The economics of Pope Francis: an introduction.

Author:Whaples, Robert M.

Responding to Pope Francis's Call for Dialogue

Pope Francis has invited those concerned about the economy, the environment, and the destiny of the world--everyone--to join a dialogue. (1) And there is a clear need for dialogue between Francis and economists because the pope and many in the economics profession do not see eye to eye at a fundamental level on many issues. (2) The purpose of this symposium is to advance the dialogue at a critical juncture when Francis's encyclical Laudato si' (2015b, hereafter cited as LS), other writings, and public comments have called into question the benefits of free markets and advocated measures to protect the environment from excessive consumption and harmful production practices.

The symposium begins with my own examination of what Pope Francis--"who credits his father, an overworked accountant, with imparting to him 'a great allergy to economic things'" (Schneider 2015)--says about the economy, especially about the poor and the rich. Then I juxtapose his first principles with those used by economists and attempt to put his ideas into the terms economists use. I close by broadly exploring the strengths and weaknesses of capitalism as seen by economists and by Pope Francis--points that each can reflect upon as the dialogue continues.

In the next essay in this symposium, "Pope Francis, His Predecessors, and the Market," Andrew M. Yuengert outlines the evolution of Catholic social teaching, demonstrating that Pope Francis's statements--including his conviction that markets are instruments of an inequality that "kills" and his rejection of the "magical conception" of the power of markets to solve social problems easily--fit into a long tradition within the Catholic Church. He shows that over the past half-century Popes Paul VI, John Paul II, and Benedict XVT credited markets with the potential to serve as an outlet for human creativity and promote the efficient provision of goods but that they always warned that markets could not be left to function without the constraints of a healthy culture and governments able to place markets at the service of the common good. "Where his predecessors warned of the danger that markets might overrun culture and political control, Francis asserts that they have in fact done so." He concludes that Francis's alarm about the dismal social facts of today's world--especially in developing countries--makes "the previous popes' analysis somewhat irrelevant, in the way that advice for keeping a car on the road does not help someone whose car is in a ditch." However, although Yuengert agrees that in some important ways Francis's evaluation is not too extreme, he fears that Francis's most extreme statements will close off real dialogue with conscientious businesspeople and sincere advocates of free markets--thus simply moving the car from one ditch to another.

In "Understanding Pope Francis: Argentina, Economic Failure, and the Teologia del Pueblo," Samuel Gregg emphasizes that Pope Francis is much more hostile to the market and capitalism than his predecessors and explains that to understand Francis one must consider his background in Argentina, a country in which a relatively free economy has over the past seventy years decayed into corporatism and cronyism due to populist political forces embodied in Peronism. Thus, when Francis envisions capitalism, it is the dysfunctional capitalism of Argentina that most informs his thinking--a model of capitalism that friends of free markets rightly reject as capitalism at its worst, which isn't reflective of how capitalism generally works in the places our readers will know best, especially the United States. Gregg also explains how Francis's affection for the teologia del pueblo, "theology of the people," which attributes much power to lowly people in forming the church, in shaping its ideas, and even in directing its doctrine, has influenced much of his outlook. This theology is not Marxist, but it unfortunately has particular problems of its own. In the first place, although the church is Christ and His people and has always had a special care for those on society's margins, it also holds that its sacred doctrines come from divine revelation and two millennia of careful, well-informed discernment of that revelation's meaning. Popular movements have had a history--from biblical times to the present--of pulling away from these truths. (One example would be the church's clear teaching on sexuality and birth control in encyclicals such as Humanae vitae [Paul VI 1968] from which so many in the restive flock have wandered.) Second, many of the ideas that emerge from the peripheries of society are, like ideas that emerge elsewhere, often unaware of facts, illogical, and sometimes simply wrong. The fact that an idea emerges on the periphery does not mean it is without flaws. Third, the teologia del pueblo has been influenced by Peronist ideas and priorities. That means it is influenced by populism, and populist movements have never been especially good at reducing material poverty.

