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Bernie Sanders Wants a “Moral Economy.” What’s That and Why’s It Relevant—Even If He Loses the Democratic Nomination?

Walter Moss: In a fitting irony for our mixed-up, topsy-turvey political season, the Jewish Bernie Sanders praises the Catholic papal positions on capitalism, while the Republican Speaker of the House, the Catholic Paul Ryan, is much more influenced by the free-market philosophy of Friedman and Hayek. Bernie Sanders Moral Economy

Several days before the New York presidential primary, Senator Bernie Sanders flew to Rome and gave a talk entitled “The Urgency of a Moral Economy: Reflections on the 25th Anniversary of Centesimus Annus.” The anniversary he referred to was that of the release of a Pope John Paul II encyclical, and Sanders spoke before a conference of The Pontifical Academy of Social Sciences.

bernie sanders moral economy

Why Bernie Sanders Wants a “Moral Economy”—Walter Moss

He noted that the Catholic Church’s “social teachings, stretching back to the first modern encyclical about the industrial economy, Rerum Novarum in 1891, to Centesimus Annus, to Pope Francis’s inspiring encyclical Laudato Si’ this past year, have grappled with the challenges of the market economy. There are few places in modern thought that rival the depth and insight of the Church’s moral teachings on the market economy.”

In his remarks Sanders uses the term “moral economy” only twice. First, he claims that Pope Francis in his 2013 “apostolic exhortation” Evangelii Gaudium “stated plainly and powerfully that the role of wealth and resources in a moral economy must be that of servant, not master.” Secondly, Sanders stated that he was “told time and time again by the rich and powerful, and the mainstream media that represent them, that we should be ‘practical,’ that we should accept the status quo; that a truly moral economy is beyond our reach.”

Although none of the papal writings mentioned above use the exact term “moral economy,” Sanders is surely correct in indicating that papal writings since 1891 have often criticized unbridled capitalism and called for a more moral economic approach, for what the senator labels a “moral economy.”

In his talk Sanders interspersed papal quotes with his own observations about the contemporary scene. For example, after quoting from Pope Leo XIII’s 1891 encyclical about the “enormous wealth of a few” and the poverty of many, Sanders adds: “And let us be clear. That situation is worse today. In the year 2016, the top one percent of the people on this planet own more wealth than the bottom 99 percent, while the wealthiest 60 people—60 people—own more than the bottom half—3 1/2 billion people. At a time when so few have so much, and so many have so little, we must reject the foundations of this contemporary economy as immoral and unsustainable.”

In referring to Centesimus Annus, written by Pope John Paul II in 1991, Sanders states that its “essential wisdom . . . is this: A market economy is beneficial for productivity and economic freedom. But if we let the quest for profits dominate society; if workers become disposable cogs of the financial system; if vast inequalities of power and wealth lead to marginalization of the poor and the powerless; then the common good is squandered and the market economy fails us.”

But since 1991, Sanders believes matters have gotten worse: “We can say that with unregulated globalization, a world market economy built on speculative finance burst through the legal, political, and moral constraints that had once served to protect the common good.”

Neither Pope Leo XIII nor John Paul II was against capitalism, just “unbridled capitalism.” As the latter wrote,

Such a society [as both pope’s proposed] is not directed against the market, but demands that the market be appropriately controlled by the forces of society and by the State, so as to guarantee that the basic needs of the whole of society are satisfied. . . . The purpose of a business firm is not simply to make a profit, but is to be found in its very existence as a community of persons who in various ways are endeavouring to satisfy their basic needs, and who form a particular group at the service of the whole of society. Profit is a regulator of the life of a business, but it is not the only one; other human and moral factors must also be considered which, in the long term, are at least equally important for the life of a business.

Such a philosophy is at odds with that of free-market capitalists like Milton Friedman, who in 1970 wrote, "The social responsibility of business is to increase its profits,” and once advocated doing away with most U. S. cabinet departments such as those dealing with commerce, education, energy, and labor.

Similar to Friedman was the Austrian-born Friedrich von Hayek, who like Friedman was a professor at the University of Chicago. He believed that to maintain freedom, free-market capitalism had to be allowed to operate unfettered and that government officials who disrupted the spontaneous economic order in the name of “social justice” (which Hayek labeled a myth) were a threat to that freedom.

The main problem with such an approach, as Daniel Bell pointed out in The Cultural Contradictions of Capitalism (1976), was that “in its products and in its advertisements, the corporation promotes pleasure, instant joy, relaxing, and letting go,” and that this situation left “capitalism with no moral or transcendental ethic.”

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At about the same time as Pope Leo XIII’s Rerum Novarum addressed the problem of “unbridled capitalism,” a separate and diverse movement arose “to limit the socially destructive effects of morally unhindered capitalism, to extract from those [capitalist] markets the tasks they had demonstrably bungled, to counterbalance the markets’ atomizing social effects with a countercalculus of the public weal [well-being].” This movement, often called Progressivism, did not attempt to overthrow or replace capitalism but to constrain and supplement it in order to insure that it served the public good.

As one source contends, “the Progressive movement . . . culminated with the New Deal of President Franklin Delano Roosevelt in the 1930s,” and “the overarching ideology of the Progressive movement, the glue that held its diverse elements together . . . was that its members aimed at replacing or at least supplementing the market economy with a moral economy of their own design. In that moral economy, government stewardship and planning became viewed as a necessary component of the economic system in order to ensure a better life for all.”

