There is no polite way to describe Pope Francis’s recent tirade against free enterprise, except to say his heart is in the right place in wanting to help the world’s poor and downtrodden. However, in venturing as boldly as he does into economic and political commentary, the pope makes a number of serious misjudgments.
In his 50,000-word “Apostolic Exhortation,” released by the Vatican on November 24, Pope Francis follows in the well-trod footsteps of a long line of left-wing commentators in leveling a series of wild charges against free-market economics.
He says, for instance, that “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.”
In the same way, Barack Obama continually attacks what he calls “the economic philosophy” of those who “say we should give more and more to those with the most and hope the prosperity trickles down to everyone else.”
Who are the unnamed people who “say” these things — declaring that the poor should be happy with whatever crumbs might fall to them from the rich man’s table?
They are not real people. They are fictional characters — created for the express purpose of representing — or misrepresenting — private enterprise as inherently rapacious and cruelly impersonal.
In one of his syndicated columns, the economist Thomas Sowell challenged readers to name even one economist, of any school of thought, who had advocated “trickle-down” economics. “Name any economist, outside of an insane asylum, who ever said such a thing,” Sowell asked. None could. Nor could readers name a single politician or policy-maker who had done so.
To quote from another one of his essays, Sowell has written:
No such theory has been found in even the most voluminous and learned histories of economic theories, including J.A. Schumpeter’s monumental 1,260-page History of Economic Analysis. Yet this non-existent theory (with no identifiable proponents) has become the object of denunciation from the pages of the New York Times and the Washington Post to the political arena. It has been attacked by Professor Paul Krugman of Princeton and Professor Peter Corning of Stanford, among others, and similar attacks have been repeated as far away as India. It is a classic example of arguing against a caricature instead of confronting the argument actually made (to cite Sowell’s example, labelling anyone who argues against high levels of taxation and government spending as, ipso facto, a proponent of transferring more wealth to the very rich).
Whenever Obama says he believes “in the power of the free market,” he is quick to add a disclaimer, with the favorite being, “But a free market was never meant to be a free license to take whatever you can get however you can get it.” And that, of course, is another caricature, or straw man — falsely suggesting that the strongest advocates of free enterprise look upon anything that clinches a deal — even through bribery, fraud, or cheating the customer — as acceptable business practice.
Unfortunately, the same kind of caricature pervades sections of the apostolic message dealing with economic matters. Pope Francis conflates all business — including the larcenous businesses that flourish in poor countries under corrupt, authoritarian governments — with free enterprise, which requires the rule of law and genuine economic freedom — recognizing the fundamental right of every individual to control his or her own labor and property and extending to all the benefit of being able to work, produce, consume, and invest as they see fit within the boundaries of the law.
A sampling of quotes from the message (Evanegelii Gaudium, or The Joy of the Gospel) includes the following:
(i) Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape . . .
(ii) In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed . . . This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding power and the sacralized workings of the prevailing economic system.
(iii) While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few. This imbalance is the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation. Consequently, they reject the right of states, charged with vigilance for the common good, to exercise any form of control. A new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules.
(iv) In this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which becomes the only rule.
To address each of those points in turn:
First, Pope Francis may not like the fact that the fastest-growing economies on earth over the past two decades — including China, India, and parts of eastern Europe and Latin America — have produced scores of millionaires and billionaires, but it is also incontestable that these same countries — having partially or fully thrown off the yoke of communism or socialism — have lifted hundreds of millions of people out of poverty. The spread of free-market capitalism since the fall of the Berlin Wall and the collapse of the Soviet empire has been aptly described as the greatest anti-poverty program in the history of the world.
Second, it is not true that the “deified market,” as Pope Francis calls it… or “free-market fundamentalism,” as other critics have called it… involves “a crude and naïve trust in those wielding (economic) power.” To the contrary, free enterprise disperses power and puts producers at the beck and call of consumers. As Ludwig von Mises put it, the market is “a daily referendum on what is to be produced and who is to produce it.” Without central control or government intervention, it is based on voluntary exchange for mutual benefit.
Third, one is reminded of Churchill’s quip that socialism consists of “the equal sharing of miseries.” Would Pope Francis prefer a world in which no one was rich and every one was poor? What’s more, can the pope — or Paul Krugman, for that matter — name a single economist, politician, or policy-maker who has ever stated his or her opposition to the exercise any form of government vigilance for the common good? That is another non-existent liberal bogeyman.
And fourth, let us recall that the president got the ball rolling on Obamacare by attacking health insurers for their “obscene and excessive” profits, which happened to be at the lower end of most industries — almost all of which rely upon retained earnings for most of their future growth (and job creation). Now, as a direct result of the suppression of the price mechanism and the deliberate scuttling of the profit motive in the sale of health insurance, millions of people have been shocked by the sudden cancellation of policies tailored to their own needs and are faced with having to buy government-mandated policies that will cost substantially more and greatly restrict their access to the doctors and hospitals they most want to use.
F. A. Hayek spoke of the “pretense of knowledge” or “fatal conceit” that comes into play when government planners substitute their judgment for the “man on the spot” knowledge encapsulated in a pricing system that leaves every individual free to act as the expert in responding to his or her own needs.
Has the pope succumbed to the same fatal conceit? Is he himself on the road to serfdom?
Ed Morrissey at Hot Air and the Fiscal Times says “no.” He writes:
Near the end of the exhortation, Francis notes that the state has a responsibility to promote the common good through “the principles of subsidiarity and solidarity.” The key concept of subsidiarity in Catholic doctrine rejects Marxism and command economies, teaching that “a community of a higher order should not interfere in the internal life of a community of a lower order” (paragraph 1883).
It specifically rejects “all forms of collectivism: and “sets limits for “state interventions” (paragraph 1885).
Well, maybe he’s right and maybe not. My wife and I have noticed among our closest conservative Catholic friends a real horror at the thought that this pope has crossed the line into the kind of collectivism that negates the primacy of individual freedom of choice — in choosing, among other things, between good and evil. They hate to think that the well intentioned (and political correct) pontiff has embraced a new and alien ethic.
Let’s hope he hasn't crossed over that line.