An Economy of Exclusion

In the titular first line of the Apostolic Exhortation Evangelii Gaudium, the Holy Father writes, “The joy of the Gospel fills the hearts and lives of all who encounter Jesus. Those who accept his offer of salvation are set free from sin, sorrow, inner emptiness and loneliness. With Christ joy is constantly born anew.”

Of this, I have no doubt. And to a world wherein, as the Buddha says (and the Old Testament wisdom writers confirm) “all things are suffering,” the all-fulfiling joy of the Gospel of Jesus Christ is a message relevant in all ages, especially (as ever) the present age, an age in which even the devout seem focused not on the joy of salvation but on the gloom and despair of the material world and its temptations. To those “Christians whose lives seem like Lent without Easter,” (or, I might add, like confession without absolution), this reminder of joy should be a welcome compass for the “decisive direction” toward which our pilgrim lives are oriented, a clear view of the “new horizon.”

From this inspired beginning, Pope Francis lays out not so much a plan, but a “dream…of a missionary impulse capable of transforming everything.” This missionary impulse, so evident in the life and lifestyle of the newest Bishop of Rome, has always been at the core of the Gospel, and has informed the best works of his predecessors. The transformative power of the New Liturgical Movement was always tied up with the New Evangelization; the renewal sought in the Second Vatican Council was a renewal not of doctrine but of mission and ministry; even the reforms of Trent, rightly understood, were not bulwark-building reactions against Protestantism, but rather mission-focused affirmations of existing doctrine and practice expressed in a newly rational language designed to bring the Gospel from the Medieval into the Modern age.

It is not surprising that this Pope, who so plainly expresses in his life the joy and missionary zeal of the Gospel, would write so compellingly on that joy, and would so convincingly lay out the case (as it were) for a much-needed renewal of mission within the Church.

Catholic Economic Confusion

Unfortunately, it is also not surprising that this Pope, a “true son” not of the material world but of “the Church,” raised in South America, educated by Jesuits, and having lived all but the tiniest fraction of his entire adult life within the personal financial cocoon of ordained ministry, would have (like many before him) somewhat confused and idealistic notions about the nature of work, employment, money, and economic security. As these are issues which he, and the Church, are quite right to be concerned about, it is all the more unfortunate that the language, philosophy, and prescriptive measures offered on these matters are so wanting.

Fortunately, the Holy Father makes clear that he does not “believe that the papal magisterium should be expected to offer a definitive or complete word on every question which affects the Church and the world.” Even more fortunate is the humility and eagerness with which the Pope has expressed a desire not just for collegiality among the rarefied world of high-ranking clerics, but also for dialogue and even correction from those outside the traditional power structure of the Church.

With a respect for Pope Francis which I am at pains even to understate, and with a hesitation brought by the knowledge that I am wading into waters which have drowned thinkers more agile than myself, I have to express deep concerns for the way in which Evangelii Gaudium, and the Catholic Church generally, frames the problems of material poverty and also with the solutions typically associated with that philosophical framework.

Exclusion is the Problem

Beginning in paragraph 53, the exhortation mourns “an economy of exclusion.” I have never heard the problem of our modern economic system so well-stated. It is, precisely, the economic exclusion of certain people - as individuals and as members of disenfranchised groups - which is at the root of economic insecurity, inequality, and instability.

However, the cause of this economic exclusion is grossly misdiagnosed. It is not the greed of free market actors, or even the selfishness and waste of the consumer class, that is the cause. In a truly free market, unlike the “prevailing economic system,” all individuals are included, because even the greedy and selfish have found that all individuals have value to offer, needs to meet, and business to transact. The exclusion of certain people and classes of people is not a product of the free market (since there isn’t one) but rather of the “sacralized workings of the prevailing economic system,” an economic system that tries desperately, though in a “crude” manner, to assist, help, control, distribute, regulate, and order wealth according to an ever-shifting set of criteria ranging from the relief of temporal suffering to the rewarding of state-sanctioned activities to the recompense of political favors.

Government Policy as the Leading Cause of Exclusion

To suggest, as the Pope (and much of Catholic economic thought) does, that secular governments of any sort can have a net positive impact on the alleviation of poverty or economic security, is an opinion “which has never been confirmed by facts.” And even if it is true that this is theoretically possible, to suggest that they actually would do is truly to express a “naïve trust in the goodness of those wielding economic power.”

