Deeply inspired by the words and actions of Saint Francis of Assisi, with his Encyclical Laudato Si' Pope Francis has offered Catholics, followers of other religious faiths, and non-believes as well a comprehensive analysis of the need for reforms to save from deep maladies Mother Earth, society, and ultimately each individual soul—in this life, let alone the afterlife.
Pope Francis knows and understands the highs and the lows of modern society. He understands the dynamics surrounding inventive minds: “Technology has remedied countless evils which used to harm and limit human beings. How can we not feel gratitude and appreciation for this progress, especially in the fields of medicine, engineering and communication?” (Laudato Si’, hereinafter "LS," 102). “Human creativity cannot be suppressed. If an artist cannot be stopped from using his or her creativity, neither should those who possess particular gifts for the advancement of science and technology be prevented from using their God-given talents for the service of others” (LS, 131). “Due to the number and variety of factors to be taken into account when determining the environmental impact of a concrete undertaking, it is essential to give researchers their due role, to facilitate their interaction, and to ensure broad academic freedom” (LS, 140)
But human beings are not completely autonomous. Our freedom fades when it is handed over to the blind forces of the unconscious, of immediate needs, of self-interest, and of violence. In this sense, we stand naked and exposed in the face of our ever-increasing power, lacking the wherewithal to control it. We have certain superficial mechanisms, but we cannot claim to have a sound ethics, a culture and spirituality genuinely capable of setting limits and teaching clear-minded self-restraint (LS, 105).
The basic problem goes even deeper: it is the way that humanity has taken up technology and its development according to an undifferentiated and one-dimensional paradigm. This paradigm exalts the concept of a subject who, using logical and rational procedures, progressively approaches and gains control over an external object. This subject makes every effort to establish the scientific and experimental method, which in itself is already a technique of possession, mastery and transformation. It is as if the subject were to find itself in the presence of something formless, completely open to manipulation (LS, 106).
Pope Francis understands just as deeply the dynamics of gang wars (LS, 149), not as isolated phenomena but totally integrated in a world that is never totally bereft of love, as demonstrated in the following: “Moreover, what takes place in any one area can have a direct or indirect influence on other areas. Thus, for example, drug use in affluent societies creates a continual and growing demand for products imported from poorer regions, where behaviour is corrupted, lives are destroyed, and the environment continues to deteriorate” (LS, 142).
In between, Pope Francis shows a deeper understanding of economics than most economists seem to possess: “Production is not always rational, and is usually tied to economic variables which assign to products a value that does not necessarily correspond to their real worth” (LS, 189). Nor is he blind to the existence of such interactions as “The failure of global summits on the environment make it plain that our politics are subject to technology and finance. There are too many special interests, and economic interests easily end up trumping the common good and manipulating information so that their own plans will not be affected” (LS, 54). And he is very attentive to the technique of turning tables: “Whenever these questions are raised, some react by accusing others of irrationally attempting to stand in the way of progress and human development” (LS, 191).
The Encyclical is so integrated and comprehensive that it reads like the outline of an encyclopedia; no issue, however minor, is neglected. Vast expanses of territory are covered, from pollution (LS, 20, 21, 24, 29, 44, 47, 111) to climate control (LS, 24, 25, 172) to urban design (LS, 152) and transportation policies (LS, 153). Beyond, there is a firm commitment to the primacy of the common good (LS, Chapters IV and V).
Pope Francis is very clear. “We are faced not with two separate crises, one environmental and the other social, but rather with one complex crisis which is both social and environmental. Strategies for a solution demand an integrated approach to combating poverty, restoring dignity to the excluded, and at the same time protecting nature” (LS, 54). “Together with the patrimony of nature, there is also an historic, artistic and cultural patrimony which is likewise under threat” (LS, 143). Pope Francis is attuned not only to the despoliation of the land, but also to the catastrophe of modern man-made city living. “We make every effort to adapt to our environment, but when it is disorderly, chaotic or saturated with noise and ugliness, such overstimulation makes it difficult to find ourselves integrated and happy” (LS, 147).
Pope Francis has presented a cogent case that the health of the earth, the health of society is not in the interest of this group of people or that, but in the interest of us all.
On the course to recommendations for the implementation of his numerous integrated solutions, Pope Francis is clear-headed about obstacles. While respecting, indeed urging, the autonomy of the two leading branches of modern life, “Politics must not be subject to the economy, nor should the economy be subject to the dictates of an efficiency-driven paradigm of technocracy” (LS, 189), he realizes that current leaders of politics and economics are unlikely to break free of the constraint they work under. “Is it realistic to hope that those who are obsessed with maximizing profits will stop to reflect on the environmental damage which they will leave behind for future generations?” (LS, 190).
