As a Jewish guy, I hardly pay attention to the leaders of other religions, but Pope Francis has won my admiration since his election this past spring. So it was somewhat dismayed when I read his recent Papal Exhortation published last month. In one section, Pope Francis seems to very nearly reject the idea of “trickle down economics”, a position that, if indeed true, would be devastating to the world.
Being in finance and business for decades, it has become abundantly clear that free markets are the best path to prosperity. So what to make of Francis’s thoughts?
My Catholic friends tell me that Francis’s discussion follows the the same path of Catholic Social Teaching — under which economics loosely falls — from the last several Popes, and therefore he hasn’t said anything new or different on the topic. This sentiment was echoed in Peggy Noonan’s piece published in the WSJ regarding Francis’s publication. Noonan was cautiously optimistic that Francis wasn’t rejecting free markets and she welcomed the conversation he has created.
On the other side of the aisle, Francis was blasted by some fiscal conservatives over a particularly thorny paragraph:
“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. Meanwhile, the excluded are still waiting. To sustain a lifestyle which excludes others, or to sustain enthusiasm for that selfish ideal, a globalization of indifference has developed. Almost without being aware of it, we end up being incapable of feeling compassion at the outcry of the poor, weeping for other people’s pain, and feeling a need to help them, as though all this were someone else’s responsibility and not our own. The culture of prosperity deadens us; we are thrilled if the market offers us something new to purchase; and in the meantime all those lives stunted for lack of opportunity seem a mere spectacle; they fail to move us.”
Here, it’s easy to see on the surface that the language Pope Francis employs — that trickle-down theories “have never been confirmed by the facts” of being successful — can be confusing. This is a very valid criticism. Certainly, the world has seen economic gains in numerous places where trickle-down economics has been practiced, including Pope Francis’s Argentina, but he seems not to discuss them.
A second reading suggests that “Free markets aren’t what Francis is criticizing here, but rather the lazy idea that “trickle down” economics somehow lifts people from poverty by its own volition, much as a sale at Wal-Mart somehow lifts people from poverty. Does it?
Francis — as well as any causal observer of any video showing Wal-Mart shoppers fight over $500 televisions — would disagree. Francis condemns a consumerist culture that is merely keeping up with the Joneses as it were (or in Francis’ words, “ we are thrilled if the market offers us something new to purchase; and in the meantime all those lives stunted for lack of opportunity seem a mere spectacle”) and simply views human beings as participants in the spectacle of consumerism as something abhorrent… “they fail to move us” as Pope Francis rightly mentions.
So what do the leaders of conservative finance and economics do about Pope Francis? Obviously he will be writing more during his pontificate. Clearly, the world is watching and his remarks and actions speak volumes not just to Catholics any more.
It’s worth it to remember that Pope Francis is not an economist first and foremost. That being said the sweeping generalities seen in his exhortation were ripe for wide interpretation. Don’t forget, the liberal media is always waiting in the wings for a statement or a sentence (this time paragraph 54) that “shows” the Pope is on their (liberal) side — in this case the issue was economics.
Pope Francis is a speaker of freedom, and in that should be included economic freedom. We have a potential opportunity to educate the Pope and ally with him about the truth about economics and the free market. Will the world listen?