Thursday, December 5, 2013

Pope Francis on Economics

From First Things:
When Pope Francis describes inequality and exclusion as very grave moral sins, we must let ourselves be challenged, and we must open our hearts.

For me, the financial crisis was an eye-opening moment. I’ve long believed in free market economics and believed that the Church would do a lot of good in the world if it embraced it. And I still believe those things. But what the financial crisis has laid bare is that the most conventional version of free market economics was actually dead wrong.

It would have been a pastoral, doctrinal, and theological disaster if the Church had, over the past twenty years, blindly subscribed to what I’ll now refer to as the Washington Consensus. What in 2006 looked like the invisible hand of the market leading the financialization of the economy turned out to be a disastrous instance of crony-capitalist central planning. And when the Pope denounced it, I was among those condescendingly explaining to him that he didn't get it. What it turns out is that economists actually know very, very little, and that a lot of what we thought we knew turned out to be wrong. Given this hard-to-swallow fact, the prophetic voice of the Church that reminds us of what must be the ends of economic activity is very salutary. (Read more.)


May said...

I understand that this is a quote of a paraphrase of a paraphrase, but it's dangerous to make sweeping statements like "inequality and exclusion are grave moral sins." Why not just talk precisely, and straightforwardly, about justice and injustice, economic oppression, love of neighbor, and so forth. The problem with saying things like "inequality is evil" is that, as you know, it leads to tyranny in order to even everyone out. Men should be equal in certain things, but not in everything. We all have different gifts, skills and roles, by nature. I know we often speak of "inequality" to refer to the injustices and great sufferings in the world, that certainly need urgent remedies. But Catholics need to be careful with their language to avoid feeding the enemy.

elena maria vidal said...

Thank you, May. Of course, the phrase taken out of context is a bit astounding. I hope you were able to read the entire article on First Things. I believe the author is quoting Our Holy Father, who, of course, does expand on the point.

The North Coast said...

It's too bad people don't understand what a free market is, well enough to understand that we have not had a free market since 1913 at least, and really not since 1900.

It is not the "free market" that caused the financial debacle, nor the savage inequality and the destruction of our middle class.

It was government intervention.

What we have had is a mixed economy steered into asset inflation, debt creation, and speculative rampages by government policy promulgated by people whose main priority is keeping the financial markets from having hissy fits. The people who have gotten the benefit of the EZ money and asset inflation are the 1%, while the population is rendered poorer by the day by currency inflation that has robbed our money of 80% of its value in the past 50 years and driven the creation of mountains of personal debt as well as public.

That's what this lovable Pope does not understand. I love Pope Francis. His heart is absolutely in the right place and he is right when he says that the inequality between the rich and poor is wrong. However, "redistributing" the wealth from the rich to the poor is not the way.

The way is to stop redistributing the wealth to the rich from the rest of us by means of the most destructive monetary policies ever.

elena maria vidal said...

Great points! I think what the Pope is mainly concerned about is the greed that drives some people to have an abundant surplus, when others have nothing. In Argentina and many such countries, that is certainly the way it is. I think he is trying to get people to share their wealth of their own accord. For the government to take people's money is not the way.

elena maria vidal said...

I mean, of course, take people's money away fro them by force. We already have huge taxes in this country and those taxes are growing all the time.

Kristina Seleshanko said...

I was about to type something about how we haven't had truly a free market in ages. Then I read what Great Coast wrote. I can only add that socialism and communism are great failures. Some like to say they haven't been implemented correctly, but when you try, try, and try some more (going back to at least the times of the Pilgrims), and it keeps failing, it isn't going to work in the real world. It also doesn't align with the Bible and it's emphasis on the importance of private property rights. The free market isn't perfect, but it's the best system the world has ever seen.

elena maria vidal said...

Socialism just seems to make more poor people.