At the bottom of the crisis, he finds this: “Our difficulty in taking up this challenge seriously has much to do with an ethical and cultural decline which has accompanied the deterioration of the environment. Men and women of our postmodern world run the risk of rampant individualism, and many problems of society are connected with today’s self-centred culture of instant gratification. We see this in the crisis of family and social ties and the difficulties of recognizing the other” (LS, 162).
Hope, he says, lies with the youth and not the youth by themselves; rather, a youth that will carry out an intellectual and moral revolution. This alone might still avert the abyss of social, economic, and ecological disruption toward which we are fast plunging, “Doomsday predictions,” he says, “can no longer be met with irony or disdain” (LS, 161). “We urgently need a humanism capable of bringing together the different fields of knowledge, including economics, in the service of a more integral and integrating vision” (LS, 141).
The last chapters of the Encyclical are devoted to the exploration of this last ditch hope, the hope that the ecological movement, overcoming its deep burrows of secularism, will join with religious people to proclaim the sacredness of Mother Earth (Gorga, 2007). This hope is based on the firm conviction that religious people, especially Trinitarian religious people, will welcome with open arms the indispensable assistance that ecologists can provide, because what is at stake is nothing less than the health of Mother Earth, the health of society, the health of each individual soul.
“The urgent challenge to protect our common home includes a concern to bring the whole human family together to seek a sustainable and integral development, for we know that things can change” (LS, 13).Yet, progress toward real solutions of problems is painfully insufficient (LS, 175). How can the program of action be speeded up? When Duccio finished his painting of the Madonna, a grateful Siena unanimously closed shop to form a procession for the delivery of the painting to the Duomo. Why are Catholics, at least, and people of all faiths as well as people of no faith, not uniting with Pope Francis to save Mother Earth, our modern society, and each one of our souls—secular and faith-full souls? Let small differences of opinion fall by the wayside.
The prize that Pope Francis promises is this: “Isolated individuals can lose their ability and freedom to escape the utilitarian mindset, and end up prey to an unethical consumerism bereft of social or ecological awareness. Social problems must be addressed by community networks and not simply by the sum of individual good deeds…. The ecological conversion needed to bring about lasting change is also a community conversion” (LS, 219).
Pope Francis’ list of problems and potentialities is all composed of problems and potentialities that affect us all—and it is indeed an expression of the deep irrationality of our age that we do not acknowledge and act upon such simple but undeniable verity as the need "to enter into dialogue with all people about our common home" (LS, 3). Is contemporary society composed mostly of philistines waiting for their Samson to go to their death? As Benjamin Franklin recognized on another fateful occasion, we have again reached a stage in which we either stand together or hang separately.
Clearly, the first step resides in a deep understanding of the fierce and widespread opposition that Laudato Si’ has raised. What are the reasons for this state of affairs—among Catholics, let alone people of other faiths or no faith at all?
The discourse is rather long, but—especially spurred by the invitation of the Holy Father (LS, 14, 60, 163ff)—it must be had, if we ever want to reach a modicum degree of concord in this world.
Fifty years of research and publication by this writer mainly in the field of Concordian economics offer a unique perspective on modern issues. Concordian economics tries to escape the grasp of mainstream economics and enter a new paradigm—a new paradigm that, surprisingly, is very old at its core. This is the paradigm of Economic Justice, a paradigm that ruled the world from Aristotle, through Saint Thomas Aquinas, all the way to Adam Smith. The perspective starts with a meditation on justice.
A Meditation on Justice
Justice is a virtue, of which every human being is endowed as a sixth sense; but which not every human being exercises. The proper exercise of this virtue calls for an integrated exercise of all other virtues, love most of all—love itself intended as a virtue. Without love in his or her heart, one cannot give or receive justice.
Justice is a universal virtue. It applies to every human being equally. In this Encyclical Pope Francis, following the social doctrine of the church of the last two hundred years, inadvertently, automatically slips into a dichotomy. He reserves justice “for the poor.”
Metal frameworks offered by such powerful conceptions as Social Justice are insidious components of our intellectual persona. They form our Weltanschauung. Since ideas control actions, they function as hidden remote controllers. No one can escape them, unless one experiences the exhilarating adventure of going through a change of those frameworks, those “paradigms.” Even a person as sensitive as our Pope Francis falls under the spell of the paradigm of Social Justice. Hence, justice becomes "justice for the poor"—and no justice for the rich. This implication, I am sure, is not wanted by Pope Francis. He firmly believes that “The rich and the poor have equal dignity, for ‘the Lord is the maker of them all’ (Prov 22:2)” (LS, 94).
