Pope Francis on Tuesday harshly criticized “trickle-down” economics and an unfettered free market, saying a socioeconomic system that leaves the poor with no means to support themselves is a grave sin.
“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,” he wrote.
“This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power . . . Meanwhile, the excluded are still waiting.”
Capitalism never confirmed by the facts? What about the nineteenth century? The era that gave us modern economics and civilization as we know it?
The nineteenth century was not unfettered capitalism. But it was close. The result was the standard of living was lifted for everyone, to a degree not seen in centuries of miserable human history prior. The stage was set, thanks to industrialization and the inventive era permitted and fostered by free markets, to conquer poverty and starvation, at least in lands which permitted free markets. The world as we know it today would not exist, had (mostly) unfettered capitalism not been permitted to flourish for decades after the American Revolution and prior to the dawn of the “Progressive” (i.e. socialist) era of the early 1900s.
Who, in the post-capitalist world, seriously worries about where his next meal is coming from? Sure, a few people make bad judgments, usually involving substance addiction, and pay the price by ending up homeless. But the conditions of today’s homeless people were pretty much the norm before the unfettered capitalism Pope Francis so hates was allowed to function. Before capitalism, everyone was hungry, and the poor were the mainstream. Should we revert to that time, Pope Francis?
For the most part, Pope Francis is attacking a straw man. The “unfettered capitalism” which he implies exists today does not exist anywhere. The “economic power” of capitalists does not exist, and could not exist. Under totally unfettered capitalism, nobody would be permitted to use the force of government to attain anything. No pull, no tax credits, no special exemptions.
Once government becomes involved in the economy, the stage is set for some for-profit companies to have unfair, unearned power over others. Pope Francis is right to decry this kind of economic power, only it’s not economic power; it’s political power. Without government involvement in the economy, money-making capitalists would answer to one source only: their customers.
Making money—even billions or trillions of dollars—does not give you “power.” If you make this money under unfettered capitalism, it means that you pleased millions of customers with the product or service they willingly bought from you. Nobody held a gun to these customers’ heads. They freely purchased the product or service of capitalists with their own money.
Pope Francis claims that no proof has ever been offered in defense of capitalism. I just provided it, and it’s plain for all to see. If we could travel in time machines back two centuries, or any time before that, we would instantaneously discover the proven value of unfettered capitalism.
Pope Francis fails to prove, in his own case, what sort of power those who persuade customers to buy their products or services have over them. Power implies force, correct? When government compels businesses to do, or not do, certain things, or when government manipulates the previously free marketplace via subsidies, regulations, regulation-exemptions or tax credits for some, then force is involved. Blame the consequences of those policies on government, not the hampered free marketplace.
Today’s mixture of political power and pull, profits, quasi-government for-profit corporations, subsidies, unfunded mandates on business with exemptions for the politically connected, hyper-regulation and hyper-taxation is properly (and most kindly) called a mixed economy. It’s not all-out socialism, but we’re getting there. This is the status quo Pope Francis appears to so dislike. But he should call it the mixed economy, not unfettered capitalism. The Pope is intellectually dishonest.
The very term “trickle down” reveals what a socialist Pope Francis truly is. Use of the term implies no recognition of the fact that wealth, to be consumed or even redistributed, must first be created. When somebody creates or generates a lot of wealth, he usually seeks to spend it, or to invest it. Either way, the economy grows by leaps and bounds when everyone is permitted to keep the products of his labor. When you outlaw profit, you get Communism, where all economic growth stops. When you hamper profit, you hamper economic growth as we’re seeing today.
The Hill.com states that Pope Francis’ remarks on economics — part of a longer missive — could place him at odds with many free-market Republicans.
Gee, you think?
Many free-market Republicans are fundamentalist Christians. Some are Catholics. These philosophical-religious viewpoints espouse such ideas as “wealth is bad, because it’s selfish” and “materialism is evil.” At root, these ideas are based on the premise that an individual’s life is not an end in itself, but justified only by service or sacrifice to others. You cannot reconcile the self-interested moral code implied by capitalism with the explicitly Christian or Catholic code of self-sacrifice. That’s why Republican candidates for President always end up looking like fools and hypocrites.
In fairness to Pope Francis, the Catholic Church has been teaching the ideology of self-sacrifice for millennia. He’s entirely correct that unfettered capitalism has no place in the teachings of the Catholic Church.
Only a morality the exact opposite of what Pope Francis supports can provide a rationale for capitalism. Only in defense of individualism, the idea that each person is sovereign over his or her own life and private property—that the collective does not own anyone—can you make the case for capitalism.
If you wonder why capitalism is no longer unfettered, and even the hampered remnants are going by the wayside under Obama and other political vultures, Pope Francis has provided the answer.
Sooner or later Catholics, like the rest of the world, will have to choose. Politically: It’s either freedom, or socialism. Morally: It’s either self-interest, or self-sacrifice. You can’t have both. Obama and the Pope understand this, but their opponents have yet to figure it out.
Dr Michael Hurd
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