Many decades later, in the 1970s, another potent criticism of the reigning capitalism of the time appeared. It was the German-British economist (and recent convert to Catholicism) E. F. Schumacher’s Small Is Beautiful (1973). Influenced by Buddhism, papal encyclicals, and other sources, this book criticized both capitalism and Russian-style communism because they allowed economics to overwhelm the “whole of ethics” and take “precedence over all other human considerations.”

In writing about Western economics, Schumacher made it clear that he believed that capitalism was not only contrary to the type of Buddhist-type economics he thought appropriate for some countries, but that it also violated some basic Christian principles. He thought its essence was “whether a thing yields a money profit to those who undertake it or not.” It does not even generally ask “whether an activity carried on by a group within society yields a profit to society as a whole. . . . In a sense, the market is the institutionalisation of individualism and non-responsibility.” With its emphasis on rapid change, economic growth, and increasing Gross National Product (GNP), Western economics failed to adequately consider “the availability of basic resources and, alternatively or additionally, the capacity of the environment to cope with the degree of interference implied.” By advertising and marketing, it also encouraged a “frenzy of greed and . . . an orgy of envy.”

Schumacher himself favored a moderate small-scale socialism. His daughter described it as “a socialism that did away with the concentrations of economic power, a socialism which gave people work that allowed them to be fully human. . . . Small-scale technology, small-scale enterprise, workshops and small factories serving a community and served by a community; that was real socialism in action.”

As Sanders indicated in his Rome talk, Pope Francis has been the latest moral authority to criticize capitalist excesses. Two documents that the senator mentions are Evangelii Gaudium and Laudato Si’. (For my earlier analysis of them and their historical context, see here and here.) Sanders cited Francis’s words criticizing our present “cult of money,” ideologies which argue for the “absolute autonomy of markets,” and our lack of compassion for the poor. He also noted the pope’s encouragement for us to deal more effectively with climate change and the protection of biodiversity, and he believes the pope “has opened the eyes of the world once again to the claims of mercy, justice and the possibilities of a better world.” In both men’s talks and writings they often refer to the “common good” as the principle goal of politics.

In a fitting irony for our mixed-up, topsy-turvey political season, the Jewish Bernie Sanders praises the Catholic papal positions on capitalism, while the Republican Speaker of the House, the Catholic Paul Ryan, is much more influenced by the free-market philosophy of Friedman and Hayek.

As I have indicated in a recent essay, Bernie Sanders is very much within the progressive and moderate socialist traditions that arose around the end of the nineteenth century—traditions also in keeping with Schumacher’s views and some of the papal pronouncements. Many Republican leaders, on the other hand, follow more in the Friedman-Hayek tradition. In a fitting irony for our mixed-up, topsy-turvey political season, the Jewish Bernie Sanders praises the Catholic papal positions on capitalism, while the Republican Speaker of the House, the Catholic Paul Ryan, is much more influenced by the free-market philosophy of Friedman and Hayek. Ryan has also suggested that because Pope Francis is from Argentina, where “a true free enterprise system” does not exist, he does not understand true capitalism. Leading Republican presidential candidate Donald Trump, as well as Ted Cruz, has also expressed views differing greatly from those of Francis on capitalism and other issues.

Although Sanders does not specifically spell out the exact difference between our present economy and the “moral economy” he calls for, he makes it clear enough. In his Rome speech he characterizes our present economy this way: it “puts profits over pollution, oil companies over climate safety, and arms trade over peace. And . . . an increasing share of new wealth and income goes to a small fraction of those at the top.” A more moral economy he suggests would “bring the economy back under the dictates of morality and the common good.” It would be a more equal and just economy, one that would “live in harmony with nature, not destroy it.” It would defend “the common good by ensuring that every person, rich or poor, has access to quality health care, nutrition and education.”

After the five April 26th primaries, Bernie Sanders’ chances of winning the Democratic nomination look dim indeed, but his influence over millions of Democrats and independents will not go away, and he intends to continue his call for a more moral economy.

In recent years the criticism of our capitalist excesses has grown along with the increasing gap between the rich and the poor. We have had not only Pope Francis’s writings, but also the Ninety-nine Percent Movement, the Occupy Wall Street Movement, and books like Peter Edelman’s So Rich, So Poor, Joseph Stiglitz’s The Price of Inequality (my reviews here and here), and two 2014 works of great influence Thomas Piketty’s Capital in the Twenty-First Century and Naomi Kline’s This Changes Everything: Capitalism vs. The Climate. Piketty and Kline have subsequently both expressed sympathy with Bernie Sanders’ campaign.

Even if Sanders loses his primary battle with Hillary Clinton, his battle for a more moral economy will not be in vain. There is considerable evidence that he has already moved her toward more progressive economic positions, and he intends to keep moving the Democratic Party and our nation toward an economy and political system that focuses more on the common good.

Many Republicans may argue with the contention of progressives, Sanders, and Pope Francis that governments need to exercise more control over economies to ensure they serve the common good—and protect our planet. But to date Republican arguments ring hollow and appear self-serving. If a convincing case can be made for the common good being best served by the Republican’s shrink-the-government approach, I’ve yet to hear it. One of Bernie Sanders’s most lasting contributions may be forcing us to reexamine the question “How moral is our economy?”

walter moss

Walter Moss