Why Pope Benedict Disagrees with Paul Ryan on Income Inequality, Economic Principles
Wednesday at Congressman Paul Ryan’s (R-WI) speech on “fear, envy and politics of division” at the Heritage Foundation, Rep. Ryan was asked about a new Congressional Budget Office report detailing the incredible rise of income inequality in the U.S.–a rise that makes clear the reality that a very small group of very wealthy Americans (the 1%) are doing extraordinarily well financially while everyone else stagnates or falls behind.
Ryan said he hadn’t read the report, but dismissed the general idea that income inequality is anything to worry about (as his speech title reveals, he thinks talking about the subject is the real problem):
Let’s not focus on redistribution, let’s focus on upward mobility…If these studies are used as justification for erecting new and more barriers for making it harder for people to rise, all that will do is reduce our prosperity in this country.
As Jonathan Chait points out in his thorough takedown of Ryan’s speech at Daily Intel, Ryan’s confusion about access to opportunity is stunning. Chait writes:
Unfortunately, Ryan’s understanding of reality is a complete inversion of actual reality. ‘Equality of opportunity’ bears no relation to the reality of the American economy or any economy. Parents can benefit their children by giving them money, better schools, better home environments, tutoring, camp, and other advantages. Opportunity is overwhelmingly unequal.
And as Matt Yglesias notes, the barriers that actually prevent social mobility are things Ryan shows no interest in addressing–problems like access to healthcare or affordable housing, nutrition and health disparities between rich and poor children, or the rapidly rising costs of higher education. For Ryan, funding key social programs that expand opportunity (not guarantee “equality of outcome,” as he dismissively claims) by requiring the richest Americans to pay more in taxes is a spiteful “redistribution of wealth.”
Noting his particular disapproval of this phrase, I asked Rep. Ryan–a Catholic–whether he thought the Pope was engaging in class warfare rhetoric as well when he used this exact redistribution language in his most recent encyclical on the economy, Caritas in Veritate. His response was both disappointing and telling:
FPL: Pope Benedict said that the wealth creation of the market should be balanced by the political redistribution of that wealth. Would you call that class warfare language?
RYAN: You can interpret these in different ways. If you read the totality of these encyclicals, that one in particular, I think you can derive different lessons from it. What I think he’s probably getting at–read “Without Roots”–a book he wrote when he was then Cardinal Ratzinger with Marcello Pera, the President of the Italian Senate at the time–phenomenal piece going at the roots of moral relativism.
And so when he’s talking about the extreme edge of individualism predicated upon moral relativism, that produces bad results in society for people and families. And I think that’s the kind of thing he’s talking about.
So do I believe that we ought to have some kind of international system of dividing the pie–no. And I don’t think that’s what he’s calling for.
So look, I believe that the social magisterium…is very helpful and it does not pick which of the two philosophies between the left and the right are right or wrong. That is up to the prudential judgment of lay people who are practicing or practicing as politicians.
Ryan starts by trying to turn Benedict’s specific economic concerns back to a more general cultural critique of “moral relativism” to explain away the Pope’s language. But you actually don’t need to guess what the Pope meant to say; he says it very clearly in the encyclical in question. (paragraph numbers in parentheses)
First the Pope specifically rejects the Ayn Rand-ian, free-market vision of profit-driven self-interest producing the best results for all of society:
Profit is useful if it serves as a means towards an end that provides a sense both of how to produce it and how to make good use of it. Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty (21).
Therefore, it must be borne in mind that grave imbalances are produced when economic action, conceived merely as an engine for wealth creation, is detached from political action, conceived as a means for pursuing justice through redistribution(36).
Most notably, the Pope goes right at the topic of income inequality, and directly disputes Ryan’s assertion that it’s not a matter for concern:
The dignity of the individual and the demands of justice require, particularly today, that economic choices do not cause disparities in wealth to increase in an excessive and morally unacceptable manner (32).
Instead of leaving “the market” to its own devices, the Pope says we need to play an active role in shaping and directing the economy to produce just results. That includes political efforts to redistribute wealth when the market has failed to distribute it fairly.
The social doctrine of the Church has unceasingly highlighted the importance of distributive justice and social justice for the market economy, not only because it belongs within a broader social and political context, but also because of the wider network of relations within which it operates. In fact, if the market is governed solely by the principle of the equivalence in value of exchanged goods, it cannot produce the social cohesion that it requires in order to function well (35).
In fact, one of Benedict’s biggest concerns in the letter is the reality that as wealth and capital become more globally interconnected, political redistribution of wealth at a national level is becoming insufficient to rectify the disparities. This is the problem that has the Pope considering ways to actively encourage economic decision makers to act more ethically and justly as well and (yes Rep. Ryan) develop stronger authority to regulate them on an international scale.
Perhaps at one time it was conceivable that first the creation of wealth could be entrusted to the economy, and then the task of distributing it could be assigned to politics. Today that would be more difficult, given that economic activity is no longer circumscribed within territorial limits, while the authority of governments continues to be principally local(37).
The processes of globalization, suitably understood and directed, open up the unprecedented possibility of large-scale redistribution of wealth on a world-wide scale; if badly directed, however, they can lead to an increase in poverty and inequality, and could even trigger a global crisis. It is necessary to correct the malfunctions, some of them serious, that cause new divisions between peoples and within peoples, and also to ensure that the redistribution of wealth does not come about through the redistribution or increase of poverty: a real danger if the present situation were to be badly managed(42).
Ryan’s further “prudential judgment” dodge is only half-right. It’s true that the Catholic church largely avoids weighing in with doctrinal authority about the specific policies of any given political movement. But he’s wrong to suggest the Church has no opinion on broader economic or political philosophies.
As Caritas in Veritate makes clear, the underlying themes of Ryan’s speech–dismissal of income inequality as “class warfare” and the clinging to supply-side economics (or supply-side fairy tales, as Chait rightly calls them) — are clearly at odds with Catholic principles on the economy.