Yet, it is unavoidable. Social Justice is an ideology not based on sound economic theory but on economic sentimentalism (Gorga, 2015a). This ideology separates the heart from the mind. We want to give justice and all good things to the poor, even when they are not ours to give. Hence, it is innately divisive. In fact, it divides the world into two segments: those who have and those who have not. Implicitly and unavoidably, this ideology sets one group against the other. This ideology is also divisive because it separates the world of matter—the world of material wealth—from the world of the spirit. Contrary to all good intentions, this ideology implicitly denies the world of the spirit, because the world of spirit unites (just as in modern physics energy unites), while the world of matter is inherently individualistic and divisive. This chair is and must separate itself from the table. The individual physical person is and must separate itself from all other persons.
To see why Social Justice is a self-deceiving framework of thought, we have to look into it; we have to look into its practices rather than its aspirations.
The invitation to conversion out of the paradigm of Social Justice is suggested by a long list of considerations. First of all, as Jonathan Kopel (2015) stressed in a personal communication, to properly “diagnose and treat the problem.... requires understanding social structures, their interactions, and human psychology.” Justice is a universal virtue that can only be granted and received by everyone or by no one at all. Yes, the conception that justice is not offered to the rich today is true and it is liberating. The poor are not created by the rich, as the Bible teaches us the poor are created by the wicked (Gorga, 1998). And then this liberation invites us to see the rich as under continuous threat by the wicked few, among the rich themselves as among all other social classes. Just follow the ups and downs of the Stock Market, and realize the daily jolts to the heart of the rich. Should we not have compassion, should we not suffer for them and with them as well? A routine explanation runs like this these days: Go to bed with a portfolio of assets worth $3 million; get up in the morning and find that, because of something that happened in other parts of the world, your portfolio is now worth $1.5 million. How would you feel? Worse yet, think that this person might have borrowed $1.5 million. Is not this a dynamic out of which suicides are made?
No, this is not a plea to neglect justice for the poor. Not at all. This is a plea, as we shall see, to adopt a plan of action that provides justice for everyone. This is Economic Justice, not Social Justice.
New contradictions might inevitably appear in the future, but for the time being all intellectual contradictions existing in the paradigm of Social Justice, as we shall see, disappear in the world of Economic Justice.
Economic Justice is integrative, because justice is integrative. We all, the entire humanity of the past as well as the humanity of the present, have a sense of justice (cf. Vico, 1971 [1725-28]., esp. p. 10).
For the time being, the integral understanding of justice offers a summary presentation of two complementary reasons for the opposition to Laudato Si’.
Two Fundamental Reasons
Apart from the myriad of personal preferences of each discussant, there are two fundamental reasons for this consistent reaction to the formulations of Pope Francis and all modern popes. The encyclical Laudato Si’ does not take into account a long series of intellectual shortcomings of the Doctrine of Social Justice. This is the first fundamental reason for the objections to Laudato Si’. The second reason is that the encyclical does not respond to the age-old principles of Economic Justice, as enunciated by Aristotle, and accepted by the Catholic Church all the way from Saint Thomas Aquinas, through the Doctors of Salamanca, up to the publication of The Theory of Moral Sentiments (1759) by Adam Smith.
In Laudato Si’ there is no acknowledgment of this historic event of major magnitude. With this publication by Adam Smith, the foundation of Economic Justice is cut at its root. Justice is no longer based on morality—since morality is no longer the foundation of human action. Morality is a “sentiment,” a personal—emotional, not rational—preference.
Surely, Adam Smith placed morality on the shoulders of a higher authority. But who or what is his “impartial spectator” who is supposed to judge our daily actions? The answer gushes fort as soon as one asks it. The impartial spectator is “lui-même,” he himself. Adam Smith’s alter ego.
We shall first give a look at some shortcomings of Social justice. Thereafter we shall enunciate the bare bone principles of the theory and practice of Economic Justice.
Social Justice
The ideals of Social Justice are so compelling as to have kept a multitude of listeners and practitioners enthralled for a long time. What the Social Justice program says that social and economic relations among human beings "ought" to be is indeed what they ought to be. Yet, the practice of the Doctrine of Social Justice is dismal. Why this dysfunction? One answer is simple: The Doctrine was born an orphan. Since it consciously rejected the past, it believed it had no history to rely upon. While this notion is still widespread, it is not true. There is a splendid history that took place before this Doctrine was born; it can be found both in the sacral and in the secular tradition (Gorga, 2015b). The other complementary reason is that, without getting out of this framework of analysis, one cannot truly see the shortcomings of this program of action.
