Only God Can Make a Market

 

I had started to write a review of the Pope’s statement about “trickle-down economics.”  I confess to peeve over that phrase, as it is almost always hurled as a pejorative. I was in the middle of writing something and my browser closed, losing what had been written. I thought I might start it again.

But I found myself instead looking at the video below (thanks to Russ Roberts for calling it to my attention).  It’s an adaptation for the smartphone of Leonard Read’s famous I, Pencil essay.  As you shop this weekend, it’s worth another look. Besides, the children are beautiful.

It’s near the end of the video where the director recalls the end of Read’s essay. I’ve reproduced a larger part than the video below:

It has been said that “only God can make a tree.” Why do we agree with this? Isn’t it because we realize that we ourselves could not make one? Indeed, can we even describe a tree? We cannot, except in superficial terms. We can say, for instance, that a certain molecular configuration manifests itself as a tree. But what mind is there among men that could even record, let alone direct, the constant changes in molecules that transpire in the life span of a tree? Such a feat is utterly unthinkable!

I, Pencil, am a complex combination of miracles: a tree, zinc, copper, graphite, and so on. But to these miracles which manifest themselves in Nature an even more extraordinary miracle has been added: the configuration of creative human energies—millions of tiny know-hows configurating naturally and spontaneously in response to human necessity and desire and in the absence of any human master-minding! Since only God can make a tree, I insist that only God could make me. Man can no more direct these millions of know-hows to bring me into being than he can put molecules together to create a tree.

Cellphones have helped provide access and income mobility to the poor around the world.   Wal-Mart may be responsible for up to half a million each year in China escaping poverty.

Martin Ravallion has done some interesting work on how the smartphone, Wal-Mart, and other Western monuments to market capitalism have brought millions out of poverty in emerging China, India, Brazil and elsewhere.  He estimates that if we were to maintain the path we are on, another billion who are currently under $1.25 a day in income could surpass it by 2025-2030.  200 million would remain below that level; a tragedy to be sure, but there is no evidence that planning has performed better than markets in lifting up the poor.

Joseph Schumpeter observed 75 years ago, “Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within reach of factory girls” at lower prices. Markets do this in ways that we cannot fathom; they are a gift of Providence. Poverty is reduced not by our intentions but by our actions, even when we simply seek to care for our material needs and desires. I think the Pope errs in calling it “blind faith”; I, Smartphone fills me instead with wonder, awe and gratitude for the Almighty who provides for us.

(P.S.  This post will be a subject of my radio program tomorrow, 9-11am CT, with application to Obamacare.)

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  1. Profile Photo Inactive
    @CrowsNest

    I hadn’t seen the “I smartphone” video before, King, but that’s an outstanding adaptation of Read’s essay.We need more ads like that to convey conservative principles within the ken of the average person.

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    @drlorentz

    The kids in the video are adorable but the narrator’s voice is annoying. He has a condescending tone that will certainly turn some people off. Using kids this way is usually indicative of a dumbing down of the message. Maybe that’s good for certain audiences who don’t like to think too much.

    Overall, the CEI’s video is superior.

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    @Allison

    My problem with the complaint is nowhere does the Pope advocate for planning–it’s another straw man you knocked down. He advocates for individuals being moral in the private and public spheres. Why spend any time arguing against that?

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    @Allison

    I have not read all of the Pope’s work. There may be much I disagree with, but to start, quoted from WP’s quote : ‘In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world,…”

    I can understand if your argument against this is statement is that it is a straw man, but I can’t see how you can argue with the claim that economic growth does not inevitably bring about justice.

    And this is where Russ Roberts seems to fail in his book The Choice, too.

    Look at China. Has greater economic freedom brought justice to the Chinese? Has it created a more moral society? One that respects life–the lives of the weak, the unborn or just born, the disabled,  the elderly? How about Russia? things went well under the oligarchs?

    No. Economic growth succeeds in bringing justice when coupled with institutions, both religious and secular, that promote certain cultural values and  mores. Not all cultures are equally good. Without a moral society, better economics will not produce a better society. (cont.)

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    @Allison

    In Roberts’ The Choice, he defends free trade by saying that the creative destruction from comparative advantage will lead to greater prosperity in the US because  “it always has”–a statement we hope is true, but ignores the other supporting conditions in the US, like property rights, decent corporate legal system, reasonable level of regulation, predictability of law, etc.  Some societies–and increasingly, ours–disincentivize people from behaving morally by increasing a person’s economic strength when they behave immorally and increasing their economic insecurity if the try to be moral. Such systems can still be growing economically, but it will not produce a better world.

    The issue is not that govt would plan better; obviously not.  But I, Smartphone isn’t so great that you would justify slavery to make it, right? 

    I would have thought the problem with the Pope’s line of reasoning is it the Cassandra during the boom and the I Told You So during the  bust. Some moral compunction against shorting the holding you told your clients to buy might have lessened the CDS problems of October 2008, right? Yet here we are debating this.

