Why Neither Party Can Fix Social Justice In The Global Economy

The changes in the global economy in recent decades have had serious implications for the Catholic Church’s understanding of social justice. With technological advances and the ability to shift capital across international borders, multi-national firms can rapidly move money to the most favorable investment spots, and—though it can’t be done overnight—can easily relocate industrial jobs to low-wage countries. This presents a problem for authentic social justice at home, as well as abroad—and what’s more, the two goals can seem incompatible. Furthermore, neither major political party in the United States is presently equipped to fix the situation.

When an auto firm packs up and leaves the Rustbelt, Detroit might be turned into a ghost town, but there’s the possibility for increased employment in Mexico City. When technical jobs are outsourced it puts middle-class American families on the economic brink but can seem like manna from heaven in India.  The Catholic Church and Karl Marx didn’t agree on much, but one area of intersection was a belief that workers around the world had a common cause in the pursuit of fair wages and working conditions—John Paul II spoke of the Solidarity that should exist globally, using the term of the labor movement that transformed Poland and helped defeat the 99 percent of Marx’s ideology that was completely off the deep end.

But what does one do when social justice in one place seems to come at the expense of another? The first thing I would argue is to emphasize the word seems. The auto company leaving Detroit or the textile mill leaving the Carolinas isn’t doing so because it’s motivated by a passionate desire to pay better wages in the Third World. Call me cynical, but I guess I don’t think the average CEO spent the night immersed in Paul VI’s Populorum Progressio or John Paul II’s Centesimus Annus—and suddenly decided they had a moral obligation to the developing countries. I think it far more likely the CEO spent the night immersed in the trade agreements of the United State, the regulations of the World Trade Organization and the wage & environmental laws of the Third World and realized they could not only set up shop abroad and get away with paying people a sub-living wage, they could also export back into the lucrative American market at no penalty.

Using exploited labor to export back into the American market at low cost does not social justice make.

Therefore, while the popes mentioned have called upon the wealthier nations to aid in the cause of the poorer ones, this sort of economic arrangement clearly benefits no one. The Third World worker is still living in poverty and working in unsafe conditions, while his American counterpart is now unemployed. It can be argued that once companies get a foothold in the Third World that will eventually result in higher pay and better conditions. But a basic living wage and working conditions that won’t get you killed are supposed to be basics, not something you strive for. The global economy that’s been created by a series of international trade agreements is a threat to social justice both home and abroad.

The worst of the trade agreements referenced was the 1994 ratification of the General Agreement on Tariffs & Trade (GATT). GATT was passed in a lame-duck session of Congress when Bill Clinton and Newt Gingrich got together and pushed the deal through. The corporate side of both parties wanted no part of giving an incoming class of Republican trade hawks (so designated because of a willingness to get tougher on the terms of international trade deals) the chance to ally with pro-labor Democrats and create a bipartisan alliance to kill GATT. The result was the creation of the World Trade Organization (WTO) an international body granted the power to overturn a member nation’s trade laws.

It's time for the World Trade Organization to spiral out of existence

I believe the WTO, because it’s perpetuates the present state of affairs, is an impediment to a lasting social justice. I should note here that John Paul II disagreed and had close relations with the organization. At this point, I’m sure the reader is sitting here thinking  “Okay, John Paul II or Dan Flaherty…who’s more likely to be right?” And you’re right to be skeptical. But no pope, no matter how great, is right all the time. Every blind writer can stumble across an acorn here and there. The WTO was JPII’s misstep. And it’s my acorn. The organization needs to go if social justice is going to be achieved.

Now comes the problem. The Republican Party is controlled by a mix of corporate-types in the pocket of Wall Street and the grass-roots conservatives believe that free trade abroad is the logical extension of free enterprise at home and ignoring that such only works if the economies of the trading partners have compatible wage and environmental laws. The Democratic Party has the instincts of labor that result in some good rhetoric on the topic, but if the United States is going to get out of the WTO this invariably involves angering prominent member nations—notably in Western Europe. If there’s anything we know about the left wing of the Democratic Party it’s that the zeal to be loved in Paris, Berlin and Brussels trumps all else.

The structure of the global economy is a problem and the major parties in the United States can’t provide a solution. What is the answer then? That’s a topic we’ll keep exploring here at Catholic Vote.

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14 thoughts on “Why Neither Party Can Fix Social Justice In The Global Economy

  1. Dan Flaherty says:

    In response to this comment by Jim T–”I often feel that people who try to legislate charity are doing so because its easier than using their own personal resources, or because they think that they know better than another man what he should do with his resources.”

