New CREDO newsletter

When the Catholic Research Economists Discussion Organization (CREDO) newsletter comes out (only twice a year), it's an occasion for celebration. Here's the latest, On The Margin Volume 2 Issue 2, Fall 2015, with a symposium on Laudato Si including:

• San Diego's Bishop McElroy, a poli-sci ph.d. (!),
• UCLA's Paco Buera, who does macro-style development (and unknowingly inspired my job market paper via Michael Carter's appreciation of his job market paper),
• Craig Gundersen, who researches food insecurity at U. of Illinois, 
• Mary Hirschfeld, the only dual ph.d. in econ and theology I know of, from Harvard and Notre Dame, respectively, and 
• Minnesota-trained applied microeconomist Jose-Miguel Sanchez. 

There's also a piece on the refugee crisis by Notre Dame labor economist Kirk Doran.

I hope to write more about these essays soon. For now, consider the passage from Laudato Si (paragraph 106) discussed by Hirschfeld more or less line-by-line:

“The basic problem goes even deeper: it is the way that humanity has taken up technology and its development according to an undifferentiated and one-dimensional paradigm. This paradigm exalts the concept of a subject who, using logical and rational procedures, progressively approaches and gains control over an external object. This subject makes every effort to establish the scientific and experimental method, which in itself is already a technique of possession, mastery and transformation. It is as if the subject were to find itself in the presence of something formless, completely open to manipulation. Men and women have constantly intervened in nature, but for a long time this meant being in tune with and respecting the possibilities offered by the things themselves. It was a matter of receiving what nature itself allowed, as if from its own hand. Now, by contrast, we are the ones to lay our hands on things, attempting to extract everything possible from them while frequently ignoring or forgetting the reality in front of us. Human beings and material objects no longer extend a friendly hand to one another; the relationship has become confrontational. This has made it easy to accept the idea of infinite or unlimited growth, which proves so attractive to economists, financiers and experts in technology.”

Her conclusion: "Economics has much of value to say about how incentives work, or how scarce resources can be well employed. This pope who does not fully appreciate what markets can do, could learn much from them. But on this deeper level, it is difficult to see how an economist could accept the pope’s critique without having to deeply rethink what is entailed in the deployment of the basic model that sees humans as subjects who maximize utility functions."

Economists, to understand Pope Francis, let's take time to engage with theology

I had the opportunity to participate in the April 2014 Lumen Christi Institute conference on Catholic Social Teaching and Economics and it was wonderfully stimulating and encouraging. However, I was surprised to realize afterward that I had not heard mention of Pope Francis’s Nov. 2013 Evangelii Gaudium (EG hereafter) in the talks, nor had I thought to bring it up in conversation even informally. This was especially surprising because the meeting organizers had provided excerpts of EG ahead of time to all participants, the only prep work that was suggested. This absence is understandable to a point, since the focus of the conference was scholarly work. Yet I felt it as a lost opportunity for us economists to engage with theology.

Of course, one aim of CREDO is to encourage engagement in the other direction, for theologians to listen to economists more. For instance, I found it somewhat discouraging that Archbishop Wenski would submit an op-ed to the inaugural CREDO newsletter suggesting a simplistic understanding of how the labor market works, and I hope that he will benefit from reading the responses in the same newsletter written by economists. (Archbishop Wenski correctly highlights two urgent goals, more jobs and dignified incomes, but he presents no coherent understanding of how policy can further those goals. He demands an increase in minimum wages, which would tend to make the first goal more difficult. Moreover he disparages a policy which can further both goals, wage subsidies, as “corporate welfare” because it provides incentives for employers to hire the most disadvantaged workers.) Yet, just as theologians often make basic errors about economics, economists may be prone to fundamentally misunderstand theology.

For instance, when Pope Francis describes the effects of consumerism (EG 2) as

“the desolation and anguish born of a complacent yet covetous heart, the feverish pursuit of frivolous pleasures, and a blunted conscience”

what is an economist to think? Is the pope merely describing different preferences, in which case most economists would reject this statement as baseless moralizing or value judgments? Behavioral economists might be able to say something about “pursuit of frivolous pleasures,” but how can we make sense of “the desolation and anguish born of a complacent yet covetous heart” or “a blunted conscience”? If he is describing something real about human well-being, it is something that my economics training has made it rather difficult to understand.

Consider also, Pope Francis quoting John Paul II (EG 178):

"The Holy Spirit can be said to possess an infinite creativity, proper to the divine mind, which knows how to loosen the knots of human affairs, even the most complex and inscrutable."

It may sound silly to ask how the Holy Spirit fits into the economic way of thinking about the world, and it may sound sanctimonious like a chaperone scolding students to “leave room for the Holy Spirit” at a middle school dance. Yet, economist Daron Acemoglu can conclude an essay on spiraling mistrust and conflict in his native Turkey with a seemingly desperate plea, “we badly need a Turkish Mandela.” Why, then, should it feel so out of place for a Catholic economist to pray for the Holy Spirit to resolve persistent political and economic problems?

Here is the passage I personally found most challenging (EG 201):

“No one must say that they cannot be close to the poor because their own lifestyle demands more attention to other areas. This is an excuse commonly heard in academic...circles.”

These words suggest that even an economist who devotes all her research effort to addressing poverty and moreover gives all of her income to effective charities is not doing enough if she is not personally “close to the poor.” Why? I personally would really like to discuss it.

(adapted from my letter to the editor published in On The Margin Volume 1 Issue 2, Fall 2014)