Acton Commentary

Pro-Growth Heresy Benefits the Poor


All of the world's major religions contain in their teachings a divine mandate commanding the believer to be attentive to the plight of the poor. In the Judeo-Christian tradition, the divine mandate is especially pronounced--the long history of the Old Testament Prophets and finally, the Son of God himself, makes it very clear that the poor are special in God's eyes and serve a special purpose in His plan of revelation and redemption. Essential to the vocation of every Christian, then, is the divine command to serve the poor and assist in meeting their needs. As a result, the primary and foundational service all policy makers should render to the poor is to pursue policies that ameliorate and, to the greatest extent possible, eliminate poverty .

For more than a generation now, many Christian policy makers have in one form or another accepted the welfare state model as the template for the alleviation of poverty. It seems such a simple idea--take from those who have “more” and give to those who have “less”. It sounds almost scriptural--“To those to whom much is given, much is expected.” Figuring out the specific details who “the haves” and the “have nots” are proved to be more difficult than well meaning welfare staters originally imagined. Furthermore, determining how much was expected from those “to whom much had been given” proved even more complicated. As a result of all this financial theologizing the United States now has a tax code that runs thousands of pages, filled with loathsome loopholes benefiting the most parochial of interests. Many Christians working in the area of social and economic policy believe, as an article of faith, that they are fulfilling at least one portion of the divine mandate to care for the poor by preserving the welfare state model of economic policy. Over time, this well meaning but misplaced fervor tends to substitute policy advocacy for real attention to the plight of the poor. Political rhetoric replaces reality.

In this politically charged environment the fundamental work of Christians to truly assist the poor by working toward the elimination of poverty is either obscured or lost completely. Given the religious fervor many Christian policy makers apply toward preserving the welfare state model of economic policy, they are usually unwilling to tolerate any heresy that mentions or suggests a new economic policy paradigm. Within this dynamic, the mere utterance of the terms “pro-growth”, “investor class tax relief”, “tax cuts”, or “tax code simplification” is cause enough to get the “heretic” hauled before the inquisition. Once again, the goal of alleviating poverty is lost in the fevered inquisition to determine if one has committed political and economic heresy.

Recent emanations from Washington indicate that a new program of pro-growth economic policies is forthcoming, perhaps after the first of the year. Contrary to the indictments already offered by some Christian “socialist” justice advocates, the poor of the world and those who serve them have much to benefit from these new pro-growth economic initiatives.

In order to relieve poverty and its effects, there has to be an increase in economic resources, in other words, the “economic pie” has to be made bigger. Thus, new sources of capital must be located, new markets must be opened and new jobs created. The Bush administration's recent emphasis on increased free trade and greater access to worldwide markets will be a boon to entrepreneurs in the developing world and to all consumers around the world. Policies promoting freer and fairer trade lead to a lower costs of goods and services and offers new economic opportunities for those previously unable due to protectionist tariffs and government subsidies. Note to the Bush administration: Good start, but freer and fairer trade policies should apply to farmers and steel producers as well.

Another important pro-growth initiative currently being floated is the reform of the various tax impediments on investment. According to numerous estimates, sixty to seventy percent of Americans are active investors in stock and other capital markets through direct investing and vehicles such pension and mutual funds. Such investments have led to new and greater sources of wealth for millions of Americans--increasing their slice of the pie. As a result, the total economic “pie” has been substantially increased. An aggressive redressing of impediments to investing, such as the ending of double taxation on dividends and lowering the capital gains tax, will accomplish a great deal toward creating new economic opportunities, such as jobs, for those who want them.

For the Christian policy maker who desires to help the poor in pursuing prudent pro-growth economic policies, the indictments of economic and political heresy will be quickly forthcoming. No matter what is said and how often the benefits that pro-growth policies have on the poor are explained, many Christian welfare state advocates will insist that “pro-growth” economic policies only benefit the rich. It does not matter to them that it is a fact that 50% of taxpayers pay 96% of the income tax.

Advocating pro-growth policy does not mean that one is anti-poor--a demagogic distinction too often left un-refuted by pro-growth advocates. Rather, pro-growth policies that have increased economic opportunity and development have directly assisted the poor in a more far-reaching and efficient way than decades of welfare state economic policy ever did. Policy issues and prescriptions, however, are to large extent matters of prudential judgment, not religious dogma. It will be important for pro-growth policy advocates to be ever diligent in watching for those on the margins of economic opportunity and to be creative in finding ways to make sure that economic policy leaves no one behind. Advocates of the pro-growth policy agenda should not be afraid to put their record of actual results in creating economic opportunity for the poor on display. Failing to do so will allow the inadequacies of welfare state economic policy to continue as a viable option in the main--allowing good intentions to triumph over good results.