Pope Francis & the Abbott government.

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Bruce Duncan. 

Joesph Stiglitz on Inequality, citizens4taxjustice, flickr cc

Pope Francis has repeatedly called for increased social and economic equity in the world, and reiterated the critique of neoliberal economics very strongly. Now he is about to issue an encyclical, the highest form of Church teaching, on the need to reduce carbon emissions and global warming. What will our pollies make of this, especially Catholics in the Coalition government?

Many observers are deeply puzzled by Mr Abbott’s metamorphosis from being lampooned as ‘Captain Catholic’ into an advocate of neoliberal policies. What has happened to the man who called BA Santamaria one of his mentors?

Whatever Santamaria’s politics, he was strenuously opposed to neoliberalism, and all his life argued for equitable distribution of wealth and property, believing this would spur responsible democracy, resulting in the wide dispersal of political power through cooperatives and forms of economic democracy.

Pope Francis has renewed the moral critique of economics and politics. He has highlighted the Church’s opposition to neoliberalism, as it is termed today, which exaggerates the role of market mechanisms and minimises considerations of equity, social justice, and fairness.

Stigliz’s critique of neoliberalism

Among the many leading economists advising the Vatican has been Joseph E Stiglitz, former chief economist at the World Bank. Stiglitz has warned repeatedly about the danger from the astonishing concentration of wealth in the United States, resulting in the impoverishment of millions. He blamed the ideology of neoliberalism for this, with its naïve view of markets disguising massive rent-seeking, political corruption, and manipulation of governments by powerful special interests, including in supposed free-trade agreements drawn up in secret negotiations.

In his latest book, The Great Divide: Unequal Societies and what we can do about them, Stiglitz again pointed out that the top 1 percent of Americans takes nearly a quarter of the nation’s income each year, and controls 40 percent of the wealth, leaving almost a quarter of US children under five living in poverty (pp 88, 303).

francis on economy
Pope Francis on Trickle Down Economic theory, Devendra Makkar, flickr cc

By comparison, in 2012, the top 10 percent of Australian earners took home 29.7 percent of Australian income, the highest on record, according to a report from the Melbourne Institute of Applied Economic & Social Research in May.

Stiglitz called for “significant investments in education, a more progressive tax system, and a tax on financial speculation” (p 392). In his view, “trickledown economics was totally wrong.” (p 415).

To increase social equity globally, he supported proposals to include a ninth goal in the Sustainable Development Agenda: to reduce inequality so that by 2030 in no country would the top 10 percent of the population have post-tax income greater than the post-transfer income of the bottom 40 percent (p 291).

Following a visit to Australia, Stiglitz warned that the Abbott government did not seem to understand the basic dynamics of “deregulation and liberalization” that were driving increasing inequality and concentrating wealth in the hands of a few. Stiglitz was particularly concerned about the defunding of Australian research and universities. (pp 355-56).

Pope Francis & Ban Ki-moon on climate change and inequality

This June, Francis will release his encyclical, calling for urgent action to tackle climate change, challenging the views of climate deniers and highlighting the issue as a decisive one for Australia as it backslides on emissions reduction.

After meeting the Pope in late April this year, UN Secretary General, Ban Ki-moon opened a Vatican conference on environment issues and their impact on poor countries, with many leading development experts present, including Jeffrey Sachs, who helped coordinate the UN Millennium Development Goals.

Ban said that religious leaders did not claim to be scientists, but could help mobilise the political will to address climate change. “The most vulnerable must be foremost in our thoughts this year, as governments construct a global response to climate change and a new framework for sustainable development.”

He warned that we are “on course for a rise of 4-5 degrees Celsius”, and concluded: “We are the first generation that can end poverty, and the last generation that can avoid the worst impacts of climate change. Future generations will judge us harshly if we fail to uphold our moral and historical responsibilities.”

Climate change is one of the six main topics for the UN Special Summit in New York in September 2015. Pope Francis will address the United Nations on the first day of this Summit on 25 September, presumably reiterating the main points of the new encyclical, stressing the moral responsibility to redress global warming and eradicate hunger and extreme poverty.

Our perplexing short-sightedness

Is Australia pulling its weight in this critical moment, which could well be a catastrophic turning point in the history of humanity? Certainly not on managing climate change, as Pope Francis will indirectly remind us.

And how about our contribution to eliminating hunger and the worst forms of poverty? The Coalition government has slashed our overseas aid budget savagely, driving our aid from its current 0.32% of GNI to its lowest level at 0.22% of GNI by 2016-17, less than half what Australia gave in 1971-72 as a proportion of GNI. In the 2014 budget, aid was cut by $7.6 billion over four years, comprising a fifth of all budget savings. In December, another cut followed of $3.7 billion over four years. And to the surprise of Australia’s Foreign Minister, Julie Bishop, another $1 billion disappeared from the 2015-16 budget, reducing Australia’s aid commitment to less than $4 billion a year. By 2017-18, Australia’s aid will fall to 0.82% of government expenditure.

Australians may rue the day we turned our backs on the needs of our neighbours. Australia’s RAMSI intervention in the Solomon Islands cost about $2.6 billion. Imagine what a failed state in Papua New Guinea or other nearby states would cost. We spend billions of dollars on border protection; we lock up some 1700 asylum seekers on remote Nauru and Manus Island at a cost of over $475,000 a year for each person; yet we refuse to see that improving stability and living conditions in poor countries is the most humane and constructive approach, and that it is definitely in our national interest, not least because it offers a decent way to manage refugee and migration issues in the long term.

Let’s hope the Pope’s encyclical will help the blind to see.

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