Monday, June 22, 2015

"Climate, Poverty, Economics, Values & the Pope"

                    Sydney M. Williams

Thought of the Day
“Climate, Poverty, Economics, Values & the Pope”
June 22, 2015

With his encyclical, “Laudato Si” (Be Praised), the Pope stepped into the quagmire that is climate change. While it is a theological treatise, he joined his infallible voice with those who regard man as the principal cause of climate change. He placed blame on the “developed” world, by which he means the English-speaking nations, Western Europe and Japan. He wrote: “The exploitation of the planet has already exceeded acceptable limits and we have still not solved the problem of poverty.” There was no mention that capitalism and democracy have done more to reduce poverty than anything else, including religion.

There are too many poor in the world. On that we agree. Yet, in our concern for those still suffering, we forget that industrialization has been the reason that starvation and famine no longer embrace the majority of the world’s population. We have become unmindful of the past. Before the Industrial Revolution only a tiny portion of the population enjoyed even the simplest things, which today we take for granted – clean water, proper sewage, medicine, decent shoes and clothes, a healthy diet and reasonable shelter. Economic growth, if it could have been measured, was glacial in the first sixteen centuries of Christianity. Royalty in Egypt 4000 years ago lived as well as their counter-parts in England 3500 years later. Industrialization changed all that. Today, in the world’s most economically successful nations, the average citizen lives better than the greatest king of 300 years ago. None of that had to do with religion. It was the result of creative imaginations and governments that honored private property, functioned under the rule of law, and which allowed individuals to prosper.

In the post-World War II years, economic growth in Europe and Japan was due to massive reconstruction efforts by the United States. During that period, the world’s economies went through a tectonic transformation, led by technology and science. Since the fall of the Soviet Union and the rise of globalization, Eastern Europe, China and other developing nations have seen standards of living improve and poverty reduced. As we become wealthier, our environmental standards change for the better. “Last year,” wrote Holman Jenkins in Saturday’s Wall Street Journal, “the 20 biggest economies produced 3.3% growth with zero increase in emissions over 2013.” Poverty still exists, but growth helps. Economic wellbeing means more energy consumed. But coal-burning furnaces are less pollutant than those of four or five decades ago. Gas and oil are “cleaner” than they have ever been. Competition forces innovation. Big oil companies today account for the majority of spending on renewables. It is in their self interest.

The Pope was right to remind us of our responsibility to the planet and its resources. It feeds and houses us. It warms and cools our environment. But there was no reminder in the Pope’s encyclical that our rivers and harbors are cleaner than they were a hundred years ago; or that the air in our big cities is no longer filled with soot from coal-fired furnaces. The encyclical was a condemnation of our consumption – consumption of products, many of which are produced in emerging countries where they provide jobs and reduce poverty.

It is natural, as we become richer, to live more environmentally-friendly lives. But we cannot let arrogance interfere with clean energy’s costs. The solar industry is a good example. Taxpayers subsidize the industry. Those who can afford solar panels get cheaper electricity at the expense of those who live with little sunlight or who cannot afford panels, as rates rise for electricity produced by power plants. It is a regressive tax that suits the Left, because costs are hidden. Cheap sources of energy are critical for impoverished nations. Why should we, who have become wealthy, deny them the opportunity we had?

A bigger problem, not addressed in this encyclical, is that too many governments under which most of the poor live are anti-capitalist and anti-democratic, with leaders who deny their people the freedom to innovate and accumulate capital. Laws in these countries do not protect private property. The Pope came from such a country. A hundred years ago, according to the February 14, 2014 issue of The Economist, Argentina was among the ten richest nations in the world. Its per capita income was 92% of the average of the 16 richest nations. It was four times richer than its neighbor Brazil. In the 43 years leading up to 1914, Argentina’s GDP had grown annually at 6%, a rate of growth greater than any other nation.

Like all of us, the Pope is conditioned by his past. But it appears he did not learn the economic lessons of dictatorship and Socialism. Today, according to the World Bank, Argentina ranks 55, between Gabon and Antigua. Its per capita GDP is less than one third that of the 16 richest nations. Why? The country fell under military dictators and then under Socialists and redistributionists, including the current President Christina Fernández de Kirchner. There became no room for entrepreneurs. Laws did not protect private property. Individuals lost freedom. Its education system failed. It didn’t have to be this way. The country has great natural resources and a temperate climate. Intrusive government impoverished it.  

I would have preferred an encyclical that addressed the moral decay that has infected Western society. The Pope did touch on some related matters, but it was not his emphasis. Political correctness prevents us addressing concerns squarely and early, like the mental health problems of those like James Eagan Holmes, Adam Lanza and Dylann Roof. We refuse to call those like Ward Churchill, Brian Williams, Elizabeth Warren and Rachel Dolezal the liars they are, and we laud deviants like Caitlyn Jenner. Walter Williams, an economist at George Mason University, recently wrote: “A civilized society’s first line of defense is not the law, police, courts, but customs, traditions, rules of etiquette and moral values.” The developed world has grown rich in material things, but has become impoverished in terms of morality and values. Respect, honor and trust have gone missing. We stand on an ethical precipice. We are in need of someone with the stature of the Pope who has the courage to lead us back from the edge.

In the meantime, there is much in the world that needs improvement, including the ridding of greenhouse gasses. But we must be careful lest we, in our haste, toss out the goose, which is democratic capitalism that has laid the eggs, which are the wealth that has allowed billions of people to rise out of poverty. Wealth alone won’t save the world, but better economic growth will help both the planet and the poor.





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