Uncertainty and the Economy of Exclusion: Insights from Post‐Keynesian Institutionalism

• Date: 01 September 2019
• Author: David A. Zalewski
• DOI: http://doi.org/10.1111/ajes.12291
• Published date: 01 September 2019

Uncertainty and the Economy of

Exclusion: Insights from Post-Keynesian

Institutionalism

By DaviD a. Zalewski*

abstract. Critics of Pope Francis’s Evangelii gaudium argue that

recent economic growth and reductions in inequality are evidence

that his notion of the “economy of exclusion” is misguided. However,

Francis alludes to another type of exclusion—increased uncertainty

generated by technological change that affects citizens even in

developed nations. Drawing from Post-Keynesian institutionalist

theory, this article argues that this condition is common in capitalism,

and that grassroots reforms are needed to ensure shared prosperity.

Introduct ion

In his apostolic exhortation Evangelii gaudium (EG hereafter) or “Joy

of the Gospel,” Pope Francis writes on familiar papal themes like

applying biblical insights to current issues and problems to promote

the common good and achieve peace. More controversial, however,

are the Pontiff’s views on economics, which reflect his experiences

ministering to the poor in Argentina. Francis is most critical of cul-

tures that emphasize the attainment of wealth and success because

many of them evolve into “economies of exclusion” in which elites

develop egocentric mindsets that disregard those left behind. This

oft-quoted passage summarizes Francis’s (2013: 53) view: “How can

it be that it is not a news item when an elderly homeless person dies

of exposure, but it is news when the stock market loses two points?”

However, Francis (2013: 57) believes this relationship goes beyond

merely ignoring the less fortunate:

Behind this attit ude lurks a rejection of ethics and a reje ction of God.

Ethics has come to be viewed with a cer tain scornfu l derision. It is seen

American Jour nal of Economics and Sociology, Vol. 78, No. 4 (Septem ber, 2019).

DOI: 10 .1111/ajes.122 91

© 2019 American Journa l of Economics and Sociology, Inc.

*Professor and Chair, Department of Finance, School of Business, Providence College,

Ryan Center, Providence, Rhode Island. Email: zalewski@providence.edu

956 The American Journal of Economics and Sociology

as counterproductive, too human, because it ma kes money and power

relative. It is felt to be a threat, since it condemns the manipu lation and

debasement of t he person. (emphasis added)

Thus, Francis condemns the powerful for knowingly jeopardizing the

welfare of already disadvantaged people in their pursuit of greater

wealth.

Although Francis rejects the utilitarian foundation of neoliberal

capitalism, he advocates the control of markets rather than their disso-

lution. Regardless, politically conservative commentators criticized EG

shortly after its publication. For example, New Yorker columnist John

Cassidy (2013) reported that talk-show host Rush Limbaugh falsely

accused Francis of espousing “Pure Marxism.” Moreover, Cassidy

quotes American Enterprise Institute blogger James Pethokouki, who

claimed that “innovative free enterprise is the greatest wealth gener-

ator ever discovered and the economic system most supportive of

human freedom and flourishing.” Other “free market” defenders go

beyond name-calling and platitudes by presenting evidence support-

ing their opinions. For example, Cato Institute analyst Marian Tupey

(2013) shows that global per-capita GDP has been steadily rising,

while inequality has narrowed. He also provides statistics indicating

reductions in global poverty and disease. Given these improvements,

has Francis intentionally downplayed these results or does his con-

cern lie elsewhere? Robert M. Whaples (2017: 325–326) addresses this

question by claiming that the main source of disagreement is in how

economists and theologians view the human person. The former uti-

lize mathematical models based on methodological individualism to

produce quantitative measures of economic activity. The latter evalu-

ate results using standards of morality and justice. Although Whaples

argues that these divergent perspectives are unlikely to be reconciled,

he recommends a continuing dialogue between the two groups.

Pope Francis’s views on the economy, however, are closer to those

of many heterodox economists who reject mainstream theory and

emphasize normative standards of economic performance. One of

these groups is Post-Keynesian institutionalists (PKI), who combine

the visions of original institutional economists Thorstein B. Veblen,

John R. Commons, and their followers with those of John Maynard