I’ve been having a conversation over at W&T that goes to the heart of the debate over how best to help the poor and whether capitalism is good or evil. It was prompted by the news that the Presbyterian Mutual Society is out of cash and can’t honor the withdrawal requests of its members. It seems some don’t think investments in mutual funds are appropriate for Christians who care about poverty in the world in the first place. Peter Morrow began by describing what the mutual fund does as “intolerable.” When I probed him about those comments, he said the church should be doing more about social justice and the fact that people are forced into labor in the third world, some of them die, some of them are victims of war, some of them are children. This is part of my response, slightly amended here:

You’re right to suggest that it’s the church’s job to stand against forced labor and such. But you’re wrong if you think most overseas labor is like that. Most are not children, not victims of war, not forced into labour. In fact, most (the vast majority) who work for companies producing western goods are making 200, 300, 500, 1000 percent of the average wage in their countries and the western companies they work for are helping them out of poverty! Do your homework!

What you appear to be advocating here is that the Presbyterians who invested in the mutual society – no matter how much they rely on that money for their retirement – should sacrifice it to give it to the third world instead. Economically, in a global sense, and with a keen eye to social justice in the world, that’s a horrendous idea for several major reasons. It is the epitome of ‘wrong’ to think that the way to eradicate poverty permanently in the third world is for first-world people to simply give their money to the third world.

What the third world needs, long-term, is what we have: capitalism. (‘Teach him to fish’!) And it isn’t going to happen if we give up our own capitalism to do it. They need our example and the runoff of our wealth, neither of which they have if we abandon our mutual funds and cease making money with our money. You should be arguing in favor of British and American people, including church members, making as much money as possible! (As a side note, I find it incredible that you don’t think any of the money made by the Presbyterian Mutual Society will find its way to the third world by the Presbyterians who participate in both the PMS and charities. That’s money that, without the PMS, wouldn’t exist to give in the first place!)

In short, I think you misunderstand economics, as do so many on the Left who are concerned about social justice. It wasn’t western giving that eased the poverty of India or China in recent decades. It was following the western example of how to compete in free markets and make money!

Capitalism isn’t the enemy of social justice, Peter. It’s its greatest hope.