The Pope vs. the Market

The Pope vs. the Market
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VATICAN-POPE-AUDIENCEReprinted from Casey Research

“It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”

Murray Rothbard

Import controls, asset seizures, money printing, and phony government statistics are no way to generate prosperity. These very policies are making Argentina destitute. Yet the country’s favorite son, Pope Francis, blames capitalism for the chasm between rich and poor.

The heavy-handed kleptocracy in Argentina is anything but capitalism. But “trickle-down theories” that assume the free market will bring economic growth to all have the pontiff annoyed. He says the facts don’t confirm such outcomes, and that trusting the free market “expresses a crude and naïve trust in the goodness of those wielding economic power.”

Paying no attention to what is going on in his home country, he prefers the heavy hand of government.

Getting to Know the New Pope

Jorge Bergoglio (Pope Francis) is Time magazine’s Person of the Year. To make his year even better, his favorite soccer team—Argentina’s San Lorenzo—won its first title since 2007. “What joy!” he exclaimed after hearing the news.

The new leader of the world’s 1.2 billion Catholics is the first non-European pope of the modern era, the first from Latin America, the first Jesuit, and the first to assume the name Francis. But this pope seems to be a normal guy, hanging with his peeps and rooting for his favorite team.

Popes don’t possess any divine knowledge. Mr. Bergoglio got the job for pragmatic reasons. The Vatican has been poorly run in the last few years, engulfed by banking scandals and internal squabbles. Worldwide, payouts to the victims of sexual abuse at the hands of the church’s key employees have ravaged the church’s finances.

Selecting an outsider from Catholicism’s growth continent for pope makes perfect sense. Latin America has nearly half a billion followers, and its population should continue to grow much faster than Europe’s.

Bergoglio served as archbishop of Buenos Aires. As a cardinal, he clashed with the government of Argentine President Cristina Fernandez de Kirchner over gay marriage and free distribution of contraceptives. He should have protested her economic policies instead. Argentina ranks #160 (eight spots behind Haiti!) in the 2013 Index of Economic Freedom, landing it firmly in the “repressed” category.

Argentinian inflation is a crippling 26.8%, though the government insists its only 10.5%. That disconnect between what the Argentinian government claims and what’s actually happening is a running theme. Independent estimates say 28% of Argentinians live in poverty, while the government claims that number is only 6%.

It’s clear that economically, life in Argentina is not so good. However, Pope Francis sees no evil in his homeland, and instead focuses his ire on capitalism.

Economic Ignorance

I mentioned earlier that the pope doesn’t possess any divine knowledge. When it comes to economics, it appears he doesn’t have any knowledge at all.

The pope says an economy of inequality kills, and “thou shall not kill.” He says laws of competition and survival of the fittest put people out of work “without any means of escape.” This presumes that goods and services come from thin air, when in fact it takes labor to create these products. Consumers determine which goods and services are successful and which are not.

The economy isn’t akin to, say, the Catholic religion, with masters from on high dictating what people should think and how they should act. Individuals in the marketplace have unique wants and desires. Entrepreneurs forecast what consumers will want, how much, and for what price. The successful ones make money, the unsuccessful go broke. Either way, consumers benefit from this competition the pope is so incensed over.

The pope believes that markets put the environment at risk. Has he never studied the environmental degradation wrought by communist regimes? Rich societies value the environment more highly than poor ones, simply because they can afford to.

Francis implies that market forces prevent states, “charged with vigilance for the common good” from exercising control. Thankfully, to some degree, he has that right. Marketplace innovations help keep us slightly ahead of the state’s thuggery.

Then, laughably, he writes about debt and interest keeping “citizens from enjoying their real purchasing power.” That’s true as far as it goes, but he fails to recognize that it’s not the free market forcing debt upon people. Governments around the world are burdening generations of citizens with debt that they can never hope to repay. None is worse than Bergoglio’s home country Argentina.

The inequality Pope Francis frets about, he says, leads to “inordinate consumerism” and ultimately to violence. The perpetrators of this violence will not be at fault, says the pope, “because the socioeconomic system is unjust at its root.”

Au contraire: nothing is fairer than a system of voluntary exchanges. That’s what laissez faire capitalism is. Government intervention destroys this fairness by creating rules to take from one group to give to another.

Rush Limbaugh called Pope Francis a Marxist, to which the pontiff replied, “Marxist ideology is wrong,” but that he knows some nice Marxists. He went on: “The promise was that when the glass was full, it would overflow, benefitting the poor. But what happens instead, is that when the glass is full, it magically gets bigger [but] nothing ever comes out for the poor.”

Your Excellency, it’s good when the glass gets bigger. A bigger glass is what we’re after. But it can only grow if the government allows it to. Taxation and regulation keep the glass small and government’s hand big. If nothing trickles down, it’s because it trickled into the government’s pockets.

  • Becky Chandler

    James Schall, S.J. delves a little deeper into the economics of Pope Francis ab his beliefs on economics and poverty:

Profile photo of Doug French

Douglas E. French is a Director of the Ludwig von Mises Institute of Canada. Additionally, he writes for Casey Research and is the author of three books; Early Speculative Bubbles and Increases in the Supply of Money, The Failure of Common Knowledge, and Walk Away: The Rise and Fall of the Home-Owenrship Myth. French is the former president of the Ludwig von Mises Institute in Auburn, Alabama.

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