The ramblings of an Eternal Student of Life
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Saturday, July 25, 2015
Current Affairs ... Economics/Business ... Religion ...

If you are a private investor looking to get rich, or just an aging middle-class schlemiel like myself hoping to retire sometime in the next five years or so, you might know about the marketwatch.com web site. It’s a pretty good place to get up-to-date stock and bond market information, and it publishes a fair number of articles that might be of interest to small-fish “investors” like me.

(Really, I never thought of myself as a capitalist financier. But any working person today who wants a half-way decent retirement is not going to be able to fully rely on Social Security and whatever few real pension arrangements are still out there. You’re going to have to save, and your employer, if they really like you, is contributing to your old-age savings. By the time you pass the big six-oh, if you’ve been diligent, you’ve got what might sound to many like a really big chunk of money; it looks like you’re rich!! But no, this chunk is all that stands between you and poverty over the next few decades of your life, as your body slowly weakens and mind slows, and you really just can’t stay up with the 9-to-5 working world anymore.)

So anyway, if you’re presently in the boat that I’m in, you may have heard of marketwatch.com and have read some of their articles. One of the regular featured columnists on that site is Paul Farrell, who seems to be the “house pessimist”. In late 2008, as the US economy was hitting bottom following the financial crash of 2007, Farrell posted an article called “30 Reasons for Great Depression 2 by 2011“.

Well, thank goodness all of his 30 reasons missed the mark. The US economy hasn’t regained the old spunk and vigor that it had in the 1950s, 60s, late 80s and 90s (and maybe for a little while between 2002 and 2007), but we’re far from a collapse either. Farrell has also posted a number of columns about the terrible things that are in store from global warming, and the big changes that will soon make all investments in oil, gas and coal energy companies worthless. And maybe all of western civilization — he ends a recent article by saying “… if Mother Earth doesn’t really care, and doesn’t have the patience to wait for us to wake up to just how desperate the situation is, how near the end is, then why deprive ourselves? So live for today, have fun, spend freely, enjoy the days that are left, for it doesn’t really matter. Soon it will be all over.”

Notice the apocalyptic tone. It turns out that Farrell has a religious streak to him, and has recently displayed that interest by writing about Pope Francis. In an article from last week, Farrell talked about Francis’s ongoing and intensifying anti-capitalist preachings. Farrell worries that a whole lot of people around the globe are going to take the good Pope seriously and rise up in revolution against the capitalist structure. His article talks about an “American socialist revolution”, so this isn’t going to be confined to some two-bit backwater place like Venezuela or the Ivory Coast.

Per Farrell: “Pope Francis is a revolutionary destined to end up in the history books right up there with Lenin and Marx, Mao and Castro. He is obviously inciting revolution, wants civil disobedience and political insurrection, he is egging the poor into rebellion against a vastly outnumbered rich . . . his is an aggressive call to arms, a call for a global revolution attacking today’s out-of-control, consumer-driven mutant capitalism, a call to replace capitalism with a new economic socialism giving the poor sacred rights on par with the super-rich.”

Hmmm . . . is Farrell serious here? Looks like he is. Here’s another choice quote: “Pope Francis is clearly inciting people to rebel with his passionate, provocative and inspirational message, which triggers memories of Marx, yet is directly from the Gospels of Jesus . . . socialism is now a moral obligation. And for Christians, the responsibility is even greater: it is a commandment. It is about giving to the poor and to peoples what is theirs as a sacred right. And if we fail to do give it freely, do not be surprised when revolutions explode across Planet Earth.”

So, if Farrell can be believed, we’re soon going to have socialist revolutions across the entire planet, thanks to Bishop Bergoglio. Well, I’m not going to hold my breath, given Farrell’s track record so far in terms of forecasting collapse and calamity. And yet, Farrell is no dummy. According to his bio, he was an investment banker with Morgan Stanley; executive vice president of the Financial News Network; executive vice president of Mercury Entertainment Corp; and associate editor of the Los Angeles Herald Examiner. Education wise, he has a law degree and a PhD.

I totally with Dr. Farrell that modern capitalism is getting ridiculous; wealth and power are being concentrated at levels once unimaginable, and this trend shows no sign of abating. Due partly to technological advances, big business has less and less need for human workers. Back in the early years of the 20th Century, in the age of steel and steam and coal, humanity faced a similar problem regarding wealth accumulating in the hands of the new industrial capitalists. The problem was how to get the capitalist business owners to share more of the proceeds of commerce with the masses, and two solutions were proposed and tried out.