Much has been written about Social Justice. It is a program of splendid rhetoric and dismal practice Apart from the vague idealism of the term, which no one seems to be able to pinpoint, the core of the Social Justice program stems from the problem of inequality of income. The problem exists, is serious, but it is not soluble as presented. The problem is presented as a problem of redistribution of income. Thus presented the problem is insoluble, because it enters the discussion at the end of the play, when the curtains are down. The remaining spectators are hot under the collar. But it is too late to raise the issue; the play is over. The play was about the distribution of wealth while it was created: Income (and wealth) was distributed in accordance with well-established rules. If one is not happy about the outcome, one has the duty to speak about the rules of distribution, not to go off topic and reach for the never-never land of redistribution.
There are various reasons why the program of redistribution has not worked so far and cannot be expected to work in the future. The tools of redistribution of income are entitlements. Since they are not based on responsibilities, entitlements eventually disenfranchise everyone: Prevailing policies of Social Justice have reduced nearly everyone, world-wide, to the condition of a beggar: The rich beg for lower taxes (and subsidies); the middle classes beg for jobs; and the poor beg for entitlements. Why have we gotten ourselves into such a sorry state?
The major reason is that there are no firm rules of Social Justice. Its rules are wholly arbitrary and personal; therefore, they are moveable and unacceptable in a well ordered society. There are no just rules of redistribution; to redistribute wealth once it has been apportioned is a task for the gods, not for men. Here are some of the insoluble specifics: What type of wealth ought to be redistributed? From whom? To whom? How much? How often? In search for answers one encounters only sketchy assumptions, imbalances, and injustices.
That is not a way to construct a just society. And, in fact, when pressed to clarify its position the redistributionist movement admits that it does not appeal to the sense of justice. It appeals to another virtue, the highest of all virtues: charity. We shall soon see what is the ultimate effect of this appeal.
Some Shortcomings of the Social Justice Movement
Shortcomings of the faulty ideal of Social Justice would be better understood through an observation of detailed results of interactions among social classes and the factors of production over time. Barring this opportunity, we will concentrate on two key moments of that dynamic: We will observe its central strategic mistake, and then the blindness that exists at the very core of the Social Justice ideology.
A Fundamental Strategic Mistake
To redress social imbalances this ideology relies on charity rather than justice. Since Jesus said that “the poor will always be with you” and “whatever you do for the least of my brothers, you do for me,” the Social Justice movement has felt fully justified in its appeal to charity. What to say about this use of high morality?
The standard applies: by the fruit you shall judge the tree. Not only has the call to charity become the line of first resort against poverty, rather than last resort; in the process of attempting to redistribute existing wealth, charity has become compulsory. Thus the task of charity has become so overwhelming as to become impossible of fulfillment; and through this impotence charity itself has lost its meaning. In the United States, you will go to jail if you do not oblige the requests of the Internal Revenue Service (IRS), requests that are mostly justified in the name of compulsory charity. When charity is made compulsory, the very meaning of charity is destroyed. We see this effect not only in the ever present, very human, attempt to shun the duties of charity; the worst of all possible worlds can be found in the assumption that one does not any longer have a duty of charity toward human beings who are in need, because the government is performing this duty for us.
There is a penalty in all this confusion about the duties of charity and the duties of justice. There is a general blindness about the mechanisms of accumulation of wealth. Thus the rich few are blindly and automatically granted privileges that account for the inordinate wealth inequality we are witnessing today.
The Blindness at the Core of Social Justice
Economists, wrapped as they are in the abstractions of pure science, do not see the mutuality of relationships that occur within the economic process. Lawyers do not see them either, because economists are blind to them. Thus adherents to Social Justice are left all alone to labor in the rough seas that produce inordinate levels of inequality in the distribution of wealth. They observe the effects, but not the causes of inequality. (Utterly frustrated, they can only call for a redistribution of wealth.) The cause of inequality can be found in the set of privileges exercised by the few.
Privilege is not an abstraction. It is an observable, objective reality. The exercise of rampant privilege is brought forward following the ancient Mosaic commandment: do not steal.
Let us leave petty larceny well alone. To see how the doctrine affects the very core of the economic process, let us, first, realize that when people do not pay the full share of the taxes they owe, especially their full share of taxes on land and natural resources, they steal from fellow citizens who are burdened with the total cost of running a country. (The issue of the amounts of taxes owed to the government can be treated only in the context of a discussion on the necessary functions of government.) Second, when the central bank sells national credit to preferred customers (the primary dealers) and excludes the majority of citizens, the central bank sells for a mess of pottage a national treasure that belongs to the entire population. Private appropriation of common goods—such as land and money—without compensation is expropriation and plunder. Third, when stockholders cash in their stocks and bonds, they rob the workers who have originally contributed to the creation of that value—and are excluded from the bounty of capital appreciation by the transparently frail fig leaf of the “wage contract.” Fourth, when one purchases a whole corporation, and uses other people’s money to concentrate the wealth of the nation into fewer and fewer hands, one robs at least the workers, if not also previous as well as future potential stockholders, of the ensuing capital appreciation of the corporation.
