Among our problems is a failure of economic language. We lack the words and concepts to describe observable reality. By conventional wisdom, the Great Recession is long over. “Recession” connotes shrinking output. “Expansion” signifies the opposite. That’s how the National Bureau of Economic Research, a group of academic economists, defines business cycles. Following this logic, the bureau determined the economy stopped contracting in mid-2009. Yet, most Americans — 53 percent, says a recent National Journal/Allstate survey — think we’re still in recession, by which they doubtlessly mean “bad times.”
The problem might not be a dearth of investments so much as a surplus of risk aversion. For that, candidates abound: the traumatic impact of the Great Recession on confidence; a backlash against globalization, reduced cross-border investments by multinational firms; uncertain government policies; aging societies burdened by diminishing innovation and costly welfare states.
The problem, then, is not machines, which are doing a great deal to boost productivity; the problem is that the benefits from increased productivity no longer accrue to workers. In a provocative paper earlier this year, Josh Bivens and Mishel argued that the gains for the richest 1 percent were due to “rent-seeking” behavior by CEOs and financial professions, not competitive markets. As John Kenneth Galbraith said, “The sense of responsibility in the financial community for the community as a whole is not small. It is nearly nil.” The newly minted rich want to blame robots for declining wages at the bottom and their innate superiority for their disproportionate share of the income. But these excuses mask their theft of productivity gains that rightfully belong to the rest of us.
The great danger in today’s world, pervaded as it is by consumerism, is the desolation and anguish born of a complacent yet covetous heart, the feverish pursuit of frivolous pleasures, and a blunted conscience. Whenever our interior life becomes caught up in its own interests and concerns, there is no longer room for others, no place for the poor.
His apostolic exhortation, “The Joy of the Gospel,” is drawing wide and deserved attention for its denunciation of “trickle-down” economics as a system that “expresses a crude and naive trust in the goodness of those wielding economic power.” It’s a view that “has never been confirmed by the facts” and has created “a globalization of indifference.” Will those conservative Catholics who have long championed tax-cutting for the wealthy acknowledge the moral conundrum that Francis has put before them?But American liberals and conservatives alike might be discomfited by the pope’s criticism of “the individualism of our postmodern and globalized era,” since each side defends its own favorite forms of individualism. Francis mourns “a vacuum left by secularist rationalism,” not a phrase that will sit well with all on the left.
The difference is that a concern for the poor and a condemnation of economic injustice are at the very heart of Francis’s mission. “In this system, which tends to devour everything which stands in the way of increased profits,” he writes, “whatever is fragile, like the environment, is defenseless before the interests of a deified market, which become the only rule.” Can you imagine an American liberal who would dare say such things?