On the Pope’s Economic Understanding

On the Pope’s Economic Understanding
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Pope Francis Holds His Weekly General AudienceMuch ado has been made about Pope Francis’s questionable claims as of late. In an interview with an atheist Italian reporter last fall, the Bishop of the Vatican seemed to have relaxed the church’s stance on conception, abortion, and gay marriage. While orthodox catechism asserts a strong position in the cultural war, Francis insisted that “it is not necessary to talk about these issues all the time.”

Progressives were overjoyed with the news. The New York Times, which has already proven its amateurish understanding of divinity, declared the Pope’s remarks were a condemnation of obsessive scrutiny paid to social conservative causes. Slate, the Washington Post’s attempt at political correctness overload, ran the headline “Pope Francis is a Liberal.” Had any of the editors to these two flagship publications of irate leftism done their research, they would see that the Pope was issuing no such proclamation. Francis was and still is a firm voice for traditional creed.

On economics however, the pontiff could use some pointers. In a new apostolic exhortation titled “Evangelii Gadium,” Francis takes aims at the target of all progressive ideologies: inequality of wealth. He decried the “idolatry of money” while challenging the idea that the “free market” and “economic growth” can bring about “greater justice and inclusiveness.” He even went as far as to claim that free enterprise defenders have “a crude and naive trust in the goodness of those wielding economic power.” If I didn’t know any better, I would assume Francis is a loyal Paul Krugman reader. He directly calls out “trickle-down” economics as a childish fairy tale used to fool the masses into handing over their laboring sovereignty. As a native Spanish speaker, the Pope’s admonishing of a key phrase in the econ lexicon has to be purposeful and meant literally.

Conservatives and libertarians, if not already wary of Francis’s worldview, are now even more on guard than before. Of course, the head of the Vatican is not an infallible being. As Catholic blogger Steve Skojec points out, “[T]here have been bad popes in the history of the church. Popes that murdered, popes that had mistresses.” Still, this new statement on the ineffectualness of laissez faire economics is surprising coming from the same church that was firmly anti-communist under the tutelage of John Paul II. It’s especially worrisome considering Francis’s imploring of the “Lord” to “grant us more politicians” that will work “to ensure that all citizens have dignified work, education and healthcare.” If there is one thing God shouldn’t do, it’s give us more scheming state planners.

Writing at First Things, the blog of The Institute of Religion and Public Life, entrepreneur Pascal-Emmanuel Gobry urges his fellow free marketeers to heed the pontiff’s words. He asks, “how much energy is devoted in free market circles in seriously discussing and debating poverty?” After declaring his distrust in statist intervention to alleviate destitution, Gobry asserts “there is a sincere and overwhelming concern for the poor that is more present in the progressive coalition than in my own” and that “[W]e must make it our own and embrace it.”

There is much to agree with in this sentiment. Ideas are what change social and political life, for better or worse. Spreading those ideas is how coalitions are built and intellectual enlightenment happens. In recent decades, the theories of economic management via the state have become en vogue despite their elitist prescriptions. The hands-off, private property approach, despite its universal merit, has been losing the battle of ideas. Opponents of free markets have largely succeeded in framing capitalism as the deceitful ideology of corporate overlords. Making the case for laissez faire is difficult precisely because the economic benefits of capital accumulation and flexible prices take time to bear fruit. Government redistributionists can promise “free” money and instantly deliver with the use of force. The perennial question of “what can you do for me now?” will always be a barrier proponents of voluntary markets have a tough time scaling.

Still, it does not hurt to make the case for capitalism to the poor. R. R. Reno brings attention to the real populist concern of there being a “danger of becoming an anonymous, throw-away person in a global economic machine.” Francis seems to be channeling this sentiment in his latest exhortation. But negative spiritual consequences aside, free enterprise has been solely responsible for improving living standards the world over. Making effective arguments for capitalism just happens to be plagued with gaps in imagination on the part of the listener. Despite Francis’s claim, jobs are not created by the good will of men who happen to own land and raw materials. They are the product of capital accumulation put to work. You can’t pay an employee with nothing, and an employee can’t produce nothing either. What’s trickling down in the production process isn’t scraps, but resources meant to satisfy consumer demand.

As Harvard economist Greg Mankiw points out, “trickle-down” is really just a “pejorative used by those on the left to describe a viewpoint they oppose.” The pontiff’s use of the phrase is understandable given that he seems to be a product of liberation theology, which is prominent in his native Latin America. In early September, he met with Gustavo Gutiérrez, an early pioneer of the redistributionist ideology. A Vatican’s newspaper, L’Osservatore Romano, reported on the meeting while declaring that a Latin American Pope meant that liberation theology should no longer “remain in the shadows to which it has been relegated for some years.”

None of this makes Francis a version of Marx reincarnate. It should provide context for his views in an economy that is already heavily regulated in favor of politically-connected power. Economic inequality will always exist as it is the driving force behind all market action. But that doesn’t make the current discrepancies in wealth justified. In fact, many corporations today rely on the state for monopoly privilege and to suppress competition – including big box retailers. If Francis and his followers wish to fulfill their laudable goal of providing meaningful employment to all, they would be better off endorsing unfettered capitalism. Anything less is an introduction of compulsion into the voluntary cooperation of individuals.

Like Pascal-Emmanuel Gobry, NYT columnist Ross Douthat also urges his fellow Catholic conservatives to once again make the case for laissez faire to the poor and “encourage a much greater integration of Catholic and conservative ideas than we’ve seen since “compassionate conservatism” collapsed.” As he writes,

Catholic social teaching, properly understood, emphasizes both solidarity and subsidiarity — that is, a small-c conservative preference for local efforts over national ones, voluntarism over bureaucracy.

If he thought about it more, I am sure Douthat would come to the realization that only the market process represents the kind of decentralized hierarchy emphasized by Aquinas and the like. Born of violence and conquest, the state only perverts harmonious exchange. Despite his economic misunderstanding, Francis is a profoundly good man. He truly is gentle and caring, even to his detractors. That makes it all the more unfortunate that he holds such progressive views on political economy.

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  • Pamela

    This progression connected with economical comprehending in the 1970s altered once more, in particular in the beginning 1970s. This beginning in the Friedman-Phelps natural-rate composition ended up being because of the particular ownership connected with both fiscal in addition to monetary policymakers.

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    I am pretty happy to read this great article in which you describe information comprehensively.

  • Pat

    Yet Ludwig von Mises proudly proclaimed that economics is a science. This article is not about science but about scientism, the application of the methods of the natural sciences to economics.…!

  • Bruce W Margolese

    If The Rich Oppress The Poor Which Includes The Middle Class Which We All Know They Do Then The Comments Of The Pope Only State The Obvious. We Have No Free Markets. We Have Powers That Like History Shows Tries To Control And Destroy To Put Their Agenda In Place Until The People Rise Up. Have A Interesting Day And Have An Open Mind. Things Are Broke And They Need Solutions Not The Views That Are Based On Myths.

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James E. Miller is editor-in-chief of Mises Canada and a regular contributor to the Mitrailleuse . Send him mail

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