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You turn on the TV and The Dow Jones Industrial falls 445 points or 5.6%. You read the morning papers and note that California's unemployment rate has risen to 8.2%, the third highest in the nation -- 1.5 million Californians are out of work. You check the Internet and realize that $8.3 trillion of Wall St. wealth has evaporated in 13 months.
The big three automakers - General Motors, Ford, and Chrysler -- are in trouble. Financial institutions, such as CitiGroup, JPMorgan Chase, etc. are in disarray, despite the $700 billion government bailout. The subprime housing meltdown has frozen the credit market and consumer spending has screeched to a halt.
The financial crisis has reverberated across the globe. Even the European market is slumping. Japan, Australia, and New Zealand are down 3%. The red-hot economies in Asia and Latin America have cooled down. The Philippine peso has inflated to P 50 vis-a-vis the weakening dollar.
What happened? Was it the billions funneled into the wars in Afghanistan and Iraq? The lack of regulation and oversight of complex financial transactions? Laissez-faire capitalism? The hunger for more and more profit? Human greed?
Laissez-faire capitalism -- the liberal economic ideology which limits government intervention to the minimum - originated in 17th century France. In 1774, the French terminology for a hands-off business model was introduced to the English-speaking world in "Principles of Trade", a book authored by George Whatley and Benjamin Franklin. The concept influenced British economy in the 18th century and later found a home in the United States at the Chicago School of Economics.
Hong Kong, particularly before its 1997 release from British colonial rule back to the People's Republic of China, is touted as the prime example of laissez-faire capitalism. Its liberal economic system is thought to be the reason for its rapid economic growth in half a century.
The other free economies of the United States, Canada, Australia, New Zealand, Ireland, and Singapore, etc., are not exactly free of government intervention. Yet their heretofore robust economies are relatively "laissez-faire", so that a progressive economy is considered identical to unbridled capitalism.
Today's economic disaster brings to mind the wisdom of Pope John Paul II. Karol Wojtyla vigorously criticized the Communist economic system as not only atheistic, but dehumanizing. He had experienced the Communist way of life firsthand in his native Poland and knew how flawed a state run economy was.
Yet, before and during his Pontificate, this staunch anti-Communist, warned against the perils of Capitalism. Pope John Paul understood that just as Karl Marx's utopia was undermined by an unethical politburo, so was capitalism in danger because of unchecked human greed.
Pope John Paul II, in his encyclical "Sollicitudo Rei Socialis", criticized the "all consuming desire for profit and the thirst for power at any price with the intention of imposing one's will upon others, which are opposed to the will of God and the good of neighbor." He warned against economic systems that lacked solidarity with the rest of the world. He was critical of economies that disregarded the scriptural and Catholic vision of love for neighbor and "a preferential option for the poor."
The Pope compared economics of self-interest (laissez-faire capitalism) to the story of the rich man and the beggar in the Gospel of St. Luke. Due to the global implication of modern-day economics, we need to take into consideration and to "embrace the immense multitudes of the hungry, the needy, the homeless, those without medical care and, above all, those without hope of a better future. It is impossible not to take account of the existence of these realities. To ignore them would mean becoming like the "rich man" who pretended not to know the beggar Lazarus lying at his gate (cf. Luke 16:19-31).
In 1987, the Holy Father warned, in "Laborem Exercens", that the maquiladora system, or the outsourcing of jobs to secure the lowest salaries possible, carried the seeds of grave injustices. The Pope found it necessary to reiterate the traditional principle of Christian social doctrine: the goods of this world are intended for all people to enjoy. The rich must not take advantage of the poor.
Capitalism may not have rejected religion, as Communism did, but it made the dollar its religion. Capitalism does encourage individual research and creativeness, yet trickle down economics, which was championed in the Reagan Era, has today been found wanting.
The economic pendulum has to swing back to the middle. Otherwise, just as the Berlin Wall fell, Wall St. will. Is President-elect Barach Obama's wealth redistribution plan the answer? Perhaps, but only if such a socialistic national policy will not foster a lazy welfare nation dependent on a few and/or the government to attend to its needs.
This may be an opportunity for hard-working and productive Filipinos in the United States, familiar and comfortable with the idea of the Bayanihan spirit, of working in cooperation with others, to lead the way into a responsible, kinder, more generous capitalism. ###