Quite in contrast to the Renaissance world of Italian city-states and merchant-kings, the world in which the Catholic Church passed into modernity, it is not wealthy business interests which presently hold economic power, but rather secular governments. It is no longer control of a particular gold mine or a particular trading route, no longer the loyalty of the commercial cabal or the violent self-interest of familial mafias, which bring the poor to their knees. It is, today, governments - governments with the power to wage total war, the arrogance to regulate all forms of trade and commerce, and the carte blanche to inflate currency until the poor widow’s two small coins become worthless tokens - which create and exacerbate the problems of poverty.

While it is true that non-government business interests exploit and profit from these circumstances, it is government authority which is responsible for their existence. Businesses and profiteers will find a way to make money in any situation, it is their essence and reason for being. To expect or demand them to control that impulse is to deny reality, to imagine a world that paradoxically exists before the fall and yet still has a need for modern commercial activity. The only way to move them away from exploitative to constructive behavior is to dismantle the framework that allows them to prosper apart from the life and work of real, actual human beings with needs and desires and sound money to spend in the pursuit of them.

Instead, informed by the long-dead politico-economic system of the Old World, wherein rich merchants had armies to rival kings, and secular rulers depended on the treasuries of the wealthy to wage petty local wars, Pope Francis and the politically “liberal” Catholic approach to economic social justice seeks to control commercial activity through misguided alliances with secular authorities that are beholden to absolutely no one - not to the rich, not to the populace, not to the moral authority of the Christian tradition, and (often) not even to their own rational self interest or troubled conscience.

Catholic Teachings contribute to Exclusion

If that were not enough, if the unmitigated amorality of the modern militarized state were not reason enough, to stop Catholics from hoping for a politically-enacted solution to the gross injustice of the modern economy of exclusion, the Church’s misplaced hope in the “the right” (as well as the intention and ability) “of states, charged with vigilance for the common good, to exercise any form of control,” has led the leadership of the Catholic Church to engage in a century-long collaboration with the twin phenomena of Pathological Altruism and the Law of Unintended Consequences, suggesting courses of actions and modes of thinking about economics which would be (and have been) disastrous, even if they were to be implemented by well-meaning civil servants sincerely intent on promoting the general welfare.

A number of these policies and ways of thinking are referenced or implied by this latest Apostolic Exhortation, though they are not unique at all to this Pontificate, despite the unfortunate alignment of many of these principles with the economic platform of the political left, which makes them seem, somehow, newly minted by the uniquely forward-thinking Jesuit currently occupying the Chair of St. Peter.

A catalog of these notions, and even a short note about their effects, would take much more time than the need for an immediate response to the present teaching allows. One particular example, the implications of which can be extrapolated into a number of other areas, will have to suffice at the present moment. Though it is, perhaps, the most difficult to tackle, it is also the most destructive in its effects.

Minimum Wage and “Just Wage” Theory

Chief among the offending suggestions constantly set forth by those in Magisterial Office is the notion that civil society can determine and mandate a minimum wage, below which employment is unjust and exploitative. Francis sums up the Church’s thinking on this matter by stating that “[a] just wage enables [the poor] to have adequate access to all the other goods which are destined for our common use.”

There is almost no idea in the realm of “justice-oriented economic reform” which is more universally held or which is more onerous in its deleterious effect on the poor and working class.

(It doesn’t help matters that the loudest opponents of Minimum Wage laws, at least in the U.S. political landscape, are angry conservatives with a clear disdain for the poor. In the same way that Westboro Baptist Church should not be taken as the best representation of the need for salvation in Jesus Christ, the scandal-mongers of television punditry should not even be considered as adequate spokespeople on economic or political issues.)

Minimum Wage Policies Exclude the Most Vulnerable

Minimum wage policies have several negative consequences which, because they are felt only by the poor, tend to remain completely hidden from view, particularly to those who are trying to help them, and so have a strong psychological incentive to be blind to the suffering caused by the supposedly altruistic actions.

Most directly, minimum wage policies serve as a primary source of economic exclusion for low-skilled workers.