The evidence is strong that this is the road to inordinate accumulation of wealth. The consequence is undeniable: The inordinate accumulation of wealth by the few is the cause of poverty of the many. No, the few are not necessarily the rich but the wicked. No, this is absolutely not a condemnation of the entrepreneur—and even less a condemnation of the inventor. No, this is not a condemnation of economic growth either. This is a condemnation of tolerance for the wrong type of economic growth, the type of financial growth that leaves the wicked free to legally steal the wealth of others and leads to outward dazzling statistics accompanied by inward substantive emptiness: When the numbers were tallied, the spectacular spikes in growth levels during the first decade of the second millennium amounted to a fat zero. We were back at the levels of wealth that existed at the beginning of the decade. Yet, zero-sum game speculative markets are not innocuous practices; they leave havoc in their wake.
So, set these four mechanisms aright, and you will Give to Caesar What Is Caesar’s. You will steer society away from the exercise of privilege; you will, instead, do justice and receive justice. With the ensuing just distribution of wealth, there is no need for its redistribution; and the task of charity becomes feasible again. It is only on the basis of curing these four blind spots in the legal and economic system that we can ever hope to build a real social contract, a contract in which the spirit of morality is tied to economic freedom for all. This is a systemic change that combines the best aspects of the moral contract—its constant moral rectitude—with the best aspects of the social contract: the idea and practice of economic freedom, now extended to all, rich and poor alike. We will thus attain the deepest goal of the Enlightenment, not only the substitution of relative poverty with relative affluence, but the presence of freedom for all. Indeed, the question is not whether these four marginal changes in our economic policies will ever be implemented; or even whether it would be possible to have one change without the others; the question is whether there are other tools to achieve the wanted levels of relative affluence and economic freedom for all.
The tools exist in the field of Economic Justice, with justice defined as an agreement between two parties about what is fair to give and to receive; namely, an agreement based on the search for an equivalence of values that can be ascertained and ratified by a third party acting in the role of judge.
These tools are obfuscated by mainstream economic theory; they appear in plain view in the field of Concordian economics.
Economic Justice in the Context of Concordian Economics
Once upon a time economics was not a science; it was a practice. It was controlled by the principles of Economic Justice, principles that were enunciated by Aristotle and endorsed by Saint Thomas Aquinas. These principles remained undisputed for about two thousand years, basically until Adam Smith came along and gave us the “science” of economics. During all that time, from Moses, through Jesus of the Parable of the Talents, to the Doctors of the Church everyone also knew everything about hoarding. Adam Smith denied the existence of hoarding as well (Smith, 1776, Bk. V., Ch. 3, pars. 1, 2, 9).
Hence, eliminating all human influences, Adam Smith reduced the economic process to a Newtonian mechanistic entity that is predictable on paper and is consistently surprising in reality. Worse, today, without batting an eyelash, it is stated that “economics is what economists do.”
Trouble is economists do not seem able to agree what is that they do. A majority of them might be convinced that the science of economics is the study of the Market. Let us see.
The behavior of the Market
Why do most mainstream economists believe, as Adam Smith did, that the Market is ruled by an invisible hand leading us gently to a condition of equilibrium and well-being for all?
The reason is that for most economists, as they openly admit, economics is a black box.
MANIPULATING the laws of demand (D) and supply (S), economists develop theories of what should go in and observe what comes out:
When analyzed in depth, the results of any theory, on the one hand, plausibly lead to growth; on the other, they lead to stability; and on the other they lead to decline. Economists do not know what happens within the box.
Why?
The fundamental reason is that Saving was substituted for Hoarding by Adam Smith—and made “equal” to Investment. The proposition that Saving equals Investment is at the foundation of all modern economic theory (Keynes, 1936, p. 63).
Trouble is Saving = Investment is a dogma. Neither Keynes nor any other economist has been able to explain why is Saving equal to Investment.
And no one ever will, because Saving in its incarnation as money deposited in a bank is Investment: It is the lowest form of investment.
We need a new paradigm
As a result of fifty years of in-depth analysis, which started with the (re)introduction of hoarding in economic analysis, I have designed a set of tools that allow us to look inside the black box. Professor Franco Modigliani, a Nobel laureate in economics at MIT, and Professor M. L. Burstein, among many other experts in a variety of disciplines, have consistently assisted my research.