    Jim, believe it or not I do sympathize with this statement. A political positon on social justice is less important than a personal act of charity and political positions per se are not measurements of compassion, patriotism or anything else that an overly political culture often ascribes. However, the Church has never supported pure libertarianism, going all the way back to Leo XIII and in the most recent encyclicals referenced in the article, and as such the level of government involvement is subject to reasonable debate among Catholics, without making it a referendum of who is compassionate or who wants to pilfer money from businessmen.

    With regard to the other comments, they all bring up fair questions. Please keep in mind that one column is a limited scope and in the future I’ll address them all.

    1. Jim T says:

      Dan, thank you for your reply. As you say, there are a lot of issues. I am still a novice on this subject, but I am a student of it. I would say that the principle of social justice has to go hand in hand with the principle of subsidiarity. One problem, in my opinion is that the policy is becoming too far removed from the people who are subject to it, and they have very little voice in the particulars. I’m sure you’re aware what a mess the federal entitlement programs are in right now. If more of the social justice work were done by voluntary associations, and if the states and localities could make their own laws, free of federal interference, thus making them more answerable to the people affected, I could see where a group of citizens, in a limited locality, could decide to have government provide a service. I feel that if the localities were left alone to decide their own policy, this could possibly be made to work, and instead of having to change the direction of an entire nation, we could take care of our own, with more supervision of how the program is going, and more ability to reasonably vote on it.

  2. Jim T says:

    Dan, since I just obliterated what I was posting, I’ll need to be more brief than I had intended. First, I’m impressed by the other comments. Second, the unemployed in this country still have it much better off than those making a “substandard” wage in China, and those in China are better off than they would be without the “substandard’ wage. Third, interference with the process of the businessman hiring at the lowest wage he can, and the laborer working for the highest wage he can only makes the process more inefficient. You cannot make people better off by interfering in this process (unless you personally inject your own wealth into it) – since there will always be winners and losers in competition, all you can do is influence who the winners are, while wasting resources in the process. Fourth, businesses are not charities. If you are concerned about social justice, work for or create a charity. Convince people to donate to help their fellow man. I often feel that people who try to legislate charity are doing so because its easier than using their own personal resources, or because they think that they know better than another man what he should do with his resources. I don’t know if that applies to you personally, but it’s one of the things that motivates me – I may not be as charitable as some, but it’s my own resources that I’m charitable with.

    1. Randall says:

      Jim T, you said “Second, the unemployed in this country still have it much better off than those making a “substandard” wage in China.” Absolutely right. I saw an infographic on Fox News that over 99.6% of “poor” households have refrigerators! And they dare to claim the status of “poor”?!?!?!?! If you’re concerned about social justice, it looks like only about 0.4% of America actually needs help. The rest have government handouts and unions (who are stifling businesses) to help them live high on the hog.

      1. Don Grant says:

        Randall,

        The unemployed in this country are not well off. To have dignity and self respect a person needs to be employed in an authentic and meaningful job. Our goal should be to be sure that such meaningful work is available to everyone who is able. I suggest you read Laborem Exercens by JPII. I learned a lot about social justice from reading it. Peace to you and your family

        1. Don Grant says:

          Pat Buchanan’s column today is on topic and is worth reading

          1. Joe M says:

            The protectionist policies that Buchanan is for have been tried multiple times in the past. They led to greater unemployment and economic harm. — Laborem Exercens applies to everyone in the world, including South Koreans. Not only Americans.

          2. Joe M says:

            This segment of Laborem Exercens directly contradicts the sentiments of protectionists like Pat Buchanan: “These new conditions and demands will require a reordering and adjustment of the structures of the modern economy and of the distribution of work. Unfortunately, for millions of skilled workers these changes may perhaps mean unemployment, at least for a time, or the need for retraining. They will very probably involve a reduction or a less rapid increase in material well-being for the more developed countries. But they can also bring relief and hope to the millions who today live in conditions of shameful and unworthy poverty.”

          3. Don Grant says:

            Joe,

            Thanks for your responce. The theme of Laborem Exercens
            as I understand it is that work is a source of human dignity and is also necessary for Participation in the community as The Church defines it. Your responce is the textbook responce of so called free traders. Buchanan is not a protectionist but the Chinese are. Not so long ago I held the same view as you, but if you put theory aside and look at the facts I think you will have to admit that with Gatt and NAFTA, most favored Nation status for China and the new agreement with Korea, American workers as loosing out.I would only suggest that you keep an open mind. I think this is a crucial debate for our country. By the way Pat Buchanan is as devout as they come and is a stauch defender of the faith when others shy away.