In the third essay in this symposium, A. M. C. Waterman turns to Pope Francis and the environment in "Pope Francis on the Environmental Crisis." He begins by explaining the key arguments of Francis's encyclical Laudato si'--its enumeration of environmental problems that have escalated to the level of a crisis that is a "matter of life and death"; its rebuttal of the hollow charge that the "dominion" granted to humankind in Genesis has encouraged the unbridled exploitation of nature; its explanation that sin is the true cause of the crisis; its call for a global political response; and its conclusion that it is we human beings who need a deep conversion, a new lifestyle "free of the obsession with consumption" so that "at the end, we will find ourselves face to face with the infinite beauty of God" (LS, 222, 243). Next, Waterman examines the intellectual context of the encyclical--the science, papal social doctrine, and nonofficial influences from Aristotle to Romano Guardini--before providing his own learned analysis of the document. Despite harsh criticisms from some economists that Laudato si' is "economically flawed," Waterman concludes that "[o]n careful examination ... some of the pope's strictures turn out to contain valid criticisms" of the "'deified market'" (quoting LS, 56), although they are sometimes "undermined or weakened by hyperbolic language." He closes with worries that Francis wants to rely too much on virtue for solving these problems and has ignored traditional church concerns that original sin has corrupted the state, too, thus "turning a blind eye to 'the proper economic function' of the market" (quoting LS, 171) and its potential to mitigate the problems it has helped unleash. Original sin makes it necessary to supplement virtue with self-interest, but Francis ignores this key insight as well as the relevance of the market economy as a potent instrument for recruiting self-interest to the common good.

Philip Booth continues this theme in "Property Rights and Conservation: The Missing Theme of Laudato si'" and points out that economists and other scholars have much to teach about how to protect the environment, citing research that should ease the worries about property rights that Pope Francis seems to express in the encyclical. The church has in the past stressed the social functions of private property, and much recent economic work suggests that this social usefulness applies also to the conservation of the natural environment. Booth discusses how Nobel Prize winner Elinor Ostrom stresses some important ways in which property rights can promote conservation, and these forms of community-controlled property seem especially well aligned with church teaching. In Laudato si', says Booth, the church has "missed an opportunity to enable its faithful to contribute in a positive way to a debate with long-term consequences for the environment and for social policy."

Lawrence J. McQuillan and Hayeon Carol Park write their contribution, "Pope Francis, Capitalism and Private Charitable Giving," with a passionate directness akin to that of Pope Francis. They embrace his emphasis on everyone's moral responsibility to help those who are less fortunate but question his tactics. They call Francis's attention to the clear historical fact that capitalism has a unique, unrivaled history of lifting the poorest of the poor out of their desperate, absolute poverty. The pope is simply too pessimistic about the facts on the ground, and his embrace of forced redistribution through the state forgets how wealth is created--by giving people incentives to be productive, not by robbing Peter to pay Paul. Forced redistribution ultimately isn't real charity; it instead crowds out the true charity to which all are called and serves primarily to make people more accepting of the use of force to achieve ends they consider worthy. McQuillan and Park question Francis's claims that "'unbridled capitalism ... has taught the logic of profit at any cost, of giving in order to receive, of exploitation without looking at the person' (qtd. in Wooden 2013)" because they believe this vision of capitalism is a caricature--the reality is that businesspeople are real people and have learned that the ethic of "profit at any cost" is generally bad for business. They go a further step and empirically document the strong positive relationship between charitable activities and both economic freedom and secure property rights across countries, drawing on a wide range of studies that support the conclusion that free markets bring forth greater charity. Economic freedom has not turned people into monsters; it has enabled them to be generous in new, powerful ways.

These summaries give a hint of the need for dialogue between the thousands of economists in the world and Pope Francis. There is much room for healthy discussion--for learning in both...

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