While it is possible (and, in fact, likely) that an employer who perceives $10 worth of received value for every hour worked will pay the worker far less than that $10, it is absolutely not the case that an employer who perceives $5 worth of value each hour will be willing to pay $7. An outsider may object to the financial value the employer perceives from some specific amount of work, but only the one running the enterprise is truly qualified to gauge the economic benefit gained by employing some particular person.

When a policy is put in place which expressly prohibits an employer from paying people less than some specific amount of money in exchange for an hour of work, the result will always be the exclusion from employment of all people who cannot - at this moment - provide a financial benefit to an employer higher than that amount.

To give a more specific example: what, do you suppose, is the economic benefit to a grocery store of employing someone to bag groceries and hand them to the customer? How would that even be calculated? Easy: How much additional revenue would a grocery store make each hour of operation while employing a bagger as opposed to not employing one? Given the almost complete disappearance of the job of “bagger” in most groceries stores, one can assume that the economic benefit of employing them is lower than the current minimum wage.

The most vulnerable workers - those whose skills and experience are so wanting (for whatever reason) that they are unable to provide a state-mandated minimum level of economic benefit - are completely excluded from engaging in economic activity which might benefit them currently and which, by providing work experience, would increase their economic value over time.

Other Effects of Minimum Wage

This exclusion should be enough reason to reject minimum wage policies, but there are at least two other effects which should be deeply concerning to the Catholic sense of justice: a measurable effect on the value of money and an immeasurable effect on the perception of the value of individuals within society.

The small percentage of workers who benefit from minimum wage increases (those being paid less than the new minimum when it is enacted and who nonetheless provide enough economic benefit to their employers to be retained) have, suddenly, more money to spend. But their nominal increase does not occur in a vacuum. The cost of all goods and services delivered or produced by low-skilled or low-wage labor goes up, in proportion to the minimum wage increase. These are precisely the goods and services most used by the poor. Because the cost increase is directly tied to the income increase, the buying-power (and, therefore, lifestyle) impact of the increase is precisely null for those who remain working. Worse, the buying power of the excluded workers drops by an amount greater than the lost income. What little the poor may have had in monetary savings is devalued. Meanwhile, since the Middle Class and the Wealthy tend to have the bulk of their wealth not in money directly but in assets which can be sold for money, the financial effect of a minute decrease in the value of nominal currency is blunted or hidden entirely.

Price Control as Commoditization

Perhaps more insidious than the financial effect of minimum wage policies is the commoditized perception of individual low skilled workers engendered by such laws and the philosophy behind them. While the explicit goal of such thinking is to recognize and remunerate the value of these workers, the implicit message is that - below some particular society-mandated level of skill and experience - all workers are essentially fungible commodities available at a price set by a central authority. Indeed, the phenomenon of outsourced labor can be seen not just in economic terms (these laborers are cheaper), but in existential terms (these laborers are basically the same as any other laborers).

Minimum wage policies, then, do precisely what the Catholic Church accuses “the market” of doing: turning people into disposable commodities and excluding them from participation in the economic life of the world.

Brief Conclusion

The Catholic Church, and this Pope, are right to be concerned for the poor, and for the economic well being of all people. As the gap between rich and poor widens, and as concern for the poor in the halls of wealth and power seems at an epoch-making low, that concern should be on the minds and hearts of all Christians, and all people of good will.

In a brilliant moment of insight, the Apostolic Exhortation Evangelii Gaudium pinpoints the immediate cause of these seemingly intractable problems: An economy built on the exclusion of certain people.

However, the first cause of that exclusion is so poorly understood by those in religious (and political) authority, that all attempts over the last century to rectify the problem - to include the excluded - have made the problems worse, both in real economic terms and in terms of the philosophical shifts they have unwittingly caused in the larger culture.

This brief essay has dealt specifically with only one of those attempts: the attempt to enforce a “just wage” for all workers. This one issue, however, is not the only issue where the social and economic ideals of the Church are at odds with the effects of its suggestions and policy opinions. A close reading of Catholic Social Teaching reveals an inspired core of ideals, mired in ill-conceived economic thought and a paternalistic attitude toward the poor that borders on insulting.

If the leadership of the Church is serious about the economic security of all people, and I believe it is, a drastic rethinking of economic philosophy is in order.

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