Inside the black box, one finds, not an economic theory but the operations of the Economic Process.
The Economic Process
As pointed out in Gorga (2002), which is now also in paperback, and in numerous papers published in peer-reviewed (albeit rather obscure) journals, the central understanding of the Economic Process results from the integration of Production of real goods and services, the Distribution of ownership rights over real and monetary wealth, and Consumption or expenditure of monetary wealth to acquire real wealth. Even in the sale of a car, we have these three items: car, money, and deed of ownership.
Logically, these elements are tied together in a relation of equivalence:
Production ↔ Distribution ↔ Consumption
Production, Distribution, and Consumption are not single words. They form processes of their own. Their integration can be seen at a glance in the following figure:
Figure 3 catches the economic process at the moment of the exchange. It indicates that a cycle of the economic process is completed when the entire production of the period is sold. Then an exchange has occurred between money and goods. For the exchange to take place, both the producer and the buyer, in an ordered society, must be legal owners of the wealth they exchange.
Placing Figure 4 next to Figure 3, we realize that this construction of the economic process is nothing new! It is simply a return to the millenarian concern with Economic Justice. The economic process is nothing but the mirror image of the complete description of three essential principles of Economic Justice.
Participative Justice offers a one-to-one correspondence with the production process; Distributive Justice a one-to-one correspondence with the process of distribution of ownership rights over real and monetary wealth; Commutative Justice gives us a one-to-one correspondence with the consumption process or the process of expenditure of monetary wealth to acquire real wealth.
Economic Justice keeps the economic process in equilibrium to the benefit of all. Economic injustice keeps the market in disequilibrium to the detriment of all. Short term benefits to the few from injustice are ephemeral. They are not sustainable. The economy built on economic injustice is not sustainable. An overview of long term trends makes these relationships quite clear:
A geometric representation of economic dynamics
Starting from an equilibrium condition at time 0, the geometric representation of economic dynamics of Production, Distribution, and Consumption—here represented respectively as values of real wealth (RW), values of distribution of ownership (DO) rights, and values of monetary wealth (MW)—is as follows:
This figure suggests that, since they are relatively easier to create, the rate of growth of assets composing monetary wealth (MW) is faster than the rate of growth of assets composing the category of real wealth (RW). And then there is the problem of the accelerating pace of concentration of the distribution of ownership (DO) rights into a few hands. Clearly, when monetary wealth is concentrated into a few hands, not enough money will be available to the majority of the population. The necessary equilibrium conditions implied in the P ↔ D ↔ C equivalence as well as in the economic process as a whole, as represented in Figure 1, will be broken and the process will not proceed organically forward. How can equilibrium be restored?
Let us look at Market governance—again
Following the dynamics implicit in Figure 5, it is possible to see how the Market might not always be ruled by a benign invisible hand. On occasion, the Market, left to the natural inclinations of ordinary human beings, is governed by another dictum by Adam Smith that is also in the Wealth of Nations (Bk. III, Ch. 4, Para 10). This is a less famous observation, but more pertinent to our situation today: "All for ourselves and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.”
If we are not misled by reductionist thinking of minds accustomed to analyzing linear trends only, we discover not one but four horses of inequality wandering all over the lot and leaving behind, instead of simple geometric patterns, a filigree of incredibly subtle interrelationships.
Four horses of inequality
Four horses of inequality raise their demanding heads as soon as one looks into the component elements of the Production Process. To produce anything, in a modern economy, one needs control over (1) Land and natural resources; (2) Tools in the form of physical capital as in plants and equipment; (3) Money in the form of financial capital; and, (4) Labor in its variegated manifestations of manual labor, intellectual labor, and (spiritual?) labor as in entrepreneurial leadership. These are the modern factors of production. It is only natural that human beings should attempt to get as much control as they can over each one of these factors. Inequality ensues.
Control over the factors of production has never been and never will be distributed equally among all human beings. That is a false, misleading, and dangerous ideal.
Within limits, inequality is natural. No two snowflakes are alike. Human beings, as well as specific plots of land, are endowed by our Creator with different measures of qualities and quantities. It is natural that we are going to get unequal results.
As repeated by many minds, what we need is equality of opportunity.
Rights vs. Privileges
Access to the factors of production today is acquired as a privilege and naturally leads to unbridled inequality. The four horses of inequality are these four unbridled privileges:
Privileged access to land and natural resources;
Privileged access to money;
Privileged access to the labor of others;
Privileged access to the wealth of others.
Each one of these privileges—historically rooted mostly in plunder and conquest—has to be turned into a universal right for everyone, if we want to build a just and ordered society. We can then forget the past, and concentrate on the present and the future.
