Mario Rizzo writes:
[The pope] focuses on the seen, but neglects the unseen in economic affairs. He looks only to intentions (Do good!) and knows little about unintended consequences. (However, he is pretty good at the unseen in spiritual life.)
The morality of the extended order that is, the world-wide system of social cooperation, cannot be a morality simply of the seen. We can eliminate fires in factories producing western goods by eliminating the production of western goods in Bangladesh. Not good. We can reduce these by requiring higher safety and this labor costs but then there will be fewer people employed in the best alternatives. Who will examine the health and safety consequences of the employment to which the poor are driven?
Perhaps the pope believes that people should not be concerned with profit and loss signals. We can focus on this one issue in Bangladesh only because it is right before us. But, in general, we do not have the epistemic capacity to investigate all of the circumstances of supply and demand with simple moralisms.
Not all Christians are as confused as this pope. Let us go back to Thomas Aquinas. Aquinas often reminded us that men are not angels. We do not have the psychological or epistemic capacity that they have. So when asked whether a merchant who was carrying grain to an area distressed by a shortage had an obligation to reveal his belief that others were coming later with more grain, Aquinas said that he did not have this obligation in terms of justice. The just price was the market price the merchant could get at the time, absent revealing this information.
Why? Aquinas is not explicit. However, I surmise it is because he knew that what motivated the additional supply to come into the area is the expectation of high profit.
Morality is not equivalent to advocating feel-good courses of action when something bad happens. Sure, we can and should be beneficent. It is good to help fire victims. But it is a good thing in the long run to understand economics. As Jean-Baptiste Say said: A good book on economics should be the first volume of a treatise on ethics.
Monopoly is a utopian concept. It is the idea that a great deal of power (in some cases a nearly unlimited amount) can be put into the hands of a single person or a very small group of people, and they will be able to exercise that power without succumbing to the temptation to misuse it.
ReplyDeleteMonopolies are usually disapproved of for purely practical reasons, as they always disproportionately benefit the owners of the monopoly, while disadvantaging those “served” by it.
Yet there is one monopoly in human society, really the only true monopoly and creator of all other monopolies: the state. The state exercises nearly unlimited power over the people of a certain territory because it has a monopoly on the lawful use of coercion. Is this monopoly abused? Nearly always! Yet people continue to support the state as a necessity to a peaceful human existence. It is understandable that those IN government think this is so, as well as those others who directly benefit in some way from the state. But what about all the people who are really net losers, who suffer more from the state in taxes, imprisonment, and other depredations? Why would they continue to support the existence of this monopoly?