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    @Allison

    “Human beings are themselves considered consumer goods to be used and then discarded. We have created a “disposable” culture which is now spreading. .. Exclusion ultimately has to do with what it means to be a part of the society in which we live; those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even a part of it. The excluded are not the “exploited” but the outcast, the “leftovers”.

    54. In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting. To sustain a lifestyle which excludes others, or to sustain enthusiasm for that selfish ideal, a globalization of indifference has developed. (cont.)

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    @Allison

    Almost without being aware of it, we end up being incapable of feeling compassion at the outcry of the poor, weeping for other people’s pain, and feeling a need to help them, as though all this were someone else’s responsibility and not our own. The culture of prosperity deadens us; we are thrilled if the market offers us something new to purchase; and in the meantime all those lives stunted for lack of opportunity seem a mere spectacle; they fail to move us.”

    • #7
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    @Koblog

    And after so many thousands of people perform their jobs, no matter how humble, from design to delivery, each trying to meet their responsibilities to their customers to get these phones to market, we still have a craven president who spends money of others he didn’t earn and doesn’t have yet (debt) to give Obamaphones away to buy the votes of people who add nothing to the economy, but believe they are due “justice” because someone else who works has more.

    The politics of greed and envy — redistribution of wealth without commensurate labor and creativity — this is what our president, and apparently the Pope, believe in.

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    @DavidWilliamson

    The Pope’s minions in America supported Mr Obama – how did that work out for ’em? (nice contraceptives you have there, they are now covered under Obamacare, whether you want ’em or not). Trickle down, indeed.

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    @KingBanaian

    Allison, do you agree or disagree with the following statement?

    “Economic growth — meaning a rising standard of living for the clear majority of citizens — more often than not fosters greater opportunity, tolerance of diversity, social mobility, commitment to fairness and dedication to democracy.  Ever since Enlightenment, Western thinking has regarded each of these tendencies positively, and in explicitly moral terms.”  Benjamin Friedman, The Moral Consequences of Economic Growth, p. 4.  (H/T: Greg Mankiw.)

    What you bemoan as a lack of compassion is hardly greater in market than planned economies that Pope Francis seems to prefer.  I am again reminded of how much of his worldview is shaped by the peculiar economics of Argentina.  It’s in fact a clear example of where economic power meant to “do good” is corrupted

    If Francis is just wishing we could care for the poor out of our benevolence, that’s a fine but, as Adam Smith pointed out, vain hope. 

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    @KingBanaian

    Allison, what do you make of this quote from then-Cardinal Bergoglio in 2007?

    We live in the most unequal part of the world, which has grown the most yet reduced misery the least,” Bergoglio said during a gathering of Latin American bishops in 2007. “The unjust distribution of goods persists, creating a situation of social sin that cries out to Heaven and limits the possibilities of a fuller life for so many of our brothers.”

    This is called in the article “the social justice ethos of Latin American Catholicism.”  What form of economic organization of society does that ethos call for, please?

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    @Quintilian

    I just watched a video by Father John Sirico of The Acton Institute (the Catholic Free Market think tank) going through extreme intellectual contortions to try to explain away the Pope’s anti-free market screed.    No matter how hard the Francis apologists try, the fact remains that the Pope is a typical  Latin American leftie who dislikes capitalism, but doesn’t mind an authoritarian government like Chavez’s Venezuela.  The decline of the Roman Catholic Church has been breathtaking.  From a saint who liberated millions ( John Paul II) and one of the most brilliant and articulate theologians of all time (Benedikt) to a socialist, closet liberation theologist like Francis. 

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    @JamesGawron

    King,

    Yes, King, only Gd can make a smart phone and it takes a really smart phone to know that.  I hope our egos can be held in check long enough to admit the miracles all around us.

    Government didn’t build that.  Gd built that.

    Regards,

    Jim

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    @FloppyDisk90
    King Banaian: Allison, what do you make of this quote from then-Cardinal Bergoglio in 2007?

    We live in the most unequal part of the world, which has grown the most yet reduced misery the least,” Bergoglio said during a gathering of Latin American bishops in 2007. “The unjust distribution of goods persists, creating a situation of social sin that cries out to Heaven and limits the possibilities of a fuller life for so many of our brothers.”

    This is called in the article “the social justice ethos of Latin American Catholicism.”  What form of economic organization of society does that ethos call for, please? · 31 minutes ago

    I was going to respond to Allison but you did it far better then I could.

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    @CrowsNest
    King Banaian: This is called in the article “the social justice ethos of Latin American Catholicism.”  What form of economic organization of society does that ethos call for, please? · 54 minutes ago

    Nicholas Frankovich has a piece up at National Review making another astute point along the same lines:

    It’s sometimes hard to reconcile Francis’s economic pronouncements with Catholic social teaching about subsidiarity. The bigger the state, the smaller the Church, and the thinner the network of Catholic schools, hospitals, nursing homes, and social services. Over the past century, the Church’s historic role to care for the poor has drifted increasingly in the direction of urging the state to care for them. That, at any rate, is the widely shared perception, which clashes somewhat with Francis’s argument that a robust social mission is an essential feature of the new evangelization.

    • #15

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