The opportunity is ours. We only need to realize that, while privileges divide, rights unite (Gorga, 1994). Rights unite because they are born out of the exercise of corresponding responsibilities.
Four economic rights and responsibilities
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RIGHTS
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RESPONSIBILITIES
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1. The right of access to land and natural resources
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1. Pay taxes on land and natural resources that are under our control
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2. The right of access to financial resources imbued in national credit
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2. Repay loans obtained through access to national credit
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3. The right of access to the fruits of one’s labor
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3. Perform tasks required in the process of wealth creation
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4. The right of access to the fruits of one’s property
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4. Respect the property of others
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No other economic rights or responsibilities seem to be essential. The consistent assumption of these four responsibilities is all that can and ought to be ingrained into government policies—at various levels. These four policies, gradually pursued, will yield all the certainty and economic security that we need, because they foster structural changes that create conditions of economic freedom and justice for all. Gradually transforming privileges into rights—rights for all—inequality will be brought to just proportions.
Who are the opponents?
Who are the powerful people who would object to this program of action? Four presumed antagonists are supposed to be (1) landowners who do not want to pay their fair share of taxes on the value of their land; (2) central bankers who do not want to serve the public interest; (3) entrepreneurs who do not want to offer full compensation for services received; and (4) business people who want to gobble up the fruit of other people’s effort.
Where are they? They are four phantoms—but more dangerous for being ingrained in the imagination of people who, blinded by their institutional power, see neither economics nor morality clearly. Read: tax assessors, politicians, and academicians who, fearful to speak truth to power, make themselves powerless and paralyze entire nations. They are the ones who get crumbs at the Table of Privilege.
Serving four Masters – Plus One
You might think that I am a lone ranger roaming these vast expanses of economic territory—all alone. Nothing could be farther from the truth. I have consistently been serving four Masters of Economics. Four great American Masters of Economics. Forget Keynes… Forget Hayek.
For the control of money, with its relevant inscription into Article 1, Section 8 of the US Constitution, I am a devoted servant of Benjamin Franklin.
For the control of land and natural resources, I am a devoted servant of Henry George. By the way, mirabile dictu, do you know that not one but 8 Nobel laureates in economics endorsed Henry George’s prescription to tax the value of the land…. while reducing taxes on buildings—and income?
For the control over the fruits of one’s labor, I am a devoted servant of Louis O. Kelso.
For the control over such basic industrial tools as the corporations, I am a devoted servant of Louis. D. Brandeis. I actually did my dissertation at the University of Naples on the political thought of Louis D. Brandeis; my work was awarded a Council of Europe Scholarship; and I entered the academic awards wind tunnel, in which I caught a Fulbright Scholarship.
Unbeknownst to me, ever since 1965, with the re-introduction of hoarding in the formal, mathematical presentation of the economic process I have been following the decisive deliberations enunciated by Jesus in the Parable of the Talents.
Conclusion
This is not "my" vision. I do not claim originality. This is the vision that unfolds mathematically by inserting hoarding, the core of the Parable of the Talents, into the description of the structure of the economic process, a vision that has been explored in much detail by four great American thinkers: Benjamin Franklin, Henry George, Louis D. Brandeis, and Louis O. Kelso. Individually, these thinkers are not as powerful as as presenters of a unified economic policy that is built on the needs of the four modern factors of production, namely land, financial capital, labor, and physical capital. Nor are the aims of this paper any different from the aims of the best minds in modern economics, from Marschall to Keynes to innumerable contemporary economists.
There are many reasons why we have to muster the courage to change our outlook on the Doctrine of Social Justice. The most important one is this. Property rights, acquired on the basis of economic responsibilities, bring economic security to the owner and stability to the nation. This has always been and forever will be the core of the struggle for Economic Justice, a struggle followed by peace brought about by the interplay of economic rights and corresponding specific economic responsibilities... The struggle for social justice, instead, whatever that means, brings only conceit, self-deceit, an unceasing succession of Pyrrhic victories, and instability to the nation. Entitlements are grants of other people’s property; entitlements are not earned through the exercise of any responsibility whatsoever. The morale of the nation is enfeebled.
This is the core of the paper; all nuances perhaps someday will follow. Better still. Ideally, the reader who has much more knowledge and wisdom than the present writer will get up and eloquently and convincingly address all necessary nuances.
Much better still. Words without action are empty. Will the reader step up to the plate and start the work of implementing the four marginal changes outlined above? Will the reader undertake the work of asking for Economic Justice for all—and granting Economic Justice within one’s own sphere of power and jurisdiction?
