: a sector PRODUCER of raw materials, a sector INDUSTRIALIZED A DEALER sector , and a sector FINANCIAL . There are four different and complementary parts that make up a unit, which is necessary for the economic system works well, the four parts are provided.
Any growth of a sector that is not followed by proportional growth of others through proper redistribution distorts and slows economic system.
The economy is the sum total of acts buyers and sellers. Always the salesman act produces economic advancement, because it represents the offer and the buyer act produces an economic slowdown as it represents the demand. Whenever the need is less able to defend their interests that do not need. The seller takes the need to purchase. Then, as a sector that acts buyers predominate acts on vendors, this sector need to go back, and to the extent that a predominant sector acts on acts buyers sellers, this sector is ahead in the exchange.
For example, the wage sector is pure buyer. The workers are paid their wages without being able to price their work, and with that money come into the business cycle as pure buyers. For this reason, the labor sector will permanently delaying an economy governed by the reciprocal changes. At the other extreme, the financial sector, which sells the service to train and mobilize capital, works as a salesman pure, and wins in all operations, without taking virtually no risk. For this why the financial sector tends permanently ahead financially, compared to other sectors.
liberal economy produces a disturbance of balance, which makes the wage sector is always delayed, which delayed the production sector in respect of industrialization, it will lag behind the distributor and financier this respect, always forward. In each cycle (fiscal year) the productive apparatus tends to deform, the financial sector hypertrophy and atrophy basic sectors of the economy, delayed permanent wage sector. In the next economic cycle all savings (savings: income - consumption) for investment productive, can not re-injected into an economic system with a sector shrunk and consumer (employee) depressed by the delay in purchasing power (inflation).
If one wishes to respect the spontaneity of the market, as claimed by liberalism, the ensuing economic crisis, with unemployment and recession. Or resize the productive through proper redistribution of global growth in all sectors, so that the economic structure return to its original shape after each cycle, capital flight is inevitable and thus fall in the gears international credit, that in every political-economic cycle takes hold of a piece of our production.
Therefore, the two fundamental laws of economics must necessarily work together, representing: the law of supply and demand, spontaneity, vitality and freedom of economic exchange, and reciprocity in the changes, harmony of the economic, social justice, and sustained economic growth, free of dependencies and external constraints.
2. deviation of productive investment
can not earn more than what corresponds to the real increase in wealth. If the GDP of a country grows in a year, 8% each of the sectors should grow at about that pace. So, for example, if the factor capital gains in proportion to the real growth of national wealth, what you are doing is to get your winnings, at least in part, the delay in the purchasing power of wages. This leads to a shrinking of the productive apparatus, because the wages are depressed delayed the ability of consumption and production has slowed, there being no room for productive investment.
The consequence of this distortion can be easily measured with statistics: 1,800 million people (half of world population) live on less than $ 2 a day, and of these, 1,200 million live on less than $ 1 a day. This poverty leads to death of 35,000 children per day and 13 million a year.
In Argentina, meanwhile, there are 16,400,000 6,300,000 poor and indigent (The Nation, 06/11/2004), data sufficient to show that there is a maldistribution of wealth.
As noted by John Paul II:
" We are, therefore, face a serious problem of unequal distribution of means of subsistence originally meant for all men, and also the benefits deriving from them . And this happens not through the fault of the needy people, much less through a sort of inevitability dependent on natural conditions or set of circumstances . "(SRS, No. 9)
On the contrary, there are specific decisions cause these results, as reported in the World Trade Organization: The United States spent in 2003, 20,000 million dollars in farm subsidies, and for the same purpose, the EU spent 40,000 million euros, in both cases hurting other countries, like ours, you see seriously affected its exports.
strong one way, the Argentine bishops explain the reasons for these decisions:
" economic and social crisis and the consequent increase in poverty, have their roots in forms of policies inspired by neo-liberalism which considers profit and the market rules as parameters, to the detriment of the dignity and respect for people and peoples . "(" Sail out to sea ", CEA, 31.05.2003, p. 34)
3. economic systems. Capitalism
The encyclical "Centesimus Annus" considers just reject an economic system that ensures the absolute predominance of capital over the free subjectivity of human labor. Neither agree, as an alternative model, the socialist system, which is nothing but a state capitalism.
promotes, on the contrary, a society based on free labor in the company, as a community of men, and participation. Such a society, accept the market as an effective instrument for utilizing resources and responding to needs, but requires that it be controlled by social forces and the State, so as to ensure meeting the fundamental needs of society .
