Pope Francis offered his judgment on modern capitalism in his 50,000 word address, Evangelii Gaudium:

Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.

Kevin Williamson responded with The Problems of Selfishness in The National Review Online.

Excerpts:

As the chief executive of the largest and most successful institution in human history, Pope Francis naturally takes an institutionalist view of things; like all of his predecessors, at least so far as I am aware, he fails to appreciate that the actual result of the free-market economy is not to transfer power away from states to corporations but from states and corporations to people. The “truly human purpose” he seeks may be found in many millions of households in poor countries, where bellies are more full and roofs more secure than they were a generation ago, owing mainly to the expansion of global trade. The pope writes that it is an error to believe that “economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world.” This is true. But then, neither will the building of churches, legislatures, or courthouses. People still have to be good. But it is easier to feed the Lord’s sheep where food is plentiful.

The pope is a very good man, and what very good men have in common with very bad men is that they tend to assume that the world is full of men who are similar to themselves. Thus, his rhetorical reliance upon “states, charged with vigilance for the common good,” an aspirational sentiment rather than a factual statement. States should act in the public good, but there is that problem of selfishness, which everybody sees in the market but overlooks in politics.

Political self-interest is no less selfish than is economic self-interest, and states have something more dangerous than even the most ruthless operator in a free market: coercion. Pope Francis might consider the case of President Obama, whose vision of the public good includes millions of federally subsidized abortions, and ask himself whether “vigilance for the common good” explains what politics is or what he wishes it were. The longstanding Catholic skepticism of economic liberalism is one of the last remnants of the Church’s skepticism of liberalism in toto, Rome having given up explicit denunciations of things such as the freedom of conscience (cf. Ubi Primum) some time ago.

It is natural that a man who sees the world the way Barack Obama sees it would view all power relationships as zero-sum: If somebody else gets a little more power, he has a little less. But there is no reason for Pope Francis to take that view. If ever the Church’s economic thinkers get over their 19th-century model of the relationship between state and market, they might appreciate that spontaneous orders and distributed economic forces could produce some truly radical outcomes in a world in which a billion or more people shared a vision of justice and mercy. The pope’s job in part is to supply that vision; unhappily, the default Catholic position seems to be delegating economic justice to the state, under the mistaken theory that its ministers are somehow less selfish than are the men who build and create and trade for a living rather than expropriate. Strange that a man who labored under the shadow of Perón has not come to that conclusion on his own.

The Pope’s criticism of capitalism was also retorted by economist Greg Mankiw as noted in Carpe Diem:

1. Throughout history, free-market capitalism has been a great driver of economic growth, and as my colleague Ben Friedman has written, economic growth has been a great driver of a more moral society.

2. “Trickle-down” is not a theory but a pejorative used by those on the left to describe a viewpoint they oppose. It is equivalent to those on the right referring to the “soak-the-rich” theories of the left. It is sad to see the pope using a pejorative, rather than encouraging an open-minded discussion of opposing perspectives.

3. As far as I know, the pope did not address the tax-exempt status of the church. I would be eager to hear his views on that issue. Maybe he thinks the tax benefits the church receives do some good when they trickle down.

HKO

The Catholic church grew for centuries in partnership with a feudal society that dispersed power from family lineage and hard statist rule. This power structure was largely threatened by capitalism, its recognition of individual rights and its allocation of resources based on market forces. Capitalism relegated both economic and political power to those the church could not control.

Is the inequality the Pope finds so objectionable less now than it was under the feudal society the Catholic church supported for so long? The more functional question is whether equality is such a noble end that we should sacrifice economic growth for it, and if so how much. The poorest nations have the greatest economic equality. Are the people under the capitalist system he condemns better off under the alternate political systems tried in Russia, Communist China, Venezuela, Cuba, etc?

There are several political continuums to describe the political debate: liberal to conservative, individual rights to the collective or to state power, capitalism to socialism, or pragmatism to ideology. But perhaps the most telling is the continuum from economic self interest to political self interest.

The characteristics of selfishness do not disappear when we bestow greater power on the state. One has only to note the incredible increase in the number of the one percenters in the nation’s capital in the last few years to recognize this.

There is much to criticize about capitalism until you examine the outcome of the alternatives.

The core difference in the conservative and liberal views of man is that the conservatives accept the imperfection of man and builds restraints into the system. The more liberal view is that man and his society can be perfected even if it requires force to subdue his nature. The imperfections of man apply as much to the political sphere as to the economic; a point that is not recognized by Pope Francis and others who feel the state is the key to salvation.

Milton Friedman noted the problem with political self interest in this classic interview with Phil Donahue:

And Margaret Thatcher noted the importance of the balance of equality and growth in this throw down in the British Parliament.

Would the Pope rather have the poor poorer if it also made the rich poorer as well? The Pope is wrong in his assessment of capitalism and the power of his pulpit gives his opinion great power. One should remember the last century in Europe and how the state handled the power he so profoundly and morally protects.

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