          4. Joe M says:

            Thank you Don. Work being a source of human dignity is a theme of Laborem Exercens. However, free trade is a vehicle for creating the conditions in which more people can have the dignity of work. Multiple economic studies have demonstrated that protectionist policies destroy more jobs than they “save” for the country imposing them. — Buchanan definitely is a protectionist. He wrote a book about it. He believes that raising tariffs is a good way to keep jobs in the US. The problem with this idea is that other countries raise tariffs in response and it becomes a net negative for everyone involved. I think it’s great that Buchanan is devout. However, his position on this subject does not have a Catholic basis. He’s arguing that we should try to maintain our comparatively luxurious life style at the expense of foreign people trying to improve their lives. And again, it’s worth pointing out that it wouldn’t work anyway. See Smoot-Hawley.

  3. Don Grant says:

    Dan,

    If patriotism is the last refuge of the scoundrel then so are free market principles. We should be demanding fairness in trade. Does the free market demand that we exploit the labor of peasants in China at the expense of meaningful work for Americans. Does it demand that we do nothing while the Chinese adjust the exchange rate to their advantage. Do we ignore the fact that China is a Communist nation that persecutes Christians and institutes a one child policy and performs mandatory abortions, Do we ignore the fact that China has never formally denounced the Cultural Revolution and the destruction of 60 million souls. Fifty thousand factories have closed and moved overseas. We are becoming Economic Man. We exist for the economy, when the economy should exist for us. It is ironic that the worship of the free market could possibly end in the destruction of true freedom.

  4. Randall says:

    In conclusion: on this issue, both sides are bad, so vote Republican. :)

  5. Joe M says:

    Thank you Dan. I think that your position is plausible but not true. There are abuses that deserve criticism. However, that is the exception rather than the rule. In most cases, foreign companies offer the best wages available in developing nations. That people still can’t afford two plasma tvs from Japan per home is not a product of not having a living wage. It’s a result of the size of their economy compared to industrialized nations. Something that changes for the better when foreign companies invest there. In the meantime, local bread in a country where people are paid 1/3 of what Americans are paid costs 1/3 of the price. In other words, by and large, they are receiving living wages for this work. — On the other side, CEOs aren’t trying to avoid paying a living wage in the US. They are trying to avoid paying a luxurious, inflated above market value wage. In most industries, there is massive over-head to take business over-seas. There are additional management, accounting, legal, transportation, construction, etc. costs. In order for it to make sense to take work 1000s of miles away from where a product or service is sold, the cost of labor there must be markedly above the over-head cost to do so. If labor wants to keep the jobs in the US, labor needs to be realistic about what a living wage actually is. I think that most people would agree that it isn’t retiring at 50 with a $150k per year pension. — Regarding the WTO, history has certainly given reason to be skeptical of internationally run organizations. It has it’s flaws. However, the absence of it was far worse from a humanitarian perspective. Before these modern efforts to liberalize the economies of developing nations took place, things were much more unstable in many parts of the world. Famine was more common and wide-spread. Disease control and other humanitarian efforts were not as effective or locally sustainable. Frankly, I think that the resentment of this effort stems from labor unions ghoulish desire to keep the less humanitarian old way because then they didn’t have to compete with increasingly competent global work-forces. — Finally, I’m not sure why people seem to believe that Wall Street is a Republican institution. Wall Street, in liberal bastion New York, has been largely in the tank for Democrats for years now. Look at Clintons economic appointees. Look at Obamas economic appointees. Top decision-making positions all over Wall Street are filled by former members of Democrat administrations. Big time traders like George Soros and Warren Buffet support Democrats. Not Republicans. Where are these Republican Wall Street obligations at specifically?

  6. Deacon Chip says:

    Whoa.

    A veritable straw army has been unleashed!

    1. Before accepting your premise, I would ask just one example of a sub-living wage being paid to overseas workers. Stating that a worker makes “a dollar a day” sounds bad to an American (who couldn’t pay bus fare to work with that wage), but tell us more. What’s the purchasing power of that dollar? ( and yes, I realize you didn’t make that statement, it’s just an example of the kind of premise with which you began.)

    2. While I’ll acknowledge that there Are overseas factories with unsafe working conditions (at least by US standards), show me the data, please. “The Third World worker is still living in poverty and working in unsafe conditions” is a statement that needs supporting evidence, doesn’t it?

    This fisk is too difficult on an iPad that won’t Llow me to copy and paste, so I’ll leave it at that for now. But some of your rhetoric sounds like Occupy Wall Street Meets The Vatican, and I cannot accept the premise you make without. e v i d e n c e…

    Not that my acceptance means anything. But your argument seems unduly broad, and marginally reasoned.

    Just saying’.

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