The encyclical considers, however, unacceptable to claim that the defeat of socialism leaves capitalism as the only model of economic organization. (No. 35) However
above, with the caution characteristic of the Church, and the difficulty of defining precisely the meaning of a word as controversial as "capitalism," the encyclical devoted a long paragraph to discern whether the system is acceptable. It does in paragraph 42 of the encyclical, in two parts:
a) "If capitalism means an economic system that recognizes the fundamental and positive role of business, market, property private and the resulting responsibility for the mass production of free human creativity in the sector of the economy, the answer is certainly positive, although perhaps would be more appropriate to speak of business administration, market economy , or simply free economy . "
b)" But if by capitalism means a system in which freedom in the economic field is not enclosed in a strong juridical framework which places it at the service of integral human freedom and consider it a particular dimension of it, centered ethical and religious, then the answer is absolutely negative. "
The definition, although complex, is not ambiguous, as it fits into the distinction that scientists have made between two types of capitalism: the Anglo and Rhine [1] . The first part of paragraph 42 ("a"), describes what is known as Rhenish capitalism, the second part ("b"), indicates that the Anglo-Saxon capitalism, which broadly agrees with the concept of neoliberalism , analyzed by the Argentine bishops in the appointment, and exposed ("Sail into the deep", p. 34).
In another part of the encyclical (p. 19), the pontiff stressed the positive effort made by some countries to "prevent market mechanisms the only point of reference for social life and tend to be monitored public upholds the principle of the common destiny of earthly goods. "After detailing the positives:
► a certain abundance of job offers;
► a solid social security system;
► freedom of association and the effective action of the union;
► social welfare in cases of unemployment.
This characterization corresponds precisely to the Rhenish capitalism, which is the economic system that is effective in several countries, especially Germany, Italy and Japan. The mention of this background is important to not take the social teaching of the Church as a "utopia" that no-place-but at least partially coincides with concrete experience of reality.
The same encyclical reiterated that the Church has no models to propose, but "offered as an indispensable and ideal orientation, the social doctrine itself, which, as already mentioned, recognizes the positive market and enterprise, but at the same time indicates they must be oriented towards the common good. "(CA, p. 43) Chapter
key social teaching on economic matters, what is the need for participation of State (CA, p. 15), which should act:
A) Indirectly, on the principle of subsidiarity, as the economic order must be carried out by individuals, except in exceptional circumstances. Not for the State "to" economic, but "direct" activity for that particular run. State action should be to: encourage, stimulate, organize, replace and supplement the activities of individuals.
The neoliberal interpretation which places the power to act only delegation of individuals, is insufficient. The right thing is that the state always acts as manager common good , guiding the economy and, in exceptional cases, directly by activities that can not be performed by individuals.
B) Directly , according to the principle of solidarity to: ►
correct abuses: usury - monopoly, etc. And may use the legal institution of expropriation;
redistribute ► wealth: applying the law of reciprocity in the changes. By, for example, tax policy and social security.
is not enough to recognize the duty of government intervention in the economy, it is also necessary to limit such intervention. For state regulation should not override or seriously affect the property and individual liberty. Pope warns that "you forget that the coexistence of men is not intended to neither the market nor the state, as it has in itself a unique value which must serve the state and the market." (CA, p. 49)
So the Social Doctrine of the Church does not accept :
Neither the non-intervention public authority in economic matters
Neither the total intervention.
Put another way, it rejected two utopias :
Absolutely free market liberalism postulates
paradise on earth, as it seeks to Marxism.
social doctrine of a realistic attitude, who knows the eternal struggle between good and evil is subject to man, and therefore "faith alone fully reveals his true identity, and it just started teaching office of the Church, which, drawing upon all the contributions of science and philosophy, aims to help the man on the path of salvation. " (CA, p. 54)
Sources:
Sacheri, Carlos. "The Church and the social", Bahia Blanca, La Nueva Provincia, 1972.
Widow, Juan Antonio. "Man, political animal", Buenos Aires, Foundation Forum, 1984.
Meinvielle. July. "Fundamentals of the economy", Buenos Aires, Eudeba, 1973.
Calvez, Jean-Ives. "The Church against economic liberalism", Buenos Aires, Ediciones de la Universidad Católica Argentina, 1997. Garda
Ortiz, Ignacio. Seminar on Defence and illustration of economic freedom ", Buenos Aires, Forum Foundation, s / f.
[1] Albert, Michel: "Capitalism versus capitalism", Buenos Aires, Polity Press, 1992.
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