Pope Francis Talks Economics

Pope Francis is not a fan of libertarian economics:

How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion. Can we continue to stand by when food is thrown away while people are starving? This is a case of inequality. 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.

In this context, 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 naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.

I love that "crude and naïve trust" line. The notion that free markets will inevitably benefit everyone is indeed a tenet of capitalist ideology, not a fact. Some countries where the government intervenes quite flagrantly in economic matters (South Korea) have done very well of late, as have some countries with strong unions and robust protections for workers (Germany, Austria, the Netherlands). It is simply not true that laissez faire is the only possible route to prosperity.

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.

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 become the only rule.

Here Francis gets at something that really irks me, a worshipful attitude toward "markets" as if they always produce the best possible outcome. They do not. Nor do they operate in a sort of neutral vacuum, but a real world of power imbalances in which political and legal decisions always matter a great deal. There are always rules. When governments step in to change the rules so as to benefit the mass of people rather than the rich, the rich often cry that this is a violation of the natural order. Nonsense; capitalism is an arbitrary human creation full of notions about property, ownership, power and so on that I think are unsupportable -- except insofar as they work to create economic growth for ordinary people. When they cease to do so, they should be discarded and other rules put in their place.