We are making way too much out of our problems, we should rather “Consider the lilies of the field, how they grow: they neither toil nor spin.” In the process we are disempowering ourselves. The long journey out of the many current nightmares starts with such simple determination as to love justice. We only have to exert our rights. History guarantees.
Economic rights, born of individual, personal responsibilities, belong to everyone—rich and poor alike. The exercise of these rights is the only way to make the poor richer, without making the rich poorer. Let us place ourselves at the dawn of a new age; let the light of reason shine on this new age; let us overcome hate and revenge; let our hearts overflow with the joy that comes from the knowledge we have done the right thing.
We will win. No doubt we will win. Love always wins.
Through the exercise of all the virtues, we can resist all vile urges that make our bodies instruments of hate and all automatic responses to silly requests of our bodies—and minds. No more excuses, then, that our "lower self" is in control—and "the devil made me do it." To love is not a vague sentiment. To exercise the virtue of love, as Jesus ordered us, we must love ourselves, we must love our neighbor, we must love God. When all is said and done, modern neuroscience seems to confirm this traditional philosophical approach; for a deep, moving clarification and extension of these points, see, Popova (2015)
Who or what is God, you say. I have a short answer and a longer one. The short answer is this: You will discover God as soon as you abandon the illegitimate idea that you can rely on yourself (even if you do not want to rely on the important insights of all religious traditions, you can, and must rely on all true wisdom accumulated by humanity so far). The longer answer is presented in A Case for God (2014).
As Pope Francis reminds us, “The God who created the universe out of nothing can also intervene in this world and overcome every form of evil. Injustice is not invincible.” (LS, 74). We only have to remember that evil prevails temporarily, because evil is organized.
Note: Unique thanks for the framework of analysis on which this paper draws are due to 27 years of exhaustive probing by Franco Modigliani and 23 years of assistance from Meyer L. Burstein. Mitchell S. Lurio and Norman G. Kurland have been great teachers of economic policy. This paper is particularly due to a suggestion by Luis T. Gutierrez and to much constructive criticism by Jonathan Kopel.
References
Gorga, Carmine. 1994. "Four Economic Rights: Social Renewal through Economic Justice for All”, Social Justice Review, January-February, 85 (1-2) 3-6.
_____. 1998. “The Creators of Poverty,” Gloucester Daily Times, Symposium, Dec. 18, p. A10.
_____. 2002 and 2010. The Economic Process: An Instantaneous Non-Newtonian Picture. Lanham, MD and Oxford: University Press of America.
_____. 2007. “On the Equivalence of Matter to Energy and to Spirit,” Transactions on Advanced Research, Volume 3, Number 2, ISSN 1820 - 4511: 40-45.
_____. 2014. A Case for God. Gloucester, MA: The Somist Institute.
_____. 2015a. Economics of Sentimentality: From Aristotelian Economic Justice to Modern Social Justice, Mother Pelican, Vol. 11, No. 4, April 2015.
_____. 2015b. Economics of Morality: Economics of Moses, Economics of Jesus, Mother Pelican, Vol. 11, No. 4, April 2015.
Keynes, John Maynard. 1936. The General Theory of Employment, Interest, and Money. NY: Harcourt.
Kopel, Jonathan. 2015, Personal email communication, July 17.
Popova, Maria. 2015. “The Science of Stress and How Our Emotions Affect Our Susceptibility to Burnout and Disease” and “Get Out of Your Own Light: Aldous Huxley on Who We Are, the Trap of Language, and the Necessity of Mind-Body Education,” Brain Pickings Weekly (Email), July 26.
Smith, Adam. 1759. Theory of Moral Sentiments. London: A. Miller.
_____. 1776. An Inquiry into the Nature and Causes of the Wealth of Nations. London: Methuen and Co., Ltd., ed. Edwin Cannan, 1904. Fifth edition.
Vico, Giambattista. 1971 [1725-28]. Opere Filosofiche. Firenze: Sansoni.
ABOUT THE AUTHOR
Carmine Gorga, President of The Somist Institute, is a Former Fulbright Scholar and recipient of a Council of Europe Scholarship for his dissertation on the “Political Thought of Louis D. Brandeis,” Using age-old principles of logic, he has founded Concordian economics, Somism, and
Relationalism. Dr. Gorga has fundamentally transformed the linear world of economic theory into a relational discipline in which everything is related to everything else—internally as well as externally. He was assisted in this endeavor by many people, notably for twenty-seven years by Professor Franco Modigliani, a Nobel laureate in economics at MIT. Mr. Gorga is the author of numerous publications, including The Economic Process: An Instantaneous Non-Newtonian Picture, 2002, a book that was reissued by The University Press of America in an expanded paperback format in 2009.
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