One idea was fueled by the thoughts and writings of Karl Marx; it eventually manifested itself as a big-government solution, i.e. the imposition of socialism and communism. The socialist revolutions were meant to direct the fruits of production and trade away from the ownership class and towards the worthy hands of the workers. The most radical version of this approach was tried in Russia and eventually China, but lighter versions (such as democratic socialism) saw their day in other parts of Europe and in the developing nations. Basically, the maximum-strength versions of socialism led to disaster. The lighter versions didn’t experience the terror and poverty of the Soviet Union, but by the 1980s they too generally converted themselves into capitalist states with larger-than-average social support guarantees (e.g. Sweden, Great Britain).

The main alternative to socialism was tried out by the USA, and actually worked pretty well for quite a while. That idea was to allow workers to unionize and to support their rights to bargain collectively with employers, letting their unions use the threat of shut-down (strikes) as leverage against the big capitalist business owners. The basic ideals of American democracy were mostly left intact by this option. By the 1950s, the middle class had expanded and the American Dream seemed to become a right for most families.

Unfortunately for that Dream, since the 1970s, things have been changing, and with each passing year, things seem to change quicker and quicker. (Back around 1975, while temporarily unemployed after graduating from college, I got around to reading the then-popular book “Future Shock” by Alvin Toffler. Although I hardly remember anything from it, I definitely do recall Toffler saying that change would accelerate, to levels that would cause a lot of social and economic disruption by the time the 21st Century had arrived; give Toffler credit for that one!).

Unfortunately, those changes have not been kind to the American middle class and to that American Dream. Sure, since 2000, things have improved for the masses in certain previously underdeveloped areas of the world; India and China come to mind most quickly, maybe also Brazil (although they are in a stall right now). Part of their new wealth has been caused by the exportation of jobs and production facilities from the US. I’m truly glad for the millions (maybe billions) of families in these places that have come out of poverty and now can taste a bit of what so many American families have enjoyed over the past 70 years. But I can’t help but wonder just how long their run will last, as robots and automation get cheaper and cheaper. At some point, even Chinese or Indian workers earning the equivalent of $3 per hour become too expensive for manufacturers.

As such, it doesn’t look very good for the trade union / democracy solution these days. If the masses really do decide they have nothing left to lose and take to rioting and property damage, just what is left in the economic “medicine cabinet” to ease their pain? Are we going to have to go thru another rise of totalitarian leadership, a leadership seemingly meant to impose justice for the crowd, but which ultimately serves its own purposes of maintaining power through brutality? If private ownership once more goes out the window and everything that’s mine is yours et al., are we headed back to world-wide stagnation and poverty for everyone but the privileged leadership class?

Personally, I think that Farrell is being his usual self regarding the possible effects of the Pope’s economic message — i.e., a bit over-dramatic. But then again, it is something to think about. Revolutions usually take the world by surprise; nobody but a few mostly-ignored cranks (like Farrell) ever see it coming. IMHO, Bishop Bergoglio doesn’t really seem to be calling for a socialist revolution. But then again, what he says and where he is saying it (e.g., in South America) is akin to testing a spark generator near a gasoline tank. My biggest problem with Francis is that he doesn’t offer a vision of what could replace today’s capitalist economy, without causing a collapse of civilization. Just what does he think should be done?

If Pope Francis is saying that the capitalists should lighten up a bit, throttle back a notch, leave those last few bucks on the table so as to pay workers a bit more and mitigate the damage being done to the earth by their machines, invest a bit in long-run social infrastructure like education facilities, and cooperate more with governments in looking out for the good of the public — well OK, fine, it’s an appeal to the conscience of the rich. And to their long-term intelligence, because things can’t go on the way they have been going. If a revolution of the masses is to be avoided, the capitalists will need to spend more on making things better for the masses, in a not-for-profit fashion. That would be a totally appropriate message for Francis to preach. But if he says things that inspire the masses to take the system into their own hands, then look out. At that point, I would not take Farrell to task for predicting “French Revolution 2”.

Paul Farrell argues that this is exactly what Pope Francis is saying, and that millions if not billions of poor people are getting the message. If so, then the Pope really needs to think this through and hone his message more precisely, to make clear exactly what he is and IS NOT recommending. Like many prophets of doom, Farrell is probably wrong in the short run. But there may be much long-run truth behind what he says; and in a world of “Future Shock”, the difference between the short run and the long run just isn’t as big as it used to be!!

PS — Pope Francis’ popularity in the USA has been declining of late. He has an upcoming visit to Washington, New York and Philadelphia planned, and an Archbishop in the Vatican speculates that the Pope might moderate his tone on economics just a bit once he gets here.

◊   posted by Jim G @ 2:46 pm      
 
 


  1. Jim, I just can’t get myself worked up about what may or may not happen in the future anymore; maybe it’s just that I’m getting old and there isn’t much future ahead of me. *But* on the other hand, I think all this worried fuss about what may happen in the future is misplaced. With all due respect, isn’t it those who will have to deal with the future who will be required to come up with solutions to the problems in their own lifetime? I had to do it in my lifetime; in fact, just that finding the solutions to the problems of the time I lived through (and still may have to live through) are what mature and develop the people of the time. It’s the way people grow; without the problems of the time I doubt humans would mature, develop, and grow.

    As to Pope Francis’ influence on Capitalism, I find myself wondering just how much influence he may have on those who are actually in the Roman Catholic Church, to say nothing of those who are *not* in the RC Church. Can you see Donald Trump worried about what the Pope has to say about Capitalism? Right now it makes me smile, just thinking about it. I heard Warren Buffett say one time when he was referring to his attempt to get billionaires (yes, with a B, not an M) to live on only half of what they have and give the other half to charities. He said, it was as if they could not survive on only half of their billions. I doubt they will suddenly be paying much attention to Pope Francis and his ideas about Capitalism.

    Then I find myself wondering: What’s all this about “YOLO”? Young people growing up with that concept in the forefront of their heads likely will not worry about Pope Francis either.

    I *will* grant that Pope Francis may shake up the Vatican as such; and shaking up the Vatican may not be an easy thing nor may it be quickly and submissively accepted. After all there were all sorts of rumors about the short 33 day term of John Paul I and how he died. Pope Francis himself has said he himself does not know how long he may live. Could that be some reference to the rumors about JPI’s death? Just a question about an odd tho’t that crossed my mind.

    As to Pope Francis and his popularity among the “regular” people: John Paul II also was very popular during his reign as Pope. That popularity seemed to have little, if any at all, influence on the ordinary person, except for a kind of religiosity and emotion that exhibited itself for a short period of time while he was visiting a place; but as soon as he was gone, it was back to daily life for most people.

    I know I haven’t addressed your concerns and issues about Pope Francis’ effect on Capitalism. But most likely my lack of addressing the issue will be the similar type of response of the ordinary person, an analogy of sorts, I’d say.

    I see that the “National Geographic” for August has an article on Francis. It seems to me that the only one I see who has changed his dress (a kind of outward symbol of what kind of change he might bring about) or his attitude toward the actual lives of ordinary people is only Pope Francis himself. All the other bishops seem to have changed little.

    Perhaps I just do not know what was discussed in the synod where they “debated such contentious issues as divorce and same-sex marriage”. (P. 40 of August 2015 Nat’l Geog.) I wish I could have heard that “debate”! A “debate”??? I doubt that. No big changes in either liturgical dress and/or tho’t about ordinary people’s lives coming from that synod discussion, it seems to me. So far, it seems Pope Francis is the only one with any new ideas. Everybody else wants things to stay just as they have been for the last 1700 years or so.

    If the bishops will not cooperate with Pope Francis in dealing with the ordinary, daily lives of people in the RC Church (divorce and same-sex marriage for only two possible questions), I find that few people will care much what is or is not being said by Pope Francis about Capitalism.

    One of the big problems I see among the RCs is that they have some wonderful theologians (as do other religions – wonderful theologians), but those who *do* address ordinary daily life of the individual are soon labeled heretics and worse and thrown out of the church, in their particular religion. I must admit that Pope F has had an influence on that aspect of things – fewer theologians are labeled heretics for even daring to take up some topics; he himself has dared to address daily life topics, among which one might be considered Capitalism. Yet, the real effect has been more on the theologians than on the ordinary individual.

    There is a “but” when it does come to the theologians, though. Pope F, when he was plain Archbishop Bergoglio came down hard on the (I think it was called) “liberation theology” put forth by many of the priests in Central and South America. I find myself wondering, then, was that “coming down hard” a political way to rise among those eligible for being elected Pope? (I read that in the previous election he came in second to Benedict XVI.) Is it then only now that he’s Pope he can say what he *really* thinks? Or is this a way of gaining popularity among the ordinary people and thus only increasing numbers at Mass? I wonder just how serious he might be about the things he’s saying. After all, very little, if anything, has there been even in discussion when it comes to what Pope F has to say.

    I guess, I simply am saying here that I refuse to worry about the sky falling somewhere in the future. While I do not wish bad things on those in the future, each generation must solve and deal with its own problems and grow and mature and develop in its own way, not in the way I or anybody else in another generation thinks would be most appropriate. Then too, until someone starts taking Pope F’s comments on Capitalism (and for that matter other topics of perhaps more interest to the everyday life of ordinary Christians) seriously, I am not going to worry too much about Capitalism and what the Pope thinks of it, even tho I might agree with some of the things Pope F has to say about the topic. MCS

    Comment by Mary S. — July 26, 2015